Document:

EMPLOYMENT AGREEMENT

         This Agreement, is effective as of the 29th day of September, 1999 (the
"Effective  Date"),  and  is  made  and  entered  into  by  and  between  GALAXY
ENTERPRISES, INC., a Nevada Corporation,  having its principal place of business
in  Orem,  Utah  ("Galaxy"),  and  _______________  the  undersigned  individual
("Employee").

                                    RECITALS

         WHEREAS, Galaxy is in the business of developing and marketing computer
software and services to companies engaged in Internet commerce; and

         WHEREAS,  both  Galaxy  and  Employee  desire to  embody  the terms and
conditions of Employee's employment in a written agreement which shall supersede
any and all prior agreements of employment, whether written or oral.

         NOW,  THEREFORE,  in  consideration  of the  mutual  agreements  herein
contained, the parties hereby agree as follows:

                               GENERAL PROVISIONS

         1.  Employment and Term:  Galaxy hereby  employs  Employee and Employee
hereby agrees to serve Galaxy as ____________________________________.  The term
of Employee's  employment shall be Thirty-six (36) months, and shall hereinafter
be referred  to as the  "Initial  Term." The Initial  Term shall begin as of the
Effective Date. Unless and until Employee's employment with Galaxy is terminated
by Galaxy or  Employee  for any reason or no reason,  at the end of the  Initial
Term this Agreement shall  automatically  be renewed and extended for additional
periods of twelve (12) months each and Employee's  employment  with Galaxy shall
continue during the extended period.

         2. Employee's Time and Loyalty:  Employee shall devote  Employee's full
time and efforts to Galaxy  during the term of Employee's  employment.  Employee
shall  also act with  complete  loyalty  to  Galaxy,  and  during  the period of
Employee's  employment,  Employee  shall not engage in any  activity  or conduct
prohibited by Section 14.

         3.  Compensation:

          (a) Base  Salary:  As  compensation,  Galaxy shall pay Employee a base
     salary in the amount of $ per year ("Base  Salary").  Galaxy shall have the
     right,  in its sole  discretion,  to  prospectively  increase the amount of
     Employee's  Base Salary.  Base Salary  shall be paid  according to Galaxy's
     regular payroll schedule.

          (b) Discretionary Bonuses: In addition to Base Salary,  Employee shall
     be eligible to participate in the executive  bonus program (the  "Executive
     Bonus  Program").  Payment of any bonus under the  Executive  Bonus Program
     shall be at the sole  discretion  of Galaxy and shall be  according  to the
     then current practice and criteria  established by Galaxy.  Galaxy may upon
     reasonable notice to Employee,  discontinue the Executive Bonus Program for
     Employee effective the end of any employment year of Employee's employment.

         4. Employee's  Benefits:  In addition to Base Salary,  until Employee's
employment is terminated,  Employee  shall be entitled to all standard  employee
benefits  then in effect for  employees  of Galaxy who are  executive  officers.
These presently include 100% of all medical and life insurance  premiums and use
of a company automobile.

         5. Employee's  Conduct:  Employee shall conduct himself or herself in a
professional  manner at all times and  perform  the  duties set forth in Exhibit
"A", attached hereto,  and such other duties as shall be specified by Galaxy, in
a competent  and  responsible  manner and to Galaxy's  reasonable  satisfaction.
Employee  further  agrees to abide by the policies and  procedures as may be set
forth in handbooks, manuals and other materials provided by Galaxy.

         6.       Termination:

          (a)  Prior  Employment  Agreements.  Employee  has  been  continuously
     employed by Galaxy on a full-time  basis since  ____________________.  This
     Agreement  revokes,  amends and  replaces any and all other  agreements  of
     employment,  written or oral, between Employee and Galaxy.  Employee's past
     employment  with  Galaxy,  if any,  for more than six (6)  months  entitles
     Employee  to certain  termination  and  severance  benefits as set forth in
     Sections 6 and 7.

          (b)  Discretionary   Termination  by  Galaxy.  If  Employee  has  been
     previously employed full-time by Galaxy for more than six months before the
     Effective  Date,  then  during  and  after the  Initial  Term,  Galaxy  may
     terminate  Employee's  employment  at will,  subject to this  Agreement and
     Galaxy's obligation to pay Severance Pay to Employee as provided in Section
     7. If Employee  has not been  previously  employed  full-time by Galaxy for
     more than six months before the Effective  Date,  then during the first six
     (6) months of the Initial Term, Galaxy may terminate Employee's  employment
     by giving  Employee at least four (4) weeks' notice of  termination  or, in
     lieu of such notice,  by paying  Employee the amount of Base Salary and the
     benefits described in Section 4 otherwise due for such notice period.

          (c)  Discretionary  Termination by Employee.  During the Initial Term,
     Employee may terminate Employee's  employment by giving Galaxy at least two
     (2) weeks' notice of said resignation. After the Initial Term, Employee may
     terminate  Employee's  employment  by giving  Galaxy at least one (1) month
     notice.

          (d) Termination for Cause by Galaxy.  Notwithstanding anything in this
     Agreement,  during the Initial  Term and  thereafter  Galaxy may  terminate
     Employee's   employment   immediately  for  Cause.  For  purposes  of  this
     Agreement,  "Cause" shall  include (i) material  breach by Employee of this
     Agreement,  (ii)  performance by Employee deemed  unsatisfactory  to Galaxy
     acting   reasonably,   provided   Galaxy's   expectations  for  a  specific
     improvement or change have been communicated to Employee in writing with at
     least a  thirty  (30)  day  probation  period  allowed  for  the  requisite
     improvement,  (iii) Employee's  dishonesty or violation of company rules by
     Employee,  or (iv)  Employee's  conviction of or entrance of a plea of nolo
     contendere  to a felony or to any other  crime  that may be  punishable  by
     incarceration.

          (e)  Termination  upon Death or  Incapacity  of  Employee.  Employee's
     employment with Galaxy shall automatically terminate upon Employee's death,
     or at the exclusive  election of Galaxy,  upon the  Incapacity of Employee.
     For purposes of Sections 6 and 7,  termination of Employee's  employment by
     reason of Employee's death or Incapacity shall be considered termination of
     Employee's  employment by Galaxy  without  Cause and  Employee,  Employee's
     estate or  Employee's  designated  beneficiary,  as the case may be,  shall
     receive the Severance Pay, if any, pursuant to Section 7.

          (f)  Definition  of  Incapacity.   For  purposes  of  this  Agreement,
     "Incapacity"  shall  mean that  Employee  is for a period  of  thirty  (30)
     consecutive days or more, unable to perform Employee's duties  effectively,
     for reasons such as mental illness, mental deficiency,  physical illness or
     disability,  or other related condition. For purposes of this Agreement, if
     at any time a question  arises as to the  "Incapacity"  of  Employee,  then
     Galaxy shall  promptly  engage three (3)  physicians who are members of the
     American Medical Association to examine Employee and determine if by reason
     of  sickness or injury,  Employee is unable to perform the major  duties of
     Employee's  employment with Galaxy.  In the event Employee  appears to have
     mental capacity to act on Employee's own behalf,  then one (1) of the three
     (3)  physicians  engaged by Galaxy for this  purpose  shall be a  physician
     selected by Employee,  one (1) shall be a physician selected by Galaxy, and
     one (1) shall be a physician selected by the other two (2) physicians.  The
     decision  of the three (3)  physicians  shall be  certified  in  writing to
     Galaxy  and  shall  be sent by  Galaxy  to  Employee  or  Employee's  legal
     representative, and shall be conclusive for all purposes of this Agreement.

         7. Effect of Termination on  Compensation  and Benefits:  If Employee's
employment is terminated by Galaxy without Cause during the first six (6) months
of Employee's employment with Galaxy, Employee shall be entitled to receive only
the amount of Base Salary and benefits as set forth in Section 6(b).

         If Employee's  employment  is terminated by Galaxy  without Cause after
the first six (6) months of Employee's employment with Galaxy, Employee shall be
entitled to receive an amount equal to Base Salary  ("Severance Pay") for twelve
(12) months from the date of termination.

         If Galaxy without Cause does not renew Employee's employment at the end
of the Initial  Term,  or the end of any  employment  period  thereafter,  or if
Employee's employment is terminated by reason of Employee's death or Incapacity,
then Employee (or Employee's estate or designated  beneficiary,  as the case may
be) shall receive Severance Pay for the applicable Severance Pay Period.

           For purposes of this Agreement, a termination by Galaxy without Cause
includes a termination of employment by Employee within 30 days following any of
the following events: (i) the assignment of any duties to Employee  inconsistent
with, or reflecting a materially adverse change in, Employee's position, duties,
responsibilities or status with the Company, or the removal of Employee from, or
failure to reelect Employee to any of such positions,  or (ii) the relocation of
the Company's principal executive offices,  or relocating  Employee's  principal
place of  business,  in excess of twenty  five  (25)  miles  from the  Company's
current executive offices.

         If  Employee's  employment  is (i)  terminated  by  Employee,  or  (ii)
terminated for Cause or for Cause not renewed by Galaxy,  Employee shall receive
only  Employee's  Base  Salary and the  benefits  described  in Section 4 earned
through the date of such termination.

         If Employee's  employment is terminated by Galaxy  without  Cause,  all
outstanding stock options held by Employee shall vest and remain exercisable for
180 days after termination of employment.

         At the option of Galaxy, Severance Pay may be distributed in a lump sum
or in regular  biweekly checks over the Severance Pay Period.  Any Severance Pay
is subject to required payroll deductions and withholdings.

         Except as provided in this Section 7, Employee shall not be entitled to
any further or other Severance Pay, Base Salary, benefits, compensation, damages
or other amounts.  Employee understands and agrees that notwithstanding anything
in this  Agreement,  Galaxy's  obligation  to pay any Base  Salary,  benefits or
Severance Pay after termination of employment depends upon Employee's compliance
with the  agreements  and  covenants of Sections 10 through 14.  Notwithstanding
anything in this  Agreement,  Employee  shall not receive,  as Severance  Pay or
otherwise,  any health or life insurance coverage after the date of termination,
except COBRA benefits, if any, as and to the extent prescribed by law.

                              PROTECTION OF GALAXY

         8. Definition of Confidential Information:  In this Agreement, the term
"Confidential  Information,"  with respect to Galaxy or any third  party,  shall
mean any and all  information  of  Galaxy,  or, as the case may be, of any third
party,  including  any and all of the  following,  which are not  intended to be
mutually exclusive:

          (a)  intellectual  property,  trade  secrets,  know  how,  technology,
     computer programs (whether owned by Galaxy or any third party or used under
     license),  designs, data, research, lab books, methods, systems,  formulae,
     formulations, recipes, compositions, devices, processes and records;

          (b)  marketing  information  and methods,  including  marketing  data,
     market research, sales techniques, and the names, addresses,  telephone and
     telecopier  numbers,  and the  operation,  buying  habits and  practices of
     customers, potential customers, distributors and representatives;

          (c) information regarding employees, including terms and conditions of
     employment and performance evaluations;

          (d) information regarding purchasing methods and sources including the
     names  and  identifying  and  other   information   regarding  vendors  and
     suppliers,  costs of materials and prices at which  materials,  products or
     services are or have been obtained or sold; and

          (e)  financial  statements,   forecasts,  reports  and  all  financial
     information not disseminated to the public.

         9. Duty of  Confidentiality:  Employee agrees to hold all  Confidential
Information  of Galaxy in strictest  confidence.  During the term of  Employee's
employment,  Employee may have access to and become acquainted with Confidential
Information  of third  parties (such as suppliers and customers of Galaxy) which
is in  Galaxy's  possession.  Employee  agrees to also hold such third  parties'
Confidential  Information  in strictest  confidence  as if it were  Confidential
Information of Galaxy.

         During the term of Employee's employment and thereafter, Employee shall
not  directly or  indirectly  in any way use,  copy,  transfer  or disclose  any
Confidential  Information of Galaxy or of any third party, except as required in
the performance of Employee's duties for Galaxy,  or as specifically  authorized
by the Chief  Executive  Officer of Galaxy.  After the termination of Employee's
employment,  such  authorization  must be in writing.  The  parties  understand,
acknowledge  and  agree  that,  as  between  them,  all  items  of  Confidential
Information are important, material and confidential trade secrets of Galaxy and
affect the  successful  conduct of the business of Galaxy and its good will. Any
breach of this Section 10 is a material breach of this Agreement.

         All files,  documents,  works and other  materials  containing  any (i)
Confidential  Information of Galaxy,  (ii)  Confidential  Information of a third
party which is in  Galaxy's  possession,  or (iii)  information  which  Employee
prepares,  uses,  possess or controls that affects or relates to the business of
Galaxy, shall be and remain the sole property of Galaxy; and, with the exception
of ordinary work routinely taken home or on business trips, shall not be removed
from Galaxy's  facilities  without  prior  specific  authorization  of the Chief
Executive Officer of Galaxy.

         After Employee  ceases to be an employee of Galaxy,  Employee shall not
undertake any  employment or activity if the loyal and complete  fulfillment  of
the duties of such employment or activity would require  Employee to disclose or
use any Confidential Information in breach of this Section 10.

         Employee shall not have any obligation of confidentiality  with respect
to any  Confidential  Information  which  (through no fault of  Employee)  is or
becomes  publicly known as evidenced by printed  publication or other  published
work.

         Employee  hereby  covenants  not to  disparage,  orally or in  writing,
Galaxy or its management  (including Galaxy's products,  practices and policies)
to any Galaxy employee, associate, distributor or member of the public. Employee
understands  and agrees that  Employee  may lose any right to  Severance  Pay if
Employee breaches this covenant not to disparage.

         10. Return of Materials  Upon Notice of  Termination:  Employee  agrees
that  effective  when  Employee  gives Galaxy,  or receives from Galaxy,  notice
terminating Employee's  employment,  Employee shall immediately return to Galaxy
all property of Galaxy in Employee's possession,  use or control,  including any
and all originals and copies of any files, documents,  works and other materials
containing  any  Confidential  Information  of  Galaxy  or of any  third  party.
Employee  shall not take with him or her,  or cause or permit  any  unauthorized
destruction,  disclosure or copying of, or the removal from Galaxy's  facilities
of, any originals or copies of any files,  documents,  works and other materials
containing any Confidential Information of Galaxy or of any third party.

         11.  Ownership of Works of Authorship and  Inventions:  Employee hereby
assigns and transfers to Galaxy, any and all works of authorship, inventions and
innovations (whether deemed patentable or not), made by Employee (or by Employee
jointly with others) during the term of Employee's employment (whether same were
made during or after normal office hours or at or away from Galaxy's facilities)
which  relate to or are  useful in the  business  of  Galaxy.  For  purposes  of
copyright law, any such work of authorship shall be deemed a work made for hire.
Employee  agrees to promptly  disclose  to Galaxy all such works of  authorship,
inventions and innovations.  Employee agrees to execute any document  reasonably
requested and prepared by Galaxy that is necessary or  appropriate  to document,
perfect  or effect the  intention  of this  Section 12 or to secure any  patent,
copyright registration (as a work made for hire) or other protection thereof for
Galaxy.

         12. Prior  Relationships of  Confidentiality:  Employee  represents and
warrants that  Employee's  employment  under this Agreement does not violate any
other agreement binding Employee,  nor violate any obligation of confidentiality
between  Employee and any third party.  Further,  Employee  agrees that Employee
will not use for  Galaxy's  benefit,  or  disclose to Galaxy,  any  Confidential
Information  of any third party if Employee is prohibited by agreement  (such as
an agreement  with a prior  employer) or otherwise  from so using or  disclosing
such Confidential  Information.  Employee  represents and warrants that Employee
has  disclosed  to  Galaxy  any  such   obligations   of   confidentiality   and
prohibitions, if any. Employee agrees to indemnify and hold Galaxy harmless from
all  damages,   expenses,  costs  (including  reasonable  attorneys'  fees)  and
liability  incurred in connection  with, or resulting  from,  any breach of this
Section 13.

         13. Noncompetition and Nonsolicitation: Employee agrees to abide by the
following restrictive  covenant,  which shall apply in the United States and any
country  where (on the date the  notice  terminating  Employee's  employment  is
received)  Galaxy is doing  business or planning to do business  within the next
year through a subsidiary or joint  venture (the  "Restricted  Territory").  The
following restrictive covenant shall apply during the "Restrictive Period" which
is defined to mean the period

          (i) commencing with the Effective Date, and

          (ii) ending  one  (1)  year  after  the  later  of  (x)  the  date  of
               termination of Employee's  employment  (whether or not employment
               is terminated by Galaxy or Employee,  or for Cause or otherwise),
               or (y) the date of final  payment  of  Severance  Pay was paid to
               Employee  (or  would  have  been  paid but for a  breach  of this
               Agreement  by Employee  or for Cause  termination  of  Employee's
               employment).

         Employee hereby covenants and agrees that Employee shall not,  directly
or indirectly,  in the Restricted Territory during the Restricted Period, do any
of the following:

          (a) own an interest in, operate, join, control, participate in or be a
     distributor, agent, consultant,  independent contractor, employee, officer,
     director,  partner,  principal or shareholder of any individual,  person or
     entity  having  revenues  from the sale or license of computer  software or
     services used by companies  engaged in the promotion of e-business over the
     Internet.  However, nothing in this Section 14 shall prohibit Employee from
     acquiring or owning less than one percent  (1%) of any type of  outstanding
     publicly  traded  securities of any company which  Employee and  Employee's
     family are not otherwise associated or affiliated with.

