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Sample Business Contracts

Stock Purchase Agreement - Americomm Direct Marketing Inc., Cardinal Marketing Inc., and Cardinal Marketing of New Jersey Inc.

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                            STOCK PURCHASE AGREEMENT


                           Dated as of March 16, 1998


                                  By and Among


                        AMERICOMM DIRECT MARKETING, INC.,


                            CARDINAL MARKETING, INC.,


                     CARDINAL MARKETING OF NEW JERSEY, INC.


                                       and


                               THE STOCKHOLDERS OF
                          CARDINAL MARKETING, INC. AND
                     CARDINAL MARKETING OF NEW JERSEY, INC.
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----

ARTICLE I      DEFINITIONS..................................................  2

ARTICLE II     PURCHASE OF STOCK............................................  7
       ss.2.1  Purchase of Stock............................................  7
       ss.2.2  Price   .....................................................  8
       ss.2.3  Working Capital Adjustment...................................  9
       ss.2.4  Purchase Price............................................... 13
       ss.2.5  Closing...................................................... 14

ARTICLE III    REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 14
       ss.3.   Representations and Warranties of the
                       Company.............................................. 14
       ss.3.1  Existence and Good Standing.................................. 14
       ss.3.2  Capital Stock................................................ 15
       ss.3.3  Authorization and Validity of this
                       Agreement............................................ 16
       ss.3.4  Subsidiaries and Investments................................. 16
       ss.3.5  Financial Statements; No Material Changes.................... 17
       ss.3.6  Books and Records............................................ 18
       ss.3.7  Title to Properties; Encumbrances............................ 18
       ss.3.8  Real Property................................................ 19
       ss.3.9  Intellectual Property........................................ 20
       ss.3.10  Leases ..................................................... 20
       ss.3.11  Material Contracts.......................................... 21
       ss.3.12  Consents and Approvals; No Violations....................... 23
       ss.3.13  Litigation.................................................. 24
       ss.3.14  Taxes  ..................................................... 24
       ss.3.15  Liabilities................................................. 28
       ss.3.16  Insurance................................................... 29
       ss.3.17  Compliance with Laws........................................ 29
       ss.3.18  Employment Relations........................................ 29
       ss.3.19  Employee Benefit Plans...................................... 30
       ss.3.20  Interests in Customers, Suppliers, etc...................... 38
       ss.3.21  Environmental Laws and Regulations.......................... 38
       ss.3.22  Bank Accounts, Powers of Attorney........................... 42
       ss.3.23  Compensation of Employees................................... 42
       ss.3.24  Conduct of Business......................................... 42
       ss.3.25  Customer Relations.......................................... 43
       ss.3.26  Condition of Assets......................................... 43
       ss.3.27  Broker's or Finder's Fees................................... 43

ARTICLE IV     REPRESENTATIONS AND WARRANTIES OF THE SELLER................. 44
       ss.4.   Representations and Warranties of the
                       Seller............................................... 44
       ss.4.1  Ownership of Stock........................................... 44
       ss.4.2  Authorization and Validity of Agreement...................... 44
       ss.4.3  Restrictive Documents........................................ 45
       ss.4.4  Broker's or Finder's Fees.................................... 45
       ss.4.5  Interests in Customers, Suppliers, etc....................... 46
       ss.4.6  Consents and Approvals; No Violations........................ 46

ARTICLE V      REPRESENTATIONS AND WARRANTIES OF
                       THE PURCHASER........................................ 47
       ss.5.  Representations and Warranties of the Purchaser............... 47
       ss.5.1  Existence and Good Standing; Power and
                        Authority........................................... 47
       ss.5.2  Restrictive Documents........................................ 47
       ss.5.3  Purchase for Investment...................................... 48
       ss.5.4  Broker's or Finder's Fees.................................... 48
       ss.5.5  Consents and Approvals; No Violations........................ 48

ARTICLE VI     TRANSACTIONS PRIOR TO THE CLOSING DATE....................... 49
       ss.6.1  Conduct of Business of the Company........................... 49
       ss.6.2  Exclusive Dealing............................................ 51
       ss.6.3  Review of the Company........................................ 52
       ss.6.4  Reasonable Efforts........................................... 53
       ss.6.5  Monthly Financial Statements................................. 53

ARTICLE VII    CONDITIONS TO THE PURCHASER'S OBLIGATIONS.................... 54
       ss.7.  Conditions to the Purchaser's Obligations..................... 54
       ss.7.1  Opinions of Counsel.......................................... 54
       ss.7.2  Good Standing and Other Certificates......................... 54
       ss.7.3  No Material Adverse Change................................... 55
       ss.7.4  Truth of Representations and Warranties...................... 55
       ss.7.5  Performance of Agreements.................................... 56
       ss.7.6  No Litigation Threatened..................................... 56
       ss.7.7  Third Party Consents; Governmental Approvals................. 56
       ss.7.8  Resignations................................................. 56
       ss.7.9  Employment Agreements........................................ 56
       ss.7.10 FIRPTA....................................................... 57
       ss.7.11  Escrow Agreement............................................ 57
       ss.7.12  Non-Competition Agreements.................................. 57
       ss.7.13  Broker's or Finder's Fees................................... 58

ARTICLE VIII      CONDITIONS TO THE COMPANY'S AND THE
                       SELLERS' OBLIGATIONS................................. 59
       ss.8.   Conditions to the Company's and the
                       Sellers' Obligations................................. 59
       ss.8.1  Opinions of Counsel.......................................... 59
       ss.8.2  Truth of Representations and Warranties...................... 59
       ss.8.3  Third Party Consents; Governmental Approvals................. 59
       ss.8.4  Performance of Agreements.................................... 60
       ss.8.5  No Litigation Threatened..................................... 60
       ss.8.6  Employment Agreements........................................ 60
       ss.8.7  Non-Competition Agreements................................... 60

ARTICLE IX     TAX MATTERS.................................................. 61
       ss.9.1  Tax Returns.................................................. 61
       ss.9.2  Apportionment of Taxes....................................... 64
       ss.9.3  Controversies................................................ 65
       ss.9.4  Transfer Taxes............................................... 67
       ss.9.5  Amended Returns.............................................. 68
       ss.9.6  Indemnification.............................................. 68
       ss.9.7  Section 338 Election......................................... 70
       ss.9.8  Valuation and Allocation..................................... 71

ARTICLE X      SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION................. 72
       ss.10.1  Survival of Representations................................. 72
       ss.10.2  Indemnification............................................. 72
       ss.10.3  Indemnification Procedure................................... 75

ARTICLE XI      TERMINATION................................................. 78
       ss.11.1  Termination................................................. 78
       ss.11.2  Effect of Termination....................................... 79

ARTICLE XII     MISCELLANEOUS............................................... 80
       ss.12.1  Knowledge of the Company.................................... 80
       ss.12.2  Expenses.................................................... 80
       ss.12.3  Governing Law............................................... 80
       ss.12.4  Captions.................................................... 80
       ss.12.5  Publicity................................................... 81
       ss.12.6  Notices..................................................... 81
       ss.12.7  Parties in Interest......................................... 82
       ss.12.8  Counterparts................................................ 82
       ss.12.9  Entire Agreement............................................ 82
       ss.12.10  Amendments................................................. 83
       ss.12.11  Severability............................................... 83
       ss.12.12  Third Party Beneficiaries.................................. 83
       ss.12.13  Jurisdiction............................................... 83

EXHIBITS

Exhibit A              Form of Opinion of Counsel to Company
Exhibit B              Form of Escrow Agreement
Exhibit C              Form of Non-Competition Agreement -
                          James Smith
Exhibit D              Form of Non-Competition Agreement -
                          Chris Smith
Exhibit E              Form of Non-Solicitation Agreement -
                          Doug Smith
Exhibit F              Form of Non-Solicitation Agreement -
                          Other Employees
Exhibit G              Form of Opinion of Counsel to Purchaser

ANNEXES

Annex I                 Stockholders; Stock
Annex II                Escrow Account; Percentage Interest

SCHEDULES

Schedule 3.7            Title to Property; Encumbrances
Schedule 3.8            Real Property
Schedule 3.9            Intellectual Property
Schedule 3.10           Leases
Schedule 3.11           Material Contracts
Schedule 3.12           Consents and Approvals; No Violations
Schedule 3.13           Litigation
Schedule 3.14           Other Tax Matters
Schedule 3.16           Insurance
Schedule 3.18           Employment Relations
Schedule 3.19           Employee Benefit Plans
Schedule 3.20           Interests in Customers, Suppliers, etc.
Schedule 3.21           Environmental Laws and Regulations
Schedule 3.22           Bank Accounts, Powers of Attorney
Schedule 3.24           Conduct of Business
Schedule 3.25           Customer Relations
Schedule 4.5            Interests in Customers, Suppliers, etc.
Schedule 4.6            Consents and Approvals; No Violations
Schedule 6.1            Conduct of Business of the Company
Schedule 9.8            Valuation of Assets
<PAGE>




                            STOCK PURCHASE AGREEMENT
                            ------------------------


     STOCK PURCHASE  AGREEMENT (this  "AGREEMENT") dated as of March 16, 1998 by
and  among  AMERICOMM  DIRECT  MARKETING,  INC.,  a  Delaware  corporation  (the
"PURCHASER"),  CARDINAL  MARKETING,  INC., a Florida  corporation  ("CARDINAL"),
CARDINAL MARKETING OF NEW JERSEY,  INC., a New Jersey corporation  ("AFFILIATE",
Affiliate and Cardinal being referred to herein collectively, as the "COMPANY"),
and the  stockholders  of the  Company  listed on Annex I attached  hereto  (the
"STOCKHOLDERS").  The Stockholders shall be referred to herein individually as a
"SELLER" and collectively, as the "SELLERS."

                              W I T N E S S E T H :
                              - - - - - - - - - - 

     WHEREAS,  each of the Sellers is the holder of the number of common  shares
of stock, $.10 par value, of the Company  (collectively,  the "STOCK") set forth
opposite  such  Seller's  name in Annex I hereto,  which  shares of the  Sellers
constitute all of the issued and outstanding  shares of the capital stock of the
Company;

     WHEREAS, the Sellers desire to sell, and the Purchaser desires to purchase,
the Stock pursuant to this Agreement; and

     WHEREAS,  it is the intention of the parties hereto that, upon consummation
of the purchase and sale of the Stock pursuant to this Agreement,  the Purchaser
shall own all of the outstanding shares of capital stock of the Company.

     NOW, THEREFORE, IT IS AGREED:


                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

     ss.1.1  Definitions.  In addition to the terms  defined  elsewhere  in this
Agreement,  the following  terms shall have the  respective  meanings  specified
therefor below (such meanings to be equally  applicable to both the singular and
plural forms of the terms defined).

     "Affiliate"  shall  have the  meaning  specified  in the  preamble  to this
Agreement.

     "Aggregate  Closing  Payment"  shall have the meaning  specified in Section
2.2.

     "Agreement" shall mean this Agreement, as amended, modified or supplemented
from time to time.

     "Balance Sheet" shall have the meaning specified in Section 3.5.

     "Balance Sheet Date" shall have the meaning specified in Section 3.5.

     "Business Day" shall mean any day other than a Saturday,  a Sunday or a day
on which banks located in New York,  New York shall be authorized or required by
law to close.

     "Cardinal"  shall  have  the  meaning  specified  in the  preamble  to this
Agreement.

     "Claim" shall have the meaning specified in Section 10.3

     "Closing" shall have the meaning specified in Section 2.5.

     "Closing Date" shall have the meaning specified in Section 2.5.

     "Closing Net Working  Capital  Amount" shall have the meaning  specified in
Section 2.3.

     "Closing Net Working Capital Statement" shall have the meaning specified in
Section 2.3.

     "Code" shall have the meaning specified in Section 3.14.

     "Common Stock" shall have the meaning specified in Section 3.2.

     "Company"  shall  have  the  meaning  specified  in the  preamble  to  this
Agreement.

     "Company Property" shall have the meaning specified in Section 3.21.

     "Damages" shall have the meaning specified in Section 10.2.

     "Employee Benefit Plans" shall have the meaning specified in Section 3.19.

     "Encumbrances" shall have the meaning specified in Section 3.7.

     "Environmental Claims" shall have the meaning specified in Section 3.21.

     "Environmental Law" shall have the meaning specified in Section 3.21.

     "ERISA" shall have the meaning specified in Section 3.19.

     "Escrow Account" shall have the meaning specified in Section 2.2.

     "Escrow Agent" shall have the meaning specified in Section 2.2.

     "Escrow Agreement" shall have the meaning specified in Section 7.11.

     "Financial Statements" shall have the meaning specified in Section 3.5.

     "Hazardous Materials" shall have the meaning specified in Section 3.21.

     "Indemnified Party" shall have the meaning specified in Section 10.3.

     "Indemnifying Party" shall have the meaning specified in Section 10.3.

     "Intellectual Property" shall have the meaning specified in Section 3.9.

     "Material Adverse Effect" shall have the meaning specified in Section 3.1.

     "Notice of Objection" shall have the meaning specified in Section 2.3.

     "Overlap Period" shall have the meaning specified in Section 9.2.

     "Permitted Encumbrances" shall have the meaning specified in Section 3.7.

     "Permitted  Payments"  means:  so long as the Closing  Net Working  Capital
Amount exceeds $300,000,  the payment of cash distributions to the Sellers at or
prior to Closing,  provided  that each of the  Sellers  shall be expected to pay
their income tax obligations of such Seller  resulting from the Company's status
as an "S" corporation.

     "Person" shall have the meaning specified in Section 3.11.

     "Post-Closing Period" shall have the meaning specified in Section 9.7.

     "Pre-Closing Period" shall have the meaning specified in Section 3.14.

     "Purchase Price" shall have the meaning specified in Section 2.4.

     "Purchaser"  shall  have the  meaning  specified  in the  preamble  to this
Agreement.

     "Real Property" shall have the meaning set forth in Section 3.8.

     "Returns" shall have the meaning specified in Section 3.14.

     "Seller"  shall  have  the  meaning  specified  in  the  preamble  to  this
Agreement.

     "Sellers' Representative" shall have the meaning specified in Section 9.1.

     "Stock" shall have the meaning specified in the preamble to this Agreement.

     "Tax Matter" shall have the meaning specified in Section 9.2.

     "Taxes" means all taxes,  assessments,  charges,  duties,  fees,  levies or
other governmental charges,  including,  without limitation, all Federal, state,
local,  foreign and other income,  franchise,  profits,  capital gains,  capital
stock, transfer, sales, use, occupation,  property, excise, severance,  windfall
profits,  stamp,  license,  payroll,  withholding and other taxes,  assessments,
charges,  duties,  fees,  levies  or  other  governmental  charges  of any  kind
whatsoever  (whether  payable  directly  or by  withholding  and  whether or not
requiring the filing of a Return), all estimated taxes,  deficiency assessments,
additions to tax,  penalties  and interest and shall  include any  liability for
such amounts as a result  either of being a member of a combined,  consolidated,
unitary or  affiliated  group or of a  contractual  obligation  to indemnify any
person or other entity.

     "Working Capital  Arbitrator"  shall have the meaning  specified in Section
2.3.

     "Working Capital Assets" shall have the meaning specified in Section 2.3.

     "Working Capital  Liabilities"  shall have the meaning specified in Section
2.3.

                                   ARTICLE II

                                PURCHASE OF STOCK
                                -----------------

     ss.2.1 Purchase of Stock.  Subject to the terms and conditions set forth in
this Agreement, the Purchaser agrees to purchase from each of the Sellers on the
Closing  Date and each of the  Sellers  agrees  to sell,  assign,  transfer  and
deliver to the  Purchaser on the Closing  Date,  the shares of Stock so owned by
such Seller.  The certificates  representing the Stock shall be duly endorsed in
blank,  or  accompanied  by stock  powers duly  executed in blank,  by each such
Seller  transferring  the same to the Purchaser with all necessary  transfer tax
and  other  revenue  stamps,  acquired  at the  Sellers'  expense,  affixed  and
cancelled.  Each  Seller  agrees to cure any  deficiencies  with  respect to the
endorsement of the  certificates  representing the Stock owned by such Seller or
with respect to the stock power accompanying any such certificates.

          ss.2.2 Price. In full consideration for the sale by the Sellers of the
Stock to the Purchaser, the Purchaser shall pay at the Closing to the Sellers an
amount equal to $4,000,000 less (i) $100,000 representing payment for the option
granted pursuant to the Stock Purchase  Agreement dated November 12, 1998 by and
among the parties hereto,  (ii) any payments  required to be made by the Company
after the Closing as a result of the transactions contemplated by this Agreement
pursuant to the terms of the Agreement with Stanton Kane dated December 23, 1987
and the  Agreement  with  Richard  Demers  dated  July 10,  1997 and  (iii)  any
severance  payments required to be paid by the Company to Doug Smith on or after
the Closing  (such amount,  the  "AGGREGATE  CLOSING  PAYMENT") in the following
manner:

          (a) by wire  transfer  in  immediately  available  funds to the escrow
agent  (the  "ESCROW  AGENT")  to be  held in an  escrow  account  (the  "ESCROW
ACCOUNT")  pursuant to the provisions of the Escrow Agreement as contemplated by
Section 10.2(e) hereof, an amount equal to $500,000 representing the sum of that
portion  of the  Aggregate  Closing  Payment to be placed and held in the Escrow
Account by the Sellers in accordance  with the percentages set forth on Annex II
hereto; and

          (b) by wire transfer in immediately available funds to the Sellers the
balance of the Aggregate  Closing Payment in accordance with the percentages set
forth opposite such Seller's name on Annex II hereof to the account specified by
each of the Sellers to the  Purchaser  at least two  Business  Days prior to the
Closing.

     ss.2.3 Working Capital  Adjustment.  (a) Closing Working Capital Statement.
(i) As soon as practicable (but in no event later than 45 days after the Closing
Date), the Sellers'  Representative shall prepare and deliver to the Purchaser a
proposed closing net working capital statement of the Company as of the close of
business on the Closing Date (the "CLOSING NET WORKING CAPITAL STATEMENT").  The
Closing Net Working  Capital  Statement will reflect the Working Capital Assets,
the Working Capital Liabilities and the Closing Net Working Capital Amount as of
the  close of  business  on the  Closing  Date and will be  prepared  on a basis
consistent  with the  preparation  of the Balance  Sheet.  For purposes  hereof,
"WORKING CAPITAL ASSETS" shall mean the current assets of the Company, excluding
cash and short term investments;  "WORKING CAPITAL  LIABILITIES"  shall mean the
current  liabilities of the Company;  and "CLOSING NET WORKING  CAPITAL  AMOUNT"
shall mean the excess (or  deficiency)  of Working  Capital  Assets over Working
Capital  Liabilities  as of the close of  business on the  Closing  Date.  It is
expressly  agreed and understood  that amounts that have accrued and will become
due to (a) Mr. J. Stanton Kane pursuant to the Incentive  Bonus Agreement by and
between  Cardinal  and Mr. J. Stanton  Kane dated  December  29,  1994,  (b) Mr.
Richard Demers pursuant to the Incentive Bonus Agreement by and between Cardinal
and Mr.  Richard  Demers  dated  December  29,  1994,  and (c) Mr.  James Branam
pursuant to the Incentive Bonus Agreement by and between  Cardinal and Mr. James
Branam dated  December 29, 1994 (Mr. J. Stanton Kane, Mr. Richard Demers and Mr.
James Branam  collectively  the "INCENTIVE  BONUS  EMPLOYEES") if such Incentive
Bonus Employee remains employed by Cardinal through and including March 31, 1998
shall not be included in the calculation of Working Capital Liabilities.

          (ii) If the  Purchaser  does not  object to the  determination  by the
Sellers'  Representative  of the proposed  Closing Net Working Capital Amount by
written  notice of  objection  (the  "NOTICE  OF  OBJECTION")  delivered  to the
Sellers'  Representative  within 30 days after the  Purchaser's  receipt of such
statement,  such  Notice of  Objection  to  describe  in  reasonable  detail the
Purchaser's  proposed adjustments to the Closing Net Working Capital Amount, the
proposed  Closing  Net  Working  Capital  Statement  shall be  deemed  final and
binding.

          (iii) If the  Purchaser  delivers a Notice of  Objection in respect of
the Closing Net Working  Capital  Amount,  then any dispute shall be resolved in
accordance with paragraph (b) of this Section 2.3.

          (iv) During the period that the Purchaser's advisors and personnel are
conducting their review of the  determination of the Closing Net Working Capital
Amount, and subsequent to issuance of the Closing Net Working Capital Statement,
the Purchaser and its representatives shall have reasonable access during normal
business hours to the workpapers, schedules, memoranda, and all of the documents
prepared or reviewed by the Sellers'  Representative and its representatives and
all other books and records and information,  in each case related to or arising
in connection with the preparation of the Closing Net Working Capital  Statement
and the determination of the Closing Net Working Capital Amount and in each case
to the extent that such books,  records and  information  are not in Purchaser's
custody and  control.  The Sellers  agree in good faith to use all  commercially
reasonable  efforts to provide  such  information  and access  described in this
Section 2.3(a)(iv). To the extent any of such workpapers,  schedules,  memoranda
and other documents, books and records are in the control of the Purchaser after
the Closing, the Purchaser agrees to grant the Sellers and their representatives
reciprocal  access rights for the purpose of calculating the Closing Net Working
Capital Amount.

          (b)  Resolution  of Disputes.  (i) If the  Purchaser  has  delivered a
Notice of Objection pursuant to Section 2.3(a)(ii),  then the Purchaser,  on the
one hand,  and the Sellers'  Representative,  on the other hand,  shall promptly
endeavor to agree upon the Closing Net Working Capital Amount. In the event that
a written  agreement as to the Closing Net Working  Capital  Amount has not been
reached within 30 days after the date of receipt by the Sellers'  Representative
from the Purchaser of the Notice of  Objection,  then the  determination  of the
Closing Net Working  Capital  Amount may be submitted  by written  notice by the
Purchaser  or the  Sellers'  Representative  to KPMG  Peat  Marwick  or  another
nationally recognized accounting firm mutually acceptable to the Sellers, on the
one  hand,  and  the  Purchaser,   on  the  other  hand  (the  "WORKING  CAPITAL
ARBITRATOR").

          (ii) Within 45 days of the  submission of any dispute  concerning  the
determination  of the Closing Net Working  Capital Amount to the Working Capital
Arbitrator, the Working Capital Arbitrator shall render a decision in accordance
with this paragraph (b) hereof along with a statement of reasons  therefor.  The
decision of the Working Capital  Arbitrator  shall be final and binding upon the
parties hereto.

          (iii) The fees and expenses of the Working Capital  Arbitrator for any
determination  under this paragraph (b) shall be borne equally by the Purchaser,
on the one hand, and the Sellers, on the other hand.

          (iv)  Nothing  herein  shall be  construed  to authorize or permit the
Working  Capital  Arbitrator  to determine  (i) any question or matter  whatever
under or in connection  with this Agreement  except the  determinations  of what
adjustments,  if any, must be made in one or more of the items  reflected in the
Closing Net Working Capital Statement  delivered by the Sellers in order for the
Closing Net Working  Capital  Amount to be  determined  in  accordance  with the
provisions of this Agreement,  or (ii) a Closing Net Working Capital Amount that
is not equal to one of, or between,  the Closing Net Working  Capital  Amount as
proposed by the Purchaser and the Closing Net Working Capital Amount as proposed
by the Sellers. Nothing herein shall be construed to require the Working Capital
Arbitrator to follow any rules or procedures of any arbitration association.

     ss.2.4 Purchase Price. (a) Upon the final  determination of the Closing Net
Working Capital Amount, the parties shall make the following  adjustments to the
Aggregate  Closing Payment (the Closing Payment,  as so adjusted,  the "PURCHASE
PRICE"):

          (i) If the Closing Net Working Capital Amount exceeds  $300,000,  then
the Aggregate Closing Payment shall be increased by the amount of such excess.

          (ii) If the Closing Net Working  Capital Amount is less than $300,000,
then the  Aggregate  Closing  Payment  shall be  decreased by the amount of such
deficiency.  (b) Any  adjustment  required  pursuant  hereto  shall be paid,  if
pursuant  to Section  2.4(a)(i),  by the  Purchaser  or, if  pursuant to Section
2.4(a)(ii),  the Seller  (determined  for each Seller by  multiplying  the total
payment by the  percentage  of the issued and  outstanding  capital stock of the
Company owned by such Seller  immediately  prior to Closing) by wire transfer in
immediately  available  funds  together  with  interest  on the  amount  of such
adjustment  from the Closing Date to the date of payment  thereof at a per annum
rate equal to the "prime  lending rate" as published in The Wall Street  Journal
on the Closing Date.  Such payment shall be made on such of the following  dates
as may be  applicable:  (A) if the  Purchaser  shall  have not  objected  to the
preparation of the Closing Net Working Capital Statement,  the earlier of (1) 35
days  after  delivery  to the  Purchaser  of the  Closing  Net  Working  Capital
Statement  or (2) 5 days  after  the  Purchaser  has  indicated  that  it has no
objections to the preparation of the Closing Net Working Capital  Statement,  or
(B) if the  Purchaser  shall have  objected to such  preparation,  within 5 days
following  final  agreement or decision  with respect to the Closing Net Working
Capital Statement as provided above.

     ss.2.5  Closing.  The  purchase  and sale  referred  to in Section 2.1 (the
"CLOSING")  shall take place at 10:00 A.M.  at the  offices of Ruden,  McClosky,
Smith, Schuster & Russell P.A., Fort Lauderdale, Florida on March 16, 1998. Such
date is herein referred to as the "CLOSING DATE".


                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  ---------------------------------------------

     ss.3.  Representations  and  Warranties of the Company.  The Company hereby
represents and warrants to the Purchaser as follows:

     ss.3.1  Existence  and  Good  Standing.  Cardinal  is  A  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Florida. Affiliate is a corporation duly organized, validly existing and in good
standing under the laws of New Jersey.  The Company has the requisite  corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. The Company is duly qualified or licensed to do
business and is in good standing in each  jurisdiction in which the character or
location  of the  properties  owned,  leased or  operated  by the Company or the
nature of the business  conducted  by the Company  makes such  qualification  or
license necessary,  except where the failure to be so duly qualified or licensed
would not have a material adverse effect on the business, operations,  financial
condition or results of operations of the Company (a "MATERIAL ADVERSE EFFECT").

     ss.3.2 Capital Stock. Cardinal has an authorized  capitalization consisting
of 75,000 shares of common stock, par value $.10 per share (the "COMMON STOCK"),
of which 8,423 shares are issued and  outstanding.  Affiliate  has an authorized
recapitalization  consisting of 75,000 shares of Common Stock,  no par value per
share, of which 100 shares are issued and outstanding. All outstanding shares of
capital stock of the Company have been duly  authorized  and validly  issued and
are  fully  paid and  nonassessable.  There  are no  outstanding  subscriptions,
options,  warrants,  rights,  calls,  commitments,  conversion rights, rights of
exchange, plans or other agreements of any character providing for the purchase,
issuance or sale of any shares of the capital stock of the Company.

     ss.3.3  Authorization  and Validity of this Agreement.  The Company has the
requisite  corporate  power and authority to execute and deliver this  Agreement
and  to  perform  its  obligations  hereunder.   The  execution,   delivery  and
performance  of  this  Agreement  by the  Company  and  the  performance  of its
obligations  hereunder  have been duly  authorized  and approved by its Board of
Directors  and by the  holders of a  requisite  amount of the Stock and no other
corporate action on the part of the Company or action by the stockholders of the
Company is necessary to authorize the  execution,  delivery and  performance  of
this  Agreement  by the  Company.  This  Agreement  has been duly  executed  and
delivered by the Company and,  assuming due  execution of this  Agreement by the
Purchaser,  is a valid and binding obligation of the Company enforceable against
the  Company  in  accordance  with its  terms,  except  to the  extent  that its
enforceability   may  be   subject   to   applicable   bankruptcy,   insolvency,
reorganization,  moratorium  and  similar  laws  affecting  the  enforcement  of
creditors' rights generally and by general equitable principles.

     ss.3.4  Subsidiaries and Investments.  The Company does not own any capital
stock or other equity or ownership or proprietary  interest in any  corporation,
partnership, association, trust, joint venture or other entity.

     ss.3.5  Financial  Statements;  No  Material  Changes.  (a) The Company has
heretofore  furnished the Purchaser  with unaudited  combined  balance sheets of
Cardinal and Affiliate for the years ended December 31, 1995,  December 31, 1996
and December 31, 1997,  together  with related  combined  statements  of income,
retained earnings and cash flows and related supplementary  information for each
of the  Florida  and New Jersey  operations  and for the  Florida and New Jersey
operations   combined   for  the  fiscal   years  then  ended  (the   "FINANCIAL
STATEMENTS").  The Financial  Statements fairly present in all material respects
the financial position of each of Cardinal and Affiliate at the respective dates
thereof,  and the results of the  operations  and cash flows of each of Cardinal
and Affiliate for the respective periods indicated.  The Financial Statements of
each of Cardinal and Affiliate dated December 31, 1997, is hereinafter  referred
to as the "BALANCE  SHEET" and December 31, 1997, is hereinafter  referred to as
the "BALANCE SHEET DATE."

     (v) Since December 31, 1997,  there has been no (i) material adverse change
in the  business,  operations,  financial  condition or results of operations of
Cardinal or Affiliate (except for adverse changes resulting from the loss of the
Company's  customer  "Wachovia  Bank Card  Services") or (ii)  material  damage,
destruction  or loss to any  asset  or  property,  tangible  or  intangible,  of
Cardinal  or  Affiliate  which  materially  affects  the  ability of Cardinal or
Affiliate to conduct its business.

     ss.3.6 Books and Records.  The minute books of the Company,  as  previously
made  available to the Purchaser  and its  representatives,  contain  materially
accurate  records of all meetings of, and corporate  actions taken by (including
action  taken by written  consent),  the  respective  shareholders  and Board of
Directors of the Company. At Closing all of the books and records of the Company
will be in the possession of the Company.

     ss.3.7 Title to Properties;  Encumbrances.  Except as set forth on Schedule
3.7 attached  hereto and except for such  properties  and assets which have been
sold or otherwise  disposed of in the ordinary  course of business,  the Company
has good  title to its  material  properties  and  assets  (real  and  personal,
tangible and intangible), including, without limitation, the material properties
and assets  reflected in the Balance  Sheet,  subject to no  encumbrance,  lien,
charge or other  restriction of any kind or character  ("ENCUMBRANCES"),  except
for (i)  Encumbrances  reflected in the Balance  Sheet,  (ii)  Encumbrances  for
current taxes, assessments or governmental charges or levies on property not yet
due and  delinquent,  (iii)  Encumbrances  arising by  operation of law and (iv)
Encumbrances described on Schedule 3.7 attached hereto (Encumbrances of the type
described in clauses (i), (ii),  (iii) and (iv) above are hereinafter  sometimes
referred to as "PERMITTED ENCUMBRANCES").

     ss.3.8 Real Property.  Schedule 3.8 attached  hereto  contains  an accurate
and complete list of all real property  owned in whole or in part by the Company
(the "REAL  PROPERTY") and identifies the nature of the activities  conducted on
such  property.   With  respect  to  all  of  the   buildings,   structures  and
appurtenances  situated on the Real Property, the Company has adequate rights of
ingress and egress for  operation of the business of the Company in the ordinary
course  consistent  with past practice.  None of such  buildings,  structures or
appurtenances,   nor  the  operation  or  maintenance   thereof,   violates  any
restrictive covenant or encroaches,  on any property owned by others, except for
such violations,  encumbrances or encroachments  which would not have a Material
Adverse Effect.

     ss.3.9  Intellectual  Property.  The Company  possesses all patents,  trade
names,  trademarks,  service marks and copyrights necessary for the ownership of
its  properties  and  the  conduct  of  its  business  as  presently   conducted
(collectively,  the "INTELLECTUAL  PROPERTY").  All Intellectual Property is set
forth on Schedule 3.9 attached hereto.  To the best of the Company's  knowledge,
all  Intellectual  Property is valid and subsisting and the Company has received
no written notice of any event, inquiry, investigation or proceeding threatening
the validity of any such Intellectual Property.

     ss.3.10 Leases. Schedule 3.10 attached hereto contains a list of all leases
or  sub-leases  to which the Company is a party  requiring  an annual  aggregate
payment of at least  $10,000.  Except as  otherwise  set forth in Schedule  3.10
attached  hereto,  each lease or sub-lease set forth in Schedule 3.10 is in full
force and effect; all rents and additional rents due to date from the Company on
each such lease or sub-lease have been paid; the Company has not received notice
that it is in material  default under any such lease or  sub-lease;  and, to the
knowledge of the Company,  there exists no event,  occurrence,  condition or act
(including the consummation of the transactions  contemplated by this Agreement)
which,  with the giving of  notice,  the lapse of time or the  happening  of any
further event or condition, would become a material default by the Company under
such lease or sub-lease.

     ss.3.11  Material  Contracts.  Except  as set  forth on  Schedule  3.10 and
Schedule 3.11 attached  hereto,  the Company neither has nor is bound by (a) any
agreement,  contract or commitment  that involves the performance of services or
the delivery of goods and/or  materials by it of an amount or value in excess of
$10,000 or for a duration in excess of six months in the case of the performance
of  services,  (b) any  agreement,  contract or  commitment  not in the ordinary
course of  business,  (c) any  agreement,  indenture or other  instrument  which
contains  restrictions  with  respect to the payment of  dividends  or any other
distribution  in respect of its capital stock,  (d) any  agreement,  contract or
commitment relating to capital  expenditures or dispositions of assets in excess
of $10,000, (e) any agreement, indenture or instrument relating to indebtedness,
liability  for  borrowed  money  or the  deferred  purchase  price  of  property
(excluding  trade payables in the ordinary course of business),  (f) any loan or
advance  to, or  investment  in, any  individual,  partnership,  joint  venture,
corporation,  trust,  unincorporated  organization,  government  or other entity
(each a "PERSON"), any agreement,  contract or commitment relating to the making
of any such loan, advance or investment or any agreement, contract or commitment
involving a sharing of profits (excluding intercompany accounts with Affiliate),
(g) any guarantee or other  contingent  liability in respect of any indebtedness
or obligation of any Person (other than in the ordinary course of business), (h)
any management  service,  consulting or any other similar type of contract,  (i)
any  agreement,  contract or  commitment  limiting the ability of the Company to
engage in any line of business or to compete with any Person,  (j) any warranty,
guaranty or other similar undertaking with respect to a contractual  performance
extended by the Company  other than in the ordinary  course of business,  or (k)
any  amendment,  modification  or supplement in respect of any of the foregoing.
Except as otherwise set forth on Schedule  3.11,  each contract or agreement set
forth on Schedule  3.11 is in full force and effect and there exists no material
default  or  event  of  default  or to  the  knowledge  of the  Company,  event,
occurrence,  condition or act (including the  consummation  of the  transactions
contemplated  hereby) which, with the giving of notice, the lapse of time or the
happening of any other event or  condition,  would become a material  default or
event of default thereunder.

     ss.3.12  Consents  and  Approvals;  No  Violations.  Except as set forth in
Schedule 3.12 attached  hereto,  the execution and delivery of this Agreement by
the Company and the consummation  of  the transactions  contemplated  hereby (a)
will not violate or contravene any provision of the Certificate of Incorporation
or By-laws of the Company, (b) will not violate or contravene any statute, rule,
regulation, order or decree of any public body or authority by which the Company
is bound or by which any of its respective  properties or assets are bound,  (c)
will not  require any filing  with,  or permit,  consent or approval  of, or the
giving  of any  notice  to,  any  governmental  or  regulatory  body,  agency or
authority,  or any other Person and (d) will not result in a violation or breach
of,  conflict with,  constitute  (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation, payment
or acceleration) under, or result in the creation of any Encumbrance upon any of
the properties or assets of the Company under,  any of the terms,  conditions or
provisions of any note, bond, mortgage,  indenture,  license, franchise, permit,
agreement,  lease,  franchise agreement or any other instrument or obligation to
which  the  Company  is a  party,  or by  which  it or any of  their  respective
properties or assets may be bound,  except,  in the case of clauses (c) and (d),
for such  filing,  permit,  consent  or  approval,  the  absence  of which,  and
violations,  breaches,  defaults,  conflicts  and  encumbrances  which,  in  the
aggregate would not have a Material Adverse Effect.

     ss.3.13  Litigation.  Except as set forth on Schedule 3.13 attached hereto,
there  is no  action,  suit,  proceeding  at law or in  equity,  arbitration  or
administrative  or other  proceeding  by or before (or to the  knowledge  of the
Company any  investigation  by) any  governmental  or other  instrumentality  or
agency,  pending,  or, to the knowledge of the Company,  threatened,  against or
affecting  the Company or its  properties or rights which could  materially  and
adversely affect the right or ability of the Company to carry on its business as
now conducted,  or which could have a Material  Adverse Effect;  and the Company
knows of no valid basis for any such action,  proceeding or  investigation.  The
Company is subject to no  judgment,  order or decree  entered in any  lawsuit or
proceeding which could reasonably be likely to have a Material Adverse Effect.

     ss.3.14 Taxes.  (a) Tax Returns.  The Company has timely filed or caused to
be  timely  filed  or will  timely  file or cause to be  timely  filed  with the
appropriate  taxing authorities all returns,  statements,  forms and reports for
Taxes  ("RETURNS")  that are  required  to be filed by, or with  respect to, the
Company on or prior to the Closing Date. The Returns have  accurately  reflected
and will  accurately  reflect  all  liability  for Taxes of the  Company for the
periods covered thereby.

     (b) Payment of Taxes. All material Taxes and Tax liabilities of the Company
for all taxable  years or periods  that end on or before the  Closing  Date and,
with respect to any taxable year or period beginning before and ending after the
Closing Date, the portion of such taxable year or period ending on and including
the Closing Date  ("PRE-CLOSING  PERIODS")  have been timely paid or accrued and
adequately  disclosed  and fully  provided  for on the books and  records of the
Company in accordance with generally accepted accounting principles consistently
applied.

     (c) Other Tax Matters.  (i) Schedule  3.14  attached  hereto sets forth (A)
each taxable year or other  taxable  period of the Company for which an audit or
other  examination of Taxes by the  appropriate  tax  authorities of any nation,
state,  locality or other jurisdiction is currently in progress (or scheduled as
of the Closing Date to be conducted)  together with the names of the  respective
tax authorities conducting (or scheduled to conduct) such audits or examinations
and a description of the subject matter of such audits or examinations,  (B) the
most recent  taxable  year or other  taxable  period for which an audit or other
examination  relating to Federal  income  taxes of the Company has been  finally
completed and the  disposition of such audits or  examinations,  (C) the taxable
years or other  taxable  periods of the Company which will not be subject to the
normally  applicable  statute  of  limitations  by  reason of the  existence  of
circumstances  that would cause any such statute of  limitations  for applicable
Taxes to be  extended,  (D) the  amount  of any  proposed  adjustments  (and the
principal  reason  therefor)  relating to any Returns for Tax  liability  of the
Company which have been  proposed or assessed by any taxing  authority and (E) a
list of all notices received by the Company from any taxing  authority  relating
to any issue which could affect the Tax  liability  of the Company,  which issue
has not been  finally  determined  and which,  if  determined  adversely  to the
Company, could result in a Tax liability.

          (ii)  The  Company  has  not  been  included  in  any  "consolidated,"
"unitary" or "combined"  Return provided for under the law of the United States,
any foreign jurisdiction or any state or locality with respect to Taxes for  any
taxable period for which the statute of limitations has not
expired.

          (iii)  All Taxes  which the  Company  is (or was)  required  by law to
withhold or collect have been duly withheld or  collected,  and have been timely
paid over to the proper authorities to the extent due and payable.

          (iv)  The  Company  is not a  "United  States  real  property  holding
corporation"  within the meaning of Section  897(c)(2) of the  Internal  Revenue
Code of 1986, as amended, and the rules and regulations  promulgated  thereunder
(the "CODE").

          (v) There are no tax sharing,  allocation,  indemnification or similar
agreements or  arrangements  in effect as between the Company or any predecessor
or  affiliate  thereof  and any  other  party  (including  the  Sellers  and any
predecessor or affiliate thereof) pursuant to which the Purchaser or the Company
could be liable for any Taxes or other claims of any party.

          (vi) The Company has not applied for, been  granted,  or agreed to any
accounting  method change for which it will be required to take into account any
adjustment under Section 481 of the Code or any similar provision of the Code or
the corresponding tax laws of any nation, state, locality or other jurisdiction.

          (vii)  No   indebtedness   of  the  Company   consists  of  "corporate
acquisition indebtedness" within the meaning of Section 279 of the Code.

     (d)  Cardinal has made a valid S election  under  Section 1361 of the Code.
With  respect to Cardinal,  such  election was made on December 23, 1986 and was
effective as of the year commencing January 1, 1987.  Cardinal has also made all
such elections  required  under any analogous  provisions of state or local law.
Cardinal will continue to be a valid S corporation  through the Closing Date and
Sellers will be eligible to make an election  under  Section  338(h)(10)  of the
Code  with  respect  to the  sale of the  stock  of  Cardinal  pursuant  to this
Agreement.

     (e) Affiliate  has made a valid S election  under Section 1361 of the Code.
With respect to  Affiliate,  such election was made on December 19, 1996 and was
effective as of the year commencing January 1, 1997.  Affiliate will continue to
be a valid S  corporation  through the Closing  Date for the purposes of federal
income  taxation  and Sellers  will be  eligible  to make the an election  under
Section  338(h)(10)  of the  Code  with  respect  to the  sale of the  stock  of
Affiliate pursuant to this Agreement.  Affiliate has not made any such analogous
election  under New Jersey  law,  therefore,  Affiliate  is not  treated as an S
corporation for New Jersey income tax purposes.

     ss.3.15  Liabilities.  Other than  liabilities  incurred  subsequent to the
Balance  Sheet Date in the  ordinary  course of  business,  the  Company  has no
outstanding  material  claims,   liabilities  or  indebtedness,   contingent  or
otherwise,  except  (i) as set  forth  in the  Balance  Sheet  and  (ii)  future
obligations  under  executory  contracts  of the  Company  entered  into  in the
ordinary course of business which  obligations  will not have a Material Adverse
Effect.

     ss.3.16 Insurance.  Schedule 3.16 contains an accurate and complete summary
description of all policies of property,  fire and casualty,  product liability,
workers  compensation and other forms of insurance owned or held by the Company.
The  Company  has not  received  (i) any  notice of  cancellation  of any policy
described in such  Schedule or refusal of coverage  thereunder,  (ii) any notice
that any  issuer  of such  policy  has  filed for  protection  under  applicable
bankruptcy  laws or is  otherwise  in the  process  of  liquidating  or has been
liquidated,  or (iii) any other  indication  that such policies are no longer in
full force or effect or that the issuer of any such policy is no longer  willing
or able to perform its  obligations  thereunder.  Since the last renewal date of
any  insurance  policy,  there has not been any material  adverse  change in the
relationship  of the  Company  with  its  insurers  or in the  premiums  payable
pursuant to such policies.

     ss.3.17  Compliance  with  Laws.  The  Company  is in  compliance  with all
applicable laws,  regulations,  orders,  judgments and decrees, except where the
failure to so comply would not have a Material Adverse Effect.

     ss.3.18  Employment  Relations.  (a) The Company is in material  compliance
with  all  Federal,  state  or  other  applicable  laws,  domestic  or  foreign,
respecting  employment  and  employment  practices,   terms  and  conditions  of
employment and wages and hours,  and has not, and is not,  engaged in any unfair
labor practice;

     (b) no unfair  labor  practice  complaint  against  the  Company is pending
before the National Labor Relations Board;

     (c)  there is no labor  strike,  dispute,  slowdown  or  stoppage  actually
pending or threatened against or involving the Company;

     (d) the Company is not a party to any collective  bargaining  agreement and
no collective bargaining agreement is currently being negotiated by the Company;
and

     (e)  except as  provided  on  Schedule  3.18,  no claim in  respect  of the
employment  of any  employee  has been  asserted  or,  to the  knowledge  of the
Company, threatened, against the Company.

     ss.3.19  Employee  Benefit Plans.  (a) List of Plans. Set forth in Schedule
3.19  attached  hereto is an accurate  and  complete  list of all  domestic  and
foreign (i) "employee  benefit plans," within the meaning of Section 3(3) of the
Employee  Retirement Income Security Act of 1974, as amended,  and the rules and
regulations  thereunder  ("ERISA");  (ii) bonus,  stock option,  stock purchase,
restricted stock,  incentive,  profit-sharing,  pension or retirement,  deferred
compensation,   medical,  life,  disability,   accident,   salary  continuation,
severance,   accrued  leave,  vacation,  sick  pay,  sick  leave,   supplemental
retirement and unemployment benefit plans, programs,  arrangements,  commitments
and/or practices  (whether or not insured);  and (iii)  employment,  consulting,
termination,  and severance  contracts or  agreements;  in each case for active,
retired  or  former  employees  or  directors,  whether  or not any such  plans,
programs,  arrangements,  commitments,  contracts,  agreements  and/or practices
(referred to in (i), (ii) or (iii) above) are in writing or are otherwise exempt
from the  provisions  of  ERISA;  that  have  been  established,  maintained  or
contributed  to (or with respect to which an obligation  to contribute  has been
undertaken)  or with  respect to which any  potential  liability is borne by the
Company  (including,  for  this  purpose  and  for  the  purpose  of  all of the
representations  in this Section 3.19, any  predecessors  to the Company and all
employers  (whether or not  incorporated)  that are by reason of common  control
treated  together with the Company  and/or the Sellers as a single  employer (i)
within the  meaning of Section  414 of the  Internal  Revenue  Code of 1986,  as
amended,  and the rules and  regulations  thereunder  (the  "CODE") or (ii) as a
result of the Company  and/or any of the Sellers  being or having been a general
partner  of any such  employer),  since  September  2, 1974  ("EMPLOYEE  BENEFIT
PLANS").

     (b) Status of Plans.  Each Employee  Benefit Plan complies in form with the
requirements of all applicable laws,  including,  without limitation,  ERISA and
the Code,  and has at all times been  maintained  and  operated  in  substantial
compliance  with  its  terms  and  the  requirements  of  all  applicable  laws,
including,  without  limitation,  ERISA and the Code.  No  complete  or  partial
termination  of any Employee  Benefit Plan has occurred or is expected to occur.
The Company has no commitment,  intention or understanding to create,  modify or
terminate  any  Employee  Benefit  Plan.  Except as  required  to  maintain  the
tax-qualified  status of any  Employee  Benefit Plan  intended to qualify  under
Section  401(a) of the Code,  no  condition  or  circumstance  exists that would
prevent the amendment or termination of any Employee  Benefit Plan. No event has
occurred  and no condition  or  circumstance  has existed that could result in a
material  increase  in the  benefits  under or the  expense of  maintaining  any
Employee  Benefit  Plan from the level of benefits or expense  incurred  for the
most recent fiscal year ended thereof.

     (c) No Pension  Plans.  No Employee  Benefit Plan is an  "employee  pension
benefit plan"  (within the meaning of Section 3(2) of ERISA)  subject to Section
412 of the Code or  Section  302 or Title IV of  ERISA.  The  Company  has never
maintained or  contributed  to, or had any obligation to contribute to (or borne
any liability with respect to) any "multiple  employer plan" (within the meaning
of the Code or  ERISA)  or any  "multiemployer  plan"  (as  defined  in  Section
4001(a)(3) of ERISA).

     (d)  Liabilities.  The Company does not maintain any Employee  Benefit Plan
which is a "group  health  plan" (as such term is defined  in Section  607(1) of
ERISA or  Section  5000(b)(1)  of the Code) that has not been  administered  and
operated in all  respects in  compliance  with the  applicable  requirements  of
Section  601 of ERISA and  Section  4980B(f)  of the Code and the Company is not
subject to any material liability,  including,  without  limitation,  additional
contributions,  fines, taxes,  penalties or loss of tax deduction as a result of
such  administration  and operation.  The Company does not maintain any Employee
Benefit Plan (whether  qualified or  nonqualified  within the meaning of Section
401(a) of the Code) providing for post-employment or retiree health, life and/or
other welfare benefits and having unfunded liabilities, and the Company does not
have any  obligation  to  provide  any such  benefits  to any  retired or former
employees  or  active   employees   following  such  employees'   retirement  or
termination of service.  The Company does not maintain any Employee Benefit Plan
which is an "employee  welfare benefit plan" (as such term is defined in Section
3(1) of ERISA) that has  provided  any  "disqualified  benefit" (as such term is
defined  in Section  4976(b)  of the Code)  with  respect to which an excise tax
could be  imposed.  The  Company  has no  unfunded  liabilities  pursuant to any
Employee  Benefit Plan that is not intended to be qualified under Section 401(a)
of the Code.

     The  Company  has not  incurred  any  liability  for any tax or excise  tax
arising under Chapter 43 of the Code, and no event has occurred and no condition
or circumstance has existed that could give rise to any such liability.

     There are no actions,  suits or claims  pending,  or, to the best knowledge
and belief of the Company and the Sellers,  threatened,  anticipated or expected
to be asserted  against any Employee Benefit Plan or the assets of any such plan
(other than routine claims for benefits and appeals of denied  routine  claims).
No civil or  criminal  action  brought  pursuant to the  provisions  of Title I,
Subtitle B, Part 5 of ERISA is pending, threatened,  anticipated, or expected to
be asserted  against the Company or any fiduciary of any Employee  Benefit Plan,
in any case with respect to any Employee  Benefit Plan. No Employee Benefit Plan
or any  fiduciary  thereof has been the direct or indirect  subject of an audit,
investigation or examination by any governmental or quasi-governmental agency.

     (e)  Contributions.  Full  payment has been made of all  amounts  which the
Company is required,  under applicable law or under any Employee Benefit Plan or
any  agreement  relating to any Employee  Benefit Plan to which the Company is a
party, to have paid as  contributions  or premiums thereto as of the last day of
the most recent  fiscal year of such  Employee  Benefit  Plan ended prior to the
date hereof. All such contributions and/or premiums have been fully deducted for
income tax purposes and no such  deduction has been  challenged or disallowed by
any governmental entity, and to the best knowledge and belief of the Sellers and
the Company no event has occurred and no condition or  circumstance  has existed
that could give rise to any such challenge or disallowance. The Company has made
adequate provision for reserves to meet contributions and premiums and any other
liabilities  that have not been paid or  satisfied  because they are not yet due
under  the  terms  of any  Employee  Benefit  Plan,  applicable  law or  related
agreements.  Benefits under all Employee  Benefit Plans are as  represented  and
have not been increased  subsequent to the date as of which  documents have been
provided.

     (f) Tax Qualification.  Each Employee Benefit Plan intended to be qualified
under Section  401(a) of the Code has been  determined to be so qualified by the
Internal Revenue Service. Each trust established in connection with any Employee
Benefit Plan which is intended to be exempt from Federal  income  taxation under
Section  501(a) of the Code has been  determined to be so exempt by the Internal
Revenue Service. Since the date of each most recent determination referred to in
this paragraph (f), no event has occurred and no condition or  circumstance  has
existed  that  resulted  or is likely to  result in the  revocation  of any such
determination  or that could adversely  affect the qualified  status of any such
Employee Benefit Plan or the exempt status of any such trust.

     (g) Transactions.  Neither the Company nor any of its directors,  officers,
employees  or, to the best  knowledge and belief of the Sellers and the Company,
other persons who  participate in the operation of any Employee  Benefit Plan or
related trust or funding vehicle, has engaged in any transaction with respect to
any Employee Benefit Plan or breached any applicable fiduciary  responsibilities
or  obligations  under Title I of ERISA that would subject any of them to a tax,
penalty or liability for prohibited  transactions  or breach of any  obligations
under ERISA or the Code or would result in any claim being made under,  by or on
behalf of any such Employee Benefit Plan by any party with standing to make such
claim.

     (h) Triggering Events. The execution of this Agreement and the consummation
of the transactions  contemplated  hereby,  do not constitute a triggering event
under any Employee Benefit Plan, policy, arrangement,  statement,  commitment or
agreement,  whether or not legally enforceable,  which (either alone or upon the
occurrence  of any  additional  or  subsequent  event) will or may result in any
payment  (whether of severance pay or otherwise),  "parachute  payment" (as such
term is defined in Section 280G of the Code), acceleration,  vesting or increase
in benefits to any employee or former  employee or director of the  Company.  No
Employee Benefit Plan provides for the payment of severance, termination, change
in control or similar-type payments or benefits.

     (i)  Documents.  The Sellers  have  delivered  or caused to be delivered to
Purchaser and its counsel true and complete copies of all material  documents in
connection with each Employee Benefit Plan, including, without limitation (where
applicable):  (i) all  Employee  Benefit  Plans as in effect on the date hereof,
together with all  amendments  thereto,  including,  in the case of any Employee
Benefit Plan not set forth in writing, a written description  thereof;  (ii) all
current  summary plan  descriptions,  summaries of material  modifications,  and
material  communications;  (iii) all current trust  agreements,  declarations of
trust and other  documents  establishing  other  funding  arrangements  (and all
amendments thereto and the latest financial statements  thereof);  (iv) the most
recent Internal  Revenue Service  determination  letter obtained with respect to
each Employee  Benefit Plan intended to be qualified under Section 401(a) of the
Code or  exempt  under  Section  501(a) of the Code;  (v) the  annual  report on
Internal  Revenue Service Form  5500-series for each of the last three years for
each Employee  Benefit Plan  required to file such form;  (vi) the most recently
prepared  financial  statements  for each  Employee  Benefit Plan for which such
statements are required; and (vii) all contracts and agreements relating to each
Employee  Benefit  Plan,   including,   without  limitation,   service  provider
agreements,   insurance  contracts,  annuity  contracts,  investment  management
agreements, subscription agreements, participation agreements, and recordkeeping
agreements and collective bargaining agreements.

     ss.3.20  Interests in  Customers,  Suppliers,  etc.  Except as set forth on
Schedule 3.20 attached  hereto,  neither the Sellers nor any officer or director
of the Company possesses,  directly or indirectly, any ownership interest in, or
is a director, officer or employee of, any Person which is a supplier, customer,
lessor, lessee, licensor,  developer,  competitor or potential competitor of the
Company.  Ownership of securities of a company whose  securities  are registered
under  the  Securities  Exchange  Act of 1934 of 5% or less of any class of such
securities  shall not be deemed to be a financial  interest for purposes of this
Section 3.20.

     ss.3.21 Environmental Laws and Regulations. Except as set forth on Schedule
3.21 and except for that which would not have a Material Adverse Effect:

     (a) Hazardous  Materials (as hereinafter  defined) have not been generated,
used,  treated or stored on,  transported to or from, or released or disposed on
any Company Property (as hereinafter  defined),  by or on behalf of the Company,
or, to the best knowledge of the Company, any property adjoining, adjacent to or
in the vicinity of any Company Property, except in compliance with Environmental
Laws.

     (b)  The  Company  is  in   compliance   in  all  material   respects  with
Environmental  Laws (as  hereinafter  defined) and the  requirements  of permits
issued under such Environmental Laws with respect to any Company Property.

     (c) There are no pending or, to the  knowledge of the  Company,  threatened
Environmental Claims (as hereinafter defined) against the Company or any Company
Property.

     (d) There are no facts, circumstances,  conditions or occurrences regarding
the Company's past or present  business or operations or any Company Property or
former  Company  Property,  or, to the  knowledge of the  Company,  any property
adjoining or in the vicinity of any Company  Property,  that could reasonably be
anticipated (i) to form the basis of an Environmental  Claim against the Company
or any  Company  Property or assets,  or (ii) to cause the  Company  Property or
assets to be subject to any  restrictions  on its ownership,  occupancy,  use or
transferability under any Environmental Law.

     (e) To the  knowledge of the Company there are not now and there have never
been any  underground  storage tanks  located on any Company  Property or on any
property adjoining or adjacent to any Company Property.  

     (f) For  purposes of this  Section  3.21 the  following  definitions  shall
apply:

     "COMPANY PROPERTY" means any real property and improvements owned,  leased,
used, operated or occupied by the Company.

     "HAZARDOUS  MATERIALS"  means  (a) any  petroleum  or  petroleum  products,
radioactive  materials,  asbestos in any form that is friable, urea formaldehyde
foam insulation,  transformers or other equipment that contain  dielectric fluid
containing  levels of  polychlorinated  biphenyls,  and radon  gas;  and (b) any
chemicals,  materials or substances  defined as or included in the definition of
"hazardous  substances,"  "hazardous wastes," "hazardous  materials," "extremely
hazardous wastes,"  "restricted  hazardous wastes," "toxic  substances,"  "toxic
pollutants," or words of similar import, under any applicable Environmental Law.

     "ENVIRONMENTAL LAW" means any federal,  state or local statute,  law, rule,
regulation,  ordinance, code, policy or rule of common law in effect and in each
case as amended as of the  Closing  Date,  and any  judicial  or  administrative
interpretation  thereof  as of the  Closing  Date,  including  any  judicial  or
administrative  order, consent decree or judgment,  relating to the environment,
health, safety or Hazardous Materials, including the Comprehensive Environmental
Response,  Compensation,  and Liability Act of 1980, 42 U.S.C. ss. 6901 et seq.;
the Resource  Conservation  and Recovery  Act, 42 U.S.C.  ss. 9601 et seq.;  the
Federal  Water  Pollution  Control  Act, 33 U.S.C.  ss. 1251 et seq.;  the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking  Water Act, 42 U.S.C.  ss. 300f et seq.; the
Oil Pollution Act of 1990, 33 U.S.C.  ss. 2701 et seq.;  the Emergency  Planning
and Community  Right-To-Know  Act, 42 U.S.C.  ss. 1101 et seq.; the Occupational
Safety and Health Act of 1970,  29 U.S.C.  ss.651 et seq.;  and their  state and
local counterparts and equivalents; in each case, as amended.

     "ENVIRONMENTAL   CLAIMS"  means  administrative,   regulatory  or  judicial
actions,   suits,   demands,   demand  letters,   claims,   liens,   notices  of
non-compliance or violation,  investigations or proceedings  relating in any way
to  any Environmental Law or any permit issued under any such Law, including (a)
Environmental   Claims  by  any  governmental  or  regulatory   authorities  for
enforcement,  cleanup, removal,  response,  remedial or other actions or damages
pursuant to any applicable  Environmental  Law, and (b) Environmental  Claims by
any third party seeking damages, contribution,  indemnification,  cost recovery,
compensation or injunctive relief resulting from Hazardous  Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

     ss.3.22  Bank  Accounts,  Powers of  Attorney.  Set forth on Schedule  3.22
attached  hereto is an  accurate  and  complete  list  showing  (a) the name and
address of each bank in which the Company has a material account or safe deposit
box, the number of any such account or any such box and the names of all persons
authorized  to draw  thereon or to have access  thereto and (b) the names of all
persons, if any, holding powers of attorney from the Company.

     ss.3.23 Compensation of Employees.  The Company has previously provided the
Purchaser  with an accurate and  complete  list for fiscal year 1997 showing the
names of all persons  employed by the Company who received  more than $50,000 in
1997 cash compensation (including,  without limitation,  salary,  commission and
bonus) and who are  expected to be employed by the Company on the Closing  Date.
Such  list sets  forth the  present  salary  or hourly  wage,  total in 1997 and
expected  1998  cash  compensation  (including,   without  limitation,   salary,
commission and bonus) and fringe benefits, of each such person.

     ss.3.24 Conduct of Business.  Except as disclosed on Schedule 3.24 attached
hereto and except as expressly  contemplated by this  Agreement,  since June 30,
1997,  the  Company  has  taken no  action  which,  if taken  subsequent  to the
execution  of  this  Agreement  and on or  prior  to  the  Closing  Date,  would
constitute a breach of the Company's agreements set forth in Section 6.1.

     ss.3.25 Customer  Relations.  Except as set forth on Schedule 3.25 attached
hereto,  the Company has not, since December 31, 1996,  received oral or written
notice from any of the top ten customers of the Company  (based on 1996 revenues
of the Company)  that any such  customer  intends to reduce the volume or dollar
amount of purchases from the Company.

     ss.3.26  Condition  of Assets.  The assets and  properties  utilized in and
material to the conduct of the Company's business,  whether owned or leased, are
in the aggregate in good  operating  condition and repair  (normal wear and tear
excepted) and, with the exception that the Company believes that the premises on
which the Company  operates  need to be expanded,  are suitable for the purposes
for which they are presently being used.

     ss.3.27 Broker's or Finder's Fees. No agent, broker,  person or firm acting
on behalf of the Company or the  Sellers,  including,  without  limitation,  The
Platinum Group,  Inc., is, or will be, entitled to any commission or broker's or
finder's fees from the Company, or from any Person controlled by or under common
control  with  the  Company,   in  connection  with  any  of  the   transactions
contemplated by this Agreement.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS
                  ---------------------------------------------

     ss.4.  Representations  and Warranties of the Sellers.  Each of the Sellers
represents and warrants to the Purchaser as follows:

     ss.4.1 Ownership of Stock. Such Seller is the lawful owner of the shares of
Stock listed  opposite such  Seller's name on Annex I hereto,  free and clear of
all liens, encumbrances,  restrictions and claims of every kind. Such Seller has
the full legal right,  power and  authority to enter into this  Agreement and to
sell,  assign,  transfer and convey such shares of Stock so owned by such Seller
pursuant to this Agreement,  and the delivery to the Purchaser of such shares of
Stock  pursuant  to the  provisions  of  this  Agreement  will  transfer  to the
Purchaser good title thereto, free and clear of all Encumbrances.  The shares of
Stock listed on Annex I hereto  constitute all of the outstanding  capital stock
of Cardinal and Affiliate.

     ss.4.2  Authorization  and  Validity  of  Agreement.  Such  Seller  has the
requisite  power and  authority  to execute and deliver this  Agreement  and the
Escrow  Agreement,  to perform its  obligations  hereunder and thereunder and to
consummate the  transactions  contemplated to be performed by such Seller hereby
and thereby.  This Agreement has been,  and at the Closing the Escrow  Agreement
will be, duly  executed and  delivered by each of the Sellers and,  assuming the
due execution of this Agreement and the Escrow Agreement by the Purchaser,  this
Agreement  is,  and at the  Closing  the Escrow  Agreement  will be, a valid and
binding  obligation  of each of the  Sellers,  enforceable  against  each of the
Sellers in accordance with its respective  terms,  except to the extent that its
enforceability   may  be   subject   to   applicable   bankruptcy,   insolvency,
reorganization  and similar laws affecting the enforcement of creditors'  rights
generally and to general equitable principles.

     ss.4.3 Restrictive  Documents.  Such Seller is not subject to any mortgage,
lien, lease, agreement,  instrument,  order, law, rule, regulation,  judgment or
decree,  or any other  restriction of any kind or character  which would prevent
consummation by such Seller of the transactions contemplated by this Agreement.

     ss.4.4 Broker's or Finder's Fees.  Except for The Platinum Group,  Inc., no
agent,  broker,  person or firm  acting on behalf of such Seller is, or will be,
entitled to any  commission  or  broker's  or finder's  fees from such Seller in
connection with any of the transactions contemplated by this Agreement.

     ss.4.5  Interests  in  Customers,  Suppliers,  etc.  Except as set forth on
Schedule 4.5, neither such Seller nor, to the best knowledge of such Seller, any
other officer or director of the Company, possesses, directly or indirectly, any
ownership  interest  in, or is a director,  officer or  employee  of, any Person
which is a supplier, customer, lessor, lessee, licensor,  developer,  competitor
or potential  competitor  of the Company.  Ownership of  securities of a company
whose securities are registered under the Securities  Exchange Act of 1934 of 5%
or less of any class of such  securities  shall not be deemed to be an ownership
interest for purposes of this Section 4.5.

     ss.4.6  Consents and Approvals;  No Violations.  Except (i) as set forth in
Schedule  4.6  attached  hereto  and (ii) for any  applicable  state or  federal
securities laws, the execution and delivery of this Agreement by the Sellers and
the consummation of the transactions contemplated hereby (a) will not violate or
contravene any statute, rule, regulation,  order or decree of any public body or
authority  by which the Sellers  are bound,  and (b) will not require any filing
with,  or permit,  consent or  approval  of, or the giving of any notice to, any
governmental or regulatory body, agency or authority, or any other Person.


                                    ARTICLE V

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
                 -----------------------------------------------

     ss.5.  Representations  and  Warranties  of the  Purchaser.  The  Purchaser
represents and warrants to the Company and each of the Sellers as follows:

     ss.5.1 Existence and Good Standing; Power and Authority. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.  The Purchaser has the requisite  corporate  power and
authority  to enter into,  execute and deliver  this  Agreement  and perform its
obligations  hereunder.  This Agreement has been duly authorized and approved by
the Purchaser  and,  assuming the due execution of this Agreement by the Company
and each of the  Sellers,  is a valid and binding  obligation  of the  Purchaser
enforceable  against it in accordance with its terms,  except to the extent that
its  enforceability  may  be  subject  to  applicable  bankruptcy,   insolvency,
reorganization,  moratorium and other similar laws affecting the  enforcement of
creditors' rights generally and by general equitable principles.

     ss.5.2 Restrictive Documents. The Purchaser is not subject to any mortgage,
lien, lease, agreement,  instrument,  order, law, rule, regulation,  judgment or
decree,  or any other  restriction of any kind or character  which would prevent
consummation by it of the transactions contemplated by this Agreement.

     ss.5.3  Purchase for  Investment.  The Purchaser will acquire the Stock for
its own  account  for  investment  and not  with a view  toward  any  resale  or
distribution thereof; provided, however, that the disposition of the Purchaser's
property shall at all times remain within the sole control of the Purchaser.

     ss.5.4 Broker's or Finder's Fees. No agent,  broker,  person or firm acting
on behalf  of the  Purchaser  is,  or will be,  entitled  to any  commission  or
broker's  or  finder's  fees  from the  Sellers  in  connection  with any of the
transactions contemplated by this Agreement.

     ss.5.5 Consents and Approvals; No Violations. The execution and delivery of
this  Agreement  by the  Purchaser  and  the  consummation  of the  transactions
contemplated  hereby (a) will not violate or  contravene  any  provision  of the
Certificate  of  Incorporation or By-laws of the Purchaser, (b) will not violate
or contravene any statute, rule, regulation,  order or decree of any public body
or  authority  by which the  Purchaser  is bound,  and (c) will not  require any
filing with, or permit,  consent or approval of, or the giving of any notice to,
any governmental or regulatory body, agency or authority, or any other Person.


                                   ARTICLE VI

                     TRANSACTIONS PRIOR TO THE CLOSING DATE
                     --------------------------------------

     ss.6.1 Conduct of Business of the Company.  During the period from the date
of this  Agreement to the Closing Date, the Company shall conduct its operations
only according to its ordinary and usual course of business;  use its reasonable
efforts to  preserve  intact its  business  organizations,  keep  available  the
services of its  officers and  employees  and  maintain  its  relationships  and
goodwill  with  licensors,   suppliers,   distributors,   customers,  landlords,
employees,  agents and others having business relationships with it; confer with
the Purchaser  concerning  operational  matters of a material  nature and report
periodically to the Purchaser  concerning the business,  operations and finances
of the Company. Notwithstanding the immediately preceding sentence, prior to the
Closing Date, except as may be first approved in writing by the Purchaser or, in
the case of clause (g) of this Section 6.1,  except to the extent dollar amounts
described therein constitute Permitted Payments or as set forth on Schedule 6.1,
and except as is otherwise permitted or required by this Agreement,  the Company
shall,  (a) refrain from amending or modifying its Certificate of  Incorporation
or By-Laws from its form on the date of this Agreement,  (b) refrain from paying
or increasing  any bonuses,  salaries,  or other  compensation  to any director,
officer,  employee or stockholder (excluding distributions covered by clause (g)
below) or entering into any employment, severance, or similar agreement with any
director,  officer, or employee other than, in each case, in the ordinary course
of business  consistent  with past  practice,  (c) refrain  from the adopting or
increasing  of  any  profit  sharing,  bonus,  deferred  compensation,  savings,
insurance,  pension,  retirement, or other employee benefit plan for or with any
of its  employees,  (d) refrain  from  entering  into any  material  contract or
commitment  except material  contracts and commitments in the ordinary course of
business  consistent  with  past  practice,   (e)  refrain  from  incurring  any
indebtedness  for borrowed money or capital leases,  (f) refrain from cancelling
or waiving any claim or right of substantial value which  individually or in the
aggregate is material,  (g) refrain  from  declaring or paying any  dividends or
other distributions in respect of its capital stock or redeeming,  purchasing or
otherwise  acquiring  any of its  capital  stock,  (h)  refrain  from making any
material change in accounting methods or practices, except as required by law or
generally accepted  accounting  principles,  (i) refrain from issuing or selling
any shares of capital stock or any other  securities,  or issuing any securities
convertible into, or options, warrants or rights to purchase or subscribe to, or
entering into any arrangement or contract with respect to the issue and sale of,
any shares of its  capital  stock or any other  securities,  or making any other
changes in its capital structure, (j) refrain from selling, leasing or otherwise
disposing of any  material  asset or property,  including,  without  limitation,
entering  into any new lease or modifying any existing  lease,  (k) refrain from
entering into any commitment for the making of a capital expenditure,  except in
the ordinary course of business  consistent with past practice  provided that no
capital  expenditure or commitment for the making of a capital expenditure shall
be made for new hardware systems for the Affiliate, (l) refrain from writing off
as  uncollectible  any notes or accounts  receivable,  except  write-offs in the
ordinary  course of  business  charged  to  applicable  reserves,  none of which
individually  or in the  aggregate is material and (m) refrain from  agreeing in
writing to do any of the foregoing.

     ss.6.2 Exclusive Dealing. During the period from the date of this Agreement
to the earlier of the  termination of this Agreement and the Closing Date,  none
of the Sellers,  any of the Sellers' respective  affiliates,  the Company or any
officer or  director  of the  Company  shall take any  action  to,  directly  or
indirectly,   encourage,   initiate,   solicit  or  engage  in   discussions  or
negotiations  with, or provide any  information  to, any Person,  other than the
Purchaser,  concerning  any purchase of any capital  stock of the Company or any
merger, asset sale or similar transaction involving the Company.

     ss.6.3 Review of the Company. The Purchaser may, prior to the Closing Date,
directly  or  through  its  representatives,  review the  properties,  books and
records of the Company and its financial  and legal  condition to the extent the
Purchaser or its  representatives  deem  necessary  or advisable to  familiarize
themselves  with such  properties  and other  matters;  such  review  shall not,
however,  affect the  representations and warranties made by the Company in this
Agreement or the remedies of the Purchaser for breaches of those representations
and warranties.  The Company shall permit the Purchaser and its  representatives
to have,  after the date of  execution  of this  Agreement,  full  access to the
premises  and to all the  books  and  records  of the  Company  and to cause the
officers  of the  Company to  furnish  the  Purchaser  with such  financial  and
operating data and other information with respect to the business and properties
of the Company as the Purchaser shall from time to time reasonably request.  The
Company shall deliver or cause to be delivered to the Purchaser such  additional
instruments,   documents,   certificates  and  opinions  as  the  Purchaser  may
reasonably request for the purpose of (a) verifying the information set forth in
this  Agreement  or on any  Schedule  attached  hereto and (b)  consummating  or
evidencing the transactions contemplated by this Agreement.

     ss.6.4  Reasonable  Efforts.  Each  of the  Company,  the  Sellers  and the
Purchaser  shall cooperate and use their  respective  reasonable best efforts to
take, or cause to be taken, all appropriate actions, and to make, or cause to be
made,  all filings  necessary,  proper or advisable  under  applicable  laws and
regulations,   and  to  deliver  or  cause  to  be  delivered  such   additional
instruments,  documents, certificates and opinions as requested, in each case to
consummate and make effective the  transactions  contemplated by this Agreement,
including,  without  limitation,  their  respective  reasonable  best efforts to
obtain, prior to the Closing Date, all licenses,  permits, consents,  approvals,
authorizations,  qualifications  and  orders  of  governmental  authorities  and
parties to contracts with the Company as are necessary for  consummation  of the
transactions  contemplated by the Agreement and to fulfill the conditions to the
sale contemplated hereby.

     ss.6.5  Monthly  Financial  Statements.   The  Company  has  furnished  the
Purchaser  with an unaudited  balance sheet of each of Cardinal and Affiliate as
of the last day of each  calendar  month from July 1, 1997 through  December 31,
1997 and shall furnish the Purchaser with an unaudited  balance sheet of each of
Cardinal and  Affiliate as of the last day each  calendar  month from January 1,
1998 through the Closing Date as soon as  practicable  following the end of such
calendar  month,  in each case  together  with  related  statements  of  income,
retained  earnings  and cash  flows  for the  month  then  ended.  Each  monthly
statement  has fairly  presented,  and shall  fairly  present,  in all  material
respects the financial position of each of Cardinal and Affiliate as of the date
indicated and the results of operations and cash flows for the period indicated.


                                   ARTICLE VII

                    CONDITIONS TO THE PURCHASER'S OBLIGATIONS
                    -----------------------------------------

     ss.7.  Conditions to the  Purchaser's  Obligations.  The  obligation of the
Purchaser to purchase the Stock  contemplated  by this  Agreement is conditioned
upon satisfaction, at or prior to the Closing, of the following conditions:

     ss.7.1 Opinions of Counsel.  The Company shall have furnished the Purchaser
with an opinion, dated the Closing Date, of Ruden, McClosky, Smith, Schuster and
Russell, to the effect set forth in Exhibit A hereto.

     ss.7.2 Good  Standing  and Other  Certificates.  The  Purchaser  shall have
received (a) copies of the charter,  including all amendments  thereto,  in each
case  certified by the Secretary of State or other  appropriate  official of the
jurisdiction  of  incorporation  of the  Company,  (b) a  certificate  from  the
Secretary  of  State  or  other  appropriate  official  of the  jurisdiction  of
incorporation  of the Company to the effect that the Company is in good standing
and listing all charter documents of the Company on file, (c) a certificate from
the Secretary of State or other appropriate  official in each State in which the
Company is  qualified  to do  business to the effect that the Company is in good
standing in such State and (d) a copy of the By-Laws of the Company certified by
the  Secretary  of the  Company as being true and  correct  and in effect on the
Closing Date.

     ss.7.3 No Material  Adverse  Change.  Prior to the Closing there shall have
been  no  material  adverse  change  in  the  business,  operations,   financial
condition,  results of  operations  or  prospects of the Company and the Company
shall have  delivered  to the  Purchaser  an  officer's  certificate,  dated the
Closing Date, to such effect.

     ss.7.4 Truth of Representations  and Warranties.  The  representations  and
warranties of the Company  contained in this  Agreement and the  representations
and  warranties  of the Sellers  contained in this  Agreement  shall be true and
correct  on and as of the  Closing  Date with the same  effect  as  though  such
representations  and  warranties  had been made on and as of such date,  and the
Company  and  the  Sellers  shall  have  each   delivered  to  the  Purchaser  a
certificate, dated the Closing Date, to such effect.

     ss.7.5 Performance of Agreements.  All of the agreements of the Company and
the Sellers to be performed  prior to the Closing  pursuant to the terms of this
Agreement  shall have been duly  performed  in all  material  respects,  and the
Company  and  the  Sellers  shall  have  each   delivered  to  the  Purchaser  a
certificate, dated the Closing Date, to such effect.

     ss.7.6 No Litigation  Threatened.  No action or proceedings shall have been
instituted or, to the knowledge of the Company or the Sellers, threatened before
a court or other  government  body or by any public  authority  to  restrain  or
prohibit any of the transactions contemplated hereby.

     ss.7.7  Third  Party  Consents;   Governmental  Approvals.   All  consents,
approvals  or waivers,  if any,  disclosed on any  Schedule  attached  hereto or
required in connection with the consummation of the transactions contemplated by
this  Agreement  shall  have  been  received.  All of the  consents,  approvals,
authorizations,  exemptions and waivers from governmental agencies that shall be
required  in order to  enable  the  Purchaser  to  consummate  the  transactions
contemplated hereby shall have been obtained.

     ss.7.8  Resignations.  All members of the Board of Directors of the Company
shall have  tendered  their  resignation  from such  positions  effective at the
Closing.

     ss.7.9 Employment  Agreements.  (a) Each of Mr. Chris Smith, Mr. J. Stanton
Kane and Ms. Pilar Grau shall have entered into an employment agreement with the
Company on terms and  conditions  reasonably  satisfactory  to the Purchaser and
each such individual.

     (b) The Company shall have used its best efforts to ensure that each of Ms.
Lydia Kuhl,  Mr.  Richard  Demers,  Mr. James Branam and Ms. Cathy Herrmann have
entered into an employment  agreement  with the Company on terms and  conditions
reasonably satisfactory to the Purchaser and each such individual.

     ss.7.10 FIRPTA.  Each of the Sellers shall have furnished to the Purchaser,
on or prior to the Closing  Date, a  non-foreign  person  affidavit  required by
Section 1445 of the Code.

     ss.7.11 Escrow Agreement.  The Sellers,  the Purchaser and the Escrow Agent
shall have entered into an escrow agreement substantially in the form of Exhibit
B hereto (the "ESCROW AGREEMENT").

     ss.7.12 Non-Competition Agreements. (a) Mr. Chris Smith shall have executed
a three year  non-competition  agreement  substantially in the form of Exhibit C
hereto for cash consideration of $300,000 payable as follows:  (i) $100,000 upon
the Closing,  (ii) $100,000 on the first  anniversary of the Closing,  and (iii)
$100,000 upon the second anniversary of the Closing.

     (b) Mr.  James  Smith  shall have  executed  a three  year  non-competition
agreement  substantially in the form of Exhibit D hereto for cash  consideration
of $150,000  payable as follows:  (i) $50,000 upon the Closing,  (ii) $50,000 on
the  first  anniversary  of the  Closing,  and  (iii)  $50,000  upon the  second
anniversary of the Closing.

     (c) Mr. Doug Smith shall have executed an eighteen  month  non-solicitation
agreement  substantially in the form of Exhibit E hereto for cash  consideration
of $150,000  payable as follows:  (i) $50,000 upon the Closing,  (ii) $50,000 on
the  first  anniversary  of the  Closing,  and  (iii)  $50,000  upon the  second
anniversary of the Closing.

     (d) Each of Mr. J. Stanton  Kane and Ms.  Pilar Grau shall have  executed a
one year  non-solicitation  agreement  substantially  in the form of  Exhibit  F
attached hereto.

     (e) The Company shall have used its best efforts to ensure that each of Mr.
Richard  Demers,  Ms. Lydia Kuhl and Mr.  James Branam have  executed a one year
non-solicitation  agreement  substantially  in the form of  Exhibit  F  attached
hereto.

     ss.7.13  Broker's  or  Finder's  Fees.  The  Sellers  shall  have  paid all
commission  or broker's or  finder's  fees due from the Sellers or the  Company,
including to The Platinum  Group,  in  connection  with any of the  transactions
contemplated by this Agreement and shall indemnify and hold harmless the Company
from all claims  with  respect to any such  commission  or  broker's or finder's
fees.


                                  ARTICLE VIII

            CONDITIONS TO THE COMPANY'S AND THE SELLERS' OBLIGATIONS
            --------------------------------------------------------

     ss.8.  Conditions  to the  Company's  and  the  Sellers'  Obligations.  The
obligations  of  the  Company  and  the  Sellers  to  effect  the   transactions
contemplated  by  this  Agreement  on the  Closing  Date  are  conditioned  upon
satisfaction or waiver, at or prior to the Closing, of the following conditions:

     ss.8.1 Opinions of Counsel.  The Purchaser shall have furnished the Sellers
with an opinion,  dated the  Closing  Date,  of White & Case,  to the effect set
forth in Exhibit G hereto.

     ss.8.2 Truth of Representations  and Warranties.  The  representations  and
warranties  of the  Purchaser  contained  in this  Agreement  shall  be true and
correct  on and as of the  Closing  Date with the same  effect  as  though  such
representations  and  warranties  had been made on and as of such date,  and the
Purchaser  shall have delivered to the Sellers an officer's  certificate,  dated
the Closing Date, to such effect.

     ss.8.3  Third  Party  Consents;   Governmental  Approvals.   All  consents,
approvals or waivers,  if any,  required in connection with the  consummation of
the transactions contemplated by this Agreement shall have been received. All of
the consents, approvals, authorizations,  exemptions and waivers from government
agencies  that  shall be  required  in order to permit the  consummation  of the
transactions contemplated hereby shall have been obtained.

     ss.8.4 Performance of Agreements. All of the agreements of the Purchaser to
be performed prior to the Closing  pursuant to the terms of this Agreement shall
have been duly performed in all material respects,  and the Purchaser shall have
delivered to the Sellers an officer's  certificate,  dated the Closing  Date, to
such effect.

     ss.8.5  No  Litigation  Threatened.   No  action  or  proceeding  shall  be
instituted or, to the knowledge of the Purchaser,  threatened  before a court or
other government body or any public authority to restrain or prohibit any of the
transactions  contemplated hereby, and the Purchaser shall have delivered to the
Sellers an officer's certificate, dated the Closing Date, to such effect.

     ss.8.6  Employment  Agreements.  Each of Mr. Chris Smith and Mr. J. Stanton
Kane shall have entered into an employment  agreement  with the Company on terms
and conditions reasonably satisfactory to the Company and each such individual.

     ss.8.7 Non-Competition  Agreements. (a) Mr. Chris Smith shall have executed
a three year  non-competition  agreement  substantially in the form of Exhibit C
hereto for cash consideration of $300,000 payable as follows:  (i) $100,000 upon
the Closing,  (ii) $100,000 on the first  anniversary of the Closing,  and (iii)
$100,000 upon the second anniversary of the Closing.

     (b) Mr.  James  Smith  shall  have  executed a  three-year  non-competition
agreement  substantially in the form of Exhibit D hereto for cash  consideration
of $150,000  payable as follows:  (i) $50,000 upon the Closing,  (ii) $50,000 on
the  first  anniversary  of the  Closing;  and  (iii)  $50,000  upon the  second
anniversary of the Closing.

     (c) Mr. Doug Smith shall have  executed an eighteen  month  non-competition
agreement  substantially in the form of Exhibit E hereto for cash  consideration
of $150,000  payable as follows:  (i) $50,000 upon the Closing,  (ii) $50,000 on
the  first  anniversary  of the  Closing;  and  (iii)  $50,000  upon the  second
anniversary of the Closing.

     (d) Mr. J.  Stanton  Kane shall have  executed a one year  non-solicitation
agreement substantially in the form of Exhibit F attached hereto.


                                   ARTICLE IX

                                   TAX MATTERS
                                   -----------

     ss.9.1 Tax  Returns.  (a) A  representative  appointed  by the Sellers (the
"SELLERS'  REPRESENTATIVE") shall have the exclusive authority and obligation to
prepare and timely file, or cause to be prepared and timely  filed,  all Returns
of the Company that are due with  respect to any taxable  year or other  taxable
period ending on or prior to the Closing Date. Such authority shall include, but
not be limited to, the determination of the manner in which any items of income,
gain,  deduction,  loss or credit  arising  out of the  income,  properties  and
operations  of the  Company  shall be  reported or  disclosed  in such  Returns;
provided, however, that such returns shall be prepared by treating items on such
Returns in a manner  consistent  with the past  practices  with  respect to such
items,  unless  otherwise  required  by law.  The Company  shall  provide to the
Sellers'  Representative  such access to the books and records of the Company as
may be  reasonably  necessary  for the  Sellers'  Representative  to prepare the
Returns.  The Sellers'  Representative  shall provide to the Purchaser drafts of
all Returns of the Company  required  to be prepared  and filed by the  Sellers'
Representative  under this Section  9.1(a) at least sixty (60) days prior to the
due  date  (including  extensions)  for the  filing  of such  Returns.  At least
forty-five (45) days prior to the due date (including extensions) for the filing
of such Returns,  the Purchaser shall notify the Sellers'  Representative of the
existence of any objection (specifying in reasonable detail the nature and basis
of such  objection)  the Purchaser may have to any items set forth on such draft
Returns. The Purchaser and the Sellers through the Sellers' Representative agree
to consult and resolve in good faith any such objection; it being agreed that if
the  Sellers'  Representative  and the  Purchaser  can not reach an agreement at
least 10 days  prior to the due date for the filing of such  Return,  the matter
shall  be  referred  to KPMG  Peat  Marwick  or  another  nationally  recognized
accounting firm mutually acceptable to the Sellers'  Representative,  on the one
hand, and the Purchaser, on the other hand, for resolution.  The Sellers, on the
one hand,  and the  Purchaser on the other hand,  shall  equally share the costs
incurred in retaining such accounting firm.

     (b) Except as  provided in Section  9.1(a),  the  Purchaser  shall have the
exclusive  authority  and  obligation to prepare and timely file, or cause to be
prepared and timely  filed,  all Returns of the Company.  Such  authority  shall
include,  but not be limited  to, the  determination  of the manner in which any
items of income,  gain,  deduction,  loss or credit  arising  out of the income,
properties  and operations of the Company shall be reported or disclosed on such
Returns; provided, however, with respect to Returns to be filed by the Purchaser
pursuant to this Section 9.1(b) for taxable periods beginning before the Closing
Date and ending after the Closing Date, items set forth on such Returns shall be
treated in a manner  consistent  with the past  practices  of the  Company  with
respect to such items,  unless  otherwise  required by law. The Purchaser  shall
provide to the Sellers'  Representative  copies of all such Returns with respect
to any  Overlap  Period  at least  ten (10)  days  prior to the  filing  of such
Returns.  The  Purchaser and the Sellers,  through the Sellers'  Representative,
agree  to  consult  and  resolve  in  good  faith  any  objection  the  Sellers'
Representative  may have to items  set  forth on such  draft  Returns;  it being
agreed that if the Sellers'  Representative  and the  Purchaser can not reach an
agreement  at least 10 days prior to the due date for the filing of such Return,
the  matter  shall be  referred  to KPMG  Peat  Marwick  or  another  nationally
recognized  accounting firm mutually acceptable to the Sellers'  Representative,
on the one hand,  and the  Purchaser,  on the other hand,  for  resolution.  The
Sellers,  on the one hand,  and the  Purchaser on the other hand,  shall equally
share the costs incurred in retaining such accounting firm.

     ss.9.2  Apportionment  of Taxes. All Taxes and Tax liabilities with respect
to the income,  property or  operations  of the Company that relate to a taxable
year or other taxable period  beginning before and ending after the Closing Date
shall be  apportioned  between  the  Pre-Closing  Period and the portion of such
taxable year or other taxable  period after the Closing Date (the  "POST-CLOSING
PERIOD") as follows:  (A) in the case of Taxes other than income Taxes and sales
and use  Taxes,  on a per diem  basis,  and (B) in the case of income  Taxes and
sales and use Taxes,  as  determined  from the books and records of the Company,
between  Pre-Closing and Post-Closing  Periods as though the taxable year of the
Company  terminated at the close of business on the Closing  Date,  and based on
accounting  methods,  elections and  conventions  that do not have the effect of
distorting  the timing of income and  expenses.  The Sellers shall be liable for
the  payment  of  all  Taxes  of  the  Company  which  are  attributable  to any
Pre-Closing  Period to the extent not  included in  determining  the Closing Net
Working Capital Amount. The Company shall be liable for the payment of all Taxes
which are attributable to any Post-Closing Period.

     ss.9.3  Controversies.  The Purchaser  shall  promptly  notify the Sellers'
Representative  in writing upon receipt by the Purchaser or any affiliate of the
Purchaser  (including  the Company after the Closing Date) of written  notice of
any  inquiries,  claims,  assessments,  audits or similar events with respect to
Taxes  relating to a taxable  period  ending on or prior to the Closing Date for
which the Sellers may be liable under this Agreement  (any such inquiry,  claim,
assessment,   audit  or  similar   event,   a  "TAX   MATTER").   The   Sellers'
Representative,  at its sole expense,  shall have the authority to represent the
interests  of the Company  with  respect to any Tax Matter  before the  Internal
Revenue Service,  any other taxing authority,  any other governmental  agency or
authority  or any court and shall have the sole right to  control  the  defense,
compromise  or other  resolution  of any Tax  Matter,  including  responding  to
inquiries,  filing Tax returns and settling audits; provided,  however, that the
Sellers'  Representative  shall not enter into any  settlement  of or  otherwise
compromise  any Tax Matter that  affects or may affect the Tax  liability of the
Purchaser,  the Company or any  affiliate of the foregoing for any period ending
after the Closing Date,  including the portion of a period  beginning before the
Closing Date and ending after the Closing Date (the  "OVERLAP  PERIOD")  that is
after the Closing  Date,  without the prior  written  consent of the  Purchaser,
which consent shall not be unreasonably  withheld.  The Sellers'  Representative
shall  keep  the  Purchaser  fully  and  timely  informed  with  respect  to the
commencement,  status and nature of any Tax Matter. The Sellers'  Representative
shall,  in good faith,  allow the  Purchaser  to make  comments to the  Sellers'
Representative  regarding  the  conduct  of  or  positions  taken  in  any  such
proceeding.

     Except as otherwise  provided in this Section 9.3, the Purchaser shall have
the sole  right to control  any audit or  examination  by any taxing  authority,
initiate  any claim for refund or amend any  Return,  and  contest,  resolve and
defend against any assessment for additional Taxes,  notice of Tax deficiency or
other  adjustment of Taxes of, or relating to, the income,  assets or operations
of the Company for all tax- able periods; provided,  however, that the Purchaser
shall not, and shall cause its affiliates  (including the Company) not to, enter
into any  settlement  of any  contest  or  otherwise  compromise  any issue with
respect to the portion of the Overlap  Period  ending on or prior to the Closing
Date without the prior  written  consent of the Sellers'  Representative,  which
consent shall not be unreasonably  withheld. The Purchaser shall promptly notify
the Sellers'  Representative  in writing  upon  receipt by the  Purchaser or any
affiliate of the  Purchaser  (including  the Company  after the Closing Date) of
written notice of any inquiries,  claims, assessments,  audits or similar events
with respect to Taxes relating to an Overlap Period for which the Sellers may be
liable   under  this   Agreement.   The   Purchaser   shall  keep  the  Sellers'
Representative  fully and timely  informed  with  respect  to the  commencement,
status and nature of any tax matter relating to an Overlap Period. The Purchaser
shall, in good faith, allow the Sellers'  Representative to make comments to the
Purchaser regarding the conduct of or positions taken in any such proceeding.

     ss.9.4 Transfer Taxes. All transfer, sales and use, registration, stamp and
similar  Taxes  imposed  in  connection  with the sale of the Stock or any other
transaction  that  occurs  pursuant  to this  Agreement  shall  be  borne by the
Sellers.

     ss.9.5 Amended Returns.  None of the Sellers, the Sellers'  Representative,
or the Company shall file or cause to be filed any amended  Return or claims for
refund without the prior written  consent of the Purchaser,  which consent shall
not be unreasonably withheld. The Company will not file or cause to be filed any
amended  Return or claim for refund  relating to any period  prior to Closing or
any Overlap  Period  without  consent of Sellers'  Representative  which consent
shall not be unreasonably withheld.

     ss.9.6  Indemnification.  The  Sellers  jointly  and  sever-  ally agree to
indemnify, defend and hold harmless the Purchaser, its affiliates (including the
Company) and the successors to the foregoing (and their respective shareholders,
officers, directors, employees and agents) on an after-tax basis against (i) all
Taxes,  losses,  claims and expenses (including  reasonable  attorneys' fees and
expenses)  resulting  from,  arising  out of, or incurred  with  respect to, any
claims  that may be  asserted  by any  party  based  upon,  attributable  to, or
resulting  from the failure of any  representation  or warranty made pursuant to
Section  3.14 to be true and  correct  as of the  Closing  Date;  (ii) all Taxes
imposed on or  asserted  against the  properties,  income or  operations  of the
Company for all  Pre-Closing  Periods  except to the extent that such Taxes were
included  as a current  liability  accrual in the  calculations  of Net  Working
Capital Amount and Purchaser shall remit to Sellers'  Representative  any refund
received by Purchaser of any such taxes with respect to any Pre-Closing  Period;
(iii) all Taxes imposed on the Company,  or for which the Company may be liable,
as a result of any transaction  contemplated  by this  Agreement,  including any
Taxes  imposed on the  Purchaser of the Company  pursuant to Section 1374 of the
Code and any comparable provision of state or local law or otherwise as a result
of a joint  election  under Section  338(h)(10) of the Code to treat the sale of
Stock  pursuant  to this  Agreement  as an asset  sale for  Federal  income  tax
purposes,  and any  analogous  provisions  of state  and  local  law,  provided,
however, this indemnification shall not apply to any New Jersey corporate income
tax that  results  from any  election  under the  provision  of New  Jersey  law
analogous  to the  provisions  of  ss.338 of the  Code,  for  which  New  Jersey
corporate  income tax  Sellers  shall have no  liability.  The  Purchaser  shall
promptly give the Sellers'  Representative  written notice of all Taxes, losses,
claims and expenses which the Purchaser has reasonably  determined may give rise
to a right of indemnification under this Section 9.6, including a computation of
the  amount  of  the  required   indemnification   with  sufficient  detail  and
particularity to enable the Sellers'  Representative to reasonably determine the
amount of such required indemnification.

     ss.9.7  Section 338 Election.  The Sellers and the Purchaser  agree that at
the  election of the  Purchaser,  the Sellers and the  Purchaser  shall  jointly
complete and make an election  under  Section  338(h)(10)  (with  respect to the
Company) of the Code on Form 8023-A or in such manner as may be required by rule
or regulation of the Internal Revenue Service, and shall, at the election of the
Purchaser,  jointly make an election in the manner  required under any analogous
provisions  of Florida law  concerning  the  transactions  contemplated  by this
Agreement.  Purchaser shall,  with the assistance and cooperation of the Seller,
prepare all such Section 338(h)(10) forms required as attachments to Form 8023-A
(and all forms under the analogous provisions of Florida law) in accordance with
applicable  Tax laws,  and the  Purchaser  shall  deliver such forms and related
documents  to the  Seller  at least  sixty  (60)  days  prior to the due date of
filing.  The Sellers  shall  deliver to the  Purchaser at least thirty (30) days
prior to the due date of filing such completed forms as are required to be filed
under Section  338(h)(10)  of the Code (and the analogous  provisions of Florida
law).  The Purchaser and Sellers shall use their best efforts to agree,  as soon
as  practicable  after Closing but in no event later than 130 days following the
Closing Date, on the  computation  of the modified  aggregate  deemed sale price
("MADSP") (as defined under Treasury Regulations).

     ss.9.8  Valuation and  Allocation.  Sellers and Purchaser  agree that those
assets set forth on Schedule  9.8 have a fair market  value as set forth on such
schedule.  If the Purchaser elects to file a ss.338(h)(10)  election pursuant to
the provisions of Section 9.7, the Purchaser shall perform a valuation of assets
of those  assets of the Company  that are not set forth on  Schedule  9.8 and an
allocation of the Modified  Aggregate Deemed Sale Price ("MADSP") of the Company
among all assets of the Company  for  purposes of the  elections  under  Section
338(h)(10) of the Code and under the  comparable  Florida law.  Purchaser  shall
provide  Sellers  with drafts of such  valuation  of assets and  allocations  of
MADSP,  prepared on a basis  consistent  with the  valuation  of such assets set
forth on  Schedule  9.8,  within 15 days  after the final  determination  of the
Closing  Net  Working  Capital  Statement  as  provided  in Section  2.3 of this
Agreement.  Sellers  shall  have 15 days  to  provide  the  Purchaser  with  any
objections to such drafts. The valuations and allocations determined pursuant to
this Section 9.8 shall be used for purposes of all relevant Tax Returns, reports
and filings that are filed by  Purchaser,  the Company and the Sellers.  Sellers
shall not be liable to  Purchaser  for any Taxes  incurred by  Purchaser  or the
Company with respect to any Post-Closing Tax periods that directly or indirectly
are  attributable  to any  challenge by a Tax  authority of the  computation  of
allocation of the MADSP pursuant to this Section 9.8.


                                    ARTICLE X

                  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
                  --------------------------------------------

     ss.10.1 Survival of  Representations.  The respective  representations  and
warranties  of the  Company,  the Sellers and the  Purchaser  contained  in this
Agreement  shall  survive the  Closing for a period of two years  except for the
representations  and  warranties  of the Company  contained in Sections 3.14 and
3.19, which shall survive for the applicable statute of limitations  period, and
the  representations  and  warranties  of the  Sellers in Article IV which shall
survive indefinitely.

     ss.10.2  Indemnification.  (a) The  Company,  and  after the  Closing,  the
Sellers (jointly and severally) hereby agree to indemnify and hold the Purchaser
and its officers,  directors,  affiliates  (including,  without limitation,  the
Company) and agents, and any successors thereto,  harmless from damages, losses,
costs or expenses  (including,  without  limitation,  reasonable  attorneys' and
consultants' fees and expenses)  ("DAMAGES") incurred or suffered as a result of
or arising out of (i) the failure of any  representation or warranty made by the
Company in this Agreement  (without regard to any "materiality" or any "material
adverse effect"  exception  contained  therein) to be true and correct as of the
Closing  Date,  (other than a breach of Section 3.14 with respect to Taxes which
shall be  governed  by  Section  9.6),  or (ii) the  breach of any  covenant  or
agreement made or to be performed by the Sellers or the Company pursuant to this
Agreement;  provided, however, that neither the Company nor the Sellers shall be
liable under clause (i) of this Section unless (A) such liability is caused by a
breach of the  representations  contained  in Section  4.1 or (B) the  aggregate
amount of Damages  exceeds  $125,000 and then only to the extent of such excess;
provided,  further, however, that the Company's and the Sellers' liability under
this Section 10.2(a) shall not exceed, in the aggregate (but excluding liability
caused  by a breach  of the  representations  contained  in  Section  4.1),  the
Purchase Price.

     (b) Following the Closing,  each of the Sellers  hereby agrees to indemnify
and hold the  Purchaser  and its  officers,  directors,  affiliates  (including,
without  limitation,  the  Company)  and  agents,  and any  successors  thereto,
harmless from Damages  incurred or suffered as a result of or arising out of (i)
the  failure  of any  representation  or  warranty  made by such  Seller in this
Agreement  to be true and correct as of the  Closing  Date or (ii) the breach of
any covenant or agreement made or to be performed by any such Seller pursuant to
this Agreement.

     (c) The Purchaser  hereby agrees to indemnify and hold the Sellers harmless
from  Damages  incurred  or  suffered  as a result of or arising  out of (i) the
failure  of any  representation  or  warranty  made  by the  Purchaser  in  this
Agreement  to be true and correct as of the  Closing  Date or (ii) the breach of
any covenant or agreement  made or to be performed by the Purchaser  pursuant to
this Agreement;  provided, however, that the Purchaser shall not be liable under
clause (i) of this  Section  unless  the  aggregate  amount of  Damages  exceeds
$75,000 and then only to the extent of such excess; provided,  further, however,
that the Purchaser's  liability under this Section 10.2(d) shall not exceed,  in
the aggregate, the Purchase Price.

     (d) The foregoing  indemnification  provisions and the  indemnification for
Taxes  provided in Section 9.6 shall be the  exclusive  remedy for any breach of
the  covenants,  obligations,  representations  or warranties  set forth in this
Agreement;  provided, however, that the provisions of this Section 10.2(d) shall
not prevent the Sellers or the  Purchaser  from seeking the remedies of specific
performance  or injunctive  relief in connection  with a breach of a covenant or
agreement of any party contained herein.

     (e) As security for the  Sellers'  indemnity  obligations  pursuant to this
Section 10.2, but without in any way limiting the amount of such indemnity,  the
Sellers agree to enter into the Escrow Agreement.

     ss.10.3  Indemnification  Procedure.  (a) Any party seeking indemnification
(the "INDEMNIFIED  PARTY") from any other party (the "INDEMNIFYING  PARTY") with
respect to any claim,  demand,  action,  proceeding or other matter  pursuant to
this Agreement (the "CLAIM") shall promptly notify the Indemnifying Party of the
existence  of the  Claim,  setting  forth in  reasonable  detail  the  facts and
circumstances pertaining thereto and the basis for the Indemnified Party's right
to indemnification.

     (b) If any third party shall notify any  Indemnified  Party with respect to
any  matter  which  may give  rise to a Claim for  indemnification  against  the
Indemnifying  Party  under this  Agreement,  then the  Indemnified  Party  shall
promptly notify each  Indemnifying  Party thereof;  provided,  however,  that no
delay on the part of the Indemnified  Party in notifying any Indemnifying  Party
shall relieve the Indemnifying Party from any liability or obligation  hereunder
unless  (and then  solely to the  extent)  the  Indemnifying  Party  thereby  is
materially  prejudiced  by such  failure to give  notice.  In the event that any
Indemnifying  Party  notifies  the  Indemnified  Party  within 30 days after the
Indemnified  Party has given  notice of the matter that the  Indemnifying  Party
would be required to indemnify  the  Indemnified  Party in full against any such
Claim and is assuming the defense thereof:

          (i) the Indemnifying  Party will defend the Indemnified  Party against
the matter with counsel of its choice reasonably satisfactory to the Indemnified
Party;

          (ii) the Indemnified Party may retain separate  co-counsel at its sole
cost and expense (except that the Indemnifying Party will be responsible for the
fees and expenses of the separate  co-counsel (a) to the extent the  Indemnified
Party  concludes  reasonably  based upon  advice of counsel  that a conflict  of
interest exists between the Indemnified Party and Indemnifying  Party or (b) the
named parties to any such action (including any impleaded  parties) include both
such  Indemnified  Party and the Indemnifying  Party and such Indemnified  Party
shall have been advised by counsel that there may be one or more legal  defenses
available to the Indemnified  Party which are not available to the  Indemnifying
Party, or available to the Indemnifying  Party, but the assertion of which would
be adverse to the interest of the Indemnified Party);

          (iii)  the  Indemnified  Party  will not  consent  to the entry of any
judgment or enter into any  settlement  with  respect to the matter  without the
written consent of the Indemnifying Party (not to be withheld unreasonably); and

          (iv) the  Indemnifying  Party  will not  consent  to the  entry of any
judgment or enter into any settlement which (A) provides for other than monetary
damages,  (B) does not include a provision  whereby the plaintiff or claimant in
the matter  unconditionally and irrevocably  releases the Indemnified Party from
all  liability  with  respect  thereto  without any further  obligation  and (C)
contains  any  admission  of  liability,  without  the  written  consent  of the
Indemnified  Party  (not  to be  withheld  unreasonably);  provided  that if the
written consent of the Indemnified Party is not required under this clause (iv),
the Indemnifying  Party shall give the Indemnified Party notice of its intent to
settle  together with the proposed terms of the  settlement and the  Indemnified
Party  shall  have the  right,  exercisable  within 10 days of  receipt  of such
notice,  to assume the  defense  of such  action  and the  Indemnifying  Party's
liability to indemnify the Indemnified  Party hereunder for such action shall be
capped at the dollar amount of the monetary damages provided for in the offer to
settle such action.

     (c) If no Indemnifying  Party notifies the Indemnified Party within 30 days
after the Indemnified Party has given notice of the matter that the Indemnifying
Party is assuming the defense  thereof,  then the  Indemnified  Party may defend
against,  or enter into any settlement with respect to, the matter in any manner
it  reasonably  may deem  appropriate,  without  prejudice  to any of its rights
hereunder.

     (d) The Indemnified  Party shall be entitled to reimbursement of reasonable
expenses  included  in Damages  with  respect to any Claim  (including,  without
limitation, the cost of defense,  preparation and investigation relating to such
Claim) as such expenses are incurred by the Indemnified Party.

                                   ARTICLE XI

                                   TERMINATION
                                   -----------

     ss.11.1  Termination.  This  Agreement  may be terminated in writing at any
time prior to the Closing:

     (a) by the mutual written consent of the Purchaser and the Sellers;

     (b) by the Purchaser,  if there has been a material  violation or breach by
the Company or the Sellers of any covenant, representation or warranty contained
in this Agreement  which has prevented the  satisfaction of any condition to the
obligations of the Purchaser at the Closing and such violation or breach has not
been waived by the Purchaser or, in the case of a covenant breach,  cured by the
Company or the  Sellers  within the  earlier  of ten days after  written  notice
thereof from the Purchaser or the Closing Date;

     (c) by the Sellers, if there has been a material violation or breach by the
Purchaser  of  any  covenant,  representation  or  warranty  contained  in  this
Agreement  which  has  prevented  the  satisfaction  of  any  condition  to  the
obligation  of the Company at the Closing and such  violation  or breach has not
been waived by the Sellers or, with respect to a covenant  breach,  cured by the
Purchaser  within the earlier of ten days after  written  notice  thereof by the
Company or the Closing Date.

     ss.11.2 Effect of  Termination.  In the event that this Agreement  shall be
terminated  pursuant to Section  11.1,  all further  obligations  of the parties
hereto under this  Agreement  (other than  pursuant to Sections  12.2,  12.3 and
12.5,  which shall  continue in full force and effect) shall  terminate  without
further  liability or obligation  of either party to the other party  hereunder;
provided,  however,  that no party shall be released from liability hereunder if
this Agreement is terminated and the transactions are abandoned by reason of (i)
willful  failure of such party to have  performed its  obligations  hereunder or
(ii) any  knowing  misrepresentation  made by such party of any matter set forth
herein.

                                   ARTICLE XII

                                  MISCELLANEOUS
                                  -------------

     ss.12.1 Knowledge of the Company. Where any representation or warranty made
by the Company  contained in this Agreement is expressly  qualified by reference
to its  knowledge,  such  knowledge  shall be deemed  to exist if the  matter is
within the knowledge of any of the Sellers and/or the executive  officers of the
Company.

     ss.12.2  Expenses.  Subject to Section  9.3,  the parties  hereto shall pay
their own expenses relating to the transactions  contemplated by this Agreement,
including, without limitation, the fees and expenses of their respective counsel
and financial  advisers,  it being  understood  that all expenses of the Company
incurred in connection  with the  transactions  contemplated  by this  Agreement
shall be paid by the Sellers prior to the Closing Date.

     ss.12.3  Governing  Law.  THE   INTERPRETATION  AND  CONSTRUCTION  OF  THIS
AGREEMENT, AND ALL MATTERS RELATING HERETO, SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF FLORIDA  APPLICABLE TO AGREEMENTS  EXECUTED AND TO BE PERFORMED  SOLELY
WITHIN SUCH STATE.

     ss.12.4  Captions.  The Article and  Section  captions  useD herein are for
reference  purposes  only,  and  shall  not in any way  affect  the  meaning  or
interpretation of this Agreement.

     ss.12.5 Publicity. Except as otherwise required by law, none of the parties
(nor any affiliates thereof) hereto shall issue, prior to the Closing, any press
release or make any other public statement,  in each case relating to, connected
with or arising out of this Agreement or the matters contained  herein,  without
obtaining the prior approval of the Sellers, on the one hand, and the Purchaser,
on the  other  hand,  to  the  contents  and  the  manner  of  presentation  and
publication thereof.  Except as otherwise required by law, after the Closing the
Sellers shall not issue any press release or make any other public statement, in
each case relating to,  connected  with or arising out of this  Agreement or the
matters contained herein, without obtaining the prior approval of the Purchaser.

     ss.12.6 Notices.  Any notice or other  communication  required or permitted
under this Agreement shall be sufficiently  given if delivered in person or sent
by registered or certified mail,  postage prepaid,  addressed as follows:  if to
the Purchaser,  to AmeriComm Direct Marketing,  Inc., Suite C150, 5775 Peachtree
Dunwoody  Road,  Atlanta,   Georgia  33342  (Facsimile  Number  (404)  705-9929)
Attention:  Robert A.  Miklas,  with a copy to its counsel,  White & Case,  1155
Avenue of the  Americas,  New  York,  New York  10036  (Facsimile  Number  (212)
354-8113),   Attention:   Frank  L.  Schiff,   Esq.;  and  if  to  the  Sellers'
Representative,  to James Smith, 1050 Seminole Drive, Ft.  Lauderdale,  FL 33304
(Facsimile  Number (954) 486- 9944),  with a copy to:  Ruden,  McClosky,  Smith,
Schuster and Russell, 200 East Broward Boulevard, Suite 1500, Ft. Lauderdale, FL
33301 (Facsimile Number (954) 764-4996),  Attention: Michael Krul, Esq., or such
other address or number as shall be furnished in writing by any such party,  and
such notice or  communication  shall be deemed to have been given as of the date
so  delivered  or mailed.  Notice  delivered  by the  Purchaser  to the Sellers'
Representative shall constitute delivery of such notice to the Sellers.

     ss.12.7  Parties  in  Interest.  This  Agreement  may  not be  transferred,
assigned,  pledged or hypothecated by any party hereto,  other than by operation
of law. This  Agreement  shall be binding upon and shall inure to the benefit of
the  parties  hereto  and their  respective  heirs,  executors,  administrators,
successors and permitted assigns.

     ss.12.8  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts, all of which taken together shall constitute one instrument.

     ss.12.9 Entire Agreement.  This Agreement (including the schedules hereto),
including the other  documents  referred to herein and therein which form a part
hereof and thereof,  contain the entire understanding of the parties hereto with
respect to the subject  matter  contained  herein and  therein.  This  Agreement
supersedes  all prior  agreements  and  understandings  between the parties with
respect to such subject matter  (including,  without  limitation,  (i) the Stock
Purchase  Agreement  dated as of November  12, 1997 by and among the  Purchaser,
Cardinal,  Affiliate and the Stockholders  identified  therein, as modified by a
certain  letter  agreement  dated  January  12,  1998 from John D. Weil to James
Smith,  and as further  modified by a certain letter dated February 5, 1998 from
John D. Weil to James Smith,  (ii) a certain letter dated February 25, 1998 from
John D. Weil to James Smith and (iii) a certain  letter dated March 2, 1998 from
John D. Weil to James Smith).

     ss.12.10 Amendments.  This Agreement may not be changed orally, but only by
an agreement in writing  signed by the  Purchaser,  the Company and the Sellers.
ss.12.11  Severability.  In case any provision in this  Agreement  shall be held
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the  remaining  provisions  hereof  will not in any way be  affected or impaired
thereby.

     ss.12.12  Third Party  Beneficiaries.  Each party hereto  intends that this
Agreement  shall not  benefit  or  create  any right or cause of action in or on
behalf of any Person other than the parties hereto.

     ss.12.13  Jurisdiction.  Any judicial proceeding brought against any of the
parties to this  Agreement or any dispute  arising out of this  Agreement or any
matter related  hereto may be brought in the courts of the State of Florida,  or
in the United States District Court for the Southern  District of Florida,  and,
by  execution  and  delivery  of this  Agreement,  each of the  parties  to this
Agreement accepts the jurisdiction of such courts,  and irrevocably agrees to be
bound by any judgment  rendered  thereby in connection with this Agreement.  The
foregoing  consent to  jurisdiction  shall not be deemed to confer rights on any
Person other than the respective parties to this Agreement.


     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf by its respective  officer  thereunto duly authorized,
all as of the day and year first above written.

                                            AMERICOMM DIRECT MARKETING, INC.


                                            By /s/ Robert B. Webster
                                              ----------------------------------
                                              Name:  Robert B. Webster
                                              Title: EVP/CFO


                                            CARDINAL MARKETING, INC.


                                            By /s/ Christopher C. Smith
                                              ----------------------------------
                                              Name:  Christopher C. Smith
                                              Title:  President


                                            CARDINAL MARKETING OF
                                            NEW JERSEY, INC.


                                            By /s/ Christopher C. Smith
                                              ----------------------------------
                                              Name:  Christopher C. Smith
                                              Title:  President


                                            /s/ James E. Smith
                                            ------------------------------------
                                            James Smith


                                            /s/ Chris Smith
                                            ------------------------------------
                                            Chris Smith


                                            /s/ Douglas C. Smith
                                            ------------------------------------
                                            Doug Smith

<PAGE>

                                                                         ANNEX I

                               Ownership of Stock
                               ------------------

                               Cardinal                             Cardinal
                              Marketing,                          Marketing of
                                 Inc.                            New Jersey Inc.
                              ----------                         ---------------
James Smith                 6,739 shares                           80 shares

Christopher Smith             842 shares                           10 shares

Douglas Smith                 842 shares                           10 shares


<PAGE>

                                                                       ANNEX II

Seller                                       Percentage
------                                       ----------

James Smith                                  80%

Christopher Smith                            10%

Douglas Smith                                10%