EXHIBIT 2.1 ASSET PURCHASE AGREEMENT

EXHIBIT 2.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

FRANCISCO ACQUISITION CORP.

"BUYER"

FRESH AMERICA CORP.

"ISSUER"

FRANCISCO DISTRIBUTING COMPANY, LLC

THE "COMPANY"

AND

THE OWNERS NAMED HEREIN

"OWNERS"

FEBRUARY 2, 1998
2
TABLE OF CONTENTS

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ARTICLE I PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1 Agreement to Purchase and Sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Contingent Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OWNERS . . . . . . . . . . . . . . . . 9

3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Condition and Sufficiency of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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3.11 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 Absence of Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.18 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.19 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.21 Members and Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.22 Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.23 Principal Customers and Suppliers; Competing Interests . . . . . . . . . . . . . . . . . 19
3.24 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.25 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.26 No Misrepresentations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.27 Construction of Certain Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND ISSUER . . . . . . . . . . . . . . . . . . . . . 22

4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.4 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.5 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 No Misrepresentations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE V COVENANTS OF THE COMPANY AND THE OWNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5.1 Conduct of Business Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 24

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5.2 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.3 Repair and Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.4 Warn Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.5 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.7 Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.8 Guaranty of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.9 Information for Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10 Nondisclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE VI COVENANTS OF BUYER AND ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

6.1 Conduct of Business After Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.2 Year End Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.3 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.4 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.5 Payment of Certain Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE VII MUTUAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

7.1 Fulfillment of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3 Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

ARTICLE VIII CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

8.1 Conditions to Obligations of Buyer and Issuer . . . . . . . . . . . . . . . . . . . . . 30
8.2 Conditions to Obligations of the Company and the Owners . . . . . . . . . . . . . . . . 31

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ARTICLE IX SURVIVAL; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

9.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Indemnification of Buyer and Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 Indemnification of the Company and the Owners . . . . . . . . . . . . . . . . . . . . . 34
9.4 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.5 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.6 Exclusivity of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE X NONCOMPETITION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

10.1 Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Agreement and Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.3 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ARTICLE XI AGREEMENT TO REGISTER THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

11.1 Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.2 Investment Intent and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.4 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.5 Orderly Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.6 Cooperation and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

12.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

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12.3 Attorneys' Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.4 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.8 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

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Exhibits:

A - Form of Employment Agreement for Xxxx Xxxxxxxxxxx
B - Form of Employment Agreement for Xxxxxxxx Xxxxxx
C - Form of Legal Opinion for the Company's and the Owners' Counsel
D - Form of Legal Opinion for Buyer's and Issuer's Counsel

Schedules:

1.1 - Asset Listing
1.2 - Excluded Assets
1.3(a) - Assumed Agreements
1.3(c) - Assumed Liabilities
3.4 - Permitted Liens
3.5 - Leased Real Estate
3.8 - Condition of Assets
3.9 - Potential Violations
3.11 - Exceptions to Financial Statements
3.12 - Disclosed Liabilities
3.13 - Material Changes
3.15 - Litigation
3.17 - Environmental Matters
3.18 - Permits
3.19(a) - Material Agreements
3.19(d) - Material Agreement Consents
3.20 - Registered Intellectual Property
3.21 - Members and Creditors
3.22 - Subsidiaries and Investments
3.23(a) - Principal Customers and Suppliers
3.23(b) - Competing Interests

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3.24 - Employees
3.25(a) - Employee Benefit Plans
3.25(c) - Employee Pension Benefit Plans
3.25(d) - Contributions to Multiemployer Plan
3.25(e) - Vesting under Employee Benefit Plans
7.3 - Transfer Taxes
7.4 - Purchase Price Allocation

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement") is made and entered
into to be effective as of February 2, 1998, by and among Francisco Acquisition
Corp., a Texas corporation ("Buyer"), Fresh America Corp., a Texas corporation
and parent corporation of Buyer ("Issuer"), Francisco Distributing Company,
LLC, a California limited liability company (the "Company"), Xxxx Xxxxxxxxxxx
("Xxxxxxxxxxx"), a member of the Company, F.J.V., Inc., a California
corporation and member of the Company ("F.J.V."), and Xxxxxxxx Xxxxxx, the
President and sole shareholder of F.J.V. ("Xxxxxx"). Xxxxxxxxxxx, F.J.V. and
Xxxxxx are individually and collectively referred to herein as the "Owners."

PRELIMINARY STATEMENTS

The Company is engaged in the business of selling, distributing or
otherwise transporting fresh produce primarily in Southern California and
Arizona.

The Company desires to sell to Buyer, and Buyer desires to purchase
from the Company, substantially all of the Company's assets on the terms and
conditions set forth in this Agreement.