          (b) plan for or organize any business  which competes or would compete
     with any product or service of Galaxy;  or combine with any other  employee
     or representative of Galaxy to organize any such competitive business.

          (c) solicit,  induce or influence (or seek to induce or influence) any
     person under  contract with Galaxy  (including any associate or distributor
     of Galaxy) to terminate or alter his or her relationship with Galaxy.

          (d) solicit any existing customer of Galaxy.

         Further,  the parties agree that Galaxy,  in its sole  discretion,  may
extend the Restrictive Period and the foregoing  restrictive  covenant for up to
an additional year. To do so, Galaxy must (i) give Employee at least ninety (90)
days prior notice of its intention to extend the restrictive covenant,  and (ii)
pay  Employee  an amount  equal to the Base  Salary for and during the period of
such  extension.  Any such payments shall be paid according to Galaxy's  regular
payroll schedule.

         It is the  intention  of the  parties  that the  foregoing  restrictive
covenant shall be enforced as written,  and, in any other event, enforced to the
greatest  extent  (but to no greater  extent) in time,  territory  and degree of
participation  as is permitted by applicable law.  Therefore,  the parties agree
that such covenant shall be construed to apply in time,  territory and degree of
participation  only so far as such  covenant is enforced by a court of competent
jurisdiction.  Thus,  as  generally  set forth in Section 19,  such  covenant is
hereby declared divisible and severable.

         14.  Acknowledgement:  Employee  acknowledges that Employee's covenants
and  agreements  in Section  14 are  reasonable  and  necessary  to protect  the
legitimate   interests  and   Confidential   Information  of  Galaxy.   Employee
acknowledges that Section 14 is not so broad as to prevent Employee from earning
a livelihood or practicing  Employee's  chosen  profession after  termination of
Employee's  employment.  The parties acknowledge and agree that the compensation
and  benefits  provided  for  under  this  Agreement  are  in  substantial  part
consideration for Employee's covenants in Section 14.

         Employee's  covenants  and  agreements  of Sections 10 through 16 shall
survive the termination of Employee's employment by any means, reason or party.

         15.  Enforcement:  For any breach of Section  10, 11, 12, 13, 14 or 15,
Employee agrees that Galaxy shall be entitled to equitable and other  injunctive
relief which may include,  but shall not be limited to (i) restraining  Employee
from  rendering  any  service  or  performing  any  activity  in  breach of this
Agreement,  (ii) an order for specific relief, (iii) other equitable relief, and
(iv) damages.  However, no remedy available under this Agreement (including this
Section 16) is intended to be exclusive of any other remedy,  and each and every
remedy  shall be  cumulative  and shall be in addition to every other  available
remedy  or  now  or  hereafter  existing  at law or in  equity,  by  statute  or
otherwise.  The  election  of any one or  more  remedies  by  Galaxy  shall  not
constitute any waiver of the right to pursue other available remedies.

                                  MISCELLANEOUS

         16.  Entire  Agreement:  This  Agreement  (including  the  recitals and
Exhibit  "A",  which is attached  hereto)  sets forth the entire  agreement  and
understanding between Employee and Galaxy and cannot be modified or altered, nor
can any provision  hereof be waived,  except in writing signed by Employee and a
duly authorized officer of Galaxy.

         17.  Interpretation:  The Section and other  headings in this Agreement
are for  purposes of  reference  only and shall not limit,  expand or  otherwise
affect the construction of any of the provisions of this Agreement. Whenever the
context  requires,  the  singular  shall  include the plural,  the plural  shall
include the singular, and the whole shall include any part thereof.

         18. Invalidity of Provision:  In case any one or more of the provisions
in this  Agreement  shall,  for any reason,  be held to be  invalid,  illegal or
unenforceable   in  any  respect,   such  invalid,   illegal  or   unenforceable
provision(s) shall be curtailed,  limited, construed or eliminated to the extent
necessary to remove such invalidity, illegality or unenforceability with respect
to the  applicable  law as it shall then be applied and the other  provisions of
this Agreement shall not be affected thereby.

         19. Binding Effect: This Agreement shall inure to the benefit of and be
binding upon Employee and  Employee's  heirs and personal  representatives,  and
upon Galaxy and its successors and assigns,  and is performable  and enforceable
in the State of Utah.

         20.  Waiver:  No  waiver  of any  provision  of  this  Agreement  shall
constitute a waiver of any other  provision,  whether or not similar,  nor shall
any waiver constitute a continuing waiver.

         21.  Notice:  Any notice  required or  permitted to be given under this
Agreement shall be in writing and shall be sufficient if personally delivered or
sent by  registered  or  certified  mail,  and  addressed,  if to  Employee,  to
Employee's  address  set forth in  Galaxy's  records,  or if to  Galaxy,  to its
principal office. Such notice shall be deemed given when delivered, if delivered
personally,  or, if sent by  registered  or  certified  mail,  at the earlier of
actual receipt or three (3) days after mailing in United States mail,  addressed
as aforesaid with postage prepaid.

         22. Governing Law: This Agreement shall be governed by and construed in
accordance  with the laws of the State of Utah.  Any  litigation  arising out of
this  Agreement  shall be conducted in  applicable  courts  located in Salt Lake
County, Utah, and the parties expressly consent to such jurisdiction and venue.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first above written.

Employee:                                       Employer:

_________________________                     GALAXY ENTERPRISES, INC.

_________________________                     By _____________________________
Signature
                                              Name ___________________________

                                              Title __________________________

<PAGE>

1

                                   EXHIBIT "A"

                                       TO

                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                            GALAXY ENTERPRISES, INC.

                                       AND

                            -------------------------

                               Duties of EmployeeSTOCK PURCHASE AGREEMENT

         This Stock Purchase  Agreement (this  "Agreement") is dated January __,
1999, between ISG Resources, Inc., a Utah corporation ("Purchaser") 11 and James
M.  Isaac  and  Tommy  C.  Isaac,  individuals  residing  in the  state of Texas
(individually a "Seller" and collectively the "Sellers").

                                    RECITALS

         The Sellers own and desire to sell to Purchaser,  and Purchaser desires
to  purchase  from the  Sellers,  all of the  issued and  outstanding  shares of
capital  stock of J. Marvin  Isaac  Interests,  Inc.,  d/b/a Best Masonry & Tool
Supply (the "Company"), a Texas corporation.

         The issued and outstanding  capital stock of the Company is referred to
herein as the "Purchased Stock."

         Unless otherwise defined in this Agreement,  the capitalized terms used
in this, Agreement have the meanings given in Article VIII below.

         In  consideration  of the mutual  covenants  and  agreements  set forth
herein,  and  for  other  good  and  valuable  consideration,  the  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

                                    ARTICLE I

1        SALE OF PURCHASED STOCK; CLOSING

         1.1 Purchase and Sale.  On the terms and  conditions  set forth in this
Agreement,  the Sellers will sell to Purchaser, and Purchaser will purchase from
the Sellers, the Purchased Stock.

         1.2      Consideration.

         1.2.1 The consideration (the  "Consideration")  for the Purchased Stock
is comprised of: (i) $13,300,000.00 IN CASH, subject to increase (riot decrease)
as set forth in Section 1.2.2 below (the "Deferred Consideration");  and (ii) as
"Additional  Consideration",  the  Purchaser  shall  also pay to the  Sellers at
closing the sum of  $2,400,000.00  IN CASH to retire all of the  indebtedness of
the Company due to the Sellers (the "Shareholder Debt").

         1.2.2 The  consideration  will  increase  (and thus,  the amount of the
Deferred Consideration is determined), dollar for dollar, equal to the amount of
increase  in the  Company's  net book value (the "Net Book  Value")  (defined as
total  assets less  liabilities)  during the period from July 31,  1998,  to the
Closing  Date (the  amount of the  Additional  Consideration  paid to retire the
Shareholder  Debt shall not be  included  in the Net Book Value  calculation  on
either date). To determine  whether an adjustment is appropriate,  Sellers shall
(within  thirty days of the Closing  Date) provide to Purchaser  with  financial
statements  of the Company  that are  prepared in a manner  consistent  with the
determination of the Net Book Value as of July 31, 1998, indicating the Net Book
Value as of the Closing Date (the "Sellers' Calculation") . Purchaser shall make
the Company  records  available,  as  necessary,  to make such  calculation.  If
Purchaser  (by notice to Sellers  within thirty (30) days of receipt of Sellers'
Calculation)  disagrees  with  the  Sellers'  Calculation  ("Sellers'  Objection
Notice"),  then  Purchaser  and the Sellers  shall  submit the matter to Ernst &
Young and Mr. Andrew M. Rossi for resolution in accordance  with GAAP on a basis
consistent with Sellers'  Financial  Statements.  If, within thirty (30) days of
the dispute being  submitted to them,  Ernst & Young and Mr. Rossi are unable to
agree as to how the dispute  should be resolved,  then the parties  shall submit
the matter to Arbitration as provided in Article 10 of this Agreement.  If Ernst
& Young  and Mr.  Rossi  are  able to  agree  as to how the  dispute  should  be
resolved,  they will jointly  prepare and deliver a report to all parties  which
will detail whether a Consideration  adjustment is necessary. The report will be
final and binding on both parties,  absent fraud or clear error. If Seller fails
to furnish Sellers'  Calculations within 45 days following the Closing,  subject
to reasonable  extensions due to the lack of Purchaser's  cooperation,  Sellers'
Calculation is deemed to be $350,000.00,  subject to Purchaser  timely objecting
to same pursuant to Sellers' Objection Notice.

         1.3 Closing.  The Closing (the  "Closing")  of the purchase and sale of
the Purchased Stock will take place at the offices of Sellers' attorney, Stephen
L. Brochstein,  Esquire, One Riverway,  Suite 1950, Houston, Texas 77056, on the
date hereof (the "Closing Date").

         1.4  Payment of  Consideration  and  Additional  Consideration.  At the
Closing,  Purchaser will pay the Consideration and the Additional  Consideration
to the  Sellers by wire  transfer  to such  account as the Sellers may direct by
written  notice  delivered to Purchaser by the Sellers  before the Closing Date.
Simultaneously,  the Sellers  will sell and convey to  Purchaser  the  Purchased
Stock  free  and  clear  of all  Liens,  by  delivering  to  Purchaser  a  stock
certificate,  registered  in the name of Purchaser,  representing  the Purchased
Stock.  At the  Closing,  the  parties  shall  also  deliver  the  certificates,
documents and instruments to be delivered pursuant to this Agreement.

         1.5  Deferred  Consideration.  If the  Purchaser  fails to timely  give
notice to Seller that it disagrees  with the Sellers'  Calculation,  then within
thirty (30) days after delivery of the Sellers'  Calculation  (or  determination
pursuant to Section 1.2),  the Purchaser will deliver to the sellers cash in the
amount of the adjustment  specified  therein.  If the Purchaser timely disagrees
with the Sellers'  Calculation,  the Purchaser  will deliver to the Sellers cash
equal to the undisputed  portion of the adjustment  specified in the report,  if
any. The Purchaser  shall also pay  interest,  at the rate of eight percent (8%)
per annum, on the unpaid principal amount of the Deferred Consideration from the
Closing  Date to the  earlier  of the date of payment  or  forty-five  (45) days
following  the date of the  Closing,  and  thereafter,  until  paid,  the unpaid
balance will accrue  interest at the rate of eighteen  (18%)  percent per annum,
but not to exceed the maximum lawful rate.

         1.6 Payment of the Deferred  Consideration.  The first  $350,000 of the
Deferred  consideration  (to  the  extent  the  proper  amount  of the  Deferred
Consideration is sufficient) shall be paid equally to Jamar Management Services,
Inc. and Tomco Management  Services,  Inc., both Texas corporations owned by the
Sellers, as consideration for the termination of existing  management  contracts
with those management  companies deemed  terminated as of the Closing Dates, and
the  balance,   if  any,  paid  to  the  Sellers.   Payment  of  the  Additional
Consideration shall not reduce the amount of the Deferred  Consideration payable
to Seller.

                                   ARTICLE II

2        REPRESENTATIONS AND WARRANTIES OF THE SELLERS

         The Sellers  represent and warrant to Purchaser  that:  (i) the "Seller
Financial  Statements"  described  in section 2.4 are  materially  accurate  and
complete,   and  prepared  in  accordance  with  generally  accepted  accounting
principles  (11GAAP11);  discrepancy or difference  between the Seller Financial
Statements and the Ernst & Young findings are not the subject of any warranty or
representation on the part of Sellers and Purchaser acquires the Purchased Stock
subject to any possible difference (and the Sellers shall not be deemed to be in
breach  of  any  representation  or  warranty  set  forth  herein  due  to  such
differences or any resulting change in the statements of operations or financial
position of the Company as a result of the Ernst & Young  findings) ; i: ii) the
Company has no  "Indebtedness"  other than as set forth on the Seller  Financial
Statements or the "Interim Statements" (and similar type obligations through the
Closing Date) and the Shareholder Debt has been satisfied;  (iii) the Company is
a corporation  duly organized,  validly  existing and in good standing under the
laws of the state of Texas and has full corporate power and authority to conduct
its business;  (iv) the Company is duly  qualified,  licensed and admitted to do
business in Texas and Georgia; (v) the Purchased Stock consists of the following
number of shares of  capital  stock:  1,000  shares of common  stock,  par value
($1.00)  per share;  (vi) the  Sellers  have full  authority  to enter into this
Agreement,  to  perform  their  obligations  hereunder  and  to  consummate  the
transactions contemplated hereby; (vii) this Agreement has been duly and validly
executed  and  delivered  by the Sellers and  constitutes  the legal,  valid and
binding obligations of the Sellers,  enforceable against them in accordance with
its terms;  (viii) the Sellers have  delivered  to  Purchaser  true and complete
copies of the  certificate  or articles of  incorporation  and by-laws (or other
comparable corporate charter documents) of the Company, including all amendments
thereto effected through the Closing Date (the "Initial  Corporate  Documents");
and (ix) the  Purchased  Stock  constitutes  all of the issued  and  outstanding
shares of  capital  stock of the  Company.  The  shares of  Purchased  Stock are
validly  issued,  fully paid and  nonassessable,  issued in compliance  with all
applicable  Laws,  and no additional  shares of capital stock have been reserved
for issuance.  There are no outstanding Options with respect to the stock of the
Company or  agreements,  arrangements  or  understandings  to issue options with
respect  to the  Company,  nor are there any  preemptive  rights or  agreements,
arrangements or  understandings  to issue preemptive  rights with respect to the
issuance or sale of the capital stock of the Company. The Sellers are the record
and beneficial owners of all of the shares of Purchased Stock, free and clear of
all Liens.  The  delivery to Purchaser  of" the  certificates  representing  the
Purchased Stock will transfer to Purchaser good and valid title to all shares of
the Purchased Stock, free and clear of all Liens, and written  restrictions that
the  Sellers  and/or the Company  may be party to, and after such  transfer  the
Purchased  Stock,  in the hands of  Purchaser,  will have been duly  authorized,
validly issued,  fully paid and  nonassessable.  From and after the Closing,  no
Seller nor any other  Person  (other than the  Purchaser  or its  successors  or
assigns,  or any  person  claiming  by or  through  them),  except to the extent
attributable,  directly or  indirectly,  to  Purchaser,  will, as of the Closing
Date,  have any rights  whatsoever with respect to the Purchased Stock or to any
other securities of the Company.

         In addition,  Sellers,  to their actual  knowledge,  (Sellers having no
duty or obligation of independent  investigation of any kind) , hereby represent
and  warrant to  Purchaser  as follows  with  respect to the  following  acts or
occurrences  during the last three years (or such shorter  applicable  period as
hereafter provided) subject to the limitations of Section 2.26:

         2.1 No Conflicts. As of the Closing Date, the execution and delivery by
the Sellers of this Agreement does not, and the consummation of the transactions
contemplated  hereby will not,  except to the extent  attributable,  directly or
indirectly,  to Purchaser or its  successors  or assigns,  or due to any Laws or
Orders applicable to Purchaser exclusively arising due to this transaction:

         2.1.1  conflict  with or result in a violation  or breach of any of the
terms, conditions or provisions of the Initial Corporate Documents;

         2.1.2  conflict  with or result in a violation or breach of any term or
provision  of any  Laws or  Order  applicable  to any of the  Sellers  or to the
Company, or any of their Assets; or

         2.1.3 except as disclosed  in Section 2.1 of the  Disclosure  Schedule,
(i) conflict with or result in a violation or breach of, (ii)  constitute  (with
or without notice or lapse of time or both) a default  under,  (iii) require any
of the Sellers or the Company to obtain any consent, approval or action of, make
any filing  with or give any notice to any Person as a result or under the terms
of, (iv) result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (v) result in or give to any
Person  any  additional   rights  or   entitlement  to  increased,   additional,
accelerated  or  guaranteed  payments  under,  or (vi) result in the creation or
imposition of any Lien upon the Company or any of its Assets under,  any written
Tiaterial  contract  or License to which any of the  Sellers or the Company is a
party or by which  any of their  respective  Assets is  bound,  except  for such
conflicts,   violations,   breaches,  defaults,  consents,  approvals,  actions,
filings, notices ! terminations,  cancellations,  accelerations,  modifications,
additional  rights  or  entitlements  or  Liens  that,  individually  or in  the
aggregate,  (A) are not having and could not be  reasonably  expected  to have a
material  adverse  effect on the business or  condition of the Company,  and (B)
could  not be  reasonably  expected  to have a  material  adverse  effect on the
validity or  enforceability  of this  Agreement  or on the ability of any of the
Sellers or the Company to perform its obligations hereunder.

