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Sample Business Contracts

Asset Purchase Agreement - Abatix Environmental Corp., Keliher Hardward Co. and George W. Keliher

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                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE  AGREEMENT  (this  "Agreement") is made and entered
into to be effective as of the 31st day of December,  1998,  by and among ABATIX
ENVIRONMENTAL  CORP.,  a  Delaware  corporation   (hereinafter  referred  to  as
"Buyer"),  KELIHER  HARDWARE  COMPANY,  a  California  corporation  (hereinafter
referred  to  as  "Seller"),  GEORGE  W.  KELIHER  (hereinafter  referred  to as
"George") and JOHN KELIHER (hereinafter referred to as "John").

                              W I T N E S S E T H:

         WHEREAS, Seller is engaged in the business of selling,  marketing,  and
distributing  construction  and industrial  supplies,  materials,  equipment and
other  businesses,  activities and endeavors  related  thereto (the  businesses,
activities and endeavors described herein are hereinafter  collectively referred
to as the "Business"); and

         WHEREAS,  pursuant to the terms and provisions contained herein, Seller
desires to sell to Buyer and Buyer desires to purchase from Seller, the Business
as a going  concern  and  certain  properties,  assets  and  rights of  Seller's
Business as provided herein; and

         WHEREAS,  George is a stockholder,  director and officer of Seller, and
he joins such parties solely for the purposes stated herein; and

         WHEREAS, John is a stockholder,  director and officer of Seller, and he
joins such parties solely for the purposes stated herein; and

         NOW, THEREFORE, for and in consideration of the premises and the mutual
representations,  warranties,  covenants and agreements  contained  herein,  and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

                                    ARTICLE I

                           TERMS OF PURCHASE AND SALE

         Section 1.1       Purchase and Sale of Assets.

         (a)  Pursuant  to the terms and  provisions  contained  herein,  Seller
hereby  agrees to sell,  assign,  transfer  and convey to Buyer at  Closing  (as
defined hereafter),  and Buyer hereby agrees to purchase from Seller at Closing,
certain properties,  assets and rights of Seller as described as follows, and as
identified on Exhibit A attached hereto and incorporated herein by reference:

                  (i)      All cash and cash equivalents of Seller;

                  (ii)     All Seller's trade accounts receivable as of the date
         of Closing;

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                  (iii) All of Seller's  inventory (the "Disposable  Inventory")
         of industrial hardware supplies and samples;

                  (iv)  All of  Seller's  equipment  inventory  (the  "Equipment
         Inventory";  the Disposable  Inventory and the Equipment  Inventory are
         sometimes hereinafter collectively referred to as the "Inventory");

                  (v) All right, title and interest, if any and of whatever kind
         or character,  of Seller in and to all customer lists,  customer files,
         customer  information,  marketing and promotional  materials,  manuals,
         marketing  studies  or  analysis  or any other  records  or  memorandum
         relating  in  any  manner   whatsoever  to  Seller's   customers   (the
         "Customers")  or  sales  of  the  Inventory  (hereinafter  collectively
         referred to as the "Customer Lists");

                  (vi) All  original  files,  books and  records of Seller  with
         respect  to  the  Customers  and  Customer  Lists  including,   without
         limitation,  all Customer files,  Customer account histories,  Customer
         purchasing and payment history, Customer credit files, etc., as well as
         a list of all current and previous  suppliers or  manufacturers  to the
         Business  within  the past two (2) years  with  sales in excess of Five
         Thousand and 00/100 Dollars ($5,000.00) per year;

                  (vii) To the extent such are assumable,  all right,  title and
         interest  of  Seller  as of the date of  Closing  in,  to and under the
         contracts,     leases,    franchises,     agreements,     arrangements,
         understandings,  commitments  and  business  relationships  and  all of
         Seller's  rights  (including  rights of refund and  offset),  deposits,
         privileges,  claims,  causes  of  action  and  options  relating  to or
         pertaining  to the Contract  Rights;  provided,  however,  except as is
         provided  otherwise  herein,  Buyer does not assume  any  liability  or
         responsibility  relating to, or arising in  connection  hereby with any
         such Contract Rights;

                  (viii) All of Seller's right, title and interest in and to any
         and all income and payments  due Seller  arising out of the Business as
         of the date of Closing;

                  (ix) To the extent transferable, all right, title and interest
         of Seller as of the date of Closing  in, to and under all  permits  and
         licenses  relating  to the  Business  or all or any of the  Assets  (as
         defined below);

                  (x) All  right,  title  and  interest  of Seller in and to all
         prepaid  rentals  and  other  prepaid  expenses,  bonds,  deposits  and
         financial assurance  requirements  relating to any of the Assets or the
         Business;

                  (xi) All  right,  title and  interest  of Seller in and to any
         benefit of and the right to enforce the  covenants and  warranties,  if
         any,  the  Seller is  entitled  to enforce  with  respect to the Assets
         against Seller's predecessors and title to the Assets;

                  (xii) All of Seller's  right,  title and  interest in the name
         "KELIHER  HARDWARE  COMPANY,"  "KELIHER  HARDWARE"  and all related and
         similar names, logos and

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         trade names including,  without limitation,  any of Seller's corporate,
         copyright,  trademark,  trade name and service mark rights and interest
         in such names,  logos and trade names;  provided,  however,  that Buyer
         hereby  grants to Seller or its  designee the right to  repurchase  the
         name "Keliher Hardware Company" as set forth in Section 7.1(b) below;

                  (xiii)  All  right,  title and  interest  of Seller in, to and
         under all  rights,  privileges,  claims,  causes of actions and options
         relating or pertaining to the Business or the Assets;

                  (xiv) All right,  title and  interest  of Seller in and to the
         goodwill of the Business and Seller;

                  (xv)     Seller's satellite Long Beach, California and Vernon,
         California business addresses;

                  (xvi)    Seller's  "800" and "888"  telephone  numbers and all
                           business telephone numbers;

                  (xvii) All right,  title and  interest of Seller in and to the
         leasehold  interest  of  Seller's  satellite  Long  Beach,   California
         commercial lease and Seller's Vernon,  California commercial lease (the
         "Real  Property  Leases"),  copies  of which  are  attached  hereto  as
         Schedule 1.1(a)(xvii).

         All of the assets,  properties  and rights listed in this  subparagraph
(a) shall hereinafter be referred to collectively as the "Assets."

         (b)  Notwithstanding  anything to the contrary  contained  herein,  the
Assets shall not include (i) the original corporate minute book of Seller;  (ii)
all claims of Seller for refunds for any income taxes (whether  federal,  state,
local, foreign or other) applicable to periods prior to the or after the date of
Closing;  (iii) any  rights  accruing  as a result of, or any  proceeds  paid or
payable in accordance  with the Agreement;  (iv) any and all insurance  proceeds
and insurance  claims of Seller,  except for proceeds and claims relating to any
damage,  loss or casualty to the Assets  accruing  after the  execution  of this
Agreement  but prior to the date of  Closing;  or (v) the assets  and  contracts
specifically listed on Schedule 1.1(b) hereto (hereinafter collectively referred
to as the "Excluded Assets").

         (c) It is expressly understood and agreed among the parties hereto that
Buyer is not assuming,  and shall not be deemed to assume,  any  liabilities  of
Seller  relating  to the Assets or arising  out of the  Business,  except  those
specifically listed on Schedule 1.1(c) hereto (the "Assumed Liabilities").

         Section 1.2       Purchase Price and Other Consideration.

         (a) The  total  consideration  to be  paid  by  Buyer  to  Seller  (the
"Purchase  Price") for all of the Assets  purchased  hereunder shall be equal to
(i) Thirty-Three  Thousand Five Hundred (33,500) shares of Buyer's common stock,
(ii) the payment of Seller's outstanding loan (the

<PAGE>

"Keliher  Loan") from George in the amount of Twenty Thousand and No/100 Dollars
($20,000.00),  together  with the payment at Closing or, at Buyer's sole option,
the  assumption by Buyer of those other  liabilities  and  obligations of Seller
identified on Schedule  1.1(c) hereto,  as may be adjusted by Buyer upon Buyer's
determination  of a  material  change in the  Business,  as set forth in Section
1.2(b) below.  Buyer hereby grants the option to Seller to receive,  at Seller's
sole option, a portion of the Purchase Price in cash at Closing in an amount not
to exceed  Thirty-Five  Thousand and No/100  Dollars  ($35,000.00)  in lieu in a
portion of the Buyer's common stock set forth above.  In the event Seller elects
for a portion of the Purchase  Price to be paid in cash, the number of shares of
Buyer's common stock to be issued to Seller shall be  proportionately  decreased
by a number of  shares  equal to the cash  Purchase  Price  divided  by the fair
market value of a share of Buyer's  common stock as of the Closing  Date,  which
fractional  number  shall be rounded to the nearest  whole  share.  The Purchase
Price  shall be payable at or before  Closing by (a) the  issuance  to Seller or
Seller's  designee(s)of certain common stock of Buyer, and, if Seller so elects,
(b) delivery by Buyer of one or more certified checks or wire transfers drawn on
Buyer's bank account of an amount not to exceed Thirty-Five  Thousand and No/100
Dollars  ($35,000.00),  either payable to Seller,  and (c) assumption of certain
obligations of Seller as set forth specifically on Schedule 1.1(c) hereto.

