Asset Purchase Agreement

Asset Purchase Agreement


                            ASSET PURCHASE AGREEMENT

                                   DATED AS OF

                                  JULY 23, 1998


                                  BY AND AMONG

                             EQUITY MARKETING, INC.

                                       AND

                          U.S. IMPORT & PROMOTIONS CO.

                               PHILIP A. MCDANIEL

                                       AND

                                JOHN C. MCDANIEL







                            ASSET PURCHASE AGREEMENT


         ASSET PURCHASE AGREEMENT, dated as of July 23, 1998 (this "AGREEMENT"),
by and among (i) Equity Marketing, Inc., a Delaware corporation ("EQUITY"), (ii)
U.S.  Import & Promotions  Co., a Florida  corporation  (the  "COMPANY"),  (iii)
Philip A. McDaniel,  an individual  residing at 51 Water Street,  St. Augustine,
Florida  32084  (the  "PRINCIPAL")  and (iv)  John C.  McDaniel,  an  individual
residing at 23 Metcalf Street, Worcester, Massachusetts 01609.

                                    RECITALS:

     WHEREAS, the Principal owns all of the issued and outstanding capital stock
of the Company;

     WHEREAS, Equity, for itself or through a wholly-owned  subsidiary,  desires
to purchase and the Company desires to sell substantially all of the assets used
by the  Company in the  operation  of its  promotional  products  business  (the
"BUSINESS"),  upon the terms and  subject  to the  conditions  set forth in this
Agreement;

     WHEREAS,  the Company and the Principal have  determined  that it is in the
best  interest of the  Company,  and in  furtherance  of its  purposes,  to sell
substantially all assets, real and personal and mixed,  tangible and intangible,
owned or leased by the Company and associated with or employed in the operations
of the Business,  and substantially all other related operations owned or leased
by the  Company  to  Equity,  subject  to the  assumption  by Equity of  certain
specified liabilities of the Company, as are more fully described herein.

     NOW,  THEREFORE,  in  consideration  of the mutual  promises and agreements
hereinafter contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         The following  terms shall have the following  respective  meanings for
all purposes of this Agreement:

         "ACQUIRED  BUSINESSES"  shall mean sales of  Promotional  Products  and
Services to the  customers of the Company and Contract  Marketing  identified on
SCHEDULE  1 hereto  and to such  additional  customers,  and of such  additional
promotional or other  products and services,  as may be solicited and secured by
the  Principal or John C. McDaniel and agreed by good faith  negotiations  among
Equity, the Principal and John C. McDaniel;  PROVIDED,  HOWEVER,  that products,
services or customers  subsequently acquired by Equity as a result of mergers or
acquisitions shall not be deemed part of the "Acquired






Businesses" unless otherwise agreed by good faith negotiations among Equity, the
Principal and John C. McDaniel.

         "ACQUISITION"  shall mean the purchase and sale of the Assets  pursuant
to the terms of this Agreement.

         "AFFILIATE"  shall mean,  with respect to any Person,  any other Person
that,  directly or  indirectly,  controls or is controlled by or is under common
control with such Person. As used in this definition, the term "control" and any
derivatives thereof mean the possession, directly or indirectly, of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through ownership of voting securities,  by contract,  or otherwise.  In
addition,  John C. McDaniel and Contract Marketing shall be deemed Affiliates of
the Principal and of the Company.

        "AFFILIATED  OBLIGATIONS"  means the amounts owed to the Company by the
Principal and his Affiliates; provided, however,  that the  obligations  arising
out of the  relationships  described on SCHEDULE 3.25 shall not be deemed
"Affiliated Obligations."

         "AGREEMENT" shall mean this Asset Purchase Agreement, as it may be from
time to time amended.

         "ASSETS" has the meaning set forth in Section 2.01.

         "ASSIGNED CONTRACTS" has the meaning set forth in Section 2.01.

         "ASSUMED LIABILITIES" has the meaning set forth in Section 2.04.

         "BALANCE SHEET" has the meaning set forth in Section 3.06.

         "BUSINESS" has the meaning set forth in the recitals to this Agreement.

         "BUSINESS DAY" shall mean any day,  other than a Saturday,  Sunday or a
legal holiday under the federal laws of the United States.

         "CLOSING" shall mean the consummation of the Acquisition pursuant to
this Agreement.

         "CLOSING DATE BALANCE SHEET" has the meaning set forth in Section 2.03.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "CONFIDENTIAL  INFORMATION"  shall  mean all  trade  secrets  and other
confidential  information concerning the Company including,  without limitation,
information  regarding the  operations,  future plans,  projected and historical
sales,  marketing,  costs,  production,  growth and  distribution,  any customer
lists, customer information,


                                       -2-





information relating to governmental relations,  and information relating to the
products or services, whether patentable or not.

       "CONTRACT MARKETING" shall mean Contract Marketing, Inc., a Massachusetts
corporation.

         "CONTRACT  MARKETING  AGREEMENT" shall mean that certain Asset Purchase
Agreement, dated as of the date hereof, by and among Equity, Contract Marketing,
John C. McDaniel and the Principal.

         "EMPLOYEE PLAN" has the meaning set forth in Section 3.17.

         "EMPLOYMENT  AGREEMENT"  shall  mean the  Employment  Agreement  by and
between  Equity and the  Principal  dated as of the date of this  Agreement,  in
substantially the form of EXHIBIT A hereto.

         "ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, statutes,
ordinances,  decrees or orders of any  governmental  entity  relating to (a) the
control of any potential  pollutant or protection of the air, water or land, (b)
solid,  gaseous  or  liquid  waste  generation,  handling,  treatment,  storage,
disposal  or  transportation,  and (c)  exposure  to  Hazardous  Materials,  and
includes  without  limitation  final and  binding  requirements  related  to the
foregoing  imposed by (i) the terms and  conditions of any  applicable  license,
permit,  approval or other  authorization by any governmental  entity,  and (ii)
applicable judicial,  administrative or other regulatory decrees,  judgments and
orders of any governmental  entity. The term "Environmental Laws" shall include,
but not be limited to, the following  statutes and the  regulations  promulgated
thereunder  as  currently  in effect:  the Clean Air Act, 42 U.S.C.  ss. 7401 ET
SEQ., the Clean Water Act, 33 U.S.C. ss. 1251 ET SEQ., the Resource Conservation
Recovery Act ("RCRA"),  42 U.S.C. ss. 6901 ET SEQ., the Superfund Amendments and
Reauthorization  Act, 42 U.S.C. ss. 11011 ET SEQ., the Toxic Substances  Control
Act, 15 U.S.C. ss. 2601 ET SEQ., the Water Pollution  Control Act, 33 U.S.C. ss.
1251, ET SEQ.,  the Safe  Drinking  Water Act, 42 U.S.C.  ss. 300f ET SEQ.,  the
Comprehensive   Environmental   Response,   Compensation,   and   Liability  Act
("CERCLA"),  42 U.S.C. ss. 9601 ET SEQ., and any similar state, federal or local
statute or ordinance.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

         "ERISA AFFILIATE" shall mean any person, firm or entity (whether or not
incorporated) which, by reason of its relationship with the Company, is required
to be aggregated with the Company under Section 414(b),  414(c) or 414(m) of the
Code,  or which  together  with the  Company is a member of a  controlled  group
within the meaning of Section 4001(a) of ERISA.

         "ESCROW AGENT" shall mean Sanwa Bank California.



                                       -3-





         "ESCROW AGREEMENT" shall mean the Escrow Agreement by and among Equity,
the Company  and the Escrow  Agent  dated as of the date of this  Agreement,  in
substantially the form of EXHIBIT B hereto.

         "EXCLUDED ASSETS" has the meaning set forth in Section 2.02.

         "FINANCIAL STATEMENTS" has the meaning set forth in Section 3.06.

         "GROSS  PROFIT" shall mean an amount  calculated by deducting  from the
net sales of the  Acquired  Businesses  (a)  product  costs,  including  without
limitation tooling costs, (b) purchase  discounts,  (c) commissions  (buying and
selling),  (d) freight and  warehousing,  (e) duty and customs,  and (f) testing
services.  Such deductions shall include either a third-party  buying commission
or allocable  overhead  "load" for Equity's Hong Kong office,  but not both. For
purposes of this definition,  all defined terms, and the accounting  methodology
used in  determining  actual  amounts  relative to such terms,  shall be applied
consistent  with the past  practice  of the Company and  Contract  Marketing  as
represented in the Financial Statements.  For purposes of this definition,  "net
sales"  shall mean gross  sales  minus  returns,  trade  discounts,  mark-downs,
allowances and bad debt.

         "HAZARDOUS  MATERIALS" shall mean any (a) toxic or hazardous  materials
or  substances;  (b) solid  wastes,  including  asbestos,  buried  contaminants,
chemicals,  flammable or explosive  materials;  (c) radioactive  materials;  (d)
petroleum wastes and spills or releases of petroleum products; and (e) any other
chemical,  pollutant,  contaminant,  substance or waste that is regulated by any
governmental entity under any Environmental Law.

         "INTELLECTUAL PROPERTY" has the meaning set forth in Section 2.01.

         "INTERIM BALANCE SHEET" has the meaning set forth in Section 3.07.

         "INTERIM BALANCE SHEET DATE" has the meaning set forth in Section 3.07.

         "INVENTORIES" has the meaning set forth in Section 2.01.

         "IRS" shall mean the Internal Revenue Service.

         "KNOWLEDGE"  of the  Principal or the Company shall mean (a) the actual
knowledge  of any  officer or  director  of the Company and (b) matters of which
such officers or directors  reasonably  should have been aware after due inquiry
to the management and employees of the Company.

         "LEASED PROPERTY" has the meaning set forth in Section 3.11.

         "LIABILITY" shall mean any liability (whether known or unknown, whether
asserted or  unasserted,  whether  absolute or  contingent,  whether  accrued or
unaccrued,  whether  liquidated  or  unliquidated,  and whether due or to become
due), including any liability for Taxes.


                                       -4-






         "LICENSE" has the meaning set forth in Section 2.01.

         "LIENS" means liens, charge,  claims,  pledges,  security interests and
encumbrances of any nature whatsoever.

         "MATERIAL  ADVERSE  EFFECT" shall mean,  with respect to any Person,  a
material  adverse  effect on the  business,  prospects,  results of  operations,
financial  condition  or assets of such Person and its  subsidiaries  taken as a
whole.  A  Material  Adverse  Effect  shall be  deemed to have  occurred  if the
cumulative  effect of any individual  event and all other  then-existing  events
would result in a Material Adverse Effect.

         "MATERIAL ADVERSE EVENT" shall mean an occurrence, event or development
which has had or is reasonably likely to have a Material Adverse Effect.

         "NET  WORTH"  of the  Company  shall  mean the  equity  of the  Company
(determined  in  accordance  with  generally  accepted   accounting   principles
consistently applied but excluding Affiliated Obligations and Excluded Assets).

         "PERSON" shall mean an individual,  partnership,  corporation,  limited
liability company, joint venture, unincorporated organization,  cooperative or a
governmental entity or agency thereof.

         "PRODUCT LIABILITY" has the meaning set forth in Section 3.16.

         "PROFIT  SHORTFALL" shall mean the cumulative  amount, if any, by which
Gross Profits of the Acquired  Businesses  have fallen short of  $5,250,000  for
each of 1998, 1999, 2000, 2001 or 2002.

         "PROMOTIONAL  PRODUCTS AND SERVICES" shall mean merchandise  given away
to consumers or sold on a "purchase  with purchase"  basis in connection  with a
promotional  event,  and the services  performed to procure and distribute  such
merchandise,  as well as those  services  provided  to  customers  in support of
planning, administering and during the execution of a promotional event.

         "RECEIVABLES" has the meaning set forth in Section 2.01.

         "REGULATORY AUTHORITY" shall mean any foreign, United States federal or
state or local government or governmental authority.

         "TAX" shall mean any federal,  state,  local, or foreign income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall profits,  environmental (including taxes under Section 59A of
the Code),  customs  duties,  capital stock,  franchise,  profits,  withholding,
social security (or similar), unemployment,  disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.



                                       -5-





         "TAX  RETURN"  shall mean any return,  declaration,  report,  claim for
refund or  information  return or  statement  relating to Taxes,  including  any
schedule or attachment thereto, and including any amendment thereof.

        "TREASURY REGULATIONS" means the regulations promulgated under the Code.


                                   ARTICLE II

                                PURCHASE AND SALE

         SECTION 2.01. ASSETS CONVEYED.  Upon the basis of the  representations,
warranties, covenants and agreements contained herein, the Company hereby sells,
transfers,  assigns, conveys and delivers to Equity or a wholly-owned subsidiary
of Equity all of the  Company's  right,  title and interest in and to the Assets
(as defined  below)  free and clear of all Liens.  The  "ASSETS"  shall mean all
those  personal,  tangible and  intangible  properties and the real property and
improvements  of the  Company  used in  connection  with  the  operation  of the
Business (or used in the past in the  operation of the  Businesses  and to which
the Company still holds title),  other than Excluded Assets,  including  without
limitation,  those more particularly  described in the Schedules to this Section
2.01,  those in the  possession  of third parties but to which the Company holds
title, and those described below:

         (a) all the rights  and  benefits  accruing  to the  Company  under all
agreements,  contracts,  arrangements,  leases with respect to real and personal
property,  guarantees,  commitments and orders, whether written or oral, between
the Company and any third party,  including  without  limitation,  the contracts
listed in SCHEDULE 2.01(A) hereto (the "ASSIGNED CONTRACTS");

         (b) all of the Company's inventories of raw materials, parts,
work-in-process and finished goods, if any ("INVENTORIES");

         (c) all  manufacturing,  production and testing  equipment,  production
tooling, computers,  computer hardware and software, tools, supplies, furniture,
vehicles, and other tangible personal property and assets of the Company related
to the Business,  including,  without  limitation,  the items listed on SCHEDULE
2.01(C) hereto;

         (d) all the  interest  of and the rights and  benefits  accruing to the
Company as lessee  under the  leases or rental  agreements  covering  machinery,
equipment,  computers,  computer  hardware  and  software,  vehicles  and  other
tangible personal property as described in SCHEDULE 2.01(D) hereto;

         (e) all accounts and notes receivable  (including  without  limitation,
any claims,  remedies and other rights  related  thereto)  evidencing  rights to
payment for services rendered through the date hereof, except for any Affiliated
Obligations  (it being  understood and agreed that such  Affiliated  Obligations
have been repaid in full) (the "RECEIVABLES");



                                       -6-





         (f) all  operating  data and  records of the  Company  relating  to the
Business,  including,  without  limitation,  client lists and records,  referral
sources,  production reports and records,  equipment logs,  operating guides and
manuals,  projections,  copies of financial,  accounting and personnel  records,
correspondence and other similar documents and records;

         (g) all claims,  warranty  rights,  causes of action and other  similar
rights granted or owing to the Company arising out of the Business to the extent
the same are assignable;

         (h) all of the Company's  rights,  to the extent of such rights, to use
the name "U.S.  Import & Promotions  Co." and all  variations on any thereof for
any and all purposes;

         (i) all the intellectual  property of the Company,  including,  without
limitation, all software and software libraries,  processes,  formulae, methods,
plans,  research data,  marketing plans and strategies,  forecasts,  patents and
patent applications,  inventions, discoveries, know-how, trade secrets and ideas
(including those in the possession of third parties,  but which are the property
of the Company),  Confidential Information,  and all drawings, records, books or
other indicia of the foregoing, trademarks, servicemarks,  tradenames, licenses,
copyrights,  operating rights, permits and other similar intangible property and
rights (the "INTELLECTUAL PROPERTY");

         (j) all  licenses,  permits,  approvals,  qualifications,  consents and
other  authorizations  (the  "LICENSES")   necessary  for  the  lawful  conduct,
ownership   and   operation   of  the  Business  to  the  extent  the  same  are
transferrable;

         (k) all prepaid expenses and cash and cash equivalents of the Company;

         (l) all goodwill and going-concern value of the Company and the
Business; and

         (m) all other assets and  properties of any nature  whatsoever  held by
the  Company,  either  directly or  indirectly,  and used in,  allocated  to, or
required for the conduct of the Business,  but excluding the Excluded Assets (as
defined in Section 2.02 below).

         SECTION 2.02. EXCLUDED ASSETS. Anything to the contrary in Section 2.01
notwithstanding,  the Assets shall exclude and Equity shall not purchase (i) all
tax books of the Company other than those relating to sales, use and other state
and local taxes,  books and ledgers  relating to the ownership  interests in the
Company,  and  minutes of  meetings  of,  and  actions  taken by, the  Company's
shareholders,  (ii) the rights which accrue or will accrue to the Company  under
this Agreement,  (iii) any Employee Plan, (iv) the Affiliated  Obligations,  and
(v) the assets set forth on SCHEDULE  2.02 hereto  (collectively,  the "EXCLUDED
ASSETS").



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         SECTION 2.03.     PURCHASE PRICE.

         (a)  AGGREGATE  PURCHASE  PRICE.  The  aggregate  purchase  price  (the
"PURCHASE PRICE") to be paid by Equity shall consist of (i) $8,500,000,  payable
upon  execution  of this  Agreement  as provided by Section  2.03(b),  (ii) such
additional  payments,  if  any,  which  may be  made  as  provided  by  Sections
2.03(c)-(d) (the "ADDITIONAL PAYMENTS"), and (iii) the assumption of the Assumed
Liabilities.

         (b) PAYMENT OF PURCHASE PRICE. Upon execution of this Agreement, Equity
shall pay the Company $8,000,000 by wire transfer of immediately available funds
and shall deposit  $500,000  with the Escrow Agent  pursuant to the terms of the
Escrow  Agreement.  Any  Additional  Payments  shall be made in accordance  with
Sections 2.03(c)-(d).

         (c) ADDITIONAL PAYMENTS. If the Gross Profit of the Acquired Businesses
in 1998,  1999,  2000,  2001 or 2002 is equal to or greater  than the sum of (i)
$5,250,000  and (ii) any Profit  Shortfall,  Equity will make a payment equal to
25% of the gross profits in excess of such sum, not to exceed $1,625,000 for any
year,  to the  Company  in the  following  year;  PROVIDED,  HOWEVER,  that  the
aggregate  amount of all  payments  pursuant to this Section  2.03(c)  shall not
exceed  $4,000,000.  No  Additional  Payment  will be made for any year in which
Gross Profit is less than the amount  specified in this  Section  2.03(c).  Upon
determination of Equity's  financial  results for each of 1998, 1999, 2000, 2001
and 2002 but in any event no later than March 31 of the following  year,  Equity
shall  prepare and submit to the  Principal a schedule  setting  forth the Gross
Profit of the Acquired  Businesses for the applicable  period. The Company shall
have the  right to  review  the  classification  of  revenues  and costs in such
schedule with Equity's  independent  auditors to confirm that the calculation of
Gross Profit set forth in such  schedule is  consistent  with the  definition of
Gross Profit in this Agreement. The Company and the Principal shall be deemed to
have accepted such schedule unless they notify Equity in writing within fourteen
days of the delivery of such schedule.  If the Company and the Principal  notify
Equity in writing within  fourteen days of the delivery of such schedules of any
dispute  with the  schedules,  Equity  shall  consult  with the  Company and the
Principal  or their  representatives  to answer  questions  with respect to such
schedule and  calculations  and attempt in good faith to resolve  such  dispute.
Equity shall pay any  undisputed  amounts due under this Section  2.03(c) to the
Company  no later  than  March 31 of the year  following  the year to which such
payment relates.

         (d)      EFFECT OF EMPLOYMENT TERMINATION UPON ADDITIONAL PAYMENTS.

                  (i) If Equity terminates the employment of the Principal prior
to the close of  business  on June 30,  2001  without  cause  (I.E.,  other than
pursuant to Sections 3(a)(i)-(iv) of the Employment Agreement), Equity shall pay
the Company,  in addition to any  severance  compensation  due to the  Principal
under the  Employment  Agreement  but in lieu of any  obligation  under  Section
2.03(c) of this Agreement to make subsequent Additional Payments to the Company,
an amount equal to the  difference  between (i) the present  value of $4,000,000
and (ii) any Additional Payments  previously made to the Company.  Present value
shall be calculated by applying an annual


                                       -8-





discount rate equal of 15% from the date of termination to the earliest March 31
date or dates on which  Additional  Payments in the  maximum  amount due (before
applying such discount)  otherwise  could have been due hereunder.  Equity shall
make such payment within fourteen days of such termination.

                  (ii) If the Employment Agreement expires pursuant to its terms
on June 30, 2001 or is  terminated  for any reason,  other than  termination  by
Equity prior to the close of business on June 30, 2001 without  cause,  Equity's
obligations   under  Section  2.03(c)  of  this  Agreement  to  make  subsequent
Additional  Payments to the Company  hereunder  shall  continue and shall not be
affected by such termination.

                  (iii)  Equity  may,  at any time at its sole  option,  pay the
Company,  in lieu of any obligation  under Section  2.03(c) of this Agreement to
make  subsequent  Additional  Payments to the  Company,  an amount  equal to the
difference  between (i) the present value of $4,000,000  and (ii) any Additional
Payments  previously  made to the Company.  Present value shall be calculated by
applying an annual  discount rate equal of 12% from the date of  termination  to
the earliest March 31 date or dates on which Additional  Payments in the maximum
amount  due  (before  applying  such  discount)  otherwise  could  have been due
hereunder.


         (e)      ADJUSTMENTS TO PURCHASE PRICE.

                  (i) As soon as  practicable  and in any  event no  later  than
ninety (90) days after the date hereof,  Equity shall deliver to the Principal a
consolidated  balance  sheet of the Company as of the date hereof (the  "CLOSING
DATE BALANCE  SHEET"),  a calculation  of the Net Worth of the Company as of the
date hereof (the "NET WORTH  CALCULATION") and, if requested by the Company,  an
"agreed upon procedures"  letter from Equity's  independent  auditors  regarding
conformity of the Closing Date Balance Sheet and the Net Worth  Calculation with
generally accepted accounting principles. The Closing Date Balance Sheet and the
Net Worth  Calculation  shall be prepared in accordance with generally  accepted
accounting  principles and on a basis consistent with the Financial  Statements;
PROVIDED,  HOWEVER,  that no Affiliated  Obligations or Excluded Assets shall be
included  as assets on the  Closing  Date  Balance  Sheet or included in the Net
Worth Calculation.

                  (ii) If the  aggregate  Net Worth of the Company and  Contract
Marketing as determined  pursuant to this Section 2.03 is lower than $2,000,000,
then the  purchase  price owed to the Company  shall be reduced by the return to
Equity of cash in the amount of one half of the  difference  between  $2,000,000
and the Net Worth  indicated on the Net Worth  Calculation.  Equity shall obtain
such  return  from the funds held by the  Escrow  Agent  pursuant  to the Escrow
Agreement if such funds are sufficient for this purpose;  otherwise, the Company
shall deliver the balance due to Equity  promptly  following the delivery of the
Net Worth  Calculation.  If the  aggregate Net Worth of the Company and Contract
Marketing  as  determined   pursuant  to  this  Section  2.03  is  greater  than
$2,000,000,  then the purchase  price owed to the Company  shall be increased by
the payment to the  Company in cash in the amount of one half of the  difference
between the Net Worth indicated on the Net Worth Calculation and


                                       -9-





$2,000,000.  Equity  shall  deliver  the  balance  due to the  Company  promptly
following the delivery of the Net Worth Calculation.  If the aggregate Net Worth
of the Company and  Contract  Marketing as  determined  pursuant to this Section
2.03 is lower than  $1,800,000,  the Company shall bear one half of the costs of
preparing the Closing Date Balance Sheet and the Net Worth Calculation.

                  (iii) If the Receivables  included on the Closing Date Balance
Sheet are not collected by October 21, 1998, then the purchase price owed to the
Company  shall be  reduced  by the return to Equity of cash in the amount of the
difference  between the  Receivables  included on the Closing Date Balance Sheet
and the Receivables collected by such date. Equity shall deliver a notice to the
Company as soon as  practicable  following such date setting forth the amount of
any such  shortfall and listing the  uncollected  accounts.  Equity shall obtain
payment from the funds held by the Escrow Agent pursuant to the Escrow Agreement
if such funds are  sufficient  for this  purpose;  otherwise,  the Company shall
deliver  the  balance  due to Equity  promptly  following  the  delivery of such
notice.  Any such  Receivable  which is  collected  after  Equity has received a
refund thereon, net of any collection fees incurred, shall be for the benefit of
the Company.

         (f) ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets and the  restrictive  covenants  of Section  6.09 hereof as the
parties shall mutually agree.

         SECTION 2.04.  LIABILITIES ASSUMED BY EQUITY. In further  consideration
for the sale of the Assets, Equity hereby assumes and agrees to pay, perform and
discharge  the Assumed  Liabilities.  For purposes of this  Agreement,  the term
"ASSUMED LIABILITIES" shall mean all the Liabilities of the Company set forth in
the Balance Sheet,  excluding (a) any Liabilities for transactional and advisory
costs,  including,  without  limitation,  attorneys' and  accountants'  fees and
expenses,  incurred in connection with the transactions  contemplated  hereby or
the proposed sale of the Company or any equity interest  therein  (collectively,
"TRANSACTION  COSTS"), (b) Taxes owing by the Company to any governmental agency
or other taxing  authority,  (c) any Employee Plan, (d) any Liabilities  arising
out or relating to the Excluded Assets, and (e) any Liabilities  resulting from,
arising  out of,  relating  to,  in the  nature  of,  or  caused by any facts or
circumstances  which  would  constitute  a  breach  of the  representations  and
warranties of the Company set forth herein for which the Company,  the Principal
and John C.  McDaniel  would be required to indemnify  Equity under the terms of
this Agreement. Nothing in this Section 2.04 shall in any way limit the right of
Equity to indemnification under this Agreement.  Notwithstanding anything to the
contrary  contained  herein,  Equity shall not assume,  pay,  discharge,  become
liable for or perform  when due,  and the Company  shall not cause  Equity so to
assume, pay, discharge,  become liable for or perform,  any Liabilities,  debts,
contracts,  commitments  and other  obligations  of the  Company  of any  nature
whatsoever not expressly assumed pursuant to this Section 2.04.

      SECTION 2.05.     OTHER ACTIONS AND DOCUMENTS.  Upon the execution of this
Agreement:



                                      -10-





         (a) the Company  shall  deliver to Equity  such  deeds,  bills of sale,
endorsements,  assignments and other instruments of sale,  conveyance,  transfer
and assignment, satisfactory in form and substance to Equity and its counsel, as
may be  reasonably  requested  by Equity  in order to convey to Equity  good and
marketable title to the Assets, free and clear of all Liens;

         (b) the  Company  shall  execute  and  deliver to Equity all  necessary
documents,  including without limitation any filings with the Secretary of State
of the State of California, to allow Equity to use the name "Contract Marketing"
from and after the  Closing and to change the name of the Company to a name that
is not confusingly similar to its current name;

         (c) the Company shall pay all sales,  use,  transfer or stamp taxes, or
similar charges, payable by reason of the sale hereunder;

         (d) the Principal and Equity shall execute and deliver the Employment
Agreement;

         (e) the Company,  Equity and the Escrow Agent shall execute and deliver
the Escrow Agreement;

         (f)Contract Marketing, Equity, the Principal and John C. McDaniel shall
execute and deliver the Contract Marketing Agreement;

         (g) the Company shall deliver to Equity the  favorable  opinion,  dated
the Closing  Date,  of counsel to the Company and the  Principal  in the form of
EXHIBIT C hereto; and

         (h) Equity shall deliver to the Company and the Principal the favorable
opinion dated as of the Closing Date of counsel to Equity in the form of EXHIBIT
D hereto.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                    CONCERNING THE COMPANY AND THE PRINCIPAL

         Each of the Company,  the Principal and John C.  McDaniel,  jointly and
severally,  represents and warrants to Equity that the  statements  contained in
this  Article  III are correct  and  complete as of the date of this  Agreement,
except as set forth in the  schedules  delivered by the Company to Equity on the
date hereof (the "SCHEDULES").

         SECTION  3.01.  ORGANIZATION,  ETC. The Company is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Florida and has full corporate power and authority to conduct its Business as it
is now being conducted and to own, operate or lease the properties and assets it
currently owns,  operates or holds under lease. The Company is duly qualified or
licensed to do business


                                                      -11-







and is in good standing as a foreign  corporation in each jurisdiction where the
character  of  its  Business  or  the  nature  of  its  properties   makes  such
qualification or licensing necessary,  except where the failure to so qualify or
be licensed would not have a Material Adverse Effect. The Company has heretofore
delivered to Equity true and correct copies of its Certificate of  Incorporation
and By-laws as in effect on the date hereof.

         SECTION 3.02.  SUBSIDIARIES.  The Company has no equity interest in any
corporation, partnership, joint venture or other legal entity.

         SECTION 3.03. CAPITALIZATION.  The Principal is the sole stockholder of
the Company.  No contract,  commitment or  undertaking of any kind has been made
for the  issuance of any  additional  capital  stock or other  interests  in the
Company; nor is there in effect or outstanding any subscription, option, warrant
or  preemptive  or other  right to acquire  any of such  capital  stock or other
instruments convertible into or exchangeable for any of such capital stock.

         SECTION  3.04.  OWNERSHIP  OF  ASSETS.  The  Company  is the  legal and
beneficial  owner of the  Assets,  free and clear of any Liens;  the Company has
full right, power and authority to sell,  transfer,  assign,  convey and deliver
all of the Assets to be sold by it hereunder;  and delivery  thereof will convey
to Equity good,  absolute and marketable title to said Assets, free and clear of
any Liens.

         SECTION 3.05. AUTHORITY AND NO CONFLICT;  CONSENTS. (a) The Company has
the full right, power and authority to execute,  deliver and carry out the terms
of this  Agreement and all other  documents and agreements to be entered into in
connection  herewith  or  necessary  to give  effect to the  provisions  of this
Agreement (the "OTHER AGREEMENTS"),  and this Agreement and the Other Agreements
have been duly authorized,  executed and delivered by the Company. The execution
and delivery of this Agreement and the Other Agreements by the Company does not,
and the  consummation  of the  transactions  contemplated  hereby will not,  (i)
conflict  with,  or result in any violation of or default or loss of any benefit
under, any provision of the Company's governing instruments; (ii) conflict with,
or result in any violation of or default or loss of any material  benefit under,
any permit,  concession,  grant,  franchise,  law,  rule or  regulation,  or any
judgment,  decree or order of any court or other  Regulatory  Authority to which
the  Company or its  assets or  Business  is a party or to which the  Company is
subject;  (iii)  conflict with, or result in a breach or violation of or default
or loss of any material  benefit under, or accelerate the  performance  required
by, the terms of any material agreement, contract, indenture or other instrument
to which the Company is a party or to which the Company's  assets or Business is
subject, or constitute a default or loss of any material right thereunder or the
creation of any material Liens upon the Company's  assets; or (iv) result in any
suspension,  revocation,  impairment,  forfeiture  or nonrenewal of any material
License.  All action and other  authorizations  prerequisite to the execution of
this Agreement and the consummation of the transactions contemplated hereby have
been taken or obtained by the Company and the  Principal.  This Agreement is the
valid and binding  agreement of the Company  enforceable in accordance  with its
terms  (except  as  such   enforceability  may  be  limited  by  any  applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or


                                      -12-





by general  principles of equity,  regardless of whether such  enforceability is
considered in equity or at law).

         (b) The  execution,  delivery  and  performance  by the Company of this
Agreement,  and  the  performance  of  the  transactions  contemplated  by  this
Agreement, do not require the authorization,  consent, approval,  certification,
license or order of, or any filing with, any  Regulatory  Authority or any other
third party except for such authorizations, consents, approvals, certifications,
licenses and orders that have been obtained.

         SECTION 3.06.  FINANCIAL  STATEMENTS;  BOOKS AND RECORDS. A copy of the
unaudited balance sheet of the Company at December 31, 1997 has been attached as
SCHEDULE 3.06 hereto (the  "BALANCE  SHEET").  Also attached  hereto as SCHEDULE
3.06 are the related statements of operations of the Company for the fiscal year
ended  December  31,  1997  (together  with the  Balance  Sheet,  the  "DECEMBER
FINANCIAL STATEMENTS") and unaudited financial statements of the Company for the
six-month period ended June 30, 1998 (the "INTERIM FINANCIAL STATEMENTS"), which
Interim  Financial  Statements  have  been  prepared  on the  same  basis as the
December  Financial  Statements,  subject  to normal  year-end  adjustments  and
accruals  (none of which is expected to be  material).  The  December  Financial
Statements and the Interim Financial Statements are collectively  referred to as
the "FINANCIAL STATEMENTS." The Financial Statements are true and correct in all
material  respects,  are  consistent  with the books and records of the Company,
fairly represent in all material respects the financial condition and results of
operations of the Company as at and for the periods reflected therein,  and have
been prepared in accordance with generally accepted accounting principles in the
United States except for the lack of footnotes.

         SECTION  3.07.  NO  UNDISCLOSED  LIABILITIES.  The  Liabilities  on the
balance sheet included in the Interim Financial Statements (the "INTERIM BALANCE
SHEET") consist solely of accrued  obligations  and Liabilities  incurred by the
Company in the ordinary  course of business to Persons which are not  Affiliates
of the Company.  There are no Liabilities of the Company of any kind whatsoever,
whether or not accrued and whether or not contingent or absolute,  determined or
determinable or otherwise,  including without limitation  documentary or standby
letters  of  credit,  bid or  performance  bonds,  or  customer  or third  party
guarantees,  and no existing  condition,  situation or set of circumstances that
could  reasonably  result  in  such a  Liability,  other  than  (i)  Liabilities
disclosed in the Interim Financial  Statements,  and (ii) Liabilities which have
arisen after June 30, 1998 (the  "INTERIM  BALANCE  SHEET DATE") in the ordinary
course  of  business  and  consistent  with  past  practice  (none of which is a
Liability for breach of contract,  breach of warranty,  tort, infringement claim
or  lawsuit)  which  do  not  exceed  $10,000  individually  or  $50,000  in the
aggregate.  There are no  asserted  claims  for  indemnification  by any  Person
against  the Company  under any law or  agreement  or pursuant to the  Company's
Certificate  of  Incorporation  or  By-laws  and  neither  the  Company  nor the
Principal is aware of any facts or circumstances that might reasonably give rise
to the  assertion of such a claim against the Company  thereunder.  There are no
rights of return with respect to products shipped to customers prior to the date
hereof.



                                      -13-





         SECTION 3.08.  CORPORATE  ACTION.  All corporate action of the Board of
Directors and of the stockholder(s) of the Company taken on or prior to the date
hereof  has been  duly  authorized,  adopted  or  ratified  in  accordance  with
applicable law and the Certificate of Incorporation  and By-laws of the Company,
and has been duly recorded in its  corporate  minute books (which have been made
available for inspection by Equity).

         SECTION  3.09.  ABSENCE OF  CHANGES.  Except as  approved in writing by
Equity, since the Interim Balance Sheet Date there has not been, with respect to
the Company,  any (a) Material  Adverse  Event;  (b)  transaction by the Company
except  in  the  ordinary  course  of  business;   (c)  capital  or  Inventories
expenditures exceeding $10,000, in each case in the aggregate;  (d) destruction,
damage (other than ordinary wear and tear) to, or loss of any asset  (whether or
not covered by insurance); (e) labor trouble or other adverse event or condition
relating to employment or labor matters;  (f) increase in  compensation  payable
to, or any employment,  bonus or compensation  agreement  entered into with, any
employee or  consultant  of the  Company;  (g) change in  accounting  methods or
practices   (including,   without   limitation,   changes  in   depreciation  or
amortization policies or rates) by the Company; (h) revaluation of the Company's
assets;  (i) sale or transfer of any asset of the Company except in the ordinary
course of business;  (j)  amendment  or  termination  of any material  contract,
agreement,  or  license  to which  the  Company  is a  party;  (k) loan or other
investment by the Company to or in any person or entity, or guaranty of any loan
other than travel or other  job-related  expenses  advanced to  employees in the
ordinary  course  of  business  not  exceeding  $2,500  in  the  aggregate;  (l)
commitment to borrow money or any mortgage,  pledge, or other encumbrance of any
asset of the  Company or grant or  commitment  to grant a mortgage,  pledge,  or
other  encumbrance  of any asset of the  Company;  (m)  waiver or release of any
right or claim of the Company  except in the ordinary  course of  business;  (n)
material  obligation  or  liability  (absolute  or  contingent)  incurred by the
Company or to which it has become subject except current liabilities incurred in
the ordinary course of business and obligations  under contracts entered into in
the  ordinary  course of  business;  (o)  write-off  in excess  of  reserves  as
uncollectible of any accounts or notes receivable;  (p) issue or split-up of, or
grant of any option or other right to acquire,  any security of the Company; (q)
amendment of the Company's Certificate of Incorporation or By-laws; (r) dividend
or  distribution  on or with respect to shares of capital  stock or other equity
securities  of the Company,  or any other  distribution  to the Principal or his
Affiliates other than payments for salaries; (s) issuance, grant, sale or pledge
of any shares of, or rights of any kind to acquire any shares of, capital stock,
or purchase, redemption or other acquisition of any shares of such capital stock
or  other  equity   securities;   (t)  cancellation  of  current  insurance  (or
reinsurance) policies or termination of any of the coverage thereunder;  (u) any
payment or provision  with respect to any employee  benefit plan,  except in the
ordinary  course of the  administration  of such plans;  (v) grants of any stock
options,   restricted  stock  grants,   stock  appreciation  rights  or  similar
instruments  or  rights;  (w) new  employment  agreement  or other  contract  or
arrangement  with respect to the  performance of personal  services which is not
terminable  at will without  liability  by the  Company;  or (x) oral or written
agreement,  contract,  arrangement or  understanding  with respect to any of the
foregoing.



                                      -14-





         SECTION 3.10.              TAXES.

         (a) All Tax Returns required to be filed by or on behalf of the Company
have been  properly  prepared  and duly and timely  filed  with the  appropriate
taxing  authorities in all  jurisdictions in which such Tax Returns are required
to be filed (after  giving  effect to any valid  extensions  of time in which to
make such filings),  and all such Tax Returns were true, complete and correct in
all material  respects.  The Company is not  currently  the  beneficiary  of any
extension of time within which to file any tax return.

         (b) All Taxes for all  periods up to the date  hereof  that are due and
payable by the Company on or before the date  hereof have been,  or on or before
the date  hereof  will be,  fully and timely  paid,  and  adequate  reserves  or
accruals  for any and all Taxes for which the Company is liable with  respect to
any period  ending on or before the date hereof for which Tax  Returns  have not
yet been  filed or for which  Taxes are not yet due and owing  have been made in
the Financial Statements.

         (c) The Company has timely withheld from employee  salaries,  wages and
other  compensation  and paid over to the  appropriate  taxing  authorities  all
amounts  required  to be so  withheld  and paid over for all  periods  under all
applicable laws ending on or before the date hereof.

         (d) Equity has  received  complete  copies of any audit  report  issued
within the last five years relating to Taxes due from the Company.

         (e) The  Company  has not  executed  or filed with the IRS or any other
taxing  authority  any  agreement,  waiver  or  other  document  or  arrangement
extending  or having  the effect of  extending  the  period  for  assessment  or
collection of Taxes  (including,  but not limited to, any applicable  statute of
limitation).

         (f) No claim  has been  made by a taxing  authority  in a  jurisdiction
where  the  Company  does not file Tax  Returns  that the  Company  is or may be
subject to taxation by that jurisdiction.

         (g) All  deficiencies  asserted or assessments  made as a result of any
examinations  by the IRS or any other taxing  authority of the Tax Returns of or
covering or including  the Company have been fully paid,  and there are no other
audits or  investigations  by any  taxing  authority  in  progress,  nor has the
Principal nor the Company  received any notice from any taxing authority that it
intends to conduct such an audit or investigation

         (h) Neither the Company nor any other person  (including  the Principal
on behalf of the Company) has filed a consent  pursuant to Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a  "subsection  (f) asset" (as such term is defined in Section  341(f)(4) of the
Code) owned by the Company.

         (i)  There  are no Liens  upon any of the  Assets as a result of unpaid
Taxes.


                                      -15-






         (j) The Company has properly and timely  elected  under Section 1362 of
the Code, and under each analogous or similar provision of state or local law in
each  jurisdiction  where such an election is available and in which the Company
is required to file a Tax Return,  to be treated as an "S"  corporation  for all
taxable  periods  since  its  inception.  There  has not been any  voluntary  or
involuntary termination or revocation of any such election.

         (k) No tax is required to be withheld by Equity  under  Section 1445 of
the Code as a result of the sale of the Assets.

         (l) All material elections and consents with respect to any Tax (or the
computation  thereof)  affecting  the  Company as of the date hereof are obvious
from the Tax Returns or are set forth on the Disclosure Schedule. After the date
hereof,  no  election  or consent  with  respect to any Tax (or the  computation
thereof)  affecting  the Company  will be made  without  the written  consent of
Equity.  The  Company  has not  agreed to make and is not  required  to make any
adjustments  under  Section 481 of the Code by reason of a change in  accounting
method or otherwise.

         (m) The Company has made no payments,  and is not obligated to make any
payments that will not be deductible under section 280G of the Code.

         (n)  The  Company  is not a  party  to any Tax  allocation  or  sharing
agreement.

         SECTION 3.11.              LEASED PROPERTY.

         (a) SCHEDULE 3.11 hereto  identifies  all  leasehold  interests in real
property  including land and  improvements  held by the Company which is used or
useful in the conduct of the Business of the Company  (the  "LEASED  PROPERTY").
The  Company  does not own of  record or  beneficially  any real  property.  The
Company has assignable  leaseholds in all real estate leased by it, in each case
under leases which are binding and  enforceable  against the Company and, to the
knowledge of the Company and the Principal,  the other parties thereto.  None of
the  leasehold  interests are subject to any Liens (other than Liens for current
property taxes and assessments or mechanics  liens, in each case with respect to
amounts not in default).

         (b) There are no  outstanding  contracts  made by the  Company  for any
improvements to the Leased Property which have not been fully paid. Concurrently
with the execution of this  Agreement,  the Company shall cause to be discharged
all  mechanics'  or  materialmen's  liens  arising  from any labor or  materials
furnished  to the Leased  Property  on behalf of the  Company  prior to the date
hereof.

         (c) All  buildings,  structures,  improvements,  fixtures,  facilities,
equipment,  all components of all buildings,  structures and other  improvements
included within the Leased Property,  including but not limited to the roofs and
structural  elements  thereof and the heating,  ventilation,  air  conditioning,
plumbing,  electrical,  mechanical,  sewer, waste water, storm water, paving and
parking equipment,  systems and facilities included therein,  and other material
items of  tangible  property  and assets  are in good  operating  condition  and
repair, subject to normal wear and maintenance and are usable


                                      -16-





in the regular and ordinary course of business. No person other than the Company
owns any equipment or other tangible assets or properties situated on the Leased
Property or necessary to the operation of Company's Business.

         (d) The use and operation of the Leased  Property is in full compliance
with all applicable statutes,  rules,  regulations,  ordinances,  orders, writs,
injunctions,  judgments,  decrees,  awards and  restrictions of every Regulatory
Authority having  jurisdiction  over any of the Leased Property,  the Company or
its Business,  and every  instrumentality or agency thereof (including,  without
limitation,  applicable statutes,  rules,  regulations,  orders and restrictions
relating to zoning, land use, safety, health, environment,  Hazardous Materials,
pollution  controls,  employment  and  employment  practices  and  access by the
handicapped)  (collectively,   "LAWS"),  and  with  all  covenants,  conditions,
restrictions,  easements,  disposition  agreements and similar matters affecting
the  Leased  Property.  As of the date  hereof,  the  Company  has the  right to
continue the use and  operation  of the Leased  Property for its current uses in
the operation of the Company's  Business  (which right shall be  transferred  to
Equity  hereby).  The Company has not received any notice of any violation of or
investigation regarding any Laws.

         SECTION  3.12.  ENVIRONMENTAL  PROTECTION.  No Hazardous  Materials are
present on or below the surface of the Leased Property except as consistent with
applicable  Environmental  Laws, and the Leased Property has not previously been
used by the Company or the Principal for the manufacture,  refining,  treatment,
storage, or disposal of any Hazardous Material.  None of the soil, ground water,
or  surface  water of the  Leased  Property  is  contaminated  by any  Hazardous
Material in violation of applicable  Environmental Laws, and neither the Company
nor the  Principal  is aware of any such  contamination  from  neighboring  real
estate.  Except as consistent with applicable  Environmental  Laws, no Hazardous
Materials are being  emitted,  discharged  or released from the Leased  Property
into the  environment.  The Company is not liable for cleanup or response  costs
with respect to the emission, discharge, or release of any Hazardous Material or
for any other matter arising under the  Environmental  Laws due to its operation
of the Leased Property.

         SECTION 3.13.  INTELLECTUAL  PROPERTY.  SCHEDULE 3.13 hereto contains a
schedule of all the  Intellectual  Property of the Company.  The Company has not
infringed, and is not now infringing,  any trade name, trademark,  service mark,
copyright,  patent, trade secret or other Intellectual  Property right belonging
to a third party,  and it has not received  any notice of  infringement  upon or
conflict with the asserted rights of others. None of such Intellectual  Property
rights are registered with the United States Patent and Trademark  Office or the
United  States  Copyright  Office.  The  Company is not a party to any  license,
agreement,  or arrangement,  whether as licensor,  licensee, or otherwise,  with
respect  to  any  Intellectual   Property  right.  There  are  no  trade  names,
trademarks,  service marks, copyrights,  patents or applications for patents and
trade  secrets  other than those listed on SECTION 3.13 which are  necessary for
the  conduct  of the  Company's  Business.  The  Company  is not a party  to any
outstanding  options,  licenses  or  agreements  of  any  kind  relating  to the
foregoing. No partner, director, shareholder, officer or employee of the Company
or any predecessor has any interest in any of the foregoing rights.



                                      -17-





         SECTION 3.14. ASSETS. The Assets constitute,  in the aggregate,  all of
the assets and tangible  personal  property  owned by, in the  possession of, or
used by the  Company  in  connection  with the  Business,  and are  owned by the
Company free and clear of any Liens.  No personal  property  used in  connection
with the  Company's  Business  is held  under  any  lease,  security  agreement,
conditional sales contract, or other title retention or security arrangement, or
is other than in its possession and control.  All tangible  personal property is
in good operating condition and repair,  subject to normal wear and maintenance,
and is suitable for the conduct of the Business.

         SECTION 3.15. INVENTORIES.  All Inventories of the Company set forth on
the Interim  Balance  Sheet,  and all  Inventories  acquired  subsequent  to the
Interim  Balance Sheet Date, are valued in accordance  with  generally  accepted
accounting  principles in the United States.  All such Inventories  consist of a
quality and quantity  usable and  saleable in the  ordinary  course of business,
except for items of  obsolete  materials,  which have been  written  down on the
Interim Balance Sheet to realizable  market value. The Company's  Inventories do
not  include any  products  or  materials  stored for  customers  or other third
parties.

         SECTION 3.16. NO PRODUCT LIABILITIES;  PRODUCT WARRANTIES.  The Company
has not  incurred,  nor does the  Company or the  Principal  know of or have any
reason to believe there is any  reasonable  basis for alleging,  any  liability,
damage,  loss,  cost or expense  as a result of any  defect or other  deficiency
(whether of design, materials, workmanship, labeling, instructions or otherwise)
("PRODUCT  LIABILITY")  with respect to any product sold or service  rendered by
the Company, whether such Product Liability is incurred by reason of any express
or  implied   warranty   (including,   without   limitation,   any  warranty  of
merchantability  or  fitness),  any  doctrine  of common law (tort,  contract or
other),  any statutory  provision or otherwise and  irrespective of whether such
Product  Liability  is covered by  insurance,  subject  only to the  reserve for
product  warranty  claims set forth in the Interim Balance Sheet as adjusted for
the passage of time through the date hereof in  accordance  with the past custom
and  practice of the  Company.  No product  sold,  leased,  or  delivered by the
Company is subject to any  guaranty,  warranty,  or other  indemnity  beyond the
applicable standard terms and conditions of sale or lease of such product.

         SECTION  3.17.  PERSONNEL AND PLANS.  SCHEDULE 3.17 hereto  comprises a
complete  and correct list of (a) the names,  titles,  length of  employment  or
service and current  annual salary rates and all other  compensation  and fringe
benefits of each of the employees, officers or consultants of the Company who is
engaged in the conduct of the  Business  and (b) the amount of accrued  bonuses,
vacation,  sick leave,  maternity leave and other leave for such personnel.  The
Company is not in default with respect to any  withholding  or other  employment
taxes or payments with respect to accrued vacation or severance pay on behalf of
any employee  for which it is  obligated  on the date  hereof.  There are not in
existence or, to the knowledge of the Company or the  Principal,  threatened any
(y) work  stoppages  respecting  employees of the Company or (z) unfair labor or
practice  complaints  against the Company.  No  representation  question  exists
respecting the employees of the Company and no collective  bargaining  agreement
is currently being negotiated by the Company covering employees of the


                                      -18-





Company, nor is any grievance procedure or arbitration  proceeding pending under
any collective bargaining agreement and no claim therefor has been asserted. The
Company  has not  received  notice  from any union or  employees  setting  forth
demands for representation, elections or for present or future changes in wages,
terms of  employment  or  working  conditions.  There have been no audits of the
equal employment  opportunity practices of the Company, and, to the knowledge of
the Company and the Principal,  no basis for such audit exists. The Company does
not have any severance  agreement or other arrangement with respect to severance
with any  employee  of the  Company.  True and  complete  copies of the  current
written  personnel  policies,  manuals  and/or  handbooks  of the  Company  have
previously been delivered to Equity.

         SCHEDULE 3.17 lists each of the following  plans,  contracts,  policies
and arrangements which is or was sponsored,  maintained or contributed to by, or
otherwise binding upon the Company or, in the case of an "employee pension plan"
(as defined in Section 3(2) of ERISA), an ERISA Affiliate for the benefit of any
current or former  employee,  director or other  personnel  (including  any such
plan, contract,  policy or arrangement approved or adopted before, but effective
on or after,  the date of this Agreement):  (a) any "employee  benefit plan," as
such term is  defined in Section  3(3) of ERISA,  whether or not  subject to the
provisions of ERISA,  (b) any personnel  policy,  and (c) any other  employment,
consulting, stock option, stock bonus, stock purchase, phantom stock, incentive,
bonus, deferred compensation,  retirement,  severance, vacation, dependent care,
employee assistance, fringe benefit, medical, dental, sick leave, death benefit,
golden parachute or other  compensatory  plan,  contract,  policy or arrangement
that is not an employee  benefit  plan as defined in Section 3(3) of ERISA (each
such plan,  contract,  policy and  arrangement  being  herein  referred to as an
"EMPLOYEE PLAN").  With respect to each Employee Plan, the Company has delivered
to Equity true and  complete  copies of each  contract,  plan  document,  policy
statement,  summary plan  description  and other written  material  governing or
describing the Employee Plan and/or any related funding arrangements (including,
without  limitation,  any related trust agreement or insurance company contract)
or,  if there  are no such  written  materials,  a  summary  description  of the
Employee Plan.

         There are no Liens against the Assets under Section  412(n) of the Code
or  Sections  302(f)  or 4068 of ERISA.  As of the date  hereof,  Equity  has no
obligation to contribute  to, or any liability in respect of, any Employee Plan.
Each  "employee  benefit  plan" of the Company that has been  required to comply
with the provisions of Section 4980B of the Code has  substantially  complied in
all material respects.

     SECTION 3.18. INSURANCE.  Attached hereto as SCHEDULE 3.18 are certificates
of insurance setting forth all insurance  agreements and policies  maintained by
the Company,  including any and all insurance  agreements and policies  covering
the Business and any life  insurance  policies  maintained by the Company on the
lives of its  employees,  officers  or  directors,  and the type and  amounts of
coverage  thereunder,  which SCHEDULE 3.18 reflects all such insurance  which is
required by law to be  maintained  by the Company.  During the past three years,
the Company has not been refused  insurance  in  connection  with the  Company's
Business,  nor has any claim in excess of  $10,000  been made in  respect of any
such agreements or policies. Such

                                      -19-





policies are in full force and effect,  and the Company is not  delinquent  with
respect to any premium  payments  thereon.  The Company  maintains  the type and
amount of insurance which is adequate to protect its financial condition against
the risks involved in the conduct of the Business.

         SECTION 3.19.  LITIGATION.  There is no suit, action,  arbitration,  or
legal,  administrative,  or  other  proceeding,  or  governmental  investigation
pending against or, to the knowledge of the Company or the Principal, threatened
against  or  affecting  the  Company   relating  to  any  of  the   transactions
contemplated  by this  Agreement.  The  Company  is not in default of any order,
writ,  injunction  or decree of any federal,  state,  local,  or foreign  court,
department, agency or instrumentality.

         SECTION  3.20.  COMPLIANCE  WITH LAW. The Company has complied with all
existing local,  state,  federal and foreign laws, rules,  regulations,  orders,
judgments and decrees  applicable to it and its properties,  including,  without
limitation, all laws, regulations,  orders and requirements relating to consumer
protection,   currency  exchange,  equal  opportunity,   health,   environmental
protection,  fire,  zoning and building,  occupation safety and pension matters.
Neither  the Company nor Equity is required to comply with any bulk sales law in
connection with the transactions contemplated by this Agreement.

         SECTION 3.21.  CONTRACTS,  OBLIGATIONS AND  COMMITMENTS.  SCHEDULE 3.21
hereto lists all existing  contracts,  obligations  or  commitments  (written or
oral) of any nature, including,  without limitation,  the following: (a) loan or
other agreements,  notes,  indentures,  or instruments relating to or evidencing
indebtedness for borrowed money or mortgaging,  pledging or granting or creating
a Lien on any of the  assets  of the  Company  or any  agreement  or  instrument
evidencing  any guaranty by the Company of payment or  performance  by any other
person;  (b) any  contract or series of  contracts  with the same person for the
furnishing  or purchase of equipment,  goods or services;  (c) any joint venture
contract or  arrangement  or other  agreement  involving a sharing of profits or
expenses;  (d) agreements which will limit the freedom of the Company to compete
in any  line of  business  or in any  geographic  area or with any  person;  (e)
agreements  providing for disposition of the assets of the Company other than in
the ordinary  course of business or agreements of merger or  consolidation;  (f)
any lease  under which the  Company is either  lessor or lessee  relating to any
asset of its  Business or any  property at which its Business or such assets are
located;  (g) any contract,  commitment or agreement with the federal government
or any state or local  government  or any agency  thereof;  or (h) any contract,
commitment or agreement with manufacturing agents or sales agents.

         Each contract, agreement,  arrangement, plan, lease, license or similar
instrument  listed on  SCHEDULE  3.21 is a valid and binding  obligation  of the
Company  and, to the  knowledge of the Company and the  Principal,  of the other
parties  thereto,  enforceable  in  accordance  with its  terms  (except  as the
enforceability thereof may be limited by any applicable  bankruptcy,  insolvency
or other laws affecting  creditors' rights generally or by general principles of
equity,  regardless of whether such enforceability is considered in equity or at
law),  and is in full force and effect,  and  neither  the  Company  nor, to the
knowledge  of the  Company  and the  Principal,  any other  party  thereto,  has
breached


                                      -20-






any material  provisions  of, or is in default  under the terms of (and,  to the
knowledge of the Company and the Principal,  no condition exists which, with the
passage of time, the giving of notice,  or both, would result in a default under
the terms of), any of such contracts.

         SECTION 3.22. LICENSES. The Company has all Licenses necessary from all
applicable Regulatory Authorities for the lawful conduct of its Business, all of
which are listed on  SCHEDULE  2.01(J)  hereto,  and it is not in default in any
material respect under such Licenses.

         SECTION 3.23.  NO BROKER.  The Company has not dealt with any broker or
finder in connection with any of the transactions contemplated by this Agreement
and no broker or other person is entitled to any  commission  or finder's fee in
connection with any of such transactions.

         SECTION 3.24. NO ILLEGAL OR IMPROPER TRANSACTIONS.  Neither the Company
nor any  stockholder,  officer or  employee  of the  Company,  has  directly  or
indirectly  used funds or other  assets of the  Company,  or made any promise or
undertaking in such regards, for (a) illegal contributions, gifts, entertainment
or other expenses relating to political activity; (b) illegal payments to or for
the benefit of governmental officials or employees, whether domestic or foreign;
(c) illegal payments to or for the benefit of any person,  firm,  corporation or
other  entity,  or any  director,  officer,  employee,  agent or  representative
thereof;  (d) gifts,  entertainment or other expenses that jeopardize the normal
business  relations  between the Company  and any of its  customers;  or (e) the
establishment  or maintenance of a secret or unrecorded fund. There have been no
false or fictitious entries made in the books or records of the Company, and the
Company  has  records  that  accurately  and validly  reflect  transactions  and
accounting  controls  sufficient to insure that such transactions are (i) in all
material respects  executed in accordance with management's  general or specific
authorization and (ii) recorded in conformity with generally accepted accounting
principles in the United States.

         SECTION  3.25.  RELATED  PARTY  TRANSACTIONS.   No  current  or  former
stockholder,  officer or  employee  or any  associate  (as  defined in the rules
promulgated  under the  Securities  Exchange  Act of 1934,  as  amended)  of the
Company or any Affiliate of any of the  foregoing,  is presently,  or during the
last  three  fiscal  years has  been,  (a) a party to any  transaction  with the
Company with respect to the business of the Company (including,  but not limited
to, any contract, agreement or other arrangement providing for the furnishing of
services by, or rental of real or personal property from, or otherwise requiring
payments  to,  any such  director,  officer,  employee  or  stockholder  or such
associate),  or  (b)  the  direct  of  indirect  owner  of an  interest  in  any
corporation,  firm,  association or business organization which is a present (or
potential)  competitor,  supplier or customer of the Company with respect to the
business of the Company, nor does any such person receive income from any source
other than the Company  which  relates to the  business  of, or should  properly
accrue to, the Company with respect to the business of the Company.

     SECTION 3.26.  SUPPLIERS AND CUSTOMERS.  (a) SCHEDULE  3.26(A) hereto lists
(i) all suppliers of the Company to which the Company made  payments  during the
years

                                      -21-





ended December 31, 1995,  1996 and 1997, or expects to make payments  during the
year ending  December 31, 1998, in excess of ten percent of the combined cost of
sales of the Company for such year and (ii) all customers  that paid the Company
during the years  ended  December  31,  1995,  1996 and 1997 or that the Company
expects will pay to the Company  during the year ending  December  31, 1998,  in
excess of one percent of the combined revenues of the Company for such year.

         (b) The Company has no information which might reasonably indicate that
any of the  customers or suppliers  listed on SCHEDULE  3.26(A)  intend to cease
purchasing from, selling to or dealing with the Company, nor has any information
been  brought to the  attention  of the  Company or the  Principal  which  might
reasonably  lead them to believe any such customer or supplier  intends to alter
in any  material  respect the amount of such  purchases,  sales or the extent of
dealings with the Company or would alter in any material respect such purchases,
sales or dealings in the event of the consummation of the  Acquisition.  Neither
the  Company  nor the  Principal  has any  information  which  might  reasonably
indicate,  or information  which has been brought to its or his attention  which
might  reasonably  lead it or him to believe,  that (i) any supplier will not be
able to fulfill outstanding or currently  anticipated  purchase orders placed by
the  Company,  or  (ii)  any  customer  will  cancel  outstanding  or  currently
anticipated purchase orders placed with the Company.

         SECTION 3.27. ACCOUNTS  RECEIVABLE.  Each of the accounts receivable of
the  Company  set forth on the  Interim  Balance  Sheet (a) arose from BONA FIDE
sales  in  the  ordinary  course  of  business,   (b)  was  entered  into  under
circumstances  and by methods usual and  customary in the Company's  Business in
the applicable state and the collection practices used with respect thereto have
been in all respects legal and proper,  (c) was entered into, and credit granted
pursuant hereto,  consistent with the Company's  historical  credit policies and
practices and (d) shall be collected within ninety (90) days of the date hereof.
The books of the Company  correctly record the principal balance of all accounts
receivable and each of the security instruments securing any account receivable,
if any, constitutes a valid lien in favor of the Company upon the property which
it  describes,  and is  enforceable  by the  Company  and its  transferees.  The
reserves for  doubtful  accounts  shown or  reflected  in the Interim  Financial
Statements are adequate and were calculated consistent with past practice.

         SECTION 3.28. CUSTOMS MATTERS.  The Company has all licenses,  permits,
consents, orders, approvals and other authorizations necessary under the customs
and trade laws of the United  States of America,  including  without  limitation
bilateral  trade  agreements,  to  carry  on its  business  as  currently  being
conducted.  The Company has properly reported all goods imported into the United
States, accurately stated dutiable cost thereof and paid all tariffs due thereon
at the time of entry.

         SECTION 3.29. NO MISLEADING STATEMENTS. This Agreement, the information
and schedules  referred to herein and the information that has been furnished to
Equity in connection with the  transactions  contemplated  hereby do not include
any untrue  statement  of a material  fact and do not omit to state any material
fact necessary to make the statements  contained herein or therein,  in light of
the circumstances under which they were made, not misleading.


                                      -22-







                                   ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES OF
                       THE PRINCIPAL AND JOHN C. MCDANIEL

         Each of the  Principal and John C. McDaniel  severally  represents  and
warrants to Equity that the statements  contained in this Article IV are correct
and  complete  as of the  date of this  Agreement,  except  as set  forth in the
Schedules attached hereto.

         SECTION  4.01.  DUE  AUTHORIZATION.  Each of the  Principal and John C.
McDaniel has full power and authority to execute and deliver this  Agreement and
the Other  Agreements  to which he is a party  and to  perform  his  obligations
hereunder  and  thereunder.  Each of the Principal and John C. McDaniel has duly
executed this Agreement and each of the Other Agreements to which he is a party,
and this  Agreement  and the Other  Agreements  to which he is a party is,  upon
execution and delivery thereof by him, his legal, valid and binding  obligation,
enforceable   against  him  in   accordance   with  its  terms  (except  as  the
enforceability thereof may be limited by any applicable  bankruptcy,  insolvency
or other laws affecting  creditors' rights generally or by general principles of
equity,  regardless of whether such enforceability is considered in equity or at
law).

         SECTION 4.02. NO CONFLICT;  CONSENTS. (a) The execution and delivery by
each of the  Principal  and John C.  McDaniel  of this  Agreement  and the Other
Agreements  to  which he is a party  and the  consummation  of the  transactions
contemplated  hereby or thereby by him will not (i) conflict  with, or result in
any violation of or default or loss of any material  benefit under,  any permit,
concession,  grant, franchise,  law, rule or regulation, or any judgment, decree
or order of any court or  Regulatory  Authority to which he is a party;  or (ii)
conflict  with,  or result in a breach or violation of or default or loss of any
material benefit under, or accelerate the performance  required by, the terms of
any material agreement, contract, indenture or other instrument to which he is a
party,  or  constitute  a default  or loss of any right  thereunder  or an event
which,  with the lapse of time or notice or both,  might  result in a default or
loss of any right  thereunder or the creation of any Lien upon the assets of the
Principal or John C. McDaniel, as the case may be.

         (b) The  execution,  delivery and  performance by each of the Principal
and  John C.  McDaniel  of this  Agreement,  and the  performance  by him of the
transactions  contemplated by this Agreement,  do not require the authorization,
consent, approval,  certification,  license or order of, or any filing with, any
Regulatory  Authority or any other third party  except for such  authorizations,
consents,  approvals,  certifications,   licenses  and  orders  that  have  been
obtained.

     SECTION 4.03. BROKERS.  Neither the Principal nor John C. McDaniel has paid
or  become  obligated  to pay  any  fee or  commission  to any  broker,  finder,
investment  banker or other  intermediary  in connection  with the  transactions
contemplated by this Agreement or the Other Agreements.


                                      -23-






                                    ARTICLE V

                    REPRESENTATIONS AND WARRANTIES OF EQUITY

         Equity  represents  and warrants to the Company and the Principal  that
the  statements  contained  in this Article V are correct and complete as of the
date of this Agreement.

     SECTION 5.01. ORGANIZATION. Equity is a corporation duly organized, validly
existing  and  in  good  standing  under  the  laws  of  its   jurisdiction   of
incorporation.

     SECTION 5.02.  AUTHORITY AND NO CONFLICT.  Equity has the full right, power
and authority to execute,  deliver and carry out the terms of this Agreement and
the Other  Agreements to which it is party,  and all  documents  and  agreements
necessary  to give  effect to the  provisions  of this  Agreement  and the Other
Agreements,  and this Agreement and the Other  Agreements to which it is a party
have been duly authorized,  executed and delivered by Equity.  The execution and
delivery of this  Agreement  and the Other  Agreements to which it is a party by
Equity does not, and  consummation of the transactions  contemplated  hereby and
thereby will not, (a) conflict with, or result in any violation of or default or
loss of any benefit under, any provision of Equity's governing instruments;  (b)
conflict  with, or result in any violation of or default or loss of any material
benefit  under,  any  permit,   concession,   grant,  franchise,  law,  rule  or
regulation,  or any  judgment,  decree  or  order  of any  court  or  Regulatory
Authority  to which  Equity is a party;  or (c)  conflict  with,  or result in a
breach or  violation  of or default or loss of any material  benefit  under,  or
accelerate  the  performance  required by, the terms of any material  agreement,
contract,  indenture  or  other  instrument  to  which  Equity  is a  party,  or
constitute a default or loss of any right thereunder or an event which, with the
lapse of time or notice or both,  might result in a default or loss of any right
thereunder or the creation of any material  Lien upon the assets of Equity.  All
action and other authorizations  prerequisite to the execution of this Agreement
and the  Other  Agreements  to which it is a party and the  consummation  of the
transactions  contemplated  hereby and  thereby  have been taken or  obtained by
Equity. This Agreement and the Other Agreements to which it is a party are valid
and binding agreements of Equity  enforceable  against Equity in accordance with
their  terms  (except as such  enforceability  may be limited by any  applicable
bankruptcy, insolvency or other laws affecting creditor's rights generally or by
general  principles  of equity,  regardless  of whether such  enforceability  is
considered in equity or at law).

     SECTION 5.03. CONSENTS.  The execution,  delivery and performance by Equity
of this  Agreement  and the  Other  Agreements  to which it is a party,  and the
performance of the transactions  contemplated hereby and thereby, do not require
the authorization, consent, approval, certification, license or order of, or any
filing with, any  Regulatory  Authority or any other third party except for such
governmental authorizations,  consents, approvals, certifications,  licenses and
orders that have been obtained.

     SECTION  5.04.  REPORTS OF EQUITY.  Equity has delivered to the Company and
the Principal (a) Equity's Annual Report on Form 10-K for the fiscal year ended

                                      -24-





December 31, 1997;  (b)  Equity's  Quarterly  Report on Form 10-Q for the fiscal
quarter ended March 31, 1998; (c) Equity's  Current Report on Form 8-K filed May
8, 1998 with respect to the acquisition of Corinthian  Marketing,  Inc.; and (d)
Equity's  Definitive Proxy Statement for the Annual Meeting held on May 27, 1998
(collectively,  the  "SEC  REPORTS").  The SEC  Reports,  when  filed  with  the
Securities  and  Exchange  Commission  (the  "SEC"),  complied as to form in all
material respects with the requirements of the Securities  Exchange Act of 1934,
as amended.  As of their  respective  dates,  the SEC Reports did not contain an
untrue  statement of material  fact or omit to state a material fact required to
be stated therein.  There has been no Current Report on Form 8-K filed by Equity
with the SEC since May 8, 1998.

     SECTION 5.05. NO MATERIAL  ADVERSE CHANGE.  Since March 31, 1998, there has
been no material adverse change in results of operations, financial condition or
Business of Equity.

     SECTION 5.06. BROKERS.  Neither Equity or any of its Affiliates has paid or
become obligated to pay any fee or commission to any broker, finder,  investment
banker or other intermediary in connection with the transactions contemplated by
this Agreement.

                                   ARTICLE VI

                             POST-CLOSING COVENANTS

                  POST-CLOSING COVENANTS OF ALL PARTIES HERETO

         SECTION  6.01.  GENERAL.  In case at any time  after  the  Closing  any
further  action is  necessary  or  desirable  to carry out the  purposes of this
Agreement and the Other  Agreements,  each of the parties  hereto will take such
further action (including the execution and delivery of such further instruments
and documents) as any other party hereto  reasonably may request.  The Principal
acknowledges  and agrees that from and after the Closing Equity will be entitled
to possession of all documents,  books, records,  agreements, and financial data
of any sort relating to the Assets.

         SECTION 6.02.     TAX MATTERS.

         (a)      COOPERATION ON TAX MATTERS.

                  (i)  Equity,  the Company and the  Principal  shall  cooperate
fully,  as and to the  extent  reasonably  requested  by  the  other  party,  in
connection  with the filing of Tax  Returns  pursuant  to this  Section  and any
audit,  litigation or other  proceeding with respect to Taxes.  Such cooperation
shall include the  retention and (upon the other party's  request) the provision
of records  and  information  which are  reasonably  relevant to any such audit,
litigation  or other  proceeding  and making  employees  available on a mutually
convenient  basis to  provide  additional  information  and  explanation  of any
material provided hereunder.



                                      -25-





                  (ii) Equity and the Principal further agree, upon request,  to
use all  commercially  reasonable  efforts  to obtain any  certificate  or other
document from any  Regulatory  Authority or any other Person as may be necessary
to mitigate,  reduce or eliminate any Tax that could be imposed (including,  but
not limited to, with respect to the transactions contemplated hereby).

         (b) ALLOCATION OF PURCHASE PRICE. The Company, the Principal and Equity
shall file all required information and tax returns (and any amendments thereto)
in a manner consistent with the mutually-agreed allocation of the Purchase Price
and comply with the applicable  information  reporting  requirements  of Section
1060 of the Code and Treasury Regulations promulgated  thereunder.  If, contrary
to the intent of the parties  hereto as  expressed  in this  Section  6.02,  any
taxing authority makes or proposes an allocation different from that agreed upon
pursuant to this  Agreement,  the Company and Equity shall  cooperate  with each
other in good faith to contest such taxing  authority's  allocation (or proposed
allocation),   PROVIDED,  HOWEVER,  that,  after  consultation  with  the  party
adversely  affected by such allocation (or proposed  allocation),  another party
hereto may file such protective  claims or returns as may reasonably be acquired
to protect its interests.

         (c) CERTAIN TAXES. All transfer  (including,  without  limitation,  any
real estate transfer taxes),  documentary,  sales, use, stamp,  registration and
other such Taxes and fees  (including  any penalties  and interest)  incurred in
connection with this Agreement and the transactions  contemplated  hereby, shall
be paid by the Company when due, and the Company will, at its expense,  file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary,  sales, use, stamp,  registration and other Taxes and fees, and, if
required by applicable  law, and the Company will, and will cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation.

         SECTION 6.03.  EQUITY TO ACT AS AGENT FOR THE COMPANY.  This  Agreement
shall not  constitute an agreement to assign any contract  right  included among
the Assets if any  attempted  assignment  of the same without the consent of the
other party  thereto would  constitute a breach  thereof or in any way adversely
affect the rights of the Company thereunder.  If such consent is not obtained or
if any attempted  assignment  would be ineffective or would adversely affect the
Company's  rights  thereunder  so that Equity would not in fact receive all such
rights,  then  Equity  shall act as the agent for the Company in order to obtain
for Equity the benefits  thereunder  and to assume the  liabilities  thereunder.
Nothing herein shall be deemed to make Equity the Company's  agent in respect of
any Excluded Asset.

         SECTION  6.04.  DELIVERY OF PROPERTY  RECEIVED BY THE COMPANY OR EQUITY
AFTER  CLOSING.  From and after the  Closing,  Equity  shall  have the right and
authority  to  collect,  for the  account of Equity,  all assets  which shall be
transferred or are intended to be transferred to Equity as part of the Assets as
provided in this Agreement, and to endorse with the name of the Company (without
recourse or warranty except to the extent set forth herein) any checks or drafts
received on account of any such assets. The Company agrees that it will transfer
or deliver  to Equity  promptly  after the  receipt  thereof,  any cash or other
property which the Company


                                      -26-





receives after the date hereof in respect of any assets  transferred or intended
to be  transferred  to Equity as part of the  Assets  under this  Agreement.  In
addition,  Equity  agrees  that it will  transfer  or  deliver  to the  Company,
promptly after receipt thereof, any cash or other property which Equity receives
after the date hereof in respect of any assets not transferred or intended to be
transferred to Equity as part of the Assets under this Agreement.

         SECTION 6.05. EQUITY APPOINTED  ATTORNEY FOR THE COMPANY.  The Company,
effective upon the execution of this Agreement,  hereby constitutes and appoints
Equity,  and its  successors  and assigns,  the true and lawful  attorney of the
Company,  in the name of Equity or the Company (as Equity shall determine in its
sole  discretion) but for the benefit of Equity:  (a) to institute and prosecute
all  proceedings  which  Equity may deem proper in order to  collect,  assert or
enforce  any claim,  right or title of any kind in or to the Assets as  provided
for in this Agreement; (b) to defend or compromise any and all actions, suits or
proceedings in respect of any of the Assets,  and to do all such acts and things
in relation  thereto as Equity shall deem advisable;  and (c) to take all action
which Equity,  its successors or assigns may reasonably  deem proper in order to
provide for Equity,  its  successors or assigns,  the benefits  under any of the
Assets where any  required  consent of another  party to the sale or  assignment
thereof to Equity pursuant to this Agreement  shall not have been obtained.  The
Company  acknowledges that the foregoing powers are coupled with an interest and
shall be irrevocable. Equity shall be entitled to retain for its own account any
amounts  collected  pursuant  to the  foregoing  powers,  including  any amounts
payable as interest in respect  thereof.  Equity  agrees to act in good faith in
seeking to  collect,  assert or enforce  any claim  against  any third  party in
accordance with this Section 6.05.  Notwithstanding the foregoing,  the power of
attorney  set forth in this  Section  6.05 shall not apply in the event that the
Company or the Principal has an indemnification obligation under Article VII and
is complying with such obligation.

         SECTION 6.06. PAYMENT OF LIABILITIES.  Following the date hereof Equity
agrees to discharge the Assumed  Liabilities in accordance  with their terms and
the Company  agrees to discharge its remaining  liabilities  in accordance  with
their terms.

         SECTION 6.07. SUBSEQUENT LIABILITY.  If, subsequent to the date hereof,
any  liability for Taxes  measured by the income of the Company  relating to the
Assets or the conduct of the  Business is imposed on Equity with  respect to any
period prior to and through the date hereof which has not otherwise been assumed
by Equity  pursuant  to this  Agreement,  then the  Company  and the  Principal,
jointly  and  severally,  shall  indemnify  and hold Equity  harmless,  from and
against,  and shall pay, the full amount of such Tax  liability,  including  any
interest, additions to tax and penalties thereon, together with interest on such
additions to tax or penalties  (as well as  reasonable  attorneys' or other fees
and  disbursements of Equity incurred in determination  thereof or in connection
therewith), or the Company and the Principal shall, at their sole expense and in
their reasonable discretion, either settle any Tax claim that may be the subject
of  indemnification  under this  Section  6.07 at such time and on such terms as
they shall deem  appropriate  or assume the entire  defense  thereof,  PROVIDED,
HOWEVER,  that the  Company  and the  Principal  shall not in any event take any
position in such  settlement or defense that subjects  Equity to any civil fraud
or any civil or criminal


                                      -27-





penalty or tax assessment.  Notwithstanding  the foregoing,  neither the Company
nor the Principal  shall consent,  without the prior written  consent of Equity,
which prior  written  consent  shall not be  unreasonably  withheld,  delayed or
conditioned,  to any change in the  treatment of any item which would  adversely
affect the tax liability of Equity for a period subsequent to the date hereof.

         SECTION 6.08.     EMPLOYEE MATTERS.

         (a) The Company has no  information  that Equity  would not qualify for
successor  status  under  Internal  Revenue  Service  Revenue  Procedure  96-60.
Pursuant to that  pronouncement,  the parties  agree  Equity will file (with the
federal  government and the state,  where appropriate) a single W-2 for the 1998
taxable year for each employee of the Company who becomes an employee of Equity,
reporting  the wages paid by both Equity and the  Company to any such  employee.
The Company will provide Equity any information not available to Equity relating
to periods ending on or prior to the date hereof necessary for Equity to prepare
and  distribute  Forms W-2 for the year  ending  December  31,  1998 to any such
employees.  In addition, both parties will file Forms 941 for the quarter during
which the sale takes place,  reflecting  the wages and deposits  made during its
period of ownership.

         (b) No term of this  Agreement  shall be deemed to create any  contract
between Equity and any current  employee of the Company which gives the employee
the right to be retained in the employment of Equity or any related employer, or
to interfere with Equity's right to terminate  employment of any employee at any
time or to change its policies regarding salaries, benefits and other employment
matters  at any time or from  time to  time.  The  representations,  warranties,
covenants  and  agreements  contained  herein  are for the sole  benefit  of the
parties hereto,  and employees are not intended to be and shall not be construed
as beneficiaries hereof.

         (c) Equity shall not assume the sponsorship  of, or the  responsibility
for  contributions  to, or any liability in connection  with, any Employee Plan.
Without limiting the foregoing, the Company shall be liable for any continuation
coverage  (including any penalties,  excise taxes or interest resulting from the
failure to provide continuation  coverage) required by Section 4980B of the Code
due to  qualifying  events  that  occur on or before  the date  hereof,  and the
Company  shall  otherwise  retain  all  obligations  and  liabilities  under the
Employee Plans.

         (d) With  respect to any employee of the Company  hired by Equity,  the
Company shall retain and shall defend,  indemnify and hold Equity  harmless from
and against (i) all liabilities  and  obligations  arising under any group life,
accident,  medical,  dental or  disability  plan (whether or not insured) to the
extent that such liability or obligation  relates to claims or expenses incurred
(whether  or not  then  reported)  on or  prior  to the  date  hereof,  (ii) all
liabilities and obligations arising under any worker's compensation  arrangement
to the extent such  liability or  obligation  arises out of an illness or injury
that  originated  prior  to  the  date  hereof,   including  liability  for  any
retroactive  worker's  compensation  premiums  attributable to such period,  and
(iii) all other  liabilities and obligations  arising under or in connection the
Employee Plans to


                                      -28-






the extent any such  liability or  obligation  relates to services  performed or
events occurring during any period on or prior to the date hereof.

         (e) No  provision  of this  Agreement  shall  create  any  third  party
beneficiary  or other rights in any employee or former  employee  (including any
beneficiary or dependent  thereof) of the Company in respect of employment  with
Equity  or in  respect  of any  benefits  that  may  be  provided,  directly  or
indirectly,  under any employee  benefit plan,  contract,  policy or arrangement
which may be  established  by  Equity.  No  provision  of this  Agreement  shall
constitute a limitation on rights to amend,  modify or terminate  after the date
hereof any such plans, contracts, policies or arrangements of Equity.

             POST-CLOSING COVENANTS OF THE COMPANY AND THE PRINCIPAL

         SECTION 6.09.     RESTRICTIVE COVENANTS.

         (a) Each of the Company and the  Principal  agrees  until  December 31,
2003  not  to  directly  or  indirectly,  as  owner,  partner,  joint  venturer,
stockholder,  employee,  broker, agent, principal,  trustee,  corporate officer,
director,  licensor, or in any capacity whatsoever engage in, become financially
interested in, be employed by, render any  consultation  or business advice with
respect to, or have any  connection  with,  any firm,  corporation,  business or
other  organization  or  enterprise  which  competes  with the  Business  in any
geographic  area where the Business is then being conducted or is proposed to be
conducted  (by  Equity  or any  Affiliate  of Equity to which all or part of the
Business  is  subsequently  transferred),  in any manner  whatsoever,  including
without  limitation sales of promotional  products and services  (including both
self-liquidating and give-away products);  PROVIDED,  HOWEVER, that ownership of
securities  of a  corporation  which is engaged in such business and is publicly
owned and traded but in an amount not to exceed at any one time one percent (1%)
of any class of stock or securities of such corporation, by itself, shall not be
deemed a violation of this  covenant.  In addition,  each of the Company and the
Principal  agrees  until  December  31, 2003 not to directly or  indirectly  (i)
solicit for employment, interfere with or entice from employment any employee of
Equity or its Affiliates,  (ii) request or cause contracting parties, licensors,
suppliers or customers  with whom Equity or any of its Affiliates has a business
relationship to cancel or terminate any such business  relationship or (iii) use
any of the proprietary  information contained in the Assets in any manner not in
the best interests of Equity.

         (b)  SCOPE  OF  RESTRICTIVE  COVENANTS.  Each  of the  Company  and the
Principal   represents,   warrants  and   acknowledges   that  the  Business  is
international in scope, that the restrictive covenants set forth in this Section
6.09 (including without limitation the territorial and time limitations thereof)
(the  "RESTRICTIVE  COVENANTS") are necessary in order adequately to protect and
maintain the  goodwill,  proprietary  interests  and other  legitimate  business
interests of the Business  being  acquired by Equity and are  reasonable  in all
respects,  and that a breach  or  threatened  breach  of any of the  Restrictive
Covenants  would cause  irreparable  injury to the  Business  being  acquired by
Equity for which money  damages  would be difficult  to calculate  and might not
adequately  compensate  Equity. In the event of a breach or threatened breach of
any


                                      -29-





of the Restrictive Covenants, in addition to all other remedies available to it,
Equity shall be entitled to injunctive or other equitable  relief.  If any court
determines that any part of a Restrictive Covenant is unenforceable, the parties
intend  and  desire  such  court to reduce  the  duration  or  coverage  of such
provision to the minimum extent necessary to render such provision  enforceable,
and in its reduced form,  such provision  shall then be enforceable and shall be
enforced.  The  existence  of any claim or cause of action by the Company or the
Principal  against Equity shall not  constitute a defense to the  enforcement by
Equity of the Restrictive Covenants,  but such claim or cause of action shall be
litigated separately.

         (c)  SURVIVAL.  The  provisions  of this Section 6.09 shall survive the
Closing  hereunder and shall remain in full force and effect for the term of the
covenants set forth in this Section 6.09 and, thereafter,  to the extent a claim
is made prior to such  expiration  with respect to any breach of such  covenant,
until such claim is finally determined or settled. Termination of the Employment
Agreement, or the non-competition  provisions contained therein, shall in no way
affect or diminish the  obligations  of the  Principal  pursuant to this Section
6.09.

         (d) ASSIGNMENT. Notwithstanding anything else in this Agreement, Equity
may assign its rights under this Section 6.09 to any  Affiliate of Equity or any
successor  in  interest  to Equity of the  Business  or the  Assets,  whether by
merger, consolidation, purchase of assets or otherwise.

     SECTION 6.10.  RELEASES OF CERTAIN LIENS.  Promptly  following the Closing,
the  Company  shall  obtain the  release  of the Lien of  Barnett  Bank of South
Florida, N.A.

                                   ARTICLE VII

                                 INDEMNIFICATION

         SECTION 7.01.  SURVIVAL OF REPRESENTATIONS  AND WARRANTIES.  All of the
representations  and warranties  contained in this  Agreement  shall survive the
Closing  hereunder and continue in full force and effect through March 31, 2000,
regardless of any investigation  made by Equity,  the Company,  the Principal or
John C. McDaniel or on their behalf; PROVIDED, HOWEVER, that the representations
and  warranties  contained in Sections 3.10,  3.12 and 3.17,  relating to Taxes,
environmental matters and ERISA, respectively,  shall survive and remain in full
force and effect for the periods equal to the applicable  statutes of limitation
relating thereto.

         SECTION 7.02.  INDEMNIFICATION PROVISIONS FOR BENEFIT OF EQUITY. In the
event the Company,  the Principal or John C. McDaniel  breaches (or in the event
any third  party  alleges  facts  that,  if true,  would mean the  Company,  the
Principal  or John C.  McDaniel  has  breached)  any of  their  representations,
warranties and covenants contained herein,  then the Company,  the Principal and
John C.  McDaniel,  jointly and severally (and severally as to Article IV) agree
to indemnify Equity from and against all damages, costs, liabilities, losses and
expenses, including reasonable attorneys' fees


                                      -30-





and  expenses,  which Equity may suffer  through and after the date of the claim
for  indemnification  resulting from, arising out of, relating to, in the nature
of or caused by the breach (or the alleged  breach).  In addition,  the Company,
the  Principal  and John C.  McDaniel,  jointly and severally but subject to all
limitations  set forth in this  Article  VII,  shall  indemnify  Equity from and
against  all  damages,  costs,  liabilities,   losses  and  expenses,  including
reasonable  attorneys'  fees and  expenses,  which Equity may suffer at any time
resulting from any product  liability claims relating to the Company's  products
that are filed after the closing  hereunder and relating to occurrences prior to
the closing hereunder.

         SECTION 7.03. INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE COMPANY AND
THE  PRINCIPAL.  In the event  Equity  breaches (or in the event any third party
alleges  facts  that,  if true,  would  mean  Equity  has  breached)  any of its
representations,  warranties and covenants  contained herein, then Equity agrees
to indemnify the Company and the Principal  from and against the entirety of all
damages,  costs,   liabilities,   losses  and  expenses,   including  reasonable
attorneys'  fees and  expenses,  which the Company or the  Principal  may suffer
through  and after the date of the claim  for  indemnification  resulting  from,
arising  out of,  relating  to, in the nature of or caused by the breach (or the
alleged breach).

         SECTION 7.04.  MATTERS INVOLVING THIRD PARTIES.  (a) If any third party
shall notify any party (the  "INDEMNIFIED  PARTY") with respect to any matter (a
"THIRD PARTY CLAIM") which may give rise to a claim for indemnification  against
any other party hereto (the  "INDEMNIFYING  PARTY") under this Article VII, then
the Indemnified Party shall promptly notify each  Indemnifying  Party thereof in
writing;  PROVIDED,  HOWEVER, that no delay on the part of the Indemnified Party
in notifying any Indemnifying  Party shall relieve the  Indemnifying  Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.

         (b)  Any  Indemnifying   Party  will  have  the  right  to  defend  the
Indemnified  Party  against  the Third  Party  Claim with  counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the  Indemnified  party in writing within fifteen (15) days after
the  Indemnified  Party has  given  notice of the  Third  Party  Claim  that the
Indemnifying  Party will  indemnify the  Indemnified  Party from and against the
entirety of all damages,  costs,  liabilities,  losses and  expenses,  including
reasonable attorneys' fees and expenses,  which the Indemnified Party may suffer
resulting  from,  arising out of, relating to, in the nature of or caused by the
Third Party Claim,  (ii) the Indemnifying  Party provides the Indemnified  Party
with  evidence   reasonably   acceptable  to  the  Indemnified  Party  that  the
Indemnifying Party will have the financial resources to defend against the Third
Party Claim and fulfill its  indemnification  obligations  hereunder,  (iii) the
Third Party Claim involves only money damages and does not seek an injunction or
other equitable relief,  (iv) settlement of, or an adverse judgment with respect
to, the Third Party Claim is not, in the good faith judgment of the  Indemnified
Party,  likely to  establish a  precedential  custom or practice  adverse to the
continuing Business interests of the Indemnified Party, and (v) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.



                                      -31-





         (c) So long as the Indemnifying  Party is conducting the defense of the
Third Party Claim in accordance with Section 7.04(b) above,  (i) the Indemnified
Party  may  retain  separate  co-counsel  at  its  sole  cost  and  expense  and
participate in the defense of the Third Party Claim,  (ii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement  with
respect  to the Third  Party  Claim  without  the prior  written  consent of the
Indemnifying  Party (not to be withheld,  delayed or conditioned  unreasonably),
and (iii) the  Indemnifying  Party will not consent to the entry of any judgment
or enter into any  settlement  with respect to the Third Party Claim without the
prior written consent of the Indemnified  Party (not to be withheld,  delayed or
conditioned unreasonably);  PROVIDED,  HOWEVER, that the Indemnified Party shall
have the right to employ its own counsel in any action and the fees and expenses
of such counsel shall be at the expense of the  Indemnifying  Party in the event
that the Indemnified  Party shall have reasonably  concluded that there may be a
conflict of interest between the Indemnified Party and the Indemnifying Party in
the conduct of such defense of such action (in which case the Indemnifying Party
shall not have the right to direct the  defense of such  action on behalf of the
Indemnified Party).

         (d) In the event any of the  conditions in Section  7.04(b) above is or
becomes  unsatisfied,  (i) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any  settlement  with respect to, the
Third  Party Claim in any manner it  reasonably  may deem  appropriate  (and the
Indemnified  Party need not  consult  with,  or obtain  any  consent  from,  any
Indemnifying  Party in connection  therewith),  (ii) the Indemnifying Party will
reimburse  the  Indemnified  Party  promptly and  periodically  for the costs of
defending  against the Third Party Claim (including  reasonable  attorneys' fees
and expenses),  and (iii) the Indemnifying Party will remain responsible for all
damages,  costs,   liabilities,   losses  and  expenses,   including  reasonable
attorneys' fees and expenses,  which the Indemnified  Party may suffer resulting
from,  arising  out of,  relating  to, in the  nature of, or caused by the Third
Party Claim to the fullest extent provided in this Article VII.

         SECTION 7.05.     LIMITATIONS.

         (a) No claim  shall be made under this  Article VII or  otherwise  with
respect to the  representations  and warranties herein for any individual matter
unless the  aggregate  of such  matters  and  matters  under  Article VII of the
Contract  Marketing  Agreement  equals  $50,000 (but after the aggregate of such
matters  equals  $50,000,  a claim  may be made for the full  amount of all such
matters); PROVIDED, HOWEVER, that such limitation shall not apply to claims made
under Sections 3.04  (Ownership of Assets),  3.10 (Taxes),  3.15  (Inventories),
3.25  (Related  Party  Transactions),  3.27  (Accounts  Receivable)  or to fraud
claims.

         (b) The  Indemnifying  Parties  shall  not have  liability  under  this
Article VII or otherwise  with  respect to the  representations  and  warranties
herein or in the Contract  Marketing  Agreement in excess of  $2,000,000  in the
aggregate;  PROVIDED,  HOWEVER,  that such limitation  shall not apply to claims
made  under   Sections   3.04   (Ownership  of  Assets),   3.10  (Taxes),   3.15
(Inventories),  3.25 (Related Party Transactions), 3.27 (Accounts Receivable) or
to fraud claims or to the covenants provided in Section 6.10 hereof.


                                      -32-






         (c) Except as otherwise  expressly provided by this Agreement,  none of
the Company,  the Principal or John C. McDaniel  shall be liable to Equity under
the  Warranties  or under this Article VII with respect to matters which are set
forth  (by  reference  to the  applicable  section  of  this  Agreement)  in the
Disclosure Schedule.

         SECTION  7.06.   OTHER   INDEMNIFICATION   PROVISIONS.   The  foregoing
indemnification  provisions  are in addition to, and not in  derogation  of, any
statutory,  equitable  or common law remedy any party hereto may have for breach
of  representation,  warranty or  covenant.  Each of the  Principal  and John C.
McDaniel  hereby  agrees  that he will not make any  claim  for  indemnification
against the Company by reason of the fact that he was a  stockholder,  director,
officer,  employee  or agent of any such entity or was serving at the request of
any such entity as a partner, trustee,  director,  officer, employee or agent of
another entity (whether such claim is for judgments,  damages, penalties, fines,
costs,  amounts paid in  settlement,  losses,  expenses or otherwise and whether
such claim is pursuant to any statute,  charter  document,  bylaw,  agreement or
otherwise) with respect to any action,  suit,  proceeding,  complaint,  claim or
demand  brought by Equity  against the  Principal  (whether  such action,  suit,
proceeding, complaint, claim or demand is pursuant to this Agreement, applicable
law or otherwise).


                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.01. EFFECT OF DUE DILIGENCE. No investigation by or on behalf
of  Equity  into  the  Business,  operations,  prospects,  assets  or  condition
(financial or otherwise) of the Company shall  diminish in any way the effect of
any representations or warranties made by the Company,  the Principal or John C.
McDaniel in this  Agreement or shall relieve the Company,  the Principal or John
C. McDaniel of any of their respective obligations under this Agreement.

         SECTION  8.02.  PRESS  RELEASES AND PUBLIC  ANNOUNCEMENTS.  Neither the
Company nor the Principal nor John C. McDaniel  shall issue any press release or
make any public  announcement  relating to the subject matter of this Agreement.
Equity may make any public  disclosure  it believes in good faith is required by
applicable law, but shall not make any such  disclosure  without prior notice to
the Company.

     SECTION 8.03. NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies  upon any Person other than the parties  hereto and their
respective successors and permitted assigns.

         SECTION 8.04. ENTIRE AGREEMENT. This Agreement and the Other Agreements
constitute  the entire  agreement  among the parties  hereto and  supersedes any
prior  understandings,  agreements  or  representations  by or among the parties
hereto,  written or oral,  to the extent they  related in any way to the subject
matter hereof and thereof.



                                      -33-





         SECTION  8.05.  SUCCESSION  AND  ASSIGNMENT.  This  Agreement  shall be
binding  upon and inure to the  benefit of the  parties  named  herein and their
respective  successors  and permitted  assigns.  No party may assign either this
Agreement  or any of his or its  rights,  interests,  or  obligations  hereunder
without  the prior  written  approval  of Equity  and the  Principal;  PROVIDED,
HOWEVER,  that (a) Equity may (i) assign any or all of its rights and  interests
hereunder to one or more of its Affiliates and (ii) designate one or more of its
Affiliates  to perform its  obligations  hereunder (in any or all of which cases
Equity  nonetheless  shall remain  responsible for the performance of all of its
obligations  hereunder)  and (b) the Company may assign its right to receive any
or all of the Purchase Price to the Principal or John C. McDaniel.

     SECTION 8.06.  COUNTERPARTS.  This Agreement may be executed in one or more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

     SECTION 8.07.  HEADINGS.  The section headings  contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

         SECTION 8.08.  NOTICES.  All notices,  requests,  demands,  claims, and
other communications  hereunder will be in writing. Any notice, request, demand,
claim or other  communication  hereunder  shall be deemed  duly given (a) on the
date of delivery, if delivered to the persons identified below, (b) two Business
Days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:


         IF TO THE COMPANY                       Philip A. McDaniel
         OR THE PRINCIPAL:                       51 Water Street
                                                 St. Augustine, Florida 32084
         IF TO JOHN C. MCDANIEL:                 John C. McDaniel
                                                 23 Metcalf Street
                                                 Worcester, Massachusetts 01609

         COPY TO:                                Goodwin, Procter & Hoar LLP
                                                 Exchange Place
                                                 Boston, Massachusetts 02109
                                                 Attn: Stuart Cable, Esq.


         IF TO EQUITY:                           Equity Marketing, Inc.
                                                 131 South Rodeo Drive
                                                 Beverly Hills, California 90212
                                                 Attn:  Stephen P. Robeck

         COPY TO:                                Fulbright & Jaworski L.L.P.
                                                 666 Fifth Avenue
                                                 New York, New York 10103


                                      -34-






                                                Attn:  Merrill M. Kraines, Esq.

Any party may send any notice,  request,  demand,  claim, or other communication
hereunder  to the  intended  recipient  at the address set forth above using any
other means (including personal delivery,  expedited courier, messenger service,
telecopy,  telex,  ordinary  mail,  or  electronic  mail),  but no such  notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received by the intended  recipient.  Any
party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.

         SECTION 8.09.  GOVERNING LAW. This  Agreement  shall be governed by and
construed in accordance  with the domestic laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.

         SECTION 8.10. CONSENT TO JURISDICTION;  RECEIPT OF PROCESS.  EACH PARTY
HEREBY CONSENTS TO THE JURISDICTION OF, AND CONFERS  NON-EXCLUSIVE  JURISDICTION
UPON,  ANY  FEDERAL OR STATE  COURT  LOCATED IN THE COUNTY OF LOS  ANGELES,  AND
APPROPRIATE  APPELLATE  COURTS  THEREFROM,  OVER ANY ACTION,  SUIT OR PROCEEDING
ARISING  OUT OF OR  RELATING  TO  THIS  AGREEMENT,  OR  ANY OF THE  TRANSACTIONS
CONTEMPLATED  HEREBY.  EACH PARTY HEREBY  IRREVOCABLY  WAIVES, AND AGREES NOT TO
ASSERT AS A DEFENSE IN ANY SUCH ACTION, SUIT OR PROCEEDING,  ANY OBJECTION WHICH
IT MAY NOW OR  HEREAFTER  HAVE TO VENUE OF ANY SUCH ACTION,  SUIT OR  PROCEEDING
BROUGHT IN ANY SUCH  FEDERAL OR STATE  COURT AND HEREBY  IRREVOCABLY  WAIVES ANY
CLAIM  THAT ANY SUCH  ACTION,  SUIT OR  PROCEEDING  BROUGHT IN ANY SUCH COURT OR
TRIBUNAL HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  PROCESS IN ANY SUCH ACTION,
SUIT OR  PROCEEDING  MAY BE SERVED ON ANY PARTY  ANYWHERE IN THE WORLD,  WHETHER
WITHIN OR WITHOUT  THE STATE OF  CALIFORNIA,  PROVIDED  THAT  NOTICE  THEREOF IS
PROVIDED PURSUANT TO PROVISIONS FOR NOTICE UNDER THIS AGREEMENT.

         SECTION 8.11.  AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement  shall be valid unless the same shall be in writing and signed by
Equity,  the  Company  and  Principal.  No waiver  by any party of any  default,
misrepresentation   or  breach  of  warranty  or  covenant  hereunder,   whether
intentional  or not,  shall be  deemed  to  extend  to any  prior or  subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any  rights  arising  by  virtue  of any  prior  or  subsequent  such
occurrence.

         SECTION  8.12.  SEVERABILITY.  Any term or provision of this  Agreement
that is invalid or unenforceable in any situation in any jurisdiction  shall not
affect the validity or  enforceability  of the  remaining  terms and  provisions
hereof or the validity or  enforceability  of the offending term or provision in
any other situation or in any other jurisdiction.

     SECTION 8.13.  EXPENSES.  Each of Equity and the Principal will bear his or
its own Transaction Costs, and the Principal shall bear the Transaction Costs of
the Company,  in each case  incurred in connection  with this  Agreement and the
transactions

                                      -35-






contemplated  hereby.  The  Principal  agrees that the Company has not borne and
will not bear any of the Principal's  Transaction  Costs in connection with this
Agreement or the Other Agreements or any of the transactions contemplated hereby
or thereby.

         SECTION 8.14.  CONSTRUCTION.  The parties have participated  jointly in
the  negotiation  and drafting of this  Agreement.  In the event an ambiguity or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations promulgated thereunder,  unless the context requires otherwise.  The
word "including"  shall mean including  without  limitation.  The parties intend
that each  representation,  warranty  and covenant  contained  herein shall have
independent significance. If any party has breached any representation, warranty
or covenant contained herein in any respect,  the fact that there exists another
representation,  warranty  or  covenant  relating  to the  same  subject  matter
(regardless  of the  relative  levels  of  specificity)  which the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.

     SECTION  8.15.  INCORPORATION  OF EXHIBITS,  ANNEXES,  AND  SCHEDULES.  The
Exhibits and Schedules  identified in this Agreement are incorporated  herein by
reference and made a part hereof.

         SECTION 8.16. SPECIFIC  PERFORMANCE.  Each of the parties  acknowledges
and agrees that the other parties would be damaged  irreparably in the event any
of the provisions of this  Agreement are not performed in accordance  with their
specific  terms or  otherwise  are  breached.  Accordingly,  each of the parties
agrees that the other parties shall be entitled to an injunction or  injunctions
to  prevent  breaches  of the  provisions  of  this  Agreement  and  to  enforce
specifically  this Agreement and the terms and  provisions  hereof in any action
instituted  in any  court of the  United  States  or any  state  thereof  having
jurisdiction over the parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.



                                      -36-




                  IN WITNESS  WHEREOF,  the undersigned  have duly executed this
Agreement as of the date set forth above.

         EQUITY MARKETING,INC.


         By:  /s/ Stephen P. Robeck
                  Stephen P. Robeck
                  Chairman and
                  Co-Chief Executive Officer



         U.S. IMPORT & PROMOTIONS CO.


         By:  /s/ Philip A. McDaniel
                  Philip A. McDaniel
                  President


      /s/PHILIP A. McDANIEL
         PHILIP A. McDANIEL



     /s/ JOHN C. McDANIEL
         JOHN C. McDANIEL