         2.2 Governmental Approvals and Filings.  Except as disclosed in Section
2.2 of the Disclosure Schedule,  no consent,  approval or action of, filing with
or notice to any Governmental or Regulatory Authority on the part of the Sellers
or the  Company is required  in  connection  with the  execution,  delivery  and
performance of this Agreement or the  consummation of transactions  contemplated
herein,  except  to  the  extent  attributable!,   directly  or  indirectly,  to
Purchaser,  or any Laws or Orders applicable to Purchaser.  Notwithstanding  any
provision  to the  contrary,  the  Sellers  make  no  representation  whatsoever
regarding  the  necessity  of a filing  under the Hart-  Scott-Rodino  Antitrust
Improvements  Act of 1976 : . as  amended,  or any  similar or  related  Laws or
orders, and Purchaser shall indemnify, defend and hold Sellers harmless from any
claim relating thereto.

         2.3 Books and Records.  The minute books and other  similar  records of
the Company  provided to Purchaser upon  execution of this  Agreement  contain a
true and materially accurate record of the mattes set forth therein.

         2.4  Financial  Statements.  The  Sellers  have  caused the  Company to
furnish to Purchaser  true and correct  copies of (i) the reviewed but Unaudited
Financial  Statements  of the Company  for the periods  ending July 31, 1997 and
July  31,  1998  prepared  in  accordance  with  GAAP  (the  "Seller   Financial
Statements")  and (ii) the unaudited  internal  balance sheets and statements of
operations  certified  as  materially  true and  correct by the chief  financial
officer of the Company for the period from August 1, 1998  through  November 30,
1998 (the  "Interim  Statements")  . The  Seller  Financial  Statements  and the
Interim  Financial  Statements  (both of which are attached as Exhibit A) fairly
represent the financial condition and results of operations of the Company as of
their  respective  dates and for the periods referred to, all in accordance with
GAAP.  The Company  engaged Ernst & Young to perform the  Company's  certain due
diligence  procedures with respect to financial  records and other matters prior
to the Closing,  at Purchaser's request and expense (and the Purchaser shall pay
the fees  associated  with  such  review).  Sellers  make no  representation  or
warranty  regarding the findings of' Ernst & Young and advise Purchaser that the
results  thereof may be in conflict with the aforesaid  books and records of the
Company and the Sellers will have no liability for those  differences.  Further,
the Sellers  represent and warrant  that,  as of the Closing Date,  the Net Book
Value  of the  Company  shall be at  least  equal  to the Net Book  Value of the
Company as of July 31, 1998 (per GAAP).

         2.5 Absence of Changes.  Since July 31, 1998, sellers have not received
written notice that there has been any  undisclosed  material  adverse change or
event or  development,  which,  individually or together with other such events,
including any positive related events, could reasonably be expected to result in
a material adverse change, in the business or condition of the Company as of the
Closing. In addition,  except as expressly  contemplated  hereby,  including any
matter covered by the preceding  sentence,  and except as otherwise disclosed by
the books and records of the Company (the Seller  Financial  Statements  and the
Interim  Statements  being  deemed to be part of the books  and  records  of the
Company) or otherwise in section 2.5 of the  Disclosure  Schedule,  Sellers have
received no written notice since July 31, 1998:

         2.5.1 any  declaration,  setting  aside or payment of any  dividend  or
other  distribution in respect of the capital stock (or other equity  interests)
of the  Company  or  any  direct  or  indirect  redemption,  purchase  or  other
acquisition by the Company of any such capital stock (or other equity interests)
of the Company;

         2.5.2 any  authorization,  issuance,  sale or other  disposition by the
Company of any shares of its capital stock (or other equity  interests) , or any
modification or amendment of any right of any holder of any  outstanding  shares
of capital stock (or other equity interests) of the Company;

         2.5.3 any uninsured physical damage, destruction or other casualty loss
(not  covered by  insurance)  affecting  any of the Assets of the  Company in an
aggregate amount exceeding $50,000;

         2.5.4 any undisclosed capital expenditures or commitments for additions
to property, plant or equipment of the Company constituting capital assets in an
aggregate amount exceeding $100,000;

         2.5.5  any  transactions  by the  Company  with  any  of its  officers,
directors,  stockholders  or  Affiliates,  involving in the aggregate  more than
$50,000 other than pursuant to a Contract or  arrangement  in effect on July 31,
1998 and  disclosed  to  Purchaser  pursuant to Section  2.13.1.6.  Contracts of
employment are verbal except for those listed  pursuant to Section 2.13.1 of the
Disclosure Schedule; or

         2.5.6 any entering  into of a binding  agreement to do or engage in any
of the foregoing for the time period indicated above.

         2.6      Taxes.

         2.6.1 Except as disclosed in Section 2.6 of the Disclosure Schedule and
subject to Section 6.3 of this Agreement,  all Tax Returns required to have been
filed by or with respect to the Company with any Taxing Authority have been duly
and timely filed, and each such Tax Return correctly and completely reflects the
income,  franchise or other Tax liability and all other information  required to
be reported thereon.

         The  Company  is not and has  never  been a member  of any  affiliated,
combined,  consolidated,  unitary or similar group with respect to the filing of
tax returns with respect to any Taxing  Authority.  All income taxes owed by the
Company  (whether  or not shown on any Tax  Return)  have been paid  through the
period ending July 31, 1998.  All monies  required to be withheld by the Company
from employees,  independent  contractors,  creditors or other third parties for
Taxes have been  collected or withheld  through the period ending July 31, 1998,
and either duly and timely paid to the appropriate  Taxing  Authority or (if not
yet due for payment) set aside in accounts for such purposes (Purchaser agreeing
to pay  same,  as due  for the  period  indicated  above).  The  Company  has no
liability  for Taxes for any Person other than the  Company,  except as shown in
the Seller Financial Statements or the Interim Statements.

         2.6. 2   The taxes due as of July 31, 1998, have been paid.

         2.6.3 The  Company  is not a party to any  existing  written  agreement
extending, or having the effect of extending,  the time within which to file any
Tax Return or the period of assessment  or collection of any Taxes.  The Company
has not received any written  ruling of a Taxing  Authority  related to Taxes or
entered into any written and legally binding  agreement with a Taxing  Authority
relating to Taxes.

         2.6.4  Except as set forth in Section  2.6.4  (being  the IRS  disputed
proposed penalty of $2,000),  the Sellers have not received written notice since
January 1, 1996 that any Taxing  Authority is asserting  against the Company any
deficiency,  claim or liability for additional Taxes or any adjustment of Taxes.
The Federal  income Tax Returns of the Company for the 3-year period ending July
31, 1998 disclose (in accordance  with Section  6662(d) (2) (B) of the Code) all
positions taken therein that could give rise to a substantial  understatement of
federal  income  Tax within the  meaning  of  section  6662(d) of the Code.  The
Sellers have delivered to Purchaser  complete and correct copies of all federal,
state, local and foreign income Tax Returns filed by or with respect to, and all
Tax  examination  reports and  statements of  deficiencies  assessed  against or
agreed to by, the Company  since July 31,  1996.  The Sellers  have not received
written  notice after  January 1, 1996,  that there are any Liens for Taxes upon
the Assets of the Company.

         2.6.5  Except as  arising  in the  ordinary  course of  business  or as
otherwise  disclosed  in section 2.6 of the  Disclosure  Schedule,  or otherwise
disclosed  to  Purchaser,  the Sellers have not  received  written  notice since
January 1, 1996 that the  Company is (i) a party to or bound by any  obligations
under any tax sharing,  tax indemnity or similar agreement or arrangement,  (ii)
subject  to any  election  under  sections  338(e)  or 341(f) of the Code or the
regulations thereunder, (iii) required to make, any adjustment under section 481
of the Code (or any  comparable  provision  of state,  local or foreign  law) by
reason of a change  in  accounting  method or  otherwise,  (iv)  subject  to any
agreement or arrangement that could result separately or in the aggregate in the
payment of any "excess parachute payments" within the meaning of section 280G of
the Code, (v) has ever been, a "United States real property holding corporation"
within the meaning of section 897 (c) (2) of the Code, (vi) a party to any "safe
harbor  lease" that is subject to the  provisions  of section  168(f)(8)  of the
Internal Revenue Code as in effect prior to the Tax Reform Act of 1986 or to any
"long-term  contract"  within the  meaning of section  460 of the Code,  (vii) a
party to any joint venture,  partnership or other arrangement that is treated as
a  partnership  for  federal  income  Tax  purposes,  or  (viii) a member of any
affiliated,  consolidated,  combined,  unitary  or  similar  group  for  any Tax
purpose.

         2.7      Legal Proceedings.

         2.7. 1 Except as  disclosed in Section 2.7 of the  Disclosure  Schedule
(with paragraph references corresponding to those set forth below) :

         2.7.1.1 Sellers have not received any written notice that there are any
material  lawsuits,  actions or proceedings  pending or threatened,  against the
Company,  or any of its Assets which (A) could  reasonably be expected to result
in the issuance of an Order restraining,  enjoining or otherwise  prohibiting or
making  illegal  any of the  transactions  contemplated  by  this  Agreement  or
otherwise result in a material  diminution of the benefits  contemplated by this
Agreement to  Purchaser,  or (B) if determined  adversely to the Company,  could
reasonably be expected to result in (x) any injunction or other equitable relief
against  the  Company,  or (y)  Losses by the  Company,  individually  or in the
aggregate with Losses in respect of other such actions or proceedings, exceeding
$50,000 (any such claim less than $50,000 not being deemed to be material);

         2.7.1.2 The Sellers have not received  written  notice  during the last
six months of any material defects,  dangerous or substandard  conditions in the
products or materials manufactured,  sold,  distributed,  or to be manufactured,
sold or distributed by the Company that could cause  substantial  bodily injury,
sickness,  disease,  death,  or damage to property,  or result in loss of use of
property,  or any claim,  suit, demand for arbitration or notice seeking damages
for bodily injury,  sickness,  disease, death, or damage to property, or loss of
use or property.

         2.7.2  Section  2.7 of the  Disclosure  Schedule  sets  forth all known
actions or proceedings relating to or affecting the Company or its Assets during
the period commencing January 1, 1996, and ending upon the Closing Date.

         2.8 Compliance with Laws and Orders. Except as disclosed in Section 2.8
of the  Disclosure  Schedule or otherwise,  the Sellers have not received  since
January 1, 1996 any written  notice (or any actual verbal notice from a reliable
source within the 90 day period  preceding the date of this  Agreement) that the
Company is or has been at any time since such date, in material  violation of or
in  default  under,  any Law or order  applicable  to the  Company or any of its
Assets  which  remains  uncured.  In  furtherance  and  not  limitation  of  the
foregoing, neither the Sellers nor the Company has violated any federal or state
securities law in connection with the offer,  sale or purchase of any securities
prior to this Agreement (and unrelated to this transaction).

         2.9 Benefit  Plans;  ERISA.  All active  Benefit Plans  relating to the
Company are listed in Section 2.9 of the Disclosure Schedule, and copies of al:_
documentation  relating to such  Benefit  Plans during the last three years have
been  delivered  or made  available to  Purchaser  (including  copies of written
Benefit  Plans,  written  descriptions  of  oral  Benefit  Plans,  summary  plan
descriptions,  trust agreements,  the three most recent annual returns, employee
communications,  and IRS determination letters).  Except as disclosed in Section
2.9 of the Disclosure Schedule,  the Sellers have not received written notice of
any uncured violations of any of the following since January 1, 1996:

         2.9.1 each Benefit Plan, and the administration thereof,  complies, and
has at all  times  complied,  with  the  requirements  of  all  applicable  Law,
including  ERISA and the Code,  and each Benefit Plan  intended to qualify under
section  401(a) of the Code has been so qualified,  and each trust which forms a
part of any such plan has at all times since its adoption been tax-exempt  under
section 501(a) of the Code;

         2.9.2 no Benefit Plan has incurred any "accumulated funding deficiency"
within the meaning of section 302 of ERISA or section 412 of the Code;

         2.9.3 no direct, contingent or secondary liability has been incurred or
is expected  to be incurred by the Company  under Title IV of ERISA to any party
with respect to any Benefit Plan, or with respect to any other Plan presently or
heretofore maintained or contributed to by any ERISA affiliate;

         2. 9. 4 the "amount of unfunded benefit liabilities" within the meaning
of  section  4001(a)  (18) of ERISA  does not  exceed  zero with  respect to any
Benefit Plan subject to Title IV of ERISA;

         2. 9. 5 no  "reportable  event"  (within the meaning of section 4043 of
ERISA.) has occurred with respect to any Benefit Plan or any Plan  maintained by
an ERISA affiliate;

         2.9.6 no Benefit  Plan is a  multiemployer  plan  within the meaning of
section 3(37) of ERISA;

         2.9.7  Neither the Company nor any ERISA  affiliate  has  incurred  any
liability  for any Tax imposed  under  section 4971 through 4980B of the Code or
civil liability under section 502(i) or (1) of ERISA;

         2.9.8 no benefit under any Benefit Plan, including, without limitation,
any severance or parachute  payment plan or agreement,  will be  established  or
become accelerated,  vested or payable by reason of any transaction contemplated
under this Agreement;

         2 .9 no Tax has  been  incurred  under  section  511 of the  Code  with
respect  to any  Benefit  Plan  (or  trust  or other  funding  vehicle  pursuant
thereto);

         2.9.10 no Benefit Plan provides health or death benefit coverage beyond
the  termination  of an employee's  employment,  except as required by Part 6 of
Subtitle  B of Title I of ERISA or  section  4980B of the Code or any state laws
requiring continuation of benefits coverage following termination of employment;

         2.9.11 no suit,  actions  or other  litigation  (excluding  claims  for
benefits  incurred in the ordinary course of plan  activities) have been brought
with respect to any Benefit Plan and there are not facts or circumstances  known
to any the Sellers or the Company that could reasonably be expected to give rise
to any such suit, action or other litigation; and

         2.9.12 all known  contributions  to Benefit Plans that were required to
be made under such Benefit Plans prior to December 31, 1998 have been made,  and
all known  benefits  accrued  under any  unfunded  Benefit  Plan have been paid,
accrued or otherwise  adequately  reserved in accordance with GAAP, all of which
accruals  under  unfunded  Benefit  Plans are as disclosed in Section 2.9 of the
Disclosure  Schedule,  and the Company has  performed  all material  obligations
required to be performed under all Benefit Plans.

         2.10     Real Property.

         2.10.1 Section 2.10.1 of the  Disclosure  Schedule  contains a true and
correct  list of (i)  each  parcel  of real  property  owned  (the  "Owned  Real
Property") by the Company, (ii) each parcel of real property leased or subleased
or otherwise  occupied by the Company as tenant or  subtenant  (the "Leased Real
Property";  together with the owned Real Property, the "Real Property") together
with a true and correct  list of all such  leases,  subleases  or other  similar
agreements and any amendments,  modifications  or extensions  thereto (the "Real
Property  Leases") , and (iii) all Liens  relating to or affecting any parcel of
Real Property,  in each case  identifying the owner,  lessor and lessee thereof,
except for liens in favor of Sellers  which will be  satisfied as of the Closing
as a result  of the  retirement  of  Shareholder  Debt as  contemplated  hereby.
Notwithstanding any provision to the contrary,  all Real Property which is owned
or leased is subject to all  matters of record  applicable  thereto  (other than
mortgage-type liens) , and matters that a correct survey thereof would reflect.

         2.10.2 Subject to Section  2.10.1,  the Company has good and marketable
title to its Owned Real  Property,  free and clear of all  Liens,  other than as
specifically  listed in Section 2.10.2 of the Disclosure  Schedule or matters of
record (other than mortgage-type  liens) or that a survey of such property would
reflect.

         2.10.3  Subject to the terms of its leases (and  Section  2.10.1),  the
Company has a valid and  subsisting  leasehold  estate in and the right to quiet
enjoyment to the Leased Real  Property  for the full term of the lease  thereof.
Except as set forth in Section  2.10.3 of the Disclosure  Schedule,  the Sellers
have not received any specific  notice of any uncured  default (or any condition
or event  which,  after  notice  or lapse of time or both,  would  constitute  a
default)  thereunder which is presently  uncured.  The Company has not assigned,
sublet,  transferred,  hypothecated or otherwise disposed of its interest in any
Real   Property   Lease,   unless;   disclosed  by  the  Sellers  to  Purchaser.
Notwithstanding  the  foregoing  or anything to the  contrary,  Sellers  make no
representation  or  warranty  regarding  (i)  oral  leases  including,   without
limitation,  any representation or warranty as their  enforceability;  or (ii) a
master lease where the Company is a sublessee.

         2.10.4 The Sellers shall deliver to Purchaser, to the extent reasonably
available,  upon the execution of this Agreement true and complete copies of all
(i)  title  policies,  mortgages,  deeds of  trust,  deeds,  leases,  easements,
restrictive covenants, certificates of occupancy, and similar documents, and all
amendments  thereto  concerning the Owned Real Property,  and (ii) Real Property
Leases and all other documents  referred to in clause (i) of this paragraph with
respect to the Leased Real Property.

         2.10.5  Except  as  disclosed  in  Section  2.10.5  of  the  Disclosure
Schedule,  have  not  received  written  notice  of any  pending  or  threatened
condemnation or appropriation  proceedings,  pending or threatened  against Real
Property or the improvements thereon.

         2.10.6 The Sellers  have not  received  written  notice of any specific
written claim,  action or proceeding,  actual or threatened in writing,  against
the Company or the Real Property by any Person which would materially affect the
future use, occupancy or value of the Real Property or any part thereof.

         2.11 Tangible Personal Property. Except as disclosed in Section 2.11 of
the  Disclosure  Schedule,  the  company  is in  possession  of and has good and
marketable  title to, or has valid leasehold  interests in or valid rights under
contract  to use,  all  tangible  personal  property  used in the conduct of its
business,  during the last 12 months,  including all tangible  personal property
reflected on the Seller  Financial  Statements  and tangible  personal  property
acquired since July 31, 1998 other than (i) property disposed of since such date
in the ordinary  course of business  consistent with past practice and the terms
of this Agreement,  or otherwise disclosed.  All such tangible personal property
is free and clear of all Liens,  other than Liens  disclosed  in Section 2.13 of
the Disclosure Schedule.

         2.12  Intellectual  Property  Rights.  The  Sellers  have not  received
written  notice  after  January 1, 1996 that the  Company is  infringing  on any
intellectual  property of any Person,  and no litigation is pending and no claim
has been made or, to the  knowledge  of any the Sellers or of the  Company,  has
been threatened to such effect. The Company owns no patents, trademarks or other
intellectual  property (other than common law rights, trade secrets, and assumed
name  reservations)  . If it is  subsequently  determined  that the Sellers,  or
either of them,  own any  intellectual  property  which relates to the business'
conducted by the Company, the Sellers shall assign their respective right, title
and  interest  in and to such  intellectual  property  to the  Purchaser  or its
designee.

         2.13     Contracts.

         2.13.1  Section  2.13.1  of the  Disclosure  Schedule  (with  paragraph
references  corresponding to those set forth below) contains a true and complete
list of each of the  following  Contracts of a substantial  nature  currently in
effect (true and complete copies, or, if none,  reasonably complete and accurate
written  descriptions  of which,  together with all amendments  and  supplements
thereto and all waivers of any terms  thereof,  have been delivered to Purchaser
prior to the execution of this Agreement), to which the Company is a party or by
which any of its Assets is bound in a material way:

         2.13.1.1 (A) all written Contracts  (excluding Benefit Plans) providing
for a commitment  of employment or  consultation  services for a specified  term
(other than (i) with Trans  Management  Company  (Georgia  plant  manager) which
remain in effect after the Closing,  and (ii) at-will  agreements);  and (B) any
written  commitments  involving an obligation of the Company to make substantial
payments  to  any  Person  in  connection  with,  or as a  consequence  of,  the
transactions  contemplated hereby or to any employee, other than with respect to
salary or incentive  compensation  payments in the  ordinary  course of business
consistent with past practice;

         2.13.1.2 all  Contracts  with any Person  containing  any  provision or
covenant  prohibiting  or  limiting  the ability of the Company to engage in any
business  activity or compete  with any Person or  prohibiting  or limiting  the
ability of any Person to compete  with the  Company or  prohibiting  or limiting
disclosure of confidential or proprietary information, of a material nature;

         2.13.1.3 all management,  partnership,  joint venture, shareholders' or
other similar Contracts with any Person which is to survive the Closing;

         2.13.1.4 all guarantees of the Indebtedness of the Company or any third
Person;

         2.13.1.5  all  Contracts   relating  to  the  future   disposition   or
acquisition  of any  Assets,  other than  dispositions  or  acquisitions  in the
ordinary  course of business  consistent with past practice or the provisions of
this Agreement;

         2.13.1.6  all  Contracts  between or among the  Company  and any of the
Sellers,  any current or former officer,  director,  stockholder or Affiliate of
the Company or of any such officer,  director,  stockholder or Affiliate, on the
other hand,  which is to survive the  Closing,  other than  Contracts  disclosed
pursuant to Section 2.13.1.6;

         2.13.1.7 any existing collective bargaining or similar labor Contracts;

         2.13.1.8 all Contracts  which are to survive the Closing that (A) limit
or  contain  restrictions  on the  ability  of the  Company  to  declare  or pay
dividends  on,  to make any  other  distribution  in  respect  of or to issue or
purchase,  redeem or otherwise acquire its capital stock, to incur Indebtedness,
to incur or  suffer  to exist any Lien,  to  purchase  or sell any  Assets or to
change the lines of  business,  (B) require  the  Company to maintain  specified
financial ratios or levels of net worth or other indicia of financial  condition
or (C)  require the Company to  maintain  insurance  in certain  amounts or with
certain coverages; and

         2.13.1.9  subject  to  Section  2.19  of  this  Agreement,   all  other
Contracts,  including but not limited to Contracts with customers,  that involve
the payment or potential payment, pursuant to the terms of any such Contract, by
or to the Company of more than $50,000 and all powers of attorney and comparable
delegations of authority.

         2.13.2 Each Contract  required to be disclosed in Section 2.13.1 of the
Disclosure  Schedule is in full force and effect and constitutes a legal,  valid
and binding  agreement,  enforceable in accordance with its terms, of each party
thereto;  and except as disclosed in Section 2.13.2 of the Disclosure  Schedule,
Sellers have not received  written  notice that it is, in violation or breach of
or default  under any such  Contract  (or with  notice or lapse of time or both,
would be violation or breach of or default under any such Contract).

         2.14 Licenses.  Section 2.14 of the Disclosure Schedule contains a true
and complete  list of all  Licenses,  other than sales tax permits,  used in and
material to the business or operations of the Company;

         2.14.1   the Company owns or validly holds all such Licenses;

         2.14.2 each license listed in Section 2.14 of the  Disclosure  Schedule
is valid, binding and in full force and effect;

         2.14.3 the Sellers are not aware that the Company  received any written
notice  during the last 12 months  that the  company is in default  (or with the
giving of notice of lapse of time or both,  would be in default)  under any such
License; and

         2.14.4 the transactions contemplated in this Agreement will not violate
any such License or give any other party thereto rights to terminate the License
or change the terms thereof.

         2.15 Insurance. Section 2.15 of the Disclosure Schedule contains a true
and  complete  list of all  existing  insurance  policies in effect  (other than
medical or  disability  insurance or insurance  relating to the Plans),  each of
which is in force and effect on this date. The Sellers have not received written
notice during the last 12 months that any insurer  under any policy  referred to
in this  Section is denying  liability  with  respect to a claim  thereunder  or
defending  under a reservation of rights clause.  Section 2.15 of the Disclosure
Schedule  contains  a list of all  claims  made  under  any  insurance  policies
covering the Company since January 1, 1996.

         2.16 Affiliate  Transactions.  Except for the Shareholder  Debt and the
Purchase]7'S  obligation  to pay the  Deferred  Consideration,  (i) there are no
Liabilities  between the Company  and any current or former  officer,  director,
stockholder,  Affiliate  of the Company or any  Affiliate  of any such  officer,
director,  stockholder  or  Affiliate,  and (ii) the Company does not provide or
cause to be provided any assets,  services or  facilities to any such current or
former officer, director, stockholder or Affiliate.

         2.17  Employees;  Labor  Relations.  Sellers have not received  written
notice  after  January 1, 1996 of (i) any  pending or  threatened  unfair  labor
practice  complaints  against the company  before the National  Labor  Relations
Board or comparable or similar  state  agency,  or any grievance or  arbitration
proceeding  arising  out of  under  collective  bargaining  agreements,  (ii) no
strike, labor dispute,  slowdown or stoppage pending or, to the knowledge of the
Sellers,  threatened  against  the  Company,  and (iii) no union  representation
question  exists with respect to the employees of' the Company or, to the actual
written knowledge of the Sellers,  no union  organization  activities are taking
place.

         2.18     Environmental Matters.

         2.18.1  Except  as  disclosed  in  Section  2.18.1  of  the  Disclosure
Schedule:

         2. 18. 1. 1 The Sellers have not received,  since January 1, 1996,  any
citation,  directive, inquiry, notice, order, summons, warning, or other similar
communications  that  relates  to any  alleged,  actual,  or  potential  uncured
violation  or failure to comply  with any  Environmental  Law, or of any written
Environmental,  Health,  and  Safety  Liabilities  with  respect.  to any of the
Facilities  or any other  Assets  in which the  Company  had an  interest  since
January 1, 1996,  or with respect to any Facility to which  Hazardous  Materials
generated,  manufactured,  refined, transferred, imported, used, or processed by
the Sellers,  the Company, or any other Person f or whose conduct it or they are
or may be held responsible,  have been transported,  treated,  stored,  handled,
transferred, disposed, recycled, or received.

         2.18.2 The Sellers have not received,  since  January 1, 1996,  written
notice that there has been any Release  since  January 1, 1996 of any  Hazardous
Materials  at or  from  the  Facilities  or at any  other  locations  where  any
Hazardous  Materials  were  generated,   manufactured,   refined,   transferred,
produced,  imported, used, or processed from or by the Facilities,  in violation
of any  Environmental  Law where the Company would be liable,  or from or by any
other  properties  and assets  (whether real,  personal,  or mixed) in which the
Company has Dr had an interest.

         2.18.3 The Sellers do not have in their possession any written reports,
studies,  analyses,  tests, and monitoring  pertaining to Hazardous Materials or
Hazardous   Activities   in,  on,  or  under  the   Facilities,   or  concerning
non-compliance  by the Company or any other Person for whose  conduct it or they
are or may be held  responsible,  with  Environmental  Laws, with respect to the
Facilities.

         2.18.4 There have been no known written  environmental  investigations,
studies, audits, tests, reviews or other analyses conducted by, on behalf of, or
which are in the possession of the Sellers,  arising since January 1, 1996, with
respect to any Asset of the Company prior to execution of this Agreement.

         2.19  Substantial  Customers  and  Suppliers.  Section  2.19.1  of  the
Disclosure  Schedule lists the ten (10) largest  customers of the Company on the
basis of revenues for goods sold or services  provided for the twelve  mont*..11
period ending July 31, 1998. Section 2.19.2 of the Disclosure Schedule lists the
ten (10)  largest  suppliers  of the  company on the basis;  of cost of goods or
services purchased during the twelve month period ending July 31, 1998.

         2.20  Accounts  Receivable.  Except as set forth in section 2.20 of the
Disclosure Schedule,  the accounts and notes receivable of the Company reflected
on the  balance  sheets  included in the Interim  Financial  Statements  for the
period ended  December 31, 1998, and all accounts and notes  receivable  arising
subsequent  to such date,  (i) arose from bona fide  sales  transactions  in the
ordinary  course of business  consistent  with past  practice and are payable on
customary  trade  terms,  (ii) are not  subject  to any known  valid  set-off or
counterclaim,  (iii) do not represent obligations for goods sold on consignment,
on approval or on a  sale-or-return  basis or subject to any other repurchase or
return  arrangements,  and (iv) are not  subject of any  Actions or  Proceedings
brought by or on behalf of the  Company to which  Sellers  have  actual  written
notice since January 1, 1996.

         2.21 Other Negotiations;  Brokers. No agent, broker, finder, investment
banker,  financial  advisor or other Person will be entitled,  by or through the
Sellers  or the  Company,  to any  fee,  commission  or  other  compensation  in
connection with the transactions  contemplated by this Agreement on the basis of
any act or statement made by the Sellers, the Company or any of their respective
Affiliates, or any investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of the Sellers, the Company,
or any such Affiliate.

         2.22 Holding Company Act and Investment Company Act Status. The Company
is not a  "holding  company"  or a "public  utility  company"  as such terms are
defined in the Public  Utility  Company Act of 1935, as amended.  The Company is
not an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

         2.23  Bank  and  Brokerage  Accounts.  Section  2.23 of the  Disclosure
Schedule  sets;  forth  (a) a list of the  names  and  locations  of all  banks,
securities brokers and other financial  institutions at which the Company has an
account or safe deposit box or maintains a banking, custodial,  trading or other
similar  relationship;  and (b) a true and complete list and description of each
such account,  box and relationship,  indicating in each case the account number
and the names of all persons having signatory power and respect thereto.

         2.24 Exemption from  Registration.  Except to the extent  attributable,
directly or indirectly,  to Purchaser,  or Laws applicable to Seller,  the offer
and sale of the Purchased  Stock made pursuant to this Agreement are exempt from
the  registration  requirements of the Securities Act.  Neither any the Sellers,
nor the  Company  nor  any  Person  authorized  to act on  behalf  of any of the
foregoing has, to Sellers,  actual  written  knowledge,  in connection  with the
offering of the Purchased Stock, engaged in (i) any form of general solicitation
or general  advertising  (as those terms are used within the meaning of Rule 501
(c) under the  Securities  Act) , (ii) any action  involving  a public  offering
within the meaning of section  4(2) of the  Securities  Act, or (iii) any action
that would require the registration under the Securities Act of the offering and
sale of the  Purchased  Stock  pursuant to this  Agreement or that would violate
applicable state securities or "blue sky" laws.

         2.25 Disclosure.  The representations and warranties  contained in this
Agreement,  and the statements  contained in the  Disclosure  Schedule or in the
certificates,  lists and other writings  furnished to Purchaser  pursuant to any
provision of this Agreement (including the Sellers' Financial Statements and the
Interim Statements), when taken together, do not contain any untrue statement of
a material fact or omit to state a material fact  necessary in order to make the
statements  herein and therein,  in the light of the  circumstances  under which
they were made, not misleading.

         2.26 Limited  Survival of  Representations,  Warranties,  Covenants and
Agreements.  Notwithstanding  any  provision  to the  contrary:  (i)  except  as
provided  in the first  grammatical  paragraph  of  Section  2 to the  contrary,
Sellers make no representation beyond their actual knowledge and have assumed no
duty  of  independent  investigation  of  any  kind  pursuant  to  the  numbered
subsections  of  this  Section  2 (2.1  through  2.24) ; (ii)  even  though  the
Purchaser may  investigate the affairs of the Company and attempt to confirm the
accuracy of the  representations  and warranties of the Sellers,  the Purchaser,
nonetheless,  shall  have the  right  to rely  fully  upon the  representations,
warranties, covenants and agreements of the Sellers contained in this Agreement,
but only to the extent not discovered,  by the Purchaser, to be inaccurate prior
to the Closing; and (iii) all such  representations,  warranties,  covenants and
agreements will survive the Closing, for a period `of eighteen (18) months only.
Any such claim must be timely pursued pursuant to Article IX only.

                                   ARTICLE III

3        REPRESENTATIONS AND WARRANTIES OF PURCHASER

         The  Purchaser  represents  and  warrants  to  Sellers  that:  (i)  the
Purchaser  has full  authority  to enter into this  Agreement,  to  perform  its
obligations  hereunder and to consummate the transactions  contemplated  hereby;
and (ii) this Agreement has been duly and validly  executed and delivered by the
Purchaser  and  constitutes  the legal,  valid and  binding  obligations  of the
Purchaser, enforceable against Purchaser in accordance with its terms.

         In addition, Purchaser, to its best knowledge,  represents and warrants
to the Sellers as follows:

         3.1 No  Conflicts.  The  execution  and  delivery by  Purchaser of this
Agreement does not, and the  performance by Purchaser of its  obligations  under
this Agreement and the consummation of the transactions  contemplated hereby, do
not and will not:

         3.1.1  conflict or result in a violation or breach of any of the terms,
conditions or  provisions  of the  certificate  of  incorporation  or by-laws of
Purchaser;

         3.1.2 subject to obtaining the consents,  approvals and actions, making
the filings and giving- the notices  disclosed in Section 3.4 of the  Disclosure
Schedule,  if any,  conflict with or result in a violation or breach of any term
or  provision  of any Law or order  applicable  to  Purchaser  or its Assets and
Properties; or

         3.1.3 (i)  conflict  with or result in a  violation  or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under, or
(iii) require  Purchaser to obtain any consent,  approval or action of, make any
filing  with or give any  notice to any Person as a result or under the terms of
any Contract or License to which Purchaser is a party, or by which it is bound.

         3.2 Governmental Approvals and Filings. No consent,  approval or action
of, filing with or notice to any  Governmental  or  Regulatory  Authority on the
part of Purchaser is required in  connection  with the  execution,  delivery and
performance of this Agreement to which it is a party or the  consummation of the
transactions contemplated herein.

         3.3 Legal Proceedings.  There are no Actions or Proceedings pending or,
to the  knowledge of  Purchaser,  threatened  against,  relating to or affecting
Purchaser or any of its Assets which (i) could  reasonably be expected to result
in the issuance of an Order restraining,  enjoining or otherwise  prohibiting or
making illegal the consummation of any of the transactions  contemplated by this
Agreement,  or  (ii)  could  reasonably  be  expected,  individually  or in  the
aggregate  with other such Actions or  Proceedings,  to have a material  adverse
effect on the business or condition of Purchaser.

         3.4 Brokers. No agent,  broker,  finder,  investment banker,  financial
advisor or other similar Person will be entitled to any fee, commission or other
compensation  in connection  with any of the  transactions  contemplated by this
Agreement on the basis of any act or statement made by Purchaser.

         3.5 Purchase for  Investment.  The Purchased  Stock will be acquired by
Purchaser for its own account for the purpose of investment  and not with a view
to the  resale  or  distribution  of all or any part of the  Purchased  Stock in
violation of the Securities Act.

         3.6 Survival of Representations,  Warranties. Covenants and Agreements.
Even though the Sellers may investigate the affairs of the Purchaser and confirm
the accuracy of the representations and warranties of the Purchaser contained in
this  Agreement,  the Sellers,  nonetheless,  shall have the right to rely fully
upon the representations,  warranties, covenants and agreements of the Purchaser
contained in this Agreement. All such representations, warranties, covenants and
agreements  will survive the Closing for a period of eighteen  (18) months only.
Any such claim must be timely pursued pursuant to Article 10 only.

         3.7 Existing Line of Credit. Purchaser, for itself and the Company, and
their successors and assigns, agree not to utilize the line of credit previously
available to the Company from Merrill Lynch Financial services or any affiliate.

         3.8 The Company  Obligations.  The Purchaser  will cause the Company to
perform all of its post-closing duties, liabilities and obligations hereunder.

                                   ARTICLE IV

4        COVENANT'S BY THE SELLERS

         4.1 Noncompetition; Non solicitation.

         4.1.1 For a period of five (5) years from the Closing Date, each of the
Sellers,  alone  or in  conjunction  with  any  other  Person,  or  directly  or
indirectly  through  their  present or future  Affiliates,  will not directly or
indirectly own, manage, operate, join, be employed by, have a financial interest
in, control or participate  in the ownership,  management,  operation or control
of, or use or permit  his name to be used in  connection  with any  business  or
enterprise engaged in the design, development, manufacture, distribution or sale
of any products, or the provision of any services involving,  in a material way,
masonry tools and products (including, but not limited to, the manufacture, sale
and/or  distribution of bagged and/or bulk masonry  products such as mortar mix,
blended  cement,  stucco,  acrylic  finish),  which the Company  was  designing,
developing, manufacturing,  distributing, selling or providing at any time prior
to and up to and  including  the Closing Date  anywhere in the United  States of
America,  provided  that the  foregoing  restriction  shall not be  construed to
prohibit the ownership,  in the aggregate,  of not more than two percent (2%) of
any  class of  securities  of any  corporation  which is  engaged  in any of the
businesses  or  enterprises  described  above,  having  a  class  of  securities
registered  pursuant to the Securities  Exchange Act of 1934, as amended,  which
securities are publicly owned and regularly  traded on any national  exchange or
in the over-the-counter market.

         4.1.2 For a period of five (5) years from the closing Date, each of the
Sellers shall not knowingly and intentionally  directly or through an Affiliate,
in a material and adverse way, (i)  directly  and  intentionally  influence  any
individual who is an employee of the Company as of the Closing, to terminate his
or her  employment  with the Company,  (ii)  interfere in any other way with the
employment,  of any employee of the Company  (while  employed by the Company) or
(iii) cause or attempt to cause (or  participate in any way in any discussion or
negotiation  concerning) (x) any client,  customer or supplier of the Company or
(y) any prospective client, customer or supplier of the Company from engaging in
business with the Company.  This Section  4.1.2 does not apply to  conversations
between Debbie Cooper and the Sellers.

         4.1.3 The Sellers agree that Purchaser's remedies at law for any breach
or threat of breach by it of any of the  provisions  of this section 4.1 will be
inadequate,  and that, in addition to any other remedy to which Purchaser may be
entitled at law or in equity,  Purchaser  shall be  entitled  to a temporary  or
permanent injunction or injunctions or temporary restraining orders or orders to
prevent  breaches  of  the  provisions  of  this  Section  4.1  and  to  enforce
specifically the terms and provisions  hereof,  in each case without the need to
post any  security or bond.  Nothing  herein  contained  shall be  construed  as
prohibiting Purchaser from pursuing,  in addition,  any other remedies available
to it for such breach or  threatened  breach.  A waiver by the  Purchaser of any
breach of any provision  hereof shall not operate or be construed as a waiver of
a breach of any other  provisions of this Agreement or of any subsequent  breach
thereof.  Any breach or  purported  breach of Sections  4.1.1 or 4.1.,2,  or any
other provision of this Agreement,  shall not be a basis to withhold any payment
due to Sellers  pursuant to Article I,  including  the  payment of the  Deferred
Consideration, when due.

         4.1.4 The parties hereto  consider the  restrictions  contained in this
Section 4.1 hereof to be reasonable  for the purpose of preserving the goodwill,
proprietary  rights  and  going  concern  value of the  Company,  but if a final
judicial  determination is made by a tribunal having  jurisdiction that the time
or  territory  or any other  restriction  contained  in this  Section  4.1 is an
unenforceable  restriction  on the sellers,  activities,  the provisions of this
Section 4.1 shall not be rendered  void but shall be deemed  amended to apply as
to such  maximum time and  territory  and to such other extent as such court may
judicially  determine  or  indicate  to be  reasonable.  Alternatively,  if  the
tribunal referred to above finds that any restriction  contained in this Section
4.1 or any remedy  provided  herein is  unenforceable,  and such  restriction or
remedy  cannot be amended so as to make it  enforceable,  such finding shall not
affect the enforceability of any of the other restrictions  contained therein or
the  availability of any other remedy.  The provisions of this Section 4.1 shall
in no respect  limit or otherwise  affect the Seller's  obligations  under other
agreements with the Company.

         4.2      Investigation by Purchaser.

         4.2.1 Sellers afforded Purchaser and Purchaser's  accountants,  Ernst &
Young, and their respective  representatives access to all contracts,  books and
records, and all other documents and data of the Company, including formulas and
manufacturing  procedural  instructions;   of  the  Company  and  certain  other
documents  and data that the Sellers  disclosed  prior to the  Closing,  such as
certain  of the  vendors  of the  Company or prices  paid for  certain  products
connected with certain formulas, manufacturing processes, bagging operations and
acrylic stucco division processes and operations,  as well as employee files and
records.  Sellers do not endorse the Ernst & Young findings if and to the extent
in conflict with Sellers' books and records.

                                    ARTICLE V

5        DELIVERABLES

         5.1 Deliveries by Sellers. At the Closing, Sellers and the Company have
delivered  or caused to be  delivered  to the  Purchaser,  all duly and properly
executed (where applicable) the following:

         5.1.1 Representations and Warranties.  A certification that each of the
representations and warranties made by the Sellers in this Agreement,  except as
provided herein to the contrary (including results of Purchaser's due diligence)
shall,  unless  waived,  be true and correct in all material  respects as of the
date of this Agreement.

         5.1.2 Regulatory Consents and Approvals.  All consents,  approvals and,
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Purchaser and the Sellers to perform their obligations under
this Agreement and to consummate the transactions contemplated hereby, if any.

         5.1.3 Third Party Consents.  Any consents (or waivers) identified i-1-i
Section 2.5 of the Disclosure  Schedule,  and all other consents (or waivers) to
the performance by the Purchaser of its obligations under this Agreement,  or to
the consummation for the transactions  contemplated hereby as are required under
any Contract or License to which the Purchaser is a party or by which any of its
Assets are bound and where the  failure to obtain any such  consent  (or in lieu
thereof waiver) could  reasonably be expected,  individually or in the aggregate
with other such failures,  to materially  adversely  affect the Purchaser or the
business  or  condition  of  the  Company  or  otherwise  result  in a  material
diminution of the benefits of the transactions contemplated by this Agreement.

         5.1.4  Sellers'  Certificates.  The  Sellers  shall have  delivered  tc
Purchaser (i) certificates,  dated the Closing Date and executed by an executive
officer  of the  Company,  in the form and to the effect of Exhibit B hereto and
(ii)  certificates,  dated the Closing Date and executed by the chief  financial
officer of the Company, in the form of Exhibit C hereto.

         5.1.5  Resignations of Officers and Directors.  The resignations of all
current officers and directors of the Company, effective as of the Closing Date.

         5.1.6 Disclosure Schedule. The Disclosure Schedule, updated and current
through the Closing Date.

         5.1.7  Receipt  of  Purchased  Stock.   Certificates  representing  the
Purchased Stock have been  transferred to Purchaser in accordance with the terms
of this Agreement.

         5.1.8 Payment of Indebtedness. A release executed by Sellers confirming
payment of the Consideration and the Additional Consideration acknowledging that
all Shareholder  Debt has been cancelled or otherwise paid in full, and is of no
further force and effect. All other  Indebtedness owing by the Company,  and not
reflected by the Seller Financial  Statements or the Interim Statements has been
retired,  released or repaid except the Deferred  Consideration shall be payable
following the Closing as provided in Section 1.5.

         5.2  Deliveries  by  Purchaser.  At  the  Closing,  the  Purchaser  has
delivered  or caused  to be  delivered  to the  Sellers,  all duly and  properly
executed (where applicable) the following:

         5.2.1  Representations  and Warranties.  A certification that each of `
the  representations and warranties made by Purchaser in this Agreement shall be
true and correct in all material respects as of the date of this Agreement.

         5.2.2 Regulatory  Consents and Approvals.  All consents,  approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Purchaser and the Sellers to perform their obligations under
this Agreement and to consummate the transactions contemplated hereby, if any.

         5.2.3  officers'  certificate.  Purchaser  shall have  delivered to the
Sellers a  certificate,  dated the Closing Date and executed by the president or
vice-president  or other officer of Purchaser,  substantially in the form and to
the effect of Exhibit D hereto.

                                   ARTICLE VI

6        INDEMNIFICATION; TAX MATTERS

         6.1 Indemnification.

         6.1.1 Except as provided in Section  6.1.3,  the Sellers will indemnify
the Company,  the Purchaser and its  stockholders  and the officers,  directors,
employees,  agents and Affiliates, in respect of, and hold each of them harmless
from and against, any and all Losses actually suffered, incurred or sustained by
any of them, or resulting  from any  misrepresentation  or breach of warranty or
nonfulfillment of or failure to perform any covenant or written agreement on the
part of the Sellers contained in this Agreement (including,  without limitation,
any certificate delivered in connection herewith or therewith).

         6.1.2  Purchaser will indemnify the Sellers in respect of, and hold him
harmless from and against,  any and all Losses  actually  suffered,  incurred or
sustained by him or to which he becomes subject,  resulting from, arising out of
or relating to any  misrepresentation or breach of warranty or nonfulfillment of
or  failure  to perform  any  covenant  or  agreement  on the part of  Purchaser
contained in this Agreement  (including,  without  limitation,  any  certificate
delivered in connection herewith or therewith).

         6.1.3 The indemnification  obligations of the Sellers set forth in this
Article  VI shall  apply  only after the  aggregate  amount of such  obligations
exceeds the sum of $50,000.00.  If, and only after, the aggregate amount of such
obligations  exceeds the sum of $50,000-00,  then such obligations shall include
the first $50,000.00.

         6.2 Method of Asserting Claims.  All claims for  indemnification by any
Indemnified Party under Section 6.1 will be asserted and resolved as follows:

         6.2.1  In  order  for  an  Indemnified  Party  to be  entitled  to  any
indemnification  provided for under Section 6.1 in respect of, arising out of or
involving a claim or demand made against the Indemnified ?arty (a "Claim"),  the
Indemnified  Party  shall  deliver  a Claim  Notice  to the  Indemnifying  Party
promptly after receipt by such Indemnified  Party of written notice of the Third
Party Claim;  Provided,  that failure to give such claim Notice shall not affect
the  indemnification  provided  hereunder  except to the extent the Indemnifying
Party shall have been actually prejudiced as a result of such failure.

         6.2.2 If a Claim is made against an Indemnified Party, the Indemnifying
Party shall be  entitled to  participate  in the defense  thereof  and, if it so
chooses, to assume the defense thereof with counsel selected by the Indemnifying
Party,  which counsel must be reasonably  satisfactory to the Indemnified Party.
Should the  Indemnifying  Party so elect to assume the  defense of a Third Party
Claim, the Indemnifying  Party shall not be liable to the Indemnified  Party for
legal expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof, but shall continue to pay for any expenses of investigation
or any Loss  suffered.  If the  Indemnifying  Party  assumes such  defense,  the
Indemnified Party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
Indemnifying  Party. If, and during such period that (i) the Indemnifying  Party
shall not assume the  defense of a Third  Party  claim with  counsel  reasonably
satisfactory  to the  Indemnified  Party  within 10  Business  Days of any Claim
Notice or (ii) legal counsel for the Indemnified Party notifies the Indemnifying
Party  that there are or may be legal  defenses  available  to the  Indemnifying
Party or to other Indemnified  Parties which are different from or additional to
those available to the Indemnified  Party,  which., if the Indemnified Party and
the  Indemnifying  Party  were to be  represented  by the  same  counsel,  would
constitute a conflict of interest for such counsel or prejudice  prosecution  of
the defenses  available to such Indemnified  Party, or (iii) if the Indemnifying
Party shall  assume the  defense of a Third  Party Claim and fail to  diligently
prosecute such defense,  then in each such case the Indemnified Party, by notice
to the Indemnifying Party, may employ its own counsel and control the defense of
the  Third  Party  Claim and the  Indemnifying  Party  shall be  liable  for the
reasonable  fees,   charges  and   disbursements  of  counsel  employed  by  the
Indemnified  Party, and the Indemnified  Party shall be promptly  reimbursed for
any such fees,  charges and  disbursements,  as and when  incurred.  Whether the
Indemnifying  Party or the  Indemnified  Party  control the defense of any Third
Party Claim,  the parties hereto shall  cooperate in the defense  thereof.  Such
cooperation  shall  include the  retention  and  provision to the counsel of the
controlling  party of records and information  which are reasonably  relevant to
such Third Party Claim, and making employees  available on a mutually convenient
basis to provide additional information and explanation or any material provided
hereunder. The Indemnifying Party shall have the right to settle,  compromise or
discharge a Third  Party  Claim  (other than any such Third Party Claim in which
criminal  conduct is alleged)  without the  Indemnified  Party's consent if such
settlement, compromise or discharge (i) constitutes a complete and unconditional
discharge and release of the Indemnified  Party, and (ii) provides for no relief
other than the payment of monetary damage and such monetary  damages are paid in
full by the Indemnifying Party.

         6.2.3 In the event any  Indemnified  Party  should  have a claim  under
11;ection 6.1 against any Indemnifying Party that does not involve a third party
Claim,  the Indemnified  Party shall promptly deliver an Indemnity Notice to the
Indemnifying  Party. The failure by any Indemnified  Party to give the Indemnity
Notice shall not impair such party's rights  hereunder except to the extent that
an Indemnifying Party demonstrates that it has been prejudiced  thereby.  If the
Indemnifying  Party notifies the Indemnified  Party that it does not dispute the
claim  described  in such  Indemnity  Notice or fails to notify the  Indemnified
Party within the Dispute  Period  whether the  Indemnifying  Party  disputes the
claim described in such Indemnity  Notice,  the Loss in the amount  specified in
the Indemnity Notice will be conclusively deemed a liability of the Indemnifying
Party under Section 6.1 and the Indemnifying  Party shall pay the amount of such
Loss to the Indemnified  Party on demand.  If the Indemnifying  Party has timely
disputed its liability with respect to such claim,  the  Indemnifying  Party and
the  Indemnified  Party will proceed in good faith to negotiate a resolution  of
such dispute,  and if not resolved through negotiations within thirty (30) days,
such dispute shall be resolved as provided in Article IX hereof.

         6.3 Allocation of Tax Liability.

         6.3.1.  Except to the extent a reserve  for Taxes is  reflected  on the
Sellers' Financial  Statements or the Interim Statements,  `the Sellers shall be
responsible for and pay and shall indemnify and hold harmless  Purchaser and the
Company  with respect to (i) any and all Taxes  imposed on the  Company,  or for
which the  Company is liable  with  respect to any  periods  ending on or before
December 31, 1998;  provided,  that in the case of any adjustment to any item of
loss or  expense  for any such  years,  which  gives rise to  corresponding  and
offsetting  items of loss or expense in subsequent years the benefit of which is
or will be  actually  realized  by the  Company  or its  successors  or  assigns
including  by reason of any  increase  in a net  operating  loss,  the  Seller's
obligations  shall  be  limited  to the  amount  of  interest  (computed  at the
appropriate  statutory  rates) and penalties  actually  paid to the  appropriate
taxing  authorities by the Company as a result of such timing differences in the
case of audit  adjustments,  or at a rate of eight percent (8~) per annum in the
case of  other  adjustments,  (ii)  without  duplication  (subject  to the  same
proviso) , all Taxes arising out of a breach of the representations,  warranties
or covenants  contained  herein (to the extent not  constituting  a Non-Material
Claim),  (iii) any Tax  liability  resulting  from any ongoing state audits that
exceed,  in the  aggregate,,  any reserve  therefore  set forth on the  Sellers,
Financial  Statements  or  the  Interim  Statements,  and  (iv)  any  reasonable
out-of-pocket costs or expenses with respect to Taxes indemnified hereunder.

         6.3.2 From and after January 1, 1999, Purchaser shall cause the Company
to prepare,  or cause to be prepared,  and shall file, or cause to be filed, all
reports and returns of the  Company  required to be filed,  and timely and fully
pay all such  Taxes.  .  Purchaser  shall  cause the  Company  to timely pay the
appropriate  taxing authorities the Taxes shown to be due and payable on all Tax
Returns of the Company filed after the Closing Date,  concurrent with the filing
of such Tax  Returns.  Tax:  Returns of the  company  for a period  ending on or
before the Closing  Date shall be prepared  on a basis  consistent  with the Tax
Returns  filed.  by the Company for  previous  taxable  periods,  subject to the
requirements of applicable law.

         6.4 Tax Contests.

         6.4.1 If any Taxing Authority or other Person asserts a Tax Claim, then
the party hereto first receiving notice of such Tax Claim shall promptly provide
written notice thereof to the other parties hereto. Such notice shall specify in
reasonable  detail the basis for such Tax Claim and shall  include a copy of any
relevant correspondence received, from time to time, as received from the Taxing
Authority or other Person.

         6.4.2 If,  within 30 calendar  days after any the  Sellers  receives or
delivers,  as the case may be, notice of a Tax Claim, the Sellers provide to the
Purchaser an Election  Notice,  then subject to the  provisions  of this Section
7.4, the Sellers shall defend or  prosecute,  at their S01E!  Cost,  expense and
risk, such Tax Claim by all appropriate  proceedings,  which  proceedings  shall
defended  or  prosecuted  diligently  by the  Sellers to a Final  Determination;
provided,  that the Sellers shall not,  without the prior written consent of the
Company,  enter into any  compromise  or settlement of such Tax Claim that would
result in any Tax detriment to the Company. So long as the Sellers are defending
or  prosecuting  a Tax  Claim  with  respect  to the  Company,  or as  otherwise
reasonably  required  by Sellers in  conjunction  with filing or amending of tax
returns,  the  Company  shall  promptly  provide or cause to be  provided to the
Sellers any information reasonably requested by the Sellers relating to such Tax
Claim, and shall otherwise cooperate with the Sellers and their  representatives
in good faith in order to contest  effectively such Tax Claim. The Sellers shall
inform the  Company of all  developments  and events  relating to such Tax claim
(including,  without limitation,  providing to the Company copies of all written
materials  relating  to such  Tax  Claim)  and  the  Company  or its  authorized
representatives shall be entitled, at the expense of the Company, to attend, but
not to  participate in or control,  all  conferences,  meetings and  proceedings
relating to such Tax Claim.

         6.4.3 If, with respect to any Tax Claim, the Sellers fail to deliver an
Election  Notice to the Company within the period  provided in Section 6.4.2 or,
after  delivery  of such  Election  Notice  to the  Company,  the  Sellers  fail
diligently to defend or prosecute such Tax Claim to a Final Determination,  then
upon not less than ten (10) days written  notice of its intention to do so (thus
giving the Sellers 10 days notice and opportunity to cure), the Company shall at
any time  thereafter  have the  right  (but not the  obligation)  to  defend  or
prosecute,  at. the sole cost, expense and risk of the Sellers,  such Tax Claim,
to the extent reasonably necessary.  The Company shall have full control of such
defense  or  prosecution  and such  proceedings,  including  any  settlement  or
compromise  thereof,  provided  they act  reasonably  and in good faith and keep
Sellers  reasonably  informed.  If requested by the Company,  the Sellers  shall
cooperate in good faith with the Company and its authorized  representatives  in
order to contest  effectively  such Tax Claim.  The Sellers may attend,  but not
participate in or control, any defense, prosecution, settlement or compromise of
any Tax Claim  controlled  by the Company  pursuant to this Section  6.4.3,  and
shall bear their own costs and expenses with respect thereto. In the case of any
Tax Claim that is defended or prosecuted by the Company pursuant to this Section
6.4.3,  the Company  shall,  from time to time,  be entitled to receive  current
payments  from the Sellers with  respect to costs and  expenses  incurred by the
Company,  to the extent reasonable in amount, in connection with such defense or
prosecution (including, without limitation, reasonable attorneys',  accountants"
and experts" fees and disbursements, settlement costs, court costs and any other
costs or expenses for  investigating,  defending or prosecuting  such Tax Claim,
and any Taxes imposed on the Company as a result of receiving a payment from the
Sellers pursuant to this Section 6.4) (collectively "Associated Costs").

         6.4 In the case of any Tax Claim that is  defended or  prosecuted  to a
Final  Determination  by the Sellers  pursuant to this  Section 6.4, the Sellers
shall pay to the appropriate Tax  Indemnitees,  in immediately  available funds,
the full amount of any Tax arising or resulting  from such Tax Claim within five
Business Days after such Final Determination.  In the case of any Tax Claim that
is defended or prosecuted to a Final  Determination  by the Company  pursuant to
and in  substantial  compliance  with the terms of this Section 6.4, the Sellers
shall pay to the appropriate Tax Indemnitee, in immediately available funds, the
full amount of any Tax arising or resulting  from such Tax Claim,  together with
any Associated  Costs that have not theretofore  been paid by the Sellers to the
Company,  within five Business Days after such Final  Determination,  subject to
any  right of  appeal.  In the case of any Tax  Claim  not:  covered  by the two
preceding  sentences,  the  Sellers  shall pay to the  Company,  in  immediately
available  funds,  the full amount of any Tax arising or resulting from such Tax
Claim  (calculated after taking into account any actual reduction in the current
liability for Taxes of such Tax  Indemnitee  for Tax arising out of or resulting
from such payment or such Tax Claim) , together with any  Associated  Costs that
have not  theretofore  been paid by the  Sellers to the  Company,  at least five
Business  Days  before  the-date  payment  of  such  Tax is  due  from  any  Tax
Indemnitee.

         6.4.5  Notwithstanding  anything  contained  in this Article VII to the
contrary,  the  rights  of the  Sellers  under  this  Section  6.4 to  defend or
prosecute,.  or to control the defense or prosecution of, any Tax Claim shall be
no greater than those rights that the Company would have to defend or prosecute,
or to control the defense or prosecution of, such Tax Claim.

         6.5  Cooperation  Regarding Tax Matters.  Each party hereto shall,  and
shall cause its  subsidiaries  and  Affiliates  to, provide to the other parties
hereto  and  the  Company  such  cooperation  and  information  as any  of  them
reasonably  may  request  related to the filing of any Tax  Return,  amended Tax
Return or claim for  refund,  determining  a  liability  for Taxes or a right to
refund of Taxes or in  conducting  any audit or other  proceeding  in respect of
Taxes.  Such cooperation and information  shall include  providing copies of all
relevant portions of relevant Tax Returns,  together with relevant  accompanying
schedules,  workpapers  and  relevant  documents  relating  to  rulings or other
determinations  by  Taxing  Authorities  and  relevant  records  concerning  the
ownership  and Tax basis of  property,  which any such party may  possess.  Each
party shall make its  employees  reasonably  available on a mutually  convenient
basis at its cost to provide  explanation  of any  documents or  information  so
provided.  Subject to the preceding  sentence,  each party  required to file Tax
Returns  pursuant  to this  Article  VII shall bear all costs of filing such Tax
Returns.

         6.6 Other Tax Covenants.

         6.6.1  Without the prior written  consent of  Purchaser,  which consent
shall not be  unreasonably  withheld  or  delayed,  neither  the Sellers nor any
Affiliate of any the Sellers shall, to the extent it may affect or relate to the
Company,  make or change any tax  election,  change  any  annual tax  accounting
period,  adopt or change  any method of tax  accounting,  file any  amended  Tax
Return,  enter  into any  method  of tax  accounting,  enter  into  any  closing
agreement,  settle any Tax Claim,  assessment or proposed assessment,  surrender
any  right to claim a Tax  refund,  consent  to any  extension  or waiver of the
limitation  period  applicable to any Tax Claim or assessment or take or omit to
take any other action,  if any such action or omission  would have the effect of
increasing any  post-closing  Tax Liability of the Purchaser,  of the Company or
any Affiliate of Purchaser.

         6.6.2  Without  the prior  written  consent  of a Seller,  neither  the
Purchaser  nor the Company  shall,  to the extent it may affect or relate tc the
Company,  make or change any tax  election,  file any amended Tax Return,  enter
into any  closing  Agreement,  settle  any Tax  claim,  assessment  or  proposed
assessment,  surrender any right to claim a Tax refund, consent to any extension
or waiver of the limitation  period applicable to any Tax claim or assessment or
take or omit to take any other  action,  if any such  action or  omission  would
affect a Pre-Closing Tax Period, unless required by applicable law.

         6.6.3 So long as any books,  records and files  retained by the Sellers
or and his  Affiliates  relating  to the  business  of the Company or the books,
records and files  delivered  to the control of the  Purchaser  pursuant to this
Agreement to the extent they relate to the  operations  of the Company  prior to
the Closing Date, remain in existence and are available,  each party (at its own
expense) shall have the right upon prior notice to inspect and to make copies of
the same at any time during business hours for any proper purpose. The Purchaser
and the Sellers and their respective Affiliates shall use reasonable efforts not
to destroy or allow the destruction of any such books, records and files without
first:  providing 60 days' written  notice of intention to destroy to the other,
and allowing such other party to take possession of such records.  The Purchaser
shall cause the Company to maintain  relevant tax records for all at least three
years following the end of the applicable tax year, or such greater period while
in dispute, or then subject to audit.

         6.7  Conflict.  In the event of a conflict  between the  provisions  of
Sections  6.3 through  6.7 of this  Article VI and any other  provision  of this
Agreement, such provisions of this Article VI shall control.

                                   ARTICLE VII

7        DEFINITIONS

         7.1 Definitions. As used in this Agreement, the following defined terms
shall have the meanings indicated below:

         "Actions  or   Proceedings"   means  any  action,   suit,   proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.

         "Affiliate"  means,  as applied  to any  Person,  (a) any other  Person
directly or indirectly  owning,  owned by,  controlling,  controlled by or under
common control with, that Person,  (b) any director,  partner,  officer,  agent,
employee or  relative  of such  Person.  For the  purposes  of this  definition,
"control"  (including  with  correlative  meanings,   the  terms  "controlling",
"controlled  by",  and "under  common  control  with") as applied to any Person,
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the management and policies of that Person.

         "Agreement"  means  this  Purchase  Agreement,  the  Exhibits  and  the
Disclosure Schedule and the certificates  delivered in connection  herewith,  as
the same may be amended from time to time in accordance with the terms hereof.

         "Assets" of any Person means all assets and  properties  of every kind,
nature,  character  and  description,  including  goodwill and other  tangibles,
operated,  owned or leased by such Person,  including cash and cash equivalents,
investments,   accounts  and  notes   receivable,   chattel  paper,   documents,
instruments, real estate, equipment, inventory, goods and intellectual property.

         "Associated Costs" has the meaning ascribed to it in Section 7.4.3.

         "Benefit  Plan" means any Plan,  existing at the Closing  Date or prior
thereto, established or to which contributions have at any time been made by the
Company or under which any employee,  former employee or director of the Company
or any beneficiary  thereof is covered,  is eligible for =overage or has benefit
rights.

         "Books and Records" means all files,  documents,  instruments,  papers,
books and records relating to the Company,  including financial statements,  Tax
Returns and related work papers and letters from accountants,  budgets,  pricing
guidelines,  ledgers,  journals,  deeds,  title  policies,  minute books,  stock
certificates and books, stock transfer ledgers,  Contracts,  Licenses,  customer
lists, computer files and programs, retrieval programs, operating data and plans
and environmental studies and plans.

         "Claim" has the meaning ascribed to it in Section 6.2-1.

         "Claim Notice" means written notification  pursuant to Section 7.2.1 of
a Third  Party  Claim as to which  indemnity  under  Section 7.1 is sought by an
Indemnified Party.

         "Closing"  and  "Closing  Date" have the  meaning  ascribed  to them in
Section 1.3.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and the
rules and regulations promulgated thereunder.

         "Company"  has the meaning  ascribed to it in the first recital of this
Agreement (and shall include all predecessors and subsidiaries of the Company).

         "Consideration" has the meaning ascribed to it in Section 1.2.1.

         "Contract"  means  any  agreement,  lease,  evidence  of  indebtedness,
mortgage,  indenture,  security  agreement or other contract (whether written or
oral).

         "Deferred Consideration" has the meaning ascribed to it in

         "Disclosure  Schedule" means the schedules delivered to Purchaser by or
on behalf of the Company and the Sellers,  and the schedules  delivered by or on
behalf  of  Purchaser,  containing  lists,  descriptions,  exceptions  and other
information  and  materials as are required to be included  therein  pursuant to
this Agreement.

         "Dispute  Period"  means the period  ending  thirty (30)  calendar days
following  receipt  by an  Indemnifying  Party of  either a Claim  Notice  or an
Indemnity Notice.

         "Election  Notice"  means a written  notice  provided by the Sellers in
respect  of a Tax Claim to the effect  that (i) the  Sellers  acknowledge  their
indemnity  obligation  under this  Agreement  with respect to such Tax Claim and
(ii) the Sellers elect to contest, and to control the defense or prosecution of,
such Tax Claim at their sole risk and sole cost and expense.

         "Environment" means all air, surface water, groundwater, drinking water
supply,  stream sediments,  or land,  including soil, land surface or subsurface
strata, all fish, wildlife,  biota and all other environmental medium or natural
resources.

         "Environmental, Health and Safety Liabilities" means any cost, damages,
expense,  liability,  obligation,  or other responsibility arising from or under
any Environmental Law or Occupational Safety and Health Law and consisting of or
relating  to (i) any  environmental,  health or  safety  matters  or  conditions
(including on-site or off-site  contamination.,  occupational safety and health,
and  regulation  of chemical  substances  or products) ; (ii) fines,  penalties,
judgments,  awards, settlements,  legal or administrative proceedings,  damages,
losses,  claims,  demands and response,  investigative,  remedial, or inspection
costs and expenses arising under  Environmental  Law or Occupational  Safety and
Health  Law;  (iii)  financial   responsibility   under   Environmental  Law  or
Occupational  Safety and Health Law for  clean-up  costs or  corrective  action,
including  any  investigation,   clean-up,   removal,   containment,   or  other
remediation or response actions  required by  Environmental  Law or Occupational
Safety  and  Health Law  (whether  or not such  clean-up  has been  required  or
requested  by any  governmental  body or any other  Person)  and for any natural
resource damages; or (iv) any other compliance,  corrective,  investigative,  or
remedial  measures required under  Environmental Law or Occupational  Safety and
Health Law. The terms "removal,"  "remedial," and "response  action" include the
types of  activities  covered by the United States  Comprehensive  Environmental
Response,  Compensation,  and Liability Act, 42 U.S.C.  Section 9601 et seq., as
amended (CERCLA).

         "Environmental  Law"  means  all  federal,  state,  local  and  foreign
environmental,  health and safety laws, common law orders,  decrees,  judgments,
codes and ordinances and all rules and regulations promulgated thereunder, civil
or  criminal,   including,  without  limitation,  Laws  relating  to  emissions,
discharges, releases or threatened releases of Hazardous Materials,  pollutants,
contaminants,  chemicals, or industrial, toxic or hazardous substances or wastes
into the  Environment  or  otherwise  relating to the  manufacture,  processing,
distribution,  use,  treatment,  storage,  disposal,  transport  or  handling of
Hazardous Materials, pollutants, contaminants,  chemicals, or industrial, solid,
toxic or hazardous substances or wastes.

         "Environmental Permit" means any federal, state, local, provincial,  or
foreign permits, licenses,  approvals, consent or authorizations required by any
Governmental   or  Regulatory   Authority   under  or  in  connection  with  any
Environmental  Law and  includes any and all orders,  consent  orders or binding
agreements  issued or entered into by a  Governmental  or  Regulatory  Authority
under any applicable Environmental Law.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

         "Facilities"  means any real property,  leaseholds,  or other interests
currently  or formerly  owned or  operated  by the  Company  and any  buildings,
plants, structures or equipment (including motor vehicles, tank cars and rolling
stock) currently or formerly owned or operated by the Company.

         "Final Determination" means (i) a decision,  judgment,  decree or other
order by any court of competent jurisdiction,  which decision,  judgment, decree
or other Order has become final after all  allowable  appeals by either party to
the action have been  exhausted or the time for filing such appeals has expired,
(ii) a closing  agreement  entered  into under  Section  7121 of the Code or any
other settlement  agreement entered into in connection with an administrative or
judicial proceeding,  (iii) the expiration of the time for instituting suit with
respect  to a  claimed  deficiency  or  (iv)  the  expiration  of the  time  for
instituting a claim for refund,  or if such a claim was filed, the expiration of
the time for instituting suit with respect thereto.

         "GAAP" means  generally  accepted  accounting  principles of the United
States, consistently applied.

         "Governmental  or  Regulatory  Authority"  means any  court,  tribunal,
arbitrator,  authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.

         "Hazardous  Activity"  means the  distribution,  generation,  handling,
importing,  management,   manufacturing,   processing,  production,  refinement,
Release,  storage,  transfer,  transportation,  treatment, or use (including-any
withdrawal or other use of  groundwater)  of Hazardous  Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment,  and any
other act, business,  operation,  or thing that increases the danger, or risk of
danger,  or poses an unreasonable  risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Company.

         "Hazardous  Material"  means (i) any  petroleum or petroleum  products,
radioactive  materials,  asbestos in any form that is or could  become  friable,
urea  formaldehyde  foam  insulation and  transformers  or other  equipment that
contain dielectric fluid containing levels of polychlorinated  biphenyls (PCBs);
(ii) any chemicals,  materials,  substances or wastes which are now or hereafter
become  defined as or included in the  definition  of  "hazardous  substances,11
"hazardous  wastes,"  "hazardous   materials,"   "extremely  hazardous  wastes,"
"restricted  hazardous wastes,," "toxic substances," "toxic pollutants" or words
of similar import,  under any  Environmental  Law; and (iii) any other chemical,
material,  substance or waste, exposure to which is now or hereafter prohibited,
limited or regulated by any Governmental or Regulatory Authority.

         "Indebtedness"  of any Person means all  obligations of such Person (i)
for borrowed  money,  (ii)  evidenced  by notes,  bonds,  debentures  or similar
instruments,  (iii) for the deferred  purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business,  as
reflected  by the Books and  Records),  (iv) under  capital  (as opposed to real
estate)  leases,  (v) long term debt and (vi) in the nature of guarantees of the
obligations described in clauses (i) through (v) above of any other Person.

         "Indemnified Party" means any Person claiming indemnification under any
provision of Article VII.

         "Indemnifying  Party"  means  any  Person  against  whom  a  claim  for
indemnification is being asserted under any provision of Article VII.

         "Indemnity Notice" means written notification pursuant to Section 7.2.3
of a claim for indemnity under Article VII by an Indemnified  Party,  specifying
the nature of and basis for such claim, together with the amount or, if not then
reasonably  ascertainable,  the estimated  amount,  determined in good faith, of
such claim.

         "Interim Statements" has the meaning ascribed to it in Section 2.4.

         "Laws" means all laws, statutes,  rules,  regulations,  ordinances arid
other pronouncements  having the effect of law of the United States, any foreign
country  or any  domestic  or foreign  state,  county,  city or other  political
subdivision or of any Governmental or Regulatory Authority.

         "Leased Real Property" has the meaning ascribed to it in Section 2.15.

         "Liabilities" means all Indebtedness, obligations and other liabilities
(or  contingencies  that have not yet become  liabilities)  of a Person (whether
absolute,  accrued,  contingent  (or  based  upon  any  contingency)  , known or
unknown, fixed or otherwise, or whether due or to become due).

         "Licenses"  means all  licenses,  permits,  certificates  of authority,
authorizations,   approvals,  registrations,  franchises  and  similar  consents
granted or issued by any Governmental or Regulatory Authority.

         "Liens"  means any mortgage,  pledge,  assessment,  security  interest,
lease,  lien,  adverse claim,  levy, charge or other encumbrance of any kind, or
any conditional  sale Contract,  title  retention  Contract or other Contract to
give any of the foregoing.

         "Loss" means any and all damages, fines, fees, penalties, deficiencies,
diminution  in value of  investment,  losses  and  expenses,  including  without
limitation,  interest,  reasonable  expenses  of  investigation,   court  costs,
reasonable  fees and expenses of  attorneys,  accountants  and other  experts or
other expenses of litigation or other  proceedings  or of any claim,  default or
assessment  (such fees and  expenses to include all fees and  expenses,  such as
fees  and  expenses  of  attorneys,   incurred  in   connection   with  (i)  the
investigation  or  defense  of any  Third  Party  Claims  or (ii)  asserting  or
disputing  any  rights  under  this  Agreement   against  any  party  hereto  or
otherwise).

         "Net Book Value" has the meaning ascribed to it in Section

         "Occupational  Safety and Health Law" means any Law designed to provide
safe and healthful  working  conditions  and to reduce  occupational  safety and
health hazards,  and any program,  whether  governmental  or private  (including
those promulgated or sponsored by industry associations and insurance companies)
, designed to provide safe and healthful working conditions.

         "Option"  with  respect  to  any  Person  means  any  security,  right,
subscription,  warrant,  option,  "phantom"  stock right or other  Contract that
gives the right to (i) purchase or otherwise  receive or be issued any shares of
capital  stock or other  equity  interests of such Person or any security of any
kind  convertible  into or exchangeable or exercisable for any shares of capital
stock or other equity interests of such Person,  or (ii) receive any benefits or
rights  similar  to those  enjoyed  by or  accruing  to the  holder of shares of
capital  stock or other  equity  interests  of such  Person,  including  without
limitation,  any rights to  participate  in the  equity,  income or  election of
directors or officers of such Person.

         "Order" means any writ, judgment,  decree,  injunction or similar order
of  any  Governmental  or  Regulatory  Authority  (in  each  such  case  whether
preliminary or final).

         "Owned Real Property" has the meaning ascribed to it in Section 2.15.

         "Person" means any natural person,  corporation,  general  partnership,
limited partnership,  limited liability company or partnership,  proprietorship,
other  business  organization,  trust,  union,  association or  Governmental  or
Regulatory Authority.

         "Plan"  means  any  bonus,   compensation,   pension,  profit  sharing,
retirement,  stock purchase or cafeteria,  life, health,  accident,  disability,
workmen's  compensation  or  other  insurance,  severance,  separation  or other
employee  benefit plan,  practice,  policy or arrangement  of any kind,  whether
written or oral, or whether for the benefit of a single  individual or more than
one individual including, but not limited to, any "employee benefit plan" within
the meaning of Section 3(3) of ERISA.

         "Post-Closing  Period"  means any  taxable  period or  portion  thereof
beginning  after the Closing Date.  If a taxable  period begins on or before the
Closing  Date and ends after the Closing  Date,  then the portion of the taxable
period that begins on the day  following  the Closing  Date shall  constitute  a
Post-Closing Period. `

         "Pre-Closing  Period" means any taxable period or portion  thereof that
is not a Post-Closing Period.

         "Consideration and Additional  Consideration" have the meaning ascribed
to it in Section 1.2.

         "Purchased  Stock" has the meaning  ascribed to it on the first page of
this Agreement.

         "Purchaser"  has the meaning  ascribed to it in the first  paragraph of
-this Agreement.

         "Real Property" has the meaning ascribed to it in Section 2.15.

         "Real Property Leases" has the meaning ascribed to it in Section 2.15.

         "Release"  means any spilling,  leaking,  pumping,  pouring,  emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Material into the Environment.

         "Securities Act" means the Securities Act of 1933, as amended,  and the
rules and regulations thereunder.

         "Seller"  and the  "Sellers"  have the meaning  ascribed to them on the
first page of this Agreement.

         "Seller Financial Statement" in Section 2.4.

         "Sellers' Calculation" has the meaning ascribed to it in Section 1.2.2.

         "Shareholder Debt" has the meaning ascribed to it in Section 1.2.1.

         "Subsidiary"  means any Person in which  another  Person,  directly  or
indirectly through  Subsidiaries or otherwise,  beneficially owns at least fifty
percent (50%) of either the equity  interest in, or the voting  control of, such
Person, whether or not existing on the date hereof. Unless the context otherwise
requires  a  different  interpretation,  references  to a  "Subsidiary"  mean  a
Subsidiary of the Company.

         "Tax" or "Taxes"  means all  federal,  state,  local or foreign  net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise,  withholding,  payroll, employment,  excise, property, alternative or
add-on minimum, environmental or other taxes, assessments,  duties, fees, levies
or other governmental  charges of any nature whatever,  whether disputed or not,
together with any interest,  penalties,  additions to tax or additional  amounts
with respect thereto.

         "Tax Claim" means any written claim with respect to Taxes  attributable
to a  Pre-Closing  Period made by any Taxing  Authority or any Person  that,  if
pursued successfully,  could serve as the basis for a claim for indemnification,
under this  Agreement,  of Purchaser the Company and other  Indemnified  Parties
specified in Section 7.1 of this Agreement.

         "Tax Indemnity"  means the Company,  the Purchaser and their respective
stockholders,  officers, directors,  employees, agents and Affiliates of each of
them (other than the Sellers).

         "Tax Returns" means any returns,  reports or statements  (including any
information returns) required to be filed for purposes of a particular Tax.

         "Taxing Authority" means any governmental agency,  board, bureau, body,
department  or  authority  of  any  United  States   federal,   state  or  local
jurisdiction  or any  foreign  jurisdiction,  having or  purporting  to exercise
jurisdiction with respect to any Tax.

         7.2 Interpretation of Agreement.

         7.2.1  Unless the context of this  Agreement  otherwise  requires,  (i)
words of any gender include each other gender;  (ii) words using the singular or
plural number also include the plural or singular  number,  respectively;  (iii)
the terms "hereof,"  "herein," "hereby" and derivative or similar words refer to
this  entire  Agreement;  (iv) the terms  "Article"  or  "Section"  refer to the
specified  Article or Section of this Agreement;  (v) the word  "including" does
not imply any limitation to the item or matter  mentioned;  and (vi) the phrases
"ordinary course of business" and "ordinary  course of business  consistent with
past practice" refer to the business and practice of the Company. All accounting
terms used herein and not expressly defined herein shall have the meanings given
to them under GAAP.

         7.2.2 When used herein,  the phrase "to the  knowledge  of" any Person,
11to the best  knowledge  of" any Person or any similar  phrase,  means (i) with
respect to any Person who is an individual, the actual knowledge of such Person,
(ii) with respect to any other Person,  the actual  knowledge of the  directors,
officers,  managers,  and other similar Persons in a similar  position or having
similar  powers and  duties,  in either  case  without  any duty of  independent
investigation of any kind.

                                   ARTICLE IX

8        MISCELLANEOUS

         8.1 Notices. All notices,  requests and other communications  hereunder
must be in writing and will be deemed to have been duly given only if  delivered
personally  or mailed by prepaid  first class  certified  mail,  return  receipt
requested,  or  sent  by  prepaid  courier,  to the  parties  at  the  following
addresses:

                  If to Purchaser, to:
                  --------------------
                  ISG Resources, Inc.
                  136 East South Temple, Suite 1300
                  Salt Lake City, UT 84111
                  Attn.: Sr. Vice President and General Counsel

                  If to the Sellers, to:
                  ----------------------
                  Mr. James M. Isaac          and      Mr. Tommy C. Isaac
                  134 Mockingbird                      P.O. Box 768
                  Livingston, Texas 77351              Flatonia, Texas 78941

                  With copies to Sellers' attorney:
                  --------------------------------
                  Stephen L. Brochstein, Esquire
                  BROCHSTEIN, SLOBIN & CHAPMAN, P.C.
                  One Riverway, Ste. 1950
                  Houston, Texas; 77056

                  and to Sellers' accountant:
                  ---------------------------
                  Mr. Andrew M. Rossi
                  A.M. ROSSI, PLLC
                  1458 Campbell Rd., Ste. 150
                  Houston, Texas 77055

All such  notices,  requests  and  other  communications  will (i) if  delivered
personally  to the address as provided in this  Section,  be deemed  given -upon
delivery, (ii) if delivered by mail in the manner described above to the address
as provided in this Section,  be deemed given upon receipt and (iv) if delivered
by courier to the address as provided  for in this  Section,  be deemed given on
the earlier of the second  Business Day  following the date sent by such courier
or upon  receipt.  Any party from time to time may  change its  address or other
information for the purpose of notices to that party by giving notice specifying
such change to the other party hereto.

         8. 2 Entire  Agreement.  This Agreement  (including the Exhibits hereto
and the Disclosure  Schedule)  supersedes all prior  discussions  and agreements
between the parties  with respect to the subject  matter  hereof and thereof and
contains the sole and entire  agreement  between the parties hereto with respect
to the subject matter hereof and thereof.

         8.3 Expenses.  Except as otherwise expressly provided in this Agreement
(including  without limitation as provided in Article VII) , each party will pay
its own costs and expenses  incurred in connection with this Agreement,  and the
transactions contemplated hereby and thereby; provided, the Sellers will pay all
expenses  relating hereto of the Company incurred in respect of the period prior
to the Closing; other than Ernst & Young.

         8.4  Confidentiality.  Purchaser  and the  Sellers  will hold in strict
confidence  from any Person (other than its Affiliates or  representatives)  all
documents  and  information  concerning  the  other  party  hereto or any of its
Affiliates furnished to it by or on behalf of the other party in connection with
this Agreement or the transactions contemplated hereby, except to the extent the
disclosing  party can  demonstrate  that such documents or  information  was (a)
previously  known by the party receiving such documents or  information,  (b) in
the public domain  (either prior to or after the furnishing of such documents or
information  hereunder)  through no fault of such  receiving  party or (c) later
acquired by the receiving  party from another  source if the receiving  party is
not aware that such source is under an  obligation  to another  party  hereto to
keep  such   documents   and   information   confidential.   Such   covenant  of
confidentiality will remain in effect unless a party is compelled to disclose by
judicial or administrative  process  (including in connection with obtaining the
necessary  approvals of this Agreement and the transactions  contemplated hereby
of Governmental or Regulatory Authorities) or by other requirements of Law. This
section is meant to supplement the section  entitled  "Confidentiality"  in that
certain  Letter  Agreement  between the Purchaser and the Sellers dated November
13, 1998 (the "Letter  Agreement").  Any conflict between the provisions of this
section  and the  "Confidentiality"  section  of the Letter  Agreement  shall be
resolved in accordance with the provisions of the Letter Agreement.

         8.5 Further Assurances;  Post-Closing Cooperation.  At any time or from
time to time after the Closing,  the  Purchaser or the Sellers shall execute and
deliver to the other party such other  documents and  instruments,  provide such
materials  and  information  and take such other  actions as the other party may
reasonably request to consummate the transactions contemplated by this Agreement
and otherwise to cause the Purchaser or the Sellers to fulfill their obligations
under this  Agreement.  The Sellers shall also, for a reasonable  period of time
(not to exceed  ninety (90) days),  cooperate  with  Purchaser by  continuing to
provide any welfare benefit plan, payroll services plan, operational service, or
other service of any nature being  provided to the Company by the Sellers or any
business entity owned, managed or controlled, in any manner, by the Sellers. All
of such  services  shall be provided  at the cost of  Sellers,  plus ten percent
(10%) , and be payable by Purchaser and the Company upon demand.

         8.6 Waiver.  Any term or condition of this  Agreement  may be waived at
any time by the party  that is  entitled  to the  benefit  thereof,  but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party  waiving such term or  condition.  No waiver by any
party of any term or condition of this Agreement,  in any one or more instances,
shall be deemed to be or  construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.  All remedies,  either under
this  Agreement  or by Law or otherwise  afforded,  will be  cumulative  and not
alternative.

         8.7 Amendment. This Agreement may be amended,  supplemented or modified
only by a written  instrument  duly  executed  by or on  behalf  of the  parties
hereto.

         8.8 No Third  Party  Beneficiary.  The  terms  and  provisions  of this
Agreement  are  intended  solely for the benefit of each party  hereto and their
respective  successors or permitted assigns,  and it is not the intention of t `
he parties to confer third-party  beneficiary  rights, and this Agreement:  does
not confer any such rights, upon any other Person other than any Person entitled
to indemnity under Article VII.

         8.9 No  Assignment;  Binding  Effect.  Neither this  Agreement  nor any
right,  interest or obligation hereunder may be assigned (by operation of law or
otherwise)  by either  party  without  the prior  written  consent  of the other
party(ies)  and any  attempt  to do so will be void.  Subject  to the  preceding
sentence,  this  Agreement  is  binding  upon,  inures to the  benefit of and is
enforceable by the parties hereto and their respective successors and. assigns.

         8. 10 Headings.  The headings used in this Agreement have been inserted
for  convenience  of  reference  only and do not define or limit the  provisions
hereof.

         8.11 Invalid Provisions.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if the
rights or  obligations  of any party hereto under this  Agreement  will.  not be
materially  and adversely  affected  thereby,  (a) such  provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or  unenforceable  provision had never comprised a part hereof,  (c) the
remaining  provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal,  invalid or  unenforceable  provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision,  there  will be added  automatically  as a part of this  Agreement  a
legal,  valid and  enforceable  provision  as similar in terms to such  illegal,
invalid or unenforceable provision as may be possible.

         8. 12 Governing Law. This Agreement  shall be governed by and construed
in  accordance  with the  domestic  laws of the State of Texas,  without  giving
effect to any  choice of law or  conflict  of law  provision  or rule that would
cause the  application of the laws of any  jurisdiction  other than the State of
Texas.

         8.13  Limited  Recourse of  Purchaser.  Regardless  of anything in this
Agreement  to  the  contrary,  (i)  obligations  and  liabilities  of  Purchaser
hereunder  shall be without  recourse to any  stockholder of Purchaser or any of
such stockholder's Affiliates,  directors, employees, officers or agents, except
and to the extent such third party is a successor  or assign of  Purchaser,  and
shall be  limited  to the  assets  of such  party and (ii) the  stockholders  of
Purchaser, except and to the extent such third party is a successor or assign of
Purchaser,   have  made  no  (and   shall  not  be  deemed  to  have  made  any)
representations,  warranties  or  covenants  (express  or  implied)  under or in
connection  with this  Agreement or any other  Operative  Agreement,  subject to
further written agreement by such obligor.

         8. 14  Counterparts.  This  Agreement  may be executed in any number of
counterparts,  each of  which  will be  deemed  an  original,  but all of  which
together will constitute one and the same instrument.

         8.15 Limited Recourse of Sellers.

         8.15.1 No  Reliance.  Purchaser  acknowledges  and agrees that upon the
Closing   Purchaser  shall  have  had  ample  opportunity  to  review  documents
concerning  the  Company  and its  Assets  and  Liabilities  (collectively,  the
"Property") and to conduct physical inspections, including specifically, without
limitation,  inspections  regarding  the  environmental  condition  of the  Real
Property and the Assets,  the Purchaser hereby  represents,  warrants and agrees
that as of the Closing,  Purchaser shall have (a) examined the Property and will
be  familiar  with  the  physical  condition  thereof;  and (b)  conducted  such
investigations of the Property  (including  without limitation the environmental
condition thereof) as Purchaser has deemed necessary to satisfy itself as to the
condition of the Property and the existence or nonexistence,  or curative action
to be taken with respect to, any hazardous or toxic  substances on or discharged
from the Property,  (c) neither Sellers,  nor any of their  affiliates,  agents,
officers, employees or representatives of any of the foregoing have made or will
make any verbal or written representations,  warranties,  promises or guarantees
whatsoever  to Purchaser,  expressed or implied,  other than as provided in this
Agreement or in any other closing  documents  executed by the Seller to be bound
thereby,  and  in  particular,   that  no  such   representations,   warranties,
*guarantees  or promises  have been or will be made with respect to the physical
condition,  operation,  or any other matter or thing affecting or related to the
Property,  and (d)  Purchaser  has  not  relied  and  will  not  rely  upon  any
representations,  warranties, guarantees or promises or upon any statements made
or any information  provided  concerning the Property provided or made by Seller
or its  predecessors,  or any of their  respective  agents and  representatives,
other than as provided in this Agreement or :-n the Closing  Documents  executed
by the Seller to be bound thereby and subject thereto.  Purchaser has elected to
purchase  the  Company  only  after  having  made and  relied  solely on its own
independent investigation,  inspection,  analysis,  appraisal and evaluation and
the facts and  circumstances  related thereto.  ACCORDINGLY,  AND SUBJECT TO THE
PROCEEDING  PROVISIONS OF THIS SECTION 8.15,  PURCHASER  ACKNOWLEDGES AND AGREES
THAT THE PROPERTY IS ACCEPTED  "AS IS,  WHERE IS, WITH ALL  FAULTS",  AND SELLER
OTHERWISE  EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY
KIND OR CHARACTER,  EXPRESS OR IMPLIED,  WITH RESPECT TO THE  PROPERTY.  WITHOUT
LIMITING THE  GENERALITY OF THE PRECEDING  SENTENCE OR ANY OTHER  DISCLAIMER SET
FORTH HEREIN, BUT SUBJECT TO ANY EXPRESS  REPRESENTATIONS MADE IN THIS AGREEMENT
OR IN ANY CLOSING DOCUMENTS EXECUTED BY THE SELLER TO BE BOUND THEREBY,  SELLERS
AND  PURCHASER  HEREBY  AGREE THAT  SELLERS HAVE NOT MADE AND ARE NOT MAKING ANY
REPRESENTATIONS  OR WARRANTIES,  EXPRESS OR IMPLIED,  WRITTEN OR ORAL, AS TO (A)
THE NATURE OR CONDITION,  PHYSICAL OR  OTHERWISE,  OF THE PROPERTY OR ANY ASPECT
THEREOF,   INCLUDING,   WITHOUT  LIMITATION,  ANY  WARRANTIES  OF  HABITABILITY,
SUITABILITY,  MERCHANTABILITY,  OR FITNESS FOR A PARTICULAR USE OR PURPOSE,  (B)
THE NATURE OR QUALITY OF CONSTRUCTION,  STRUCTURAL  DESIGN OR ENGINEERING OF THE
IMPROVEMENTS  OR  THE  STATE  OF  REPAIR  OR  LACK  OF  REPAIR  OF  ANY  OF  THE
IMPROVEMENTS,  (C)  THE  SOIL  CONDITIONS,  DRAINAGE  CONDITIONS,  TOPOGRAPHICAL
FEATURES,  ACCESS TO PUBLIC  RIGHTS-OF-WAY,  AVAILABILITY  OF UTILITIES OR OTHER
CONDITIONS OR  CIRCUMSTANCES  WHICH AFFECT OR MAY AFFECT THE PROPERTY OR ANY USE
TO WHICH  PURCHASER MAY PUT THE  PROPERTY,  (E) ANY  ENVIRONMENTAL,  GEOLOGICAL,
METEOROLOGICAL,  STRUCTURAL, OR OTHER CONDITION OR HAZARD OR THE ABSENCE THEREOF
HERETOFORE, NOW OR HEREAFTER AFFECTING IN ANY MANNER THE PROPERTY, INCLUDING BUT
NOT  LIMITED  TO,  THE  ABSENCE OF  ASBESTOS  OR ANY  ENVIRONMENTALLY  HAZARDOUS
SUBSTANCE ON, IN, UNDER OR ADJACENT TO THE PROPERTY,  (I) THE  COMPLIANCE OF THE
PROPERTY OR THE OPERATION OR USE OF THE PROPERTY WITH ANY APPLICABLE RESTRICTIVE
COVENANTS,  OR WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL BODY
(INCLUDING SPECIFICALLY, WITHOUT LIMITATION, ANY ZONING LAWS OR REGULATIONS, ANY
BUILDING CODES, ANY ENVIRONMENTAL  LAWS, AND THE AMERICANS WITH DISABILITIES ACT
OF 1990,  42 U.S.C.  12101 ET SEQ.  PURCHASER  RECOGNIZES  AND AGREES TF~AT UPON
CLOSING PURCHASER SHALL OTHERWISE BEAR THE RISK THAT ADVERSE MATTERS,  INCLUDING
BUT NOT LIMITED TO, VIOLATIONS OF ANY APPLICABLE LAWS, CONSTRUCTION DEFECTS, AND
ADVERSE  PHYSICAL AND  ENVIRONMENTAL  CONDITIONS,  MAY NOT HAVE BEEN REVEALED BY
PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE
WAIVED,  RELINQUISHED  AND RELEASED SELLERS FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES,  COSTS AND EXPENSES (INCLUDING  ATTORNEYS' FEES AND COURT COSTS) OF
ANY AND EVERY KIND OR CHARACTER,  KNOWN OR UNKNOWN,  WHICH  PURCHASER MIGHT HAVE
ASSERTED  OR  ALLEGED  AGAINST  SELLERS  BY  REASON  OF OR  ARISING  OUT  OF ANY
VIOLATIONS  OF  ANY  APPLICABLE   LAWS  (INCLUDING  ANY   ENVIRONMENTAL   LAWS),
CONSTRUCTION  DEFECTS,  PHYSICAL  CONDITIONS,   AND  ANY  AND  ALL  OTHER  ACTS,
OMISSIONS,  EVENTS,  CIRCUMSTANCES  OR MATTERS  REGARDING  THE PROPERTY WITH THE
EXCEPTION  OF THOSE  MATTERS  SET  FORTH IN THIS  AGREEMENT  AND IN ANY  CLOSING
DOCUMENT, SIGNED BY A SELLER.

                                   ARTICLE IX

9        DISPUTE RESOLUTION

         9.1  In  the  event  there  is a  dispute  under  this  Agreement,  the
disagreeing  parties  shall  meet with one  another  and  diligently  attempt to
resolve their  disagreements.  If they are unable to do so, then upon request of
either  party to the  dispute  made  within  twenty  (20) days of the failure of
negotiations,  they will arbitrate the dispute,  utilizing the process Set forth
below

         9.2 Any  dispute,  controversy  or claim  arising out of or relating to
this Agreement,  including those  pertaining to indemnities and taxes,  shall be
submitted for  determination  by a board of three (3) arbitrators to be selected
for each such controversy so arising as follows:  The party desiring arbitration
(the  "Petitioner")  shall  notify the other  party (the  "Respondent")  to such
effect and shall submit the name of an  arbitrator  and state the  "Question" or
"Questions".  The  Respondent  shall within ten (10)  business  days  thereafter
select an arbitrator and notify the  Petitioner of the name of such  arbitrator.
If Respondent  shall fail to name an arbitrator  within said ten (10) days, then
the  Petitioner  shall have the right to apply to the person who is then  Senior
Judge  (in  term  of  service)  of  the  United  States  District  Court  having
jurisdiction  for the  Southern  District of Texas,  Houston  Division,  for the
appointment  of an arbitrator  for or on behalf of the  Respondent,  and in such
case the  arbitrator  appointed  by the person who is such Judge shall act as if
named by the  Respondent.  Within  ten (10) days  after the  appointment  of the
second arbitrator, the two arbitrators shall choose the third arbitrator. In the
event said two  arbitrators  should fail to choose the third  arbitrator  within
said ten (10) days, then either  Petitioner or Respondent  shall have the right,
upon  reasonable  notice to the other party,  to apply to the person who is such
Judge for the appointment of a third arbitrator, and in such case the arbitrator
so  appointed  by such  Judge  shall act as the  third  arbitrator.  Should  any
arbitrator be or become unable or unwilling to act, another shall be selected in
the same manner.

         9.3 The  Question to be decided by the  arbitrators  shall be stated in
writing in the written  request for  arbitration,  and the  jurisdiction  of the
arbitrators shall be limited to a decision of the Question so stated in writing.
The board of arbitrators so chosen shall proceed  immediately,  after reasonable
notice to the Parties hereto, to hear and determine the Question or Questions in
dispute. The arbitrators shall be impartial. The' arbitration shall be conducted
in Houston,  Texas in  accordance  with the most recent  commercial  arbitration
rules  promulgated  by the American  Arbitration  Association,  except as may be
provided for herein to the contrary.  The arbitrators are relieved from judicial
formalities, and shall make their award with a view toward effecting the general
intent  of this  Agreement.  The  decision  of the  majority  shall be final and
binding  upon  the  Parties.  The  Petitioner  shall  submit  its  brief  to the
arbitrators  within  fifteen (15) days after notice of the election of the third
arbitrator.  Upon receipt of the  Petitioner's  brief, the Respondent shall have
fifteen (15) days to file a reply brief. On receipt of the  Respondent's  brief,
the  Petitioner  shall  have  seven  (7)  days to  file a  rebuttal  brief.  The
Respondent  shall have  seven (7) days.  from the  receipt  of the  Petitioner's
rebuttal to file its rebuttal  brief.  The  arbitrators  may extend the time for
filing of briefs at the request of either Party.  The arbitration  hearing shall
be concluded within three (3) days unless  otherwise  ordered by the arbitrators
and the award thereon shall be made within three (3) days after the close of the
submission  of  evidence.  An award  rendered by a majority  of the  arbitrators
appointed  pursuant to this Agreement  shall be final and binding on all Parties
to the proceeding,  and judgment on such award may be entered by either party in
the highest court, state or federal, having jurisdiction.

         9.4 The decision of the  arbitrators  shall be in writing and signed by
such arbitrators, or a majority of them, and shall be final and binding upon the
Parties hereto as to the Question or Questions so submitted to and determined by
such arbitrators.  Each Party shall bear the fees and expenses of the arbitrator
selected by or for such  Party,  the fees and  expenses of counsel,  witness and
employees  of the  Parties  hereof  and all other  costs and  expenses  incurred
exclusively  for the benefit of the Party  incurring  the same shall be borne by
the Party  incurring  such fees or  expenses.  The Party to be  responsible  for
paying  all  other  fees  and  expenses,   including  but  without   limitation,
compensation  for the third  arbitrator,  shall be determined by the decision of
the  arbitrators  as a  part  of the  award.  The  Parties  stipulate  that  the
provisions hereof shall be a complete defense to any suit, action, or proceeding
instituted in any federal,  state,  or local court or before any  administrative
tribunal with respect to any controversy or dispute arising during the period of
this  Letter  Agreement  and  which is  arbitrable  as  herein  set  forth.  The
arbitration  provisions  hereof  shall,  with  respect  to such  controversy  or
dispute, survive the termination or expiration of this Letter Agreement. Nothing
herein  contained shall be deemed to give the arbitrators any authority,  power,
or right to alter,  change,  amend,  modify, add to, or subtract from any of the
provisions of this Letter Agreement.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date set forth on the first page hereof.

                                    PURCHASER
                                    ISG RESOURCES, INC.

                                    /s/ J. I. Everest II
                                    -----------------------
                                    By: J. I. Everest II
                                    Its: Treasurer & CFO

                                    SELLERS

                                    JAMES M. ISAAC

                                    /s/James M. Isaac
                                    --------------------
                                    James M. Isaac

                                    TOMMY C. ISAAC

                                    /s/ Tommy C. Isaac
                                    --------------------
                                    Tommy C. Isaac

<PAGE>

                                    EXHIBIT A

          Sellers' Financial Statements For Period Ending July 31, 1998
                           and the Interim Statements

<PAGE>

                                    EXHIBIT B

                         Sellers' Officer's Certificate

         We, the  undersigned,  being the  President  and Vice  President  of J.
Marvin  Isaac  Interests,  Inc.,  d/b/a  Best  Masonry  & Tool  Supply,  a Texas
corporation (the "Company"), do hereby certify that:

         1. This Certificate is being delivered at the Closing today pursuant to
Section 5.1.8 of the Stock Purchase  Agreement  dated as of January 7, 1999 (the
"Agreement")  between  James M.  Isaac  and  Tommy C.  Isaac  (collectively  the
"Sellers") and ISG Resources, Inc., a Utah corporation (the "Purchaser"). Unless
otherwise  defined herein,  capitalized  terms used in this Certificate have the
meanings given to them in the Agreement.

         2. Attached hereto as Exhibit B-1 is a correct and complete copy of the
Articles of Incorporation of the Company, as in effect on the date hereof.

         3. Attached hereto as Exhibit B-2 is a correct and complete copy of the
By-Laws of the Company, as
in effect on the date hereof.

         4. Attached hereto as Exhibit B-3 is a correct and complete copy of the
Certificate of Good
Standing of the Company, as in effect on the date hereof.

         5.  Attached  hereto as Exhibit B-4 is a schedule of persons  that have
been duly  elected (or  appointed)  or  qualified,  and/or  that have acted,  as
officers of the Company (to and  including  the date  hereof),  each holding the
respective  offices set forth opposite their names; and the signatures set forth
on Exhibit B-4 opposite their names are the genuine  signatures of such officers
executing the  Agreement and any other  agreements or documents on behalf of the
Company in connection with the Closing under the Agreement.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Certificate
as of January 7, 1999.

                                 J. MARVIN ISAAC INTERESTS, INC.,
                                 d/b/a BEST MASONRY & TOOL SUPPLY

                                 __________________
                                 By:_______________
                                 Its: President

                                 J. MARVIN ISAAC INTERESTS, INC.,
                                 d/b/a BEST MASONRY & TOOL SUPPLY

                                 __________________
                                 By:_______________
                                 Its: Vice President

<PAGE>

                                    EXHIBIT C

                              Officer's Certificate

         We, the  undersigned,  the  President  and Vice  President of J. Marvin
Isaac Interests,  Inc.,  d/b/a Best Masonry & Tool Supply,  a Texas  corporation
(the "Company"), do hereby certify that:

         1. This  Certificate is being  delivered as of the Closing  pursuant to
Section 5.1.8 of the Stock Purchase  Agreement  dated as of January 6, 1999 (the
"Agreement")  between  James M.  Isaac  and  Tommy C.  Isaac  (collectively  the
"Sellers") and ISG Resources, Inc., a Utah corporation (the "Purchaser"). Unless
otherwise  defined herein,  capitalized  terms used in this Certificate have the
meanings given to them in the Agreement.

         2. We are familiar with the Company's finances and capitalization.

         3. The Sellers have  provided the  Purchaser  with  Seller's  Financial
Statements for the period Ending July 31, 1998 and Financial  Statements for the
period  August 1, 1998  through  December 31, 1998 (the  "Interim  Statements"),
collectively, the "Statements".

         4. The Statements  fairly represent the Company's  financial  condition
and  operations  as of and through  the  respective  dates and  periods  therein
delineated, and the results of the Company's operations and changes in financial
position  for the  periods  then ended,  and have been  prepared as set forth in
Section 2.4 of the Agreement.

         5. As of the  Closing,  no  material  adverse  change in the  financial
condition  or  operations  of the  Company has  occurred  from that shown on the
Statements, except as may be contemplated in the Agreement.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Certificate
to be effective as of January 7, 1999.

                                   J. MARVIN ISAAC INTERESTS, INC.,
                                   d/b/a BEST MASONRY & TOOL SUPPLY

                                   ______________________
                                   By:___________________
                                   Its:     President

                                   J. MARVIN ISAAC INTERESTS, INC.,
                                   d/b/a BEST MASONRY & TOOL SUPPLY

                                   _______________________
                                   By:____________________
                                   Its:     Vice President

<PAGE>

                                    EXHIBIT D

                        Purchaser's Officer's Certificate

         The  undersigned,  the Vice  President,  Treasurer and Chief  Financial
Officer of ISG Resources,  Inc., a Utah  corporation (the  "Purchaser"),  hereby
certifies that:

         1. This Certificate is being delivered at the Closing today pursuant to
Section  5.2 of the Stock  Purchase  Agreement  dated as of January 7, 1999 (the
"Agreement")  between  James M.  Isaac  and  Tommy C.  Isaac  (collectively  the
"Sellers") and the Purchaser. Unless otherwise defined herein, capitalized terms
used in this Certificate have the meanings given to them in the Agreement.

         2. Attached hereto is a correct and complete copy of the  authorization
of the Board of Directors of the Purchaser  authorizing the  consummation of the
transactions described in the Agreement.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Certificate
as of January 7, 1999.

                                                     ISG RESOURCES, INC.

                                                     _______________________
                                                     By: J.I. Everest, II

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