         (b) In addition,  Buyer and Seller agree and  acknowledge  that, at the
sole option of Buyer,  (i) the Purchase Price may be adjusted by Buyer,  or (ii)
Buyer may elect to terminate all of its obligations under this Agreement with no
further  obligation of Buyer,  in the event of a material change in the Business
prior to the  Closing;  for  purposes of  illustration  but not for  purposes of
exclusion,  a "material  change" in the Business  would include but shall not be
limited to (x) a loss of a one or more customer relationship(s) which constitute
individually or in the aggregate more than ten percent (10%) by gross revenue of
Seller or (y) a decrease in the "net asset value" of Seller's  November 30, 1998
financial statements which were previously provided to Buyer below the amount of
Two Hundred Fifty and 50/100 Dollars ($250,000.00). For purposes of this Section
1.2(b) and Section  3.1 below,  the term "net asset  value"  shall mean the book
value of Seller's  cash,  accounts  receivables  and  Inventory,  less  accounts
payable,  the  Union  Bank  of  California  Loan  (as  defined  below)  and  the
shareholders loans set forth on Seller's November 30, 1998 financial statements.
The parties agree and  acknowledge  that Seller's  loss of  Morrow-Mealows  as a
customer shall be an exception to this Section 1.2(b).

         (c) After the Closing,  Buyer (i) shall offer  employment to George and
John,  and such parties agree to be employed by Buyer,  subject to the terms and
conditions  set  forth  in  the  Employment  Agreements  on  Exhibits  B and  C,
respectively,  which are incorporated herein for all purposes, and (ii) may, but
shall not be obligated to, offer employment on a temporary or permanent basis to
the other  employees of Seller.  Seller shall  encourage all  employees  offered
employment  by Buyer to accept  employment  with  Buyer and  Seller  shall  not,
directly or indirectly  solicit the employment of or seek to retain the services
of any such employee without the prior consent of Buyer.

         (d) The parties  hereto  acknowledge  and agree that Buyer shall not be
required to, nor shall Buyer assume,  adopt or accept any other employee benefit
plan, contract,  practice, program, policy or arrangement or any kind of Seller,
including without limitation, any stock option, bonus,

<PAGE>

compensation,   retirement,  profit  sharing,  vacation,  retirement,   medical,
disability benefit,  life insurance or severance pay plan,  contract,  practice,
program or policy or arrangement  and shall have no liability  whatsoever  under
any  such  employee  benefit  plan,  contract,   practice,  program,  policy  or
arrangement.

         Section 1.3 Physical Inventory. Buyer and Seller hereby acknowledge and
agree that after the close of business of Seller on December 31, 1998 and within
fifteen  (15) days of the date of Closing,  Buyer or its  designee may perform a
physical  inventory of Seller's Inventory to compare the actual Inventory to the
list set forth on Exhibit A.

         Section 1.4 Compliance  with Uniform  Commercial Code - Bulk Transfers.
Seller and Buyer  acknowledge and agree that the purchase and sale of the Assets
may be subject to Chapter 6 of the Uniform  Commercial Code enacted in the State
of California regarding bulk transfer.  In that regard,  Seller hereby agrees to
indemnify,  defend and hold harmless Buyer, and Buyer's directors,  officers and
agents  from and  against  any and all  demands,  claims,  actions  or causes of
actions,  assessments,   losses,  damages,  liabilities,   costs  and  expenses,
including  reasonable  attorney's  fees,  asserted  against or  imposed  upon or
incurred by Buyer,  its  directors,  officers  and  agents,  as the case may be,
directly  or  indirectly,  in  whole  or in part,  resulting  from  any  alleged
noncompliance of such former provisions by Seller.

         Section 1.5 Allocation of Purchase  Price.  The Purchase Price shall be
allocated among the Assets in the manner set forth in a schedule to be delivered
by Buyer to Seller  within  thirty  (30) days of the  Closing  Date,  subject to
adjustments,  as provided in Section 1.2(a) hereof; and the parties agree (a) to
comply with all filing, notice and reporting  requirements  described in Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code") and (b) that,
without the consent of both parties,  neither party will make any representation
to any party as to such  allocation  that is at variance with the allocation set
forth on such schedule.

                                   ARTICLE II

                               REPRESENTATIONS AND
                      WARRANTIES OF SELLER, GEORGE AND JOHN

         Seller,  George and John hereby  jointly and  severally  represent  and
warrant  to Buyer as  follows,  and  acknowledge  that  Buyer is relying on such
representations and warranties,  in connection with the purchase by Buyer of the
Assets and consummation of the other transactions described herein.

         Section 2.1       Title to and Ownership and Condition of Assets.

         (a) Seller has, at the  Closing,  and shall  convey to Buyer,  good and
indefeasible  title  to the  Assets,  free  and  clear  of all  liens,  security
interests,  claims,  demands,  charges  or  other  encumbrances  of any kind and
character  whatsoever,  save and except for any lien  burdening  the Assets as a
result of the Assumed Liabilities.

<PAGE>

         (b)  There  are no  outstanding  contractual  or other  rights of third
parties  to acquire  any  portion of the  Assets,  and there are no  outstanding
agreements,  options or other  arrangements  or commitments  which would require
Seller to obtain  the  consent of any party to effect  the  consummation  of the
transactions  contemplated  hereby,  except  for  any  notification  or  consent
required from Union Bank of California  relating to the bank  indebtedness  (the
"Union Bank of California Loan").

         (c) Seller shall pay its remaining  liabilities (other than the Assumed
Liabilities)  that  exist as of the date of Closing  in the  ordinary  course of
business,  and shall  fulfill and satisfy,  during the period after the Closing,
all  of  its  debts,   obligations  and  liabilities  (other  than  the  Assumed
Liabilities)  existing  as of the  Closing  Date,  in order to  ensure  that the
purchase of the Assets by Buyer is effective against any and all persons holding
claims against Seller based on  transactions  or events  occurring  prior to the
Closing.

         Section  2.2  Organization.  Seller is a  corporation  duly  organized,
validly existing and in good standing under the laws of the State of California.
Seller  conducts its Business and maintains its properties in such  jurisdiction
and is presently qualified as a foreign or domestic entity under the laws of all
jurisdictions in which it conducts its Business.  Seller has the requisite power
and  authority to own or lease its  properties  and to carry on its Business as,
and in the places where,  such  properties are owned or leased and such Business
is conducted.  There are 3025 issued and outstanding  shares of Seller's $10 per
share common stock.

         Section 2.3 Power and  Authority.  Seller has the power,  authority and
legal right to enter into and perform this Agreement and all other  documents or
instruments contemplated herein, and the execution,  delivery and performance of
such agreements and the  consummation of the transactions  contemplated  thereby
will not (i) result in any breach of, default  under,  violation of, or conflict
with or require  consent  under any term or  provision  of Seller's  Articles of
Incorporation or Bylaws, (ii) result in any material breach or default under any
mortgage,  loan  agreement,  deed of  trust,  indenture  or  other  loan-related
instrument  to which  Seller is a party or by which it is bound  (except for the
Union Bank of California  Loan),  (iii) violate any order,  writ,  injunction or
decree  applicable to any Seller,  or (iv) violate any provisions of laws, rules
or regulations to which any Seller is subject. This Agreement  constitutes,  and
all other  agreements and documents  executed in connection  herewith by Seller,
upon due execution and delivery by Seller,  shall  constitute  valid and binding
obligations  of Seller,  enforceable  against  Seller in  accordance  with their
terms,  except  insofar as  enforcement  hereof  may be  limited by  bankruptcy,
insolvency or similar laws for general equitable principles, or as otherwise set
forth herein.

         Section  2.4  Inventory.  Seller  shall be  present  during,  and shall
warrant the results of, the Physical  Inventory as of the Closing Date. No items
included  in  Inventory  are or will be pledged  as  collateral  (other  than in
connection  with  the  Union  Bank of  California  Loan) or held by  Seller,  as
applicable, on consignment from others.

         Section 2.5  Accounts  Receivable.  Except as set forth in Schedule 2.5
attached hereto and incorporated herein for all purposes, all the receivables of
Seller  reflected in the financial  statements of Seller dated November 30, 1998
(the "Financial Statements"), arising after the

<PAGE>

applicable  dates of the Financial  Statements,  or recorded on the books of the
Company as of the Closing Date relating  thereto (i) did or will  represent bona
fide  indebtedness,  (ii) arose or will have  arisen on or prior to the  Closing
Date in the ordinary course of business, and (iii) were or will be subject to no
prior  assignment,  claim,  lien or  security  interest  (other  than  liens  as
disclosed in Schedule  1.1(c)  attached  hereto for all purposes).  The bad debt
reserves,  if any,  established  in  connection  with  such  receivables  are in
conformity with generally accepted accounting principles.

         Section 2.6 Liabilities and Litigation.  At Closing,  there shall be no
liabilities  of any kind  whatsoever  (except  for the Union Bank of  California
Loan), whether accrued, absolute, contingent,  determined or determinable, which
would  encumber the Assets or title  thereto or result in any liability to Buyer
with respect  thereto.  At Closing there shall exist no claim,  circumstances or
matter  whatsoever,  of or relating to the Assets or the Business (other than in
connection with the Assumed  Liabilities) which would encumber the title thereto
or result in any  liability to Buyer with respect  thereto;  provided,  however,
Seller shall be permitted to discharge  such  obligations  within a commercially
reasonable   period  of  time  after  the  Closing  but  shall  not  permit  any
encumbrances or liens to attach to the Assets. There are no actions, proceedings
or  investigations  pending  or, to the best of Seller's  knowledge,  threatened
against  Seller  or  any  shareholder  of  Seller  or any  of  their  respective
properties or rights,  at law or in equity or before or by any court or federal,
state, municipal or other governmental  department,  commission,  board, bureau,
agency or other governmental  department,  commission,  board, bureau, agency or
instrumentality,  domestic  or foreign  (collectively,  "Agent"  and  "Agency").
Seller is not, nor is any shareholder of Seller, directly or indirectly, subject
to any continuing court or Agency order,  writ, in junction or decree applicable
specifically  to it, the Assets or the  Business.  Seller  shall  continue to be
solely liable for, and Buyer is not assuming  responsibility  or liability  for,
all matters described in this Section 2.6, unless  specifically set forth as the
Assumed Liabilities.

         Section 2.7 Breach of Other Agreements. Except as set forth on Schedule
2.7,  Seller  warrants  that the  execution of this  Agreement or any  documents
contemplated  herein,  and the  consummation  of the  transactions  contemplated
herein, will not violate,  conflict with, modify or breach (i) any material term
or provision  of, or cause a default  under,  or be an event which,  with notice
and/or  lapse of time,  would  constitute  a  default  under,  or  result in the
acceleration  of, or result in the creation of any  encumbrance  upon any of the
Assets  pursuant to any  material  contract or  agreement  to which  Seller is a
party,  (ii) any  judgment,  decree,  writ,  order or injunction of any court or
arbitration  body relating to the Assets or Seller,  or (iii) any order or other
action of any  governmental  authority,  commission,  bureau  or  administrative
agency.

         Section 2.8 Taxes. Seller has duly filed all federal,  state, local and
other tax returns, including,  without limitation, all federal and state payroll
tax returns, all federal and state income and/or franchise tax returns and state
or local sales tax returns,  which are or were  required to be filed by it as of
Closing.  Seller has paid all taxes that have become due,  have  accrued or have
been or will be assessed against it, including all taxes, penalties and interest
which any taxing  authority  has proposed or asserted to be owing on or relating
to its Business or Assets for all periods through the Effective Date;  provided,
however,  that Buyer shall cooperate with Seller in assuming Seller's obligation
for December sales taxes and providing sufficient information to Seller to allow
Seller to file its December sales tax returns.  There are no tax deficiencies or
claims

<PAGE>

presently  being  asserted  against  any  Seller  relating  to the Assets or the
operation  of its  Business.  There is no  pending  or  threatened  claim by any
federal,  state or local taxing authority  against or with respect to any Seller
for payment of  additional  taxes for any period  prior to the date  hereof.  No
Seller  has  executed  any waiver or  extension  of any  statute of  limitations
relating to assessment  or collection of taxes,  and neither has any such waiver
or extension  been  executed on behalf of it nor is any such waiver or extension
in force with respect to or  applicable to Seller.  Notwithstanding  anything to
the contrary  contained  herein,  all risk and liability with respect to any tax
obligation  or  liability  of Seller  relating to or arising with respect to its
ownership,  use,  control or operation of the Assets or the Business  during any
period up to and  including  the Closing  Date, or arising as of a result of the
transactions contemplated herein, shall be borne exclusively by Seller.
         Section 2.9 Compliance with Laws. To the best of its knowledge,  Seller
has not violated and is not now in violation of, any federal, state or municipal
law, ordinance,  order,  regulation or requirement  affecting the Assets, and no
written  notice  of any such  violation  has  been  issued  by any  governmental
authority.

         Section  2.10 Prior Bulk Sales.  During the period  beginning  four (4)
years prior to the Closing Date and continuing  through the Closing Date, Seller
has not  transferred  in bulk or  otherwise  not in the  ordinary  course of its
business all or any major part of the materials,  supplies, merchandise or other
inventory of the Business,  or any  substantial  portion of the equipment of the
Business, in connection with a bulk transfer of its Inventory.

         Section 2.11 No Finder's  Fees.  Seller has not made any agreement with
any broker or other  person or entity or taken any action  which would cause any
broker or other person or entity to become  entitled to any fee or commission in
connection with the transactions contemplated hereby.

         Section  2.12   Attachments  and  Other   Proceedings.   There  are  no
attachments, executions, assignments for the benefit of creditors, receiverships
or voluntary or involuntary  proceedings in bankruptcy or pursuant to any debtor
relief laws  contemplated or filed by or against Seller relating to the Business
or the Assets.

         Section 2.13 Governmental and Other Consents.  No consent,  approval or
other  authorization  of any  governmental  authority  or other  third  party is
required in  connection  with the  execution  or delivery of this  Agreement  by
Seller or the consummation by Seller of the transactions contemplated hereby.

         Section 2.14      Employees and Benefits.

         (a)  Seller is not a party to, or bound by, any  collective  bargaining
agreements  or other  labor  agreements.  Schedule  2.14  contains a list of all
written and oral employment, profit sharing, deferred compensation, bonus, stock
option, stock purchase, pension, retainer,  consultant,  retirement,  benefit or
incentive  plans or similar  contracts to which Seller is a party or by which it
is bound.  Furthermore,  Seller is not in  default  with  respect to any of such
agreements,  which default would materially and adversely effect the Business or
the Assets of Seller, and all such

<PAGE>

plans and contracts, if any, are in compliance with all federal, state and local
laws, the violation of which would  materially and adversely effect the Business
or Assets of Seller (including  minimum funding  requirements).  All returns and
reports with respect to such plans and contracts  required to be filed by Seller
have been filed with all  appropriate  governmental  offices or departments in a
timely manner.

         (b) Schedule  2.14 sets forth all oral and written  plans or agreements
to which  Seller  is a party  and  which  constitute  "fringe  benefits"  to its
employees, including without limitation,  vacation plans or programs, sick leave
plans or programs,  employee  discounts and related benefits.  Correct copies of
all written  agreements,  plans and  programs,  certified by Seller,  George and
John,  will be made  available  to Buyer  prior  to the  Closing.  Seller  is in
compliance with all federal, state and local laws respecting  employment,  wages
and hours and occupational safety and health standards. Seller is not engaged in
the  unfair or  unsafe  labor  practices  nor have any  unfair  or unsafe  labor
practices or other  complaints  been filed  against  Seller or  threatened to be
filed against  Seller with or by any agency or  instrumentality  of any state or
local government.  Seller is in full compliance with the terms of all contracts,
agreements, plans and programs described herein.

         Section 2.15      Environmental Matters.

         (a) Seller,  and the properties and Assets of Seller, are in compliance
with all material respects with all existing  Environmental Laws (as hereinafter
defined);

         (b) To the best  knowledge  of  Seller,  George  or John,  there are no
present or past Environmental  Conditions (as hereinafter defined) or violations
of any  existing  Environmental  Law in any way relating to Seller or any of its
present or former assets or properties  that is likely to lead to the imposition
of any liability or that Seller should  reasonably expect would give rise to any
civil or criminal litigation,  suit, action, claim,  proceeding or investigation
by any person, including any Governmental Authority (as hereinafter defined);

         (c) There are no  aboveground  or  underground  waste  disposal  units,
including landfills,  surface impoundments,  pits, ponds or lagoons,  whether or
not in use or to the  knowledge of Seller,  formerly  used and still  containing
Contaminants  (as hereinafter  defined),  or any  underground  storage tanks, or
subsurface  disposal systems,  including injection wells, dry wells, leach field
or septic systems on any property of Seller;

         (d) There is no pending, or to the best knowledge of Seller,  George or
John, threatened civil or criminal litigation or suit, action, claim, proceeding
or investigation by any person, including any Governmental Authority, or written
notice of violation of, or formal  administrative  proceedings  relating to, any
existing Environmental Laws involving Seller of any of its Assets or properties;

         (e)  "Contaminants"  shall mean any material,  pollutant,  substance or
waste which is defined in,  regulated  by or subject to any  Environmental  Law,
including asbestos and asbestos containing materials;

<PAGE>

         (f) "Environmental  Conditions" shall mean the ambient state of (1) the
surface,  sub-surface,  soil, air, surface waters, including streams,  channels,
marshes and wetlands,  groundwater,  wastewater, leachate and run-on and run-off
of precipitation beneath,  interior or exterior to any building or improvements;
(2) any and all structures above and below ground, improvements,  appurtenances,
pipes, pumps, valves, fittings,  tanks, vessels and containers;  and (3) any and
all systems for the collection, treatment, storage or disposal of Contaminants;

         (g) "Environmental  Laws" shall mean all Governmental Rules relating to
the protection or pollution of the  environment or community  health and safety,
including the Comprehensive  Environmental  Response  Compensation and Liability
Act,  as  amended,  the  Federal  Solid  Waste  Disposal  Act, as amended by the
Resource  Conservation  and  Recovery  Act and the  Hazardous  and  Solid  Waste
Amendments, the Clean Air Act, the Clean Water Act, the Toxic Substances Control
Act,  the  Safe  Drinking  Water  Act and any  similar  or  analogous  statutes,
regulations and decisional law of any Governmental Authority, as now exist; and

         (h)  "Governmental  Authority" shall mean any governmental  department,
commission,  board, bureau, agency, court or other instrumentality of the United
States or any jurisdiction,  municipality or other political subdivision thereof
where the Company is now operating or has operated.

         Section 2.16 Investment  Representations.  Seller, George, John and all
other shareholders of Seller,  jointly and severally,  hereby make the following
representations  and  warranties  to Buyer with regard to Buyer's  common  stock
which will make up all or a part of the Purchase Price:

         (a) The  stock of Buyer to be issued to  Seller  will be  acquired  for
investment  for Seller's own account for  investment  only,  not as a nominee or
agent, and not with a view to or for resale in connection with, any distribution
or public  offering of securities  within the meaning of the  Securities  Act of
1933,  as amended,  or any other  applicable  securities  law, and Seller has no
present  intention  of  selling,   granting  a  participation  in  or  otherwise
distributing  the same.  Seller  represents that the entire legal and beneficial
interest of the common  stock of Buyer will be held for Seller's  account  only,
neither in whole or in part for any other person.  By executing  this  Agreement
and related  certificates  required by Buyer, the undersigned further represents
that it has no present contract, undertaking,  agreement or arrangement with any
person to sell,  transfer or grant  participation to such person or to any third
person with respect to any of the common stock of Buyer. Seller understands that
the common stock of Buyer to be issued  hereunder has not been registered  under
the Securities Act of 1933, as amended, or applicable state securities laws, and
that such common stock may not be transferred without an effective  registration
statement  covering  such shares under such  securities  laws,  or an opinion of
counsel or other  evidence  satisfactory  to Buyer in its sole  discretion  that
registration  is not  required  under  the  applicable  securities  laws.  These
restrictions  under the  applicable  securities  laws are in  addition  to those
restrictions  contained in this Agreement.  Seller  represents and warrants that
it, along with its advisors,  is knowledgeable in making investments  similar to
the purchase of the common stock of Buyer,  and is able to bear the risk of such
illiquidity in its investment and the economic risk of such  investment.  Seller
hereby additionally represents, warrants and acknowledges that it has been given
the  opportunity  to  review  such  information  about  Buyer  so as to  make  a
fully-informed

<PAGE>

decision to purchase the common stock of Buyer,  and further that no  guarantees
have been given by Buyer about the value of the common stock of Buyer.

         (b) Seller  understands and acknowledges that the common stock of Buyer
to be  issued  pursuant  to the  Agreement  has not been  registered  under  the
Securities  Act of  1933,  as  amended,  (the  "Securities  Act")  or any  other
applicable state securities laws.

         (c) The share certificate(s) issued to Seller representing common stock
of Buyer or any share  certificate(s)  issued or issuable in respect of any such
common stock of Buyer upon any stock split, stock dividend,  recapitalization or
similar event, shall contain the following restrictive legend:

         "THE SHARES  REPRESENTED BY THIS  CERTIFICATE  ("SHARES") HAVE NOT BEEN
         REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ENACTED IN
         THE UNITED STATES OF AMERICA (THE "U.S.  ACT"),  THE SECURITIES LAWS OF
         ANY STATE OF THE UNITED  STATES  ("STATE ACT") OR THE LAWS OF ANY OTHER
         COUNTRY  OR  LAWFUL   JURISDICTION  (THE  "OTHER   APPLICABLE   LAWS").
         ACCORDINGLY,  THE  HOLDER  OF THIS  CERTIFICATE  MAY NOT  OFFER,  SELL,
         RENOUNCE OR TRANSFER THE SHARES  DIRECTLY OR  INDIRECTLY  IN THE UNITED
         STATES OR TO A UNITED  STATES  CITIZEN,  RESIDENT,  OR  RESIDENT  ALIEN
         ("AMERICAN  NATIONAL")  UNLESS DONE IN COMPLIANCE WITH THE REGISTRATION
         REQUIREMENTS  OF THE  U.S.  ACT,  RULE 144  UNDER  THE  U.S.  ACT,  ANY
         APPLICABLE  STATE ACT,  AND ALL OTHER  APPLICABLE  LAWS OR AS PART OF A
         TRANSACTION  IN  CONNECTION  WITH WHICH THE  COMPANY  HAS  RECEIVED  AN
         OPINION  OF  COUNSEL  WHICH  SHALL BE  REASONABLY  SATISFACTORY  TO THE
         COMPANY  THAT  SUCH  TRANSACTION  IS  EXEMPT  FROM  SUCH   REGISTRATION
         REQUIREMENTS OR THAT COMPLIANCE WITH SUCH REGISTRATION  REQUIREMENTS IS
         NOT REQUIRED."

         "THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
         OF IN  WHOLE OR IN  PART,  DIRECTLY  OR  INDIRECTLY,  TO ANY  PURCHASER
         OUTSIDE THE UNITED STATES OR WHO IS NOT AN AMERICAN NATIONAL UNLESS THE
         TRANSACTION IS IN COMPLIANCE  WITH THE U.S. ACT, THE SECURITIES LAWS OF
         THE  JURISDICTIONS  IN WHICH THE OFFER  AND/OR SALE TAKES PLACE AND ALL
         OTHER APPLICABLE LAWS AND REGULATIONS."

         (d)  Seller  acknowledges  that the  common  stock of Buyer held by the
undersigned must be held subject to Rule 144 and other applicable  provisions of
the Securities Act. Seller,  George and John represent,  warrant and acknowledge
that  the  common  stock of  Buyer  shall  not be  transferrable  except  on the
conditions  specified in this Agreement and Rule 144 of the Securities  Act, and
accordingly,  any intended transfer,  assignment or sale by Seller prior to such
applicable  waiting  period under Rule 144 or in  violation of other  applicable
provisions of the Securities Act shall be null and void.

         (e) The  certificates  evidencing  the common stock of Buyer shall also
bear any legend required  pursuant to any state,  local or foreign law governing
such securities.

         (f) Buyer shall use its reasonable  best efforts to file a registration
statement or secondary registration under the Securities Act with the Securities
Exchange Commission within

<PAGE>

twelve (12) months after the Closing  Date of the  transaction  contemplated  in
this Agreement. It is the intention of Buyer to cover all shares of common stock
of Buyer issued to Seller; provided, however, that the obligations of Seller set
forth  in this  Section  2.16 (f) are  expressly  conditioned  on the  following
obligations of Seller:

                  (i) Seller shall promptly furnish all information requested by
         Buyer regarding  Seller to the extent such  information is requested in
         connection with the  registration or  qualification of the common stock
         of  Buyer  with  the  Securities   Exchange  Commission  or  any  state
         securities commission;

                  (ii) Seller  shall comply with all  provisions  of federal and
         state   securities  laws  in  connection   with  an  offer,   sale  and
         distribution  of the common stock of Buyer;  and Seller shall indemnify
         Buyer,  its  directors  and  officers,  its  underwriters,  if any, any
         experts  set forth on the  applicable  registration  statement  and any
         person who  controls  Buyer  within the meaning of the  Securities  Act
         against any and all claims, losses, damages and liabilities arising out
         of and based on any untrue statement (or alleged untrue  statement) and
         any  registration  statement,  prospectus,  offering  circular or other
         document,  or any  omission (or alleged  omission)  to state  therein a
         material  fact  required to be stated  therein or necessary to make the
         statements  therein  not  misleading  and will  reimburse  Buyer,  such
         directors,  officers,  persons, experts or underwriters for any and all
         legal or any other expenses  reasonably incurred in connection with the
         investigating or defending any such claim, loss,  damage,  liability or
         action, in each case to the extent,  and only to the extent,  that such
         untrue statement (or alleged untrue  statement) or omission (or alleged
         omission), is made in such registration statement, prospectus, offering
         circular  or other  document in reliance  upon and in  conformity  with
         information  furnished to any such party by Seller specifically for the
         use therein.

         (g) Seller has had the  opportunity to review with its own tax advisors
the tax  consequences  to the  undersigned  of the  Agreement  and  transactions
contemplated  thereby.  Seller  understands  that  it  must  solely  rely on its
advisors and not on any  statements  or  representations  by Buyer or any of its
agents.  Seller understands that it (and not Buyer) shall be responsible for any
such  tax  liability  that  may  arise  as a  result  of  the  Agreement  or any
transactions contemplated thereby.

         Section 2.17 Enforceability.  This Agreement and any other agreement to
be entered into pursuant to the terms hereof or as contemplated hereby by Seller
constitute  valid and binding  obligations of Seller,  enforceable in accordance
with their  respective  terms,  except as the same may be limited by  applicable
bankruptcy,  insolvency,  reorganization or other laws affecting the enforcement
of creditors  rights  generally  and the  application  of general  principles of
equity.

         Section 2.18 Full Disclosure.  No representation or warranty of Seller
made in this Agreement, nor any written statement or certificate furnished or to
be furnished  by Seller to Buyer  pursuant  hereto,  or in  connection  with the
transactions   contemplated  hereby,  contains,  or  will  contain,  any  untrue
statement of a material  fact, or omits,  or will omit to state, a material fact
necessary  to make the  statement  or facts  contained  herein  or  therein  not
misleading. No Seller has

<PAGE>

withheld,  and no Seller  will  withhold,  from Buyer  knowledge  of any events,
conditions or facts of which Seller has  knowledge  which could  materially  and
adversely affect the Assets or Buyer.

                                   ARTICLE III

                      COVENANTS OF SELLER, GEORGE AND JOHN

         Seller, George and John hereby jointly and severally covenant and agree
with Buyer as follows:

         Section 3.1 Conduct of Business. From November 30, 1998 to the Closing,
Seller will, in all material respects,  and will cause such entities to, conduct
its  Business  in the  ordinary  course  and use  good  faith  and  commercially
reasonable  efforts to preserve such Business,  and shall not,  without  Buyer's
prior  written  consent,  impair or fail to use its best efforts to preserve its
relationships with employees,  suppliers, Customers, creditors and others having
business  relationships  with Seller.  In this regard,  Seller's net asset value
shall not  decrease  below the amount of Two  Hundred  Fifty and No/100  Dollars
($250,000.00)  based upon Seller's November 30, 1998 financial  statements which
were provided to Buyer.

         Section 3.2 Notices and Approvals.  Prior to the Closing, Seller shall,
at its sole  expense,  promptly  give all notices to and use its best efforts to
obtain  all  consents  from  third  parties  which  may be  necessary  or deemed
desirable by Buyer in connection with this Agreement and the consummation of the
transactions  contemplated hereby, including without limitation,  those shown on
Schedule 3.2 hereto.  If all such  consents are not  forthcoming  by the date of
Closing,  Seller  shall  continue  to use their best  efforts to obtain all such
consents, at the sole expense of Buyer.

         Section 3.3 Fulfillment of All Covenants and Obligations.  Seller shall
satisfy and fulfill all of its other obligations and covenants set forth in this
Agreement or as may otherwise be contemplated herein or necessary or appropriate
to consummate the transactions set forth herein.

         Section 3.4 Certified Corporate Documents.  At or prior to the Closing,
Seller shall deliver to Buyer  certified  copies of the resolutions of its Board
of Directors and shareholders authorizing this Agreement and the consummation of
the  transactions  contemplated  hereby and Certificates of Incumbency of George
and John,  who shall be  authorized  to sign and execute this  Agreement and all
ancillary documents on behalf of Seller.

         Section 3.5 Good  Standing.  At the Closing,  Seller  shall  deliver to
Buyer a current  certificate  of good standing from the State of California  and
all other jurisdictions in which Seller is qualified to do business.

         Section 3.6 Termination of Seller's Business. Seller shall use its best
efforts to sell and/or close all  remaining  portions of its Business  which are
not acquired by the Buyer pursuant hereto and which would otherwise  violate the
Covenants Not to Compete, Trade Secrets or

<PAGE>

Confidentiality  set  forth in  Sections  3.11,  3.12 or 3.13  hereto as soon as
possible after the Closing Date.

         Section  3.7  Material  Change.  From  December  1, 1998 to the date of
Closing,  Seller shall promptly inform Buyer in writing of any material  adverse
change to the Business or the Assets. Notwithstanding the disclosure to Buyer of
any such material adverse change,  Seller shall not be relieved of any liability
to Buyer  pursuant to this  Agreement or, nor shall provide such  information by
Seller to Buyer be deemed a waiver by Buyer of, the breach of any representation
or warranty of Seller contained in this Agreement.

         Section 3.8 Material  Contracts.  From  December 1, 1998,  Seller shall
not, without the prior written consent of Buyer,  incur any obligation in excess
of  $5,000.00;  make any  purchases  in excess of  $5,000.00  in the  aggregate;
increase the compensation paid or payable to any officer, director,  employee or
agent of any Seller; or otherwise take any action outside the ordinary course of
business.

         Section 3.9  Contracts.  Except with  Buyer's  prior  written  consent,
Seller shall not waive any material right or cancel any material contract,  debt
or claim that constitutes an Asset.

         Section 3.10      Non-Competition; Confidentiality.

         (a) Seller recognizes and acknowledges that it will derive  substantial
benefit  from  the  consummation  of  the  transactions   contemplated  by  this
Agreement.  Seller further  recognizes and  acknowledges  that Buyer is making a
substantial investment pursuant to this Agreement in reliance upon the fact that
the  knowledge  and  expertise  developed  by Seller and its  management  of the
affairs of Seller and in the Business  will be preserved and will not be used in
competition with the Business  purchased by Buyer.  Seller hereby agrees that it
is reasonable  and necessary for the  protection of Buyer and the Business to be
purchased by Buyer that Seller  agrees to take all  necessary  actions to assure
that Seller will not, directly or indirectly, except for the benefit of Buyer or
with the prior  written  consent  of Buyer,  which  consent  may be  granted  or
withheld at Buyer's sole discretion:

                  (i)  Own,  manage,   engage  in,  control,   be  employed  by,
         participate  in or be connected  with,  in any manner  whatsoever,  the
         ownership,  management,  operation  or  control of any  business  which
         sells, promotes or distributes products or services, or which otherwise
         performs  services,  which are reasonably like and which may reasonably
         compete  with those  products  or  services  previously  offered by the
         Seller,  any affiliate or subsidiary of Seller or the Buyer at any time
         during the term of this Agreement;

                  (ii) Canvas, solicit or accept business from "Customers of the
         Buyer"  after the Closing  (except on behalf of the Buyer)  which,  for
         purposes of this  Agreement,  shall mean any person or entity which has
         been  contacted by Seller or its  affiliates  or  subsidiaries,  or has
         engaged  in  business   with  Seller  or  any  of  its   affiliates  or
         subsidiaries,  during the two (2) year  period  prior to the  effective
         date of this Agreement;

<PAGE>

                  (iii) Directly or indirectly request or advise any Customer of
         the Buyer to withdraw,  curtail or cancel such Customer's business with
         the  Buyer,  or  otherwise  interfere  with the  business  relationship
         between  such  Customers  and the Buyer,  or any of its  affiliates  or
         subsidiaries;

                  (iv)  Otherwise  aid,  consult or assist anyone engaged in any
         business which is  competitive  with the "Business of the Buyer," which
         "Business of the Buyer" shall include all business  activities in which
         the Buyer or any of its  affiliates or  subsidiaries  is engaged at any
         time  after the date of Closing  (including,  but not  limited  to, the
         manufacturing  of print band  equipment,  operation  of the business of
         print  band  engineering,  sales and the  acquisition  of such types of
         business)  or  in  which  the  Buyer  or  any  of  its   affiliates  or
         subsidiaries plans to engage after the date of Closing; or

                  (v)  communicate  to any person or entity  any trade  secrets,
         customer  lists,  information  (financial  or  otherwise),  strategies,
         systems,  methods or any other  business  data or secrets of the Buyer,
         any of the Buyer's affiliates or subsidiaries.

         (b) Seller's covenants against competition as set forth in subparagraph
(a) above shall  commence on the date of this Agreement and shall continue for a
period  of two (2)  years  after  the  Effective  Date of  this  Agreement.  The
restraints against competition imposed on and agreed to by each Seller hereunder
shall apply to, and be enforceable  in, the State of California,  and/or an area
within  fifty  (50)  miles  of  any  location  where  the  Buyer,  or any of its
affiliates or subsidiaries, or any Acquisition Candidate, is doing business.

         (c) The restrictions set forth in this Section 3.10 shall apply only to
Seller  and  shall  not  apply  to  either   George,   individually,   or  John,
individually. Any restrictions on competition regarding George and John shall be
limited  to  those  restrictions  as  set  forth  in the  respective  Employment
Agreements of these individuals.

         Section 3.11      Trade Secrets.

         (a) In  consideration  of the  employment  of George and John under the
terms  of the  Employment  Agreements  and in  consideration  of the  exhaustive
benefits  derived by Seller under the terms of this Agreement,  Seller covenants
and agrees  that it will not,  directly  or  indirectly,  for its own account or
benefit, or for the account or benefit of any other person or party, communicate
to  any  person  or  entity  any  trade  secrets,  customer  lists,  information
(financial or  otherwise),  strategies or any other  business data or secrets of
Buyer.

         (b) Seller's  covenant against  disclosure as set forth in subparagraph
(a) above shall  commence on the date of this Agreement and shall continue for a
period of two (2) years from the Effective Date of this Agreement.

<PAGE>

         Section 3.12      Nondisclosure of Confidential Information.

         (a) Seller  acknowledges  that  Buyer may  disclose  or has  previously
disclosed  certain  confidential   information  to  such  party.  Seller  hereby
covenants and agrees that it will not,  without prior written  consent of Buyer,
at the closing or at any time thereafter,  disclose or permit to be disclosed to
any third party by any method whatsoever any of the confidential  information of
Buyer whether  acquired prior to or after the Closing Date. For purposes of this
Agreement,  "confidential information" shall include, but not be limited to, any
and all records, notes, memoranda, data, ideas, processes,  methods, techniques,
systems,  formulas,  patents,  models,  devices,  programs,  computer  software,
writings,  research,  personnel information,  plans, or any other information of
whatever  nature  in the  possession  or  control  of Buyer  which  has not been
published  or  disclosed  to the  general  public,  or  which  gives to Buyer an
opportunity  to obtain an advantage over  competitors  who do not know of or use
it.

         (b) The  foregoing  paragraph  shall  not be  applicable  if and to the
extent  Seller is  required to testify in a judicial  or  regulatory  proceeding
pursuant to an order of a judge or  administrative  law judge  issued after such
party and his legal  counsel  urge that the  aforementioned  confidentiality  be
preserved.

         (c) Any breach of this nondisclosure covenant will result in the waiver
by Seller of any and all rights to  compensation,  if any, unpaid at the time of
the  breach.  In such event Buyer  shall have no further  obligation  to pay any
amounts related thereto.

         Section 3.13      Remedy for Breach.

         (a) The parties hereto, recognizing that irreparable injury will result
to Buyer,  its  business  and  property  in the event of a breach or  threatened
breach  of  any  of  the  above   covenants  in  Section  3.10,  3.11  or  3.12,
respectively, by Seller and that Buyer's purchase of the Assets pursuant hereto,
agree that in the event of a violation of any of the  covenants  herein  against
competition or disclosure of confidential information by Seller:

                  (i)  George's and John's employment described hereunder may be
         terminated in the sole discretion of Buyer;

                  (ii) all payments otherwise due hereunder to Seller, including
         without  limitation  the Deferred  Purchase  Price,  may be immediately
         terminated  without  further  obligation  to  the  Buyer  in  the  sole
         discretion of the Buyer; and

                  (iii) in addition to any other legal or equitable remedies and
         damages  available,  the Buyer  shall be  entitled  to the  issuance of
         restraining  orders or  injunctions,  both temporary and permanent,  in
         order to  restrict  the  violation  thereof  by Seller,  its  partners,
         agents,  servants,  employees  and  employers,  and all persons  acting
         directly or indirectly for or with it.

<PAGE>

         (b) The restrictive covenants contained in this Agreement shall survive
the date of  Closing  and any  termination  of  George's  or  John's  employment
provided  under the terms of the respective  Employment  Agreements and provided
under the terms of this  Agreement and any  termination of this  Agreement,  and
shall be enforceable according to their respective terms.

         (c) If any court of competent jurisdiction should hereinafter determine
in  the  course  of  litigation  that  the  provisions  of  this  paragraph  are
unreasonable with respect to length of time, geographical area, or activities so
restrained,  then this clause  shall be  construed to operate for such period of
time and such  geographical  area or areas and in respect of such  activities as
said  court  shall  determine  to be the  maximum  reasonable  restraint  in the
circumstances,  and the parties  agree to submit such  question or  questions to
such court in the event of any such determination of unreasonableness.

         (d) The  waiver  of any  party of a  breach  of any  provision  of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
by either such party.  The failure to enforce any  provision(s) of the Agreement
shall not be construed as a waiver of such provision(s).

         (e) The  covenants of Sections  3.10,  3.11,  3.12 or 3.13 hereof shall
survive the Closing of this  Agreement,  and be  enforceable  according to their
terms.

         Section 3.14 Conflict with  Employment  Agreement.  In the event of any
conflict  between the terms and provisions of Sections 3.10,  3.11, 3.12 or 3.13
and those of Article IV of the Employment Agreement, the terms and provisions of
Sections 3.10,  3.11,  3.12 or 3.13, as the case may be, of the Agreement  shall
govern;  provided,  however,  that the invalidity or unenforceabilty of all or a
part of such  Article  IV shall  not  have  any  effect  upon  the  validity  or
enforceability of Sections 3.10, 3.11, 3.12 or 3.13, as the case may be.

                                   ARTICLE IV

                       CONDITIONS TO OBLIGATIONS OF BUYER

         The  obligations  of Buyer to purchase  the Assets and  consummate  the
transactions at the Closing shall be subject to the  satisfaction on or prior to
the Closing Date (as defined below) of all of the following  conditions,  except
such conditions as Buyer may waive in writing:

         Section 4.1 Representations, Warranties and Covenants of Seller. All of
the  representations and warranties of Seller contained herein shall be accurate
in all  material  respects  when made and as of the  Closing  Date with the same
effect as though such  representations  and  warranties  (in the exact  language
contained  herein  with  appropriate  modification  of  tense  in  the  case  of
representations  and  warranties  relating to statements of fact as of specified
dates) had been made as of the Closing  Date,  and Seller shall have complied in
all  material  respects  with all of its  respective  agreements  and  covenants
contained herein to be performed on or prior to the Closing Date.

<PAGE>

         Section  4.2  Further  Action.  All action that shall be required to be
taken by Seller in order to effect the sale and  transfer of the Assets to Buyer
and to consummate  the other  transactions  contemplated  herein shall have been
taken.

         Section 4.3       Authorizing Resolutions.  Seller shall have delivered
to Buyer copies of evidence of authority for Seller  relating to consummation of
the transactions contemplated herein.

         Section 4.4 Opinion of Counsel of Seller.  Seller's  counsel shall have
delivered to Buyer an opinion of counsel in the form shown on Exhibit D attached
hereto and incorporated herein for all purposes.

                                    ARTICLE V

                            REPRESENTATIONS OF BUYER

         Buyer  hereby  represents  and  warrants  to  Seller  as  follows,  and
acknowledges that Seller is relying upon such representations and warranties, in
connection with the purchase by Buyer of the Assets and the  consummation of the
other transactions described herein.

         Section  5.1  Organization.  Buyer  is a  corporation  duly  organized,
validly existing,  and in good standing under the laws of the State of Delaware.
Buyer  conducts its business and maintains its  properties in each  jurisdiction
and is presently qualified as a foreign or domestic entity under the laws of all
jurisdictions  in which it conducts its business.  Buyer has the requisite power
and authority to own or lease  properties and to carry on its businesses as, and
in the places where,  such  properties  are owned or leased and such business is
conducted.

         Section 5.2 Power and  Authority.  Buyer has the power,  authority  and
legal right to enter into and perform this Agreement and all other  documents or
instruments contemplated herein, and the execution,  delivery and performance of
such agreements and the  consummation of the transactions  contemplated  thereby
will not (i) result in any breach of, default  under,  violation of, or conflict
with or require  consent under any term or provision of Buyer's  Certificate  of
Incorporation or Bylaws, (ii) result in any material breach or default under any
mortgage,  loan  agreement,  deed of  trust,  indenture  or  other  loan-related
instrument to which any Buyer is a party or by which it is bound,  (iii) violate
any order,  writ,  injunction or decree applicable to any Buyer, or (iv) violate
any provisions of laws, rules or regulations to which any Buyer is subject. This
Agreement  constitutes,  and all other  agreements  and  documents  executed  in
connection  herewith  by Buyer upon due  execution  and  delivery by Buyer shall
constitute  valid and binding  obligations of Buyer,  enforceable  against it in
accordance with their terms, except insofar as enforcement hereof may be limited
by  bankruptcy,   insolvency  or  other  similar  laws  for  general   equitable
principles, or as otherwise set forth herein.

         Section 5.3 Breach of Other Agreements. The execution of this Agreement
or any documents  contemplated  herein, and the consummation of the transactions
contemplated  herein, will not violate,  conflict with, modify or breach (i) any
material term or provision of, or cause a default  under,  or be an event which,
with notice and/or lapse of time, would constitute a default under, or result in
the acceleration of, or result in the creation of any encumbrance upon any of

<PAGE>

the Assets  pursuant to any  material  contract or agreement to which Buyer is a
party,  (ii) any  judgment,  decree,  writ,  order or injunction of any court or
arbitration  body relating to the Assets,  or (iii) any order or other action of
any governmental authority, commission, bureau or administrative agency.

         Section 5.4 Taxes.  Buyer has duly filed all federal,  state, local and
other tax returns, including,  without limitation, all federal and state payroll
tax returns, all federal and state income and/or franchise tax returns and state
or local sales tax returns,  which are or were  required to be filed by it as of
Closing.  Buyer has paid all taxes that have  become due,  have  accrued or have
been or will be assessed against it for all periods through the date of Closing.
There are no tax  deficiencies or claims  presently being asserted against Buyer
relating to the operations of its business.

         Section 5.5 Finder's  Fees.  Buyer has not made any agreement  with any
person or entity or taken any action  which  would cause any person or entity to
become  entitled to any fee or commission in  connection  with the  transactions
contemplated hereby.

         Section  5.6   Attachments   and  Other   Proceedings.   There  are  no
attachments, executions, assignments for the benefit of creditors, receiverships
or voluntary or involuntary  proceedings in bankruptcy or pursuant to any debtor
relief laws contemplated or filed by or against Buyer.

         Section 5.7  Governmental and Other Consents.  No consent,  approval or
other  authorization  of any  governmental  authority  or other  third  party is
required in connection with the execution or delivery of this Agreement by Buyer
or the consummation by Buyer of the transactions contemplated hereby.

         Section 5.8 Full  Disclosure.  No  representation  or warranty of Buyer
made in this Agreement, nor any written statement or certificate furnished or to
be furnished  by Buyer to Seller  pursuant  hereto,  or in  connection  with the
transactions   contemplated  hereby,  contains,  or  will  contain,  any  untrue
statement of a material  fact, or omits,  or will omit to state, a material fact
necessary  to make the  statement  or facts  contained  herein  or  therein  not
misleading.  Buyer has withheld, nor will it withhold,  from Seller knowledge of
any  events,  conditions  or facts of which  Buyer  has  knowledge  which  could
materially and adversely affect the Assets or Seller.

                                   ARTICLE VI

                               COVENANTS OF BUYER

         Section 6.1  Assumption  of  Liabilities.  Buyer hereby  covenants  to,
effective with the date of Closing,  assume the Assumed Liabilities as set forth
in Schedule  1.1(c).  Buyer  shall  undertake  to remit  payment for the Assumed
Liabilities, including without limitation the accounts payable assumed by Buyer,
to be paid in the  normal  course of  business  on a basis  consistent  with its
normal business practices.

<PAGE>

         Section 6.2 Fulfillment of all Covenants and  Obligations.  Buyer shall
satisfy and fulfill all of its other obligations and covenants set forth in this
Agreement or as may otherwise be contemplated herein or necessary or appropriate
to consummate the transactions set forth herein.

         Section 6.3 Certified Corporate Documents.  At or prior to the Closing,
Buyer  shall  deliver to Seller or its  representative  certified  copies of the
resolutions  of its  Board  of  Directors  authorizing  this  Agreement  and the
consummation of the transactions contemplated hereby.

                                   ARTICLE VII

                                     CLOSING

         Section 7.1 Closing.  (a) The closing (the  "Closing")  of the purchase
and sale of the Assets and the other transactions contemplated hereby shall take
place at the offices of Buyer  beginning  at 10:00 a.m. on January 15, 1999 (the
"Closing Date"),  or at such other place, date and time as the parties may agree
upon in writing.  The Closing of the transactions  contemplated  herein shall be
effective as of the close of business on December 31, 1998  ("Effective  Date").
In particular, the parties hereto shall deliver the following at the Closing:

                  (i) Seller shall  deliver to Buyer fully and validly  executed
         bills of sale, filings,  assignments,  licenses, consents and all other
         documents contemplated or specifically  identified in this Agreement or
         which are otherwise  necessary or appropriate  to fully  effectuate the
         transfer of the Assets to Buyer as contemplated herein.

                  (ii)  Buyer  shall  deliver to Seller  the  Purchase  Price as
         specified in Section 1.2 hereof,  including any  certificates of Seller
         deemed necessary by Buyer to issue the applicable certificates of stock
         and cash, as applicable.

                  (iii) Seller shall  deliver to Buyer  possession of all books,
         accounts,  records,  documents,  agreements and reports  (excluding any
         original minute books) held by Seller with respect to the Customers.

                  (iv) Buyer shall deliver to George and John, respectively, the
         Employment Agreements.

                  (v)  Seller's  counsel  shall  deliver to Buyer the opinion of
         counsel as set forth in Section 4.4 hereof.

         (b)  Following  the  Closing  Date,  Buyer and Seller  hereby  agree to
         provide for the following:

                  (i) Seller  shall,  as soon as possible  following the Closing
         Date, but in no event later than thirty (30) days following the Closing
         Date,  change the name of Seller to a name other than "Keliher Hardware
         Company" which is not deceptively similar to such name;

<PAGE>

                  (ii) The fiscal  inventory set forth in Section 1.3 shall take
         place  within  fifteen  (15) days of the Closing  Date,  as provided in
         Section 1.3 above;

                  (iii) The Purchase  Price shall be allocated  among the Assets
         as set forth in Section  1.5  within  thirty  (30) days of the  Closing
         Date; and

                  (iv)  Following  the  expiration  of two (2)  years  from  the
         Closing Date, Seller or its desginee shall have the right to repurchase
         from Buyer the name "Keliher Hardware Company",  upon written demand of
         Buyer, for the agreed purchase price of One and No/100 Dollars ($1.00).

                                  ARTICLE VIII

                         INDEMNIFICATION AND ARBITRATION

         Section 8.1       Agreement to Indemnify.

         (a) Subject to the  conditions and provisions set forth in this Article
VIII,  Seller,  George and John  agree,  upon the lapse of the  thirty  (30) day
period  after Seller is notified in writing of such a demand,  claim,  action or
cause of  action,  to  indemnify,  defend and hold  harmless  the Buyer from and
against all demands, claims, actions or causes of action,  assessments,  losses,
damages, liabilities,  costs and expenses, including reasonable attorney's fees,
asserted  against or imposed upon or incurred by the Buyer,  as the case may be,
directly  or  indirectly,  in whole or in part,  resulting  from (i) all  debts,
liabilities  and  obligations,  actual or  alleged,  arising at any time from or
related to the  ownership,  control or  operation  of the Assets or  Business by
Seller prior to Closing, (ii) sales taxes imposed upon Seller and arising out of
the  operation of the  Businesses  or with respect to Seller's  ownership,  use,
control,  operation  or sale of the  Assets,  (iii)  any  obligation  of  Seller
pertaining  to  interest  on  the  shareholder  loans  whether  directly  to the
shareholder  advancing  funds to  Seller or to any  federal,  state or local tax
authority,  (iv) a breach of any covenant,  or the  inaccuracy in any respect of
any representation or warranty,  of Seller contained in or made pursuant to this
Agreement  and (v) all other  liabilities  for which the Buyer may become liable
and which are covered by this  indemnity,  including,  without  limitation,  all
federal, state and local taxes applicable to the ownership, control or operation
of the  Assets on and prior to the  Closing  Date and  liabilities  arising as a
result of the calculation of same.

         (b) Subject to the  conditions  and  provisions  of this Article  VIII,
Buyer  agrees,  upon the lapse of the  thirty  (30) day  period  after  Buyer is
notified  in writing  of such a demand,  claim,  action or cause of  action,  to
indemnify,  defend and hold  harmless  the Seller from and against all  demands,
claims, actions or causes of action, assessments,  losses, damages, liabilities,
cost and expenses,  including  reasonable  attorney  fees,  asserted  against or
imposed  upon or  incurred  by the  Seller,  as the  case  may be,  directly  or
indirectly,  in whole or in part, resulting from (i) the failure of Buyer to pay
any of the  Assumed  Liabilities  (except  as may be set  forth in  Section  1.2
above), (ii) a breach of any covenant, or other inaccuracy in any respect of any
representation  or  warranty,  of Buyer  contained  in or made  pursuant to this
Agreement,  (iii) all other  liabilities  for which Seller may become liable and
which are covered by this indemnity, including, without limitation, all

<PAGE>

federal, state and local taxes applicable to the ownership, control or operation
of the Assets after the Closing Date and liabilities  arising as a result of the
calculation of same.

         (c) All of the  adjustments,  demands,  claims,  actions  or  causes of
action, assessments, losses, damages, liabilities, costs and expenses to which a
party may be  entitled  to recover or for which  such party may be  entitled  to
indemnification  pursuant to this Agreement shall  hereinafter be referred to as
the "Indemnification Claims".

         Section  8.2  Arbitration.  Any and all  disputes  arising  between the
parties with respect to the validity and/or payment of any Indemnification Claim
as provided by this Article VIII shall be finally settled by binding arbitration
pursuant  to the  commercial  rules  of  the  American  Arbitration  Association
following the Federal Rules of Civil Procedure. If the parties cannot agree on a
single  arbitrator  for purposes of settling  such a dispute,  the  indemnifying
party and the  indemnified  party shall each appoint an arbitrator and so advise
the other party, and these two arbitrators will appoint a third  arbitrator.  If
either  party  fails to  appoint an  arbitrator  within  thirty  (30) days after
receipt of written  request to do so, the decision of the  appointed  arbitrator
shall be final.  If an arbitrator  fails or is unable to act, his successor will
be  appointed  in the  same  manner  as the  arbitrator  whom he  succeeds.  The
arbitrators  appointed as aforesaid shall  immediately  proceed to arbitrate the
dispute  between the  indemnified  party and the  indemnifying  party,  and they
shall,  within  fifteen  (15)  days of the  arbitration  proceeding,  or as soon
thereafter as may be practicable,  render their decision in writing and transmit
such written decision to the parties hereto. The forum for such proceeding shall
be in the city of Dallas,  Texas and the  arbitrators  shall be entitled to such
information,  including the business  records of Buyer and Seller,  as they deem
necessary or desirable for purposes of determining or resolving the dispute. The
decision of the majority of the  arbitrators  then serving  shall be binding and
final upon the parties,  and judgment  made upon the order may be entered in any
court having  appropriate  jurisdiction.  The arbitrator  shall  determine which
party shall bear the costs, including attorney's fees, of the proceedings or the
portion of such cost which each party should bear.

                                   ARTICLE IX

                                  MISCELLANEOUS

         Section 9.1 Date of  Agreement.  The term "date of this  Agreement"  as
used herein shall mean the date this Agreement has been fully executed by Seller
and the Buyer as indicated by their signatures below.

         Section 9.2 Date of  Performance.  In the event the Closing Date or any
other date or provision provided herein should fall, expire or be due on a legal
holiday,  Saturday or Sunday,  such date or  provision  shall be extended to the
next working day which is not a legal holiday, Saturday or Sunday, and such next
working  day  shall  be  considered  to be the  due  date,  performance  date or
expiration date for all purposes  hereunder.  Similarly,  upon the occurrence of
any act of God or any other  event  which is out of either  party's  control  or
otherwise  considered  to be a  condition  of  force  majeure,  the  performance
hereunder  including the Closing  hereunder shall be extended until such time as
performance is possible.

<PAGE>

         Section 9.3 Entire  Agreement.  This  Agreement  contains  the complete
agreement  between the parties hereto and cannot be varied,  modified or altered
except by the written  agreement of the parties  hereto.  The parties agree that
there are no oral  agreements,  understandings,  representations  or  warranties
which are not expressly set forth herein. This Agreement (including the Exhibits
and Schedules  hereto) shall supersede all prior agreements and  understandings,
both  written and oral,  between the parties  hereto with respect to the subject
matter  hereof and no party  shall be liable or bound to the other in any manner
by any  warranties,  representations  or  covenants  not  set  forth  herein  or
contemplated hereby.

         Section 9.4  Successors  and Assigns.  The terms and conditions of this
Agreement  shall  inure to the  benefit  of and be binding  upon the  respective
parties hereto and their  successors,  representatives,  heirs,  administrators,
executors and assigns.  This  Agreement may not be assigned by any party without
the prior written consent of the other party hereto.

         Section 9.5 Third Party Beneficiary. Nothing in this Agreement shall be
deemed to create any right in any creditor or other  person not a party  hereto,
and this  instrument  shall not be  construed in any respect to be a contract in
whole or in part for the benefit of any other party except as aforesaid.

         Section 9.6 Identical  Counterparts.  This Agreement may be executed in
one or more  counterparts,  each of which shall for all purposes be deemed to be
an original and all of which shall constitute the same instrument,  but only one
of which need be produced to evidence the agreement of the parties hereto.

         Section 9.7 Headings.  The captions and headings of the  paragraphs and
subparagraphs  of this Agreement are inserted for convenience only and shall not
be deemed to  constitute  part of, or to  construe or limit the meaning of, this
Agreement or to affect the construction hereof.

         Section 9.8 Use of Certain Terms. As used in this Agreement,  the words
"herein",  "hereof", and "hereunder" and the other words of similar import refer
to this Agreement as a whole and not to any particular  paragraph,  subparagraph
or other subdivision.

         Section  9.9  Consent  and  Waiver.  No consent  or waiver,  express or
implied,  by any party hereto of any breach or default by any other party hereto
in the performance of its obligations  hereunder shall be deemed or construed to
be a consent or waiver to or of any other  breach or default in the  performance
by such  party of the same or any other  obligations  of such  party  hereunder.
Failure on the part of any party to complain of any act or failure to act of the
other party or to declare the other party in default,  irrespective  of how long
such  failure  continues,  shall not  constitute  a waiver by such  party of its
rights hereunder.

         Section 9.10  Severability.  If any provision of this  Agreement or the
application  thereof  to any  person or  circumstance  shall be held  invalid or
unenforceable to any extent, such illegality or unenforceability shall extend to
that provision solely,  and the remainder of this Agreement shall be enforced to
the  greatest  extent  permitted  by law as if  such  illegal  or  unenforceable
provision were not incorporated herein.

<PAGE>

         Section 9.11 Exhibits,  Schedules, Etc. All statements contained in any
Exhibit, Schedule,  certificate or other instrument delivered by or on behalf of
the parties hereto, or in connection with the transactions  contemplated hereby,
are an integral part of this  Agreement,  and shall be deemed to be incorporated
herein by reference.  The Parties agree that certain  schedules may be delivered
after Closing.

         Section 9.12 Notices. Any notice or communication required or permitted
hereunder shall be deemed to be delivered and received when actually received by
the intended  recipient or, whether actually received or not, on the third (3rd)
day after it is deposited  in the United  States mail,  postage  fully  prepaid,
registered  or  certified  mail,  return  receipt  requested,  addressed  to the
intended recipient at the address shown below:

         If to the Buyer, to:     Abatix Environmental Corp.
                                  8311 Eastpoint Drive, Suite 400
                                  Dallas, Texas  75227
                                  Attn: Terry W. Shaver

         with a copy to:          Bellinger & DeWolf, L.L.P.
                                  750 North St. Paul, Suite 900
                                  Dallas, Texas  75201
                                  Attn:  Glen A. Bellinger, Esq.

         If to Seller, to:        Keliher Hardware Company
                                  1375 Caspian Avenue
                                  Long Beach, California 90813
                                  Attn: George W. Keliher

         with a copy to:          Petillon & Hansen
                                  21515 Hawthorne Blvd.
                                  1260 Union Tower
                                  Torrence, California 90503
                                  Attn: Ray Seto, Esq.

or at such other address for a party as shall be specified by like notice.

         Section  9.13  Survival.  The  representations  and  warranties  of the
parties  contained  herein  shall  survive the Closing for the period  specified
herein.  All covenants and agreements made in this Agreement shall survive,  and
shall not be extinguished by, the Closing for the period specified herein.

         Section 9.14 Expenses.  Except as otherwise  expressly provided herein,
each  party  will  pay  all of  its  expenses,  including  attorneys'  fees,  in
connection  with the  negotiation  of this  Agreement,  the  performance  of its
obligations  hereunder and the consummation of the transactions  contemplated by
this Agreement.

<PAGE>

         Section 9.15 Further  Assurances.  The parties  hereto will execute and
deliver  such  further  instruments  of  conveyance  and  transfer and take such
additional  actions  as the  other  party  may  reasonably  request  to  effect,
consummate,  confirm or evidence the transfer to the Buyer of the Assets. Seller
will  execute  such  documents  as may be  necessary  to  assist  the  Buyer  in
preserving or perfecting  its rights in the Assets and will also do such acts as
are  necessary to fully  perform any Seller's  representations,  warranties  and
agreements contained herein.

         Section 9.16 Governing  Law. This agreement and the  obligations of the
parties hereto shall be governed by and  interpreted,  construed and enforced in
accordance  with the laws of the  State of  Texas.  Each of the  parties  hereto
agrees that any suit, action or proceeding for the enforcement of this Agreement
shall be  brought  only in the State  courts or  Federal  courts in the State of
Texas,  County of Dallas,  and each party hereby consents to the jurisdiction of
such courts.

         Section 9.17 Knowledge.  As used herein, the term "to the best of their
knowledge" or "to the best of its  knowledge",  and all similar terms or phrases
shall  mean all facts and  information  presently  known to such  person and any
facts and  information  which such person  should have known in the  exercise of
such care as a reasonable  and prudent  person would  exercise under the same or
similar circumstances, without the need for any independent investigation.

         Section 9.18 Time.The parties hereto agree that time is of the essence.

         Section 9.19  Facsimile  Signatures.  The parties hereto agree that the
Closing  may occur  simultaneously,  with  facsimile  signatures  of each  party
serving for purposes of the  Closing,  with the  understanding  that the parties
shall obtain fully executed original signatures following the Closing.

         IN  WITNESS  WHEREOF,  each of the  parties  hereto has  executed  this
Agreement as of the date set forth above.

                                           SELLER:

                                           KELIHER HARDWARE COMPANY
                                           a California corporation


                                           By:                                
                                           Name:                              
                                           Its:                               


                                           ------------------------------------
                                           George W. Keliher

                                           ------------------------------------
                                           John Keliher

<PAGE>

                                           BUYER:

                                           ABATIX ENVIRONMENTAL CORP.
                                           a Delaware corporation


                                           By:                                
                                           Terry W. Shaver, President

<PAGE>

                                    EXHIBIT A


                           ASSETS SUBJECT TO PURCHASE

                  (i)   all cash and cash equivalents of Seller;

                  (ii)  All Seller's trade accounts receivable as of the date of
         Closing;

                  (iii) All of Seller's  inventory (the "Disposable  Inventory")
         of building supplies and samples;

                  (iv)  All of  Seller's  equipment  inventory  (the  "Equipment
         Inventory";  the Disposable  Inventory and the Equipment  Inventory are
         sometimes hereinafter collectively referred to as the "Inventory");

                  (v) All right, title and interest, if any and of whatever kind
         or character,  of Seller in and to all customer lists,  customer files,
         customer  information,  marketing and promotional  materials,  manuals,
         marketing  studies  or  analysis  or any other  records  or  memorandum
         relating  in  any  manner   whatsoever  to  Seller's   customers   (the
         "Customers")  or  sales  of  the  Inventory  (hereinafter  collectively
         referred to as the "Customer Lists");

                  (vi) All  original  files,  books and  records of Seller  with
         respect  to  the  Customers  and  Customer  Lists  including,   without
         limitation,  all Customer files,  Customer account histories,  Customer
         purchasing and payment history, Customer credit files, etc., as well as
         a list of all current and previous  suppliers or  manufacturers  to the
         Business  within  the past two (2) years  with  sales in excess of Five
         Thousand and 00/100 Dollars ($5,000.00) per year;

                  (vii) To the extent such are assumable,  all right,  title and
         interest  of  Seller  as of the date of  Closing  in,  to and under the
         contracts,     leases,    franchises,     agreements,     arrangements,
         understandings,  commitments  and business  relationships  described on
         Schedule 1.1(a)(vii) attached hereto (the "Contract Rights") and all of
         Seller's  rights  (including  rights of refund and  offset),  deposits,
         privileges,  claims,  causes  of  action  and  options  relating  to or
         pertaining  to the Contract  Rights;  provided,  however,  except as is
         provided  otherwise  herein,  Buyer does not assume  any  liability  or
         responsibility  relating to, or arising in  connection  hereby with any
         such Contract Rights;

                  (viii) All of Seller's right, title and interest in and to any
         and all income and payments  due Seller  arising out of the Business as
         of the date of Closing;

                  (ix) To the extent transferable, all right, title and interest
         of Seller as of the date of Closing  in, to and under all  permits  and
         licenses  relating  to the  Business  or all or any of the  Assets  (as
         defined below);

<PAGE>

                  (x) All  right,  title  and  interest  of Seller in and to all
         prepaid  rentals  and  other  prepaid  expenses,  bonds,  deposits  and
         financial assurance  requirements  relating to any of the Assets or the
         Business;

                  (xi) All  right,  title and  interest  of Seller in and to any
         benefit of and the right to enforce the  covenants and  warranties,  if
         any,  the  Seller is  entitled  to enforce  with  respect to the Assets
         against Seller's predecessors and title to the Assets;

                  (xii) All of Seller's  right,  title and  interest in the name
         "KELIHER  HARDWARE  COMPANY,"  "KELIHER  HARDWARE"  and all related and
         similar names, logos and trade names including, without limitation, any
         of Seller's  corporate,  copyright,  trademark,  trade name and service
         mark rights and interest in such names, logos and trade names;

                  (xiii)  All  right,  title and  interest  of Seller in, to and
         under all  rights,  privileges,  claims,  causes of actions and options
         relating or pertaining to the Business or the Assets;

                  (xiv) All right,  title and  interest  of Seller in and to the
         goodwill of the Business and Seller;

                  (xv)     Seller's satellite Long Beach, California and Vernon,
         California business addresses;

                  (xvi)    Seller's  "800" and "888"  telephone  numbers and all
                           business telephone numbers;

                  (xvii) All right,  title and  interest of Seller in and to the
         leasehold  interest  of  Seller's  satellite  Long  Beach,   California
         commercial lease and Seller's Vernon,  California commercial lease (the
         "Real  Property  Leases"),  copies  of which  are  attached  hereto  as
         Schedule 1.1(a)(xvii).

<PAGE>

                                   EXHIBIT B

                              EMPLOYMENT AGREEMENT

                                George W. Keliher

<PAGE>
                                    EXHIBIT C

                              EMPLOYMENT AGREEMENT

                                  John Keliher

<PAGE>

                                    EXHIBIT D


                           SELLER'S OPINION OF COUNSEL

<PAGE>

                              SCHEDULE 1.1(a)(xvii)


                              REAL PROPERTY LEASES

<PAGE>

                                 SCHEDULE 1.1(b)


                                 EXCLUDED ASSETS

- -        Interest Receivable, Stockholder

- -        Deferred Income Tax

- -        Note from Keliher de Mexico

<PAGE>

                                 SCHEDULE 1.1(c)


                               ASSUMED LIABILITIES

1) Union Bank of California Loan and line of credit not to exceed the amount of
   $450,000.00, which shall be satisfied by Buyer's wire transfer at Closing.

2) Outstanding  trade payables incurred in the ordinary course of business not
   to exceed, in the aggregate, the amount of $366,000.00.

3) Outstanding loans from shareholders not to exceed, in the aggregate, the
   amount of $60,000.00.
   [NOTE:  Seller's loan from George Keliher not to exceed $20,000.00 shall be
   paid by Buyer at Closing.]

4) Long Beach, California Real Property Lease.

5) Vernon, California Real Property Lease (currently on a month-to-month basis).

6) Accrued expenses not to exceed, in the aggregate, the amount of 35,000.00.

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                                  SCHEDULE 2.5

                          ACCOUNTS RECEIVABLE RESERVES

                                      None

<PAGE>

                                  SCHEDULE 2.7


                   AGREEMENTS REQUIRING NOTICE AND/OR CONSENT


1.       The Union Bank of California Loan.

2.       The Real Property Lease(s).

<PAGE>

                                  SCHEDULE 2.14

                             EMPLOYEES AND BENEFITS

<PAGE>

                                  SCHEDULE 3.2

                              NOTICES AND APPROVALS