The Owners, by their direct and indirect ownership of the Company,
will receive substantial direct and indirect benefits from the transactions
contemplated by this Agreement, and Buyer and Issuer have requested that the
Owners enter into this Agreement as a condition to Buyer's and Issuer's
execution hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

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AGREEMENT

ARTICLE I

PURCHASE AND SALE

1.1 Agreement to Purchase and Sell. At the closing of the
transactions contemplated by this Agreement (the "Closing"), the Company agrees
to sell, transfer, assign and deliver to Buyer the Assets, and Buyer agrees to
purchase and take the Assets, on the terms and subject to the conditions set
forth in this Agreement. As used herein the "Assets" mean all assets and
properties of the Company, of every kind, nature and description, whether
tangible or intangible, real or personal, contingent or otherwise, including
without limitation, all accounts receivable, inventory, equipment, rolling
stock, real property, fixtures, furnishings, systems, goodwill, leasehold
rights, leasehold improvements, vehicles, prepaid assets, contract rights,
licenses, permits, customer, prospect and marketing lists, routes, sales data,
records, computer software and software licenses, proprietary information,
intellectual property, trade secrets, patents, patent applications, patent
licenses, trademarks and trade names (including all rights to the name
"Francisco Distributing Company, LLC"), copyrights, drawings and designs owned
by the Company or acquired by the Company after the date hereof and prior to
the Closing, but will exclude the Excluded Assets (as defined in Section 1.2).
Set forth in Schedule 1.1 is a complete list (including the street address,
where applicable) of each asset of the Company with a book value or fair market
value greater than $10,000.

1.2 Excluded Assets. Notwithstanding the provisions of Section
1.1, the Assets will exclude all of the Company's cash, cash equivalents and
marketable securities, the minute books, the seal and membership interest
records of the Company and the notes, produce prepayments and other assets of
the Company specifically identified on Schedule 1.2 (collectively, the
"Excluded Assets").

1.3 Assumed Liabilities. It is understood and agreed that neither
Buyer nor Issuer will assume any direct or indirect debts, obligations or
liabilities of the Company or the Owners of any nature, whether absolute,
accrued, contingent, liquidated or otherwise, and whether due or to become due,
asserted or unasserted, known or unknown (collectively, "Liabilities"), except
for the following specifically identified Liabilities (collectively, the
"Assumed Liabilities"): (a) obligations of the

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Company to be performed in the ordinary course of business accruing after the
Closing under the agreements to be assumed by Buyer and identified on Schedule
1.3(a) (the "Assumed Agreements"); (b) trade payables and accrued expenses
incurred by the Company in the ordinary course of business prior to the
Closing; and (c) the Liabilities owing to National Bank of Southern California
specifically identified on Schedule 1.3(c). All other Liabilities of the
Company will be retained by the Company and discharged in full by the Company
out of the Excluded Assets or out of the purchase price for the Assets. For
purposes of this Agreement, ordinary course obligations under the Assumed
Agreements do not include any Liabilities under an agreement resulting from or
relating to any breach or default (or event that with notice or lapse of time
would constitute a breach or default) by the Company or any of the Owners under
such agreement.

1.4 Purchase Price. The aggregate consideration to be paid to the
Company for the Assets (the "Purchase Price") will be (a) a cash payment made
at the Closing of $5,575,000 (the "Cash Payment"); (b) a number of shares of
the common stock of Issuer, $.01 par value (the "Common Stock"), with an
aggregate value of $5,500,000, valued at the Average Trading Price (as defined
below) per share; (c) certain contingent payments as described in Section 1.5
(the "Contingent Payments"); and (d) the assumption of the Assumed Liabilities.
No fractional shares of Common Stock will be issued to the Company, and in lieu
thereof, all fractional shares will be increased to the next higher whole
number of shares. As used herein, "Average Trading Price" means the per share
average closing price of the Common Stock on the Nasdaq Stock Market for the
ten consecutive trading days immediately prior to two business days before the
Closing; provided, however, the Average Trading Price will not be less than $18
and will not be more than $22.

1.5 Contingent Payments.

(a) The Contingent Payments will be determined from
Pretax Prebonus Earnings (as defined in Section 1.5(d)) for Buyer's 1998 and
1999 fiscal years, as follows: (i) if Pretax Prebonus Earnings for Buyer's 1998
fiscal year are greater than $691,000, $3.10 per $1.00 of Pretax Prebonus
Earnings in excess of $691,000 will be paid to the Company, but such

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Contingent Payment pursuant to this clause (i) will not exceed $2,957,400; (ii)
if Pretax Prebonus Earnings for Buyer's 1998 fiscal year are greater than
$1,645,000, $4.00 per $1.00 of Pretax Prebonus Earnings in excess of $1,645,000
will be paid to the Company, but such Contingent Payment pursuant to this
clause (ii) will not exceed $5,020,000; (iii) if Pretax Prebonus Earnings for
Buyer's 1999 fiscal year are greater than $816,000, $2.40 per $1.00 of Pretax
Prebonus Earnings in excess of $816,000 will be paid to the Company, but such
Contingent Payment pursuant to this clause (iii) will not exceed $3,568,800;
and (iv) if Pretax Prebonus Earnings for Buyer's 1999 fiscal year are greater
than $2,303,000, $1.90 per $1.00 of Pretax Prebonus Earnings in excess of
$2,303,000 will be paid to the Company, but such Contingent Payment pursuant to
this clause (iv) will not exceed $5,016,000. Notwithstanding the foregoing and
regardless of the amount, if any, of Pretax Prebonus Earnings, but subject to
Section 1.5(c), the Contingent Payment for Buyer's 1998 fiscal year will not be
less than $1,000,000, and the Contingent Payment for Buyer's 1999 fiscal year
will not be less than $1,500,000.

(b) The Contingent Payments will be payable in cash,
Common Stock or a combination thereof as provided in Section 1.5(e). The
$1,000,000 minimum Contingent Payment (subject to Section 1.5(c)) for Buyer's
1998 fiscal year will be due and payable on the first business day of the 1999
fiscal year and any additional Contingent Payment for Buyer's 1998 fiscal year
will be due and payable in a single installment on March 31, 1999. The
$1,500,000 minimum Contingent Payment for Buyer's 1999 fiscal year will be due
and payable on the first business day of the 2000 fiscal year and any
additional Contingent Payment for Buyer's 1999 fiscal year will be due and
payable in a single installment on March 31, 2000.

(c) If the aggregate net book value of the Assets less
the aggregate amount of the Assumed Liabilities, as determined from the audited
balance sheet of the Company as of December 31, 1997 prepared by Buyer after
the Closing (the "Year End Balance Sheet"), is less than $2,000,000, the
Purchase Price will be reduced by an amount equal to such difference by
deducting such difference from the Contingent Payment for Buyer's 1998 fiscal
year.

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(d) As used herein, "Pretax Prebonus Earnings" means, for
any fiscal year of Buyer, an amount equal to the sum of (i) the net income of
Buyer for such fiscal year; plus (ii) federal, state and local income taxes
deducted in arriving at such net income; plus (iii) employee bonus expenses
deducted in arriving at such net income. In determining Pretax Prebonus
Earnings, (x) corporate overhead expenses charged by Issuer to Buyer will not
exceed $75,000 for any fiscal year; (y) goodwill associated with the purchase
of the Assets will be amortized over a 15 year period; and (z) amortizable
capitalized costs incurred by Buyer in the start up of its operation of the
business previously conducted by the Company, including, without limitation,
the costs related to the transactions contemplated hereby, will not exceed
$200,000. Pretax Prebonus Earnings for Buyer's 1998 fiscal year will be
calculated by annualizing the Pretax Prebonus Earnings for the period from the
Closing to the last day of such fiscal year. Pretax Prebonus Earnings will be
determined in accordance with generally accepted accounting principles
consistently applied.

(e) At least three business days prior to the scheduled
payment date of any Contingent Payment, Issuer will elect whether to convert on
the scheduled payment date up to fifty percent of such payment amount into
shares of Common Stock at the Conversion Price (as defined below), and after
such election, the Company will elect at least two business days prior to such
scheduled payment date whether to convert on the scheduled payment date up to
fifty percent of such payment amount into shares of Common Stock at the
Conversion Price. No fractional shares will be issued upon conversion of any
Contingent Payment. In lieu of fractional shares, all fractional shares will
be increased to the next higher whole number of shares. Any portion of a
Contingent Payment not converted into shares of Common Stock will be due and
payable in cash on the scheduled payment date. As used herein, the Conversion
Price means the average per share closing price of the Common Stock on the
Nasdaq Stock Market (or on the principal national stock exchange on which the
Common Stock is then listed) for the ten trading days immediately preceding the
last day of Buyer's 1998 of 1999 (as applicable) fiscal year end.

(f) If in the event of any merger or consolidation of
Issuer in which Issuer is not the survivor, any sale of all or substantially
all of Issuer's assets or any other similar

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reorganization of Issuer (a "Reorganization"), the Common Stock outstanding at
the time of the Reorganization is converted into publicly traded common stock,
the term "Common Stock" as used herein will mean such publicly traded common
stock. If a Reorganization occurs and the outstanding Common Stock is
converted into property or securities that are not publicly traded common
stock, the Contingent Payments will not be convertible and will be payable in
cash only.

ARTICLE II

CLOSING

2.1 Time and Place. The Closing will occur at the offices of
Xxxxxx, Xxxx & Xxxxxxxx, 0 Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 on the date on
which all of the Closing Conditions set forth in Article VIII are satisfied or
waived (the "Closing Date"), but in no event later than January 31, 1998.

2.2 Closing Deliveries. At the Closing,

(a) Buyer will deliver to the Company the following, each
of which will be duly executed by the parties thereto, as applicable,
and will be in form and substance satisfactory to the Company and its
legal counsel:

(i) the Cash Payment by wire transfer of
immediately available funds;

(ii) an assignment and assumption agreement
pursuant to which Buyer will assume the Assumed Liabilities;

(iii) an officer's certificate with incumbency and
including the charter, the bylaws, applicable resolutions of
the Board of Directors and certificates of good standing and
tax status in the jurisdiction of its incorporation; and

(iv) a certificate dated the Closing Date to the
effect that the representations and warranties of Buyer
contained in this Agreement are true and

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correct in all material respects on and as of the Closing Date
with the same effect as though such representations and
warranties had been made on and as of such date, and the
covenants and agreements of Buyer to be performed on or before
the Closing Date in accordance with this Agreement have been
duly performed in all material respects.

(b) Issuer will deliver to the Company the following
documents, each of which will be duly executed by the parties thereto
and will be in form and substance satisfactory to the Company and its
legal counsel:

(i) stock certificates evidencing the shares of
Common Stock to be issued to the Company on the Closing Date;

(ii) an officer's certificate with incumbency and
including the charter, the bylaws, applicable resolutions of
the Board of Directors and certificates of good standing and
tax status in the jurisdiction of its incorporation; and

(iii) a certificate dated the Closing Date to the
effect that the representations and warranties of Issuer
contained in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been
made on and as of such date, and the covenants and agreements
of Issuer to be performed on or before the Closing Date in
accordance with this Agreement have been duly performed in all
material respects.

(c) The Company and the Owners will deliver to Buyer the
following documents, each of which will be duly executed by the
parties thereto and will be in form and substance reasonably
satisfactory to Buyer and its legal counsel:

(i) bills of sale and other instruments of
assignment, transfer and conveyance and such other documents
necessary or desirable to transfer good and

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marketable title to the Assets to Buyer, free and clear of any
Liens other than Permitted Liens (as such capitalized terms
are defined in Section 3.4);

(ii) an officer's certificate with incumbency and
including the articles of organization, the operating
agreement, applicable resolutions of the members and
certificates of good standing and tax status in those
jurisdictions in which the Company does business and is
required to be qualified;

(iii) an officer's certificate with supporting
financial information certifying that the aggregate net book
value of the Assets less the aggregate amount of the Assumed
Liabilities, as determined on the Closing Date in accordance
with generally accepted accounting principles consistent with
the Company's past practices, is no less than $2,000,000;

(iv) all consents, approvals and authorizations of
third parties required to be obtained by the Company or the
Owners in order to effect the transfer of the Assets and the
Assumed Liabilities and the other transactions contemplated
hereby;

(v) a certificate dated the Closing Date of the
Company and the Owners to the effect that the representations
and warranties of the Company and the Owners contained in this
Agreement are true and correct in all material respects on and
as of the Closing Date as though such representations and
warranties had been made on and as of such date, and the
covenants and agreements of the Company and the Owners to be
performed on or before the Closing Date in accordance with
this Agreement have been duly performed in all material
respects; and

(vi) the originals or copies of all of the
Company's books, records, ledgers, disks, proprietary
information and other data and all other written or electronic
depositories of information relating to the Assets and the
Assumed Liabilities requested by either Buyer or its legal
counsel.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OWNERS

The Company and the Owners, jointly and severally, hereby represent
and warrant to Buyer and Issuer as follows:

3.1 Organization and Qualification. The Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of California, has all requisite power and authority to
own, lease and operate its properties and to conduct its business as presently
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary,
other than where the failure to be so duly qualified and in good standing would
not have a Material Adverse Effect. As used herein, Material Adverse Effect
means any change or effect that individually or when taken together with all
other such changes or effects, would be materially adverse to the business,
operations, assets, condition (financial or otherwise), results of operations,
Liabilities or prospects of the Company.

3.2 Authority. The Company and the Owners have all requisite
power and authority to execute, deliver and perform under this Agreement and
all other agreements and instruments required to be executed and delivered by
the Company or the Owners hereunder (together with this Agreement, as each may
be amended, modified, or supplemented, the "Company Documents"). The
execution, delivery and performance by the Company of each Company Document
have been duly authorized by all members of the Company and all other necessary
action on the part of the Company and the Owners has been taken. This
Agreement has been, and at the Closing the other Company Documents will be,
duly executed and delivered by the Company and the Owners (to the extent each
is a party thereto). This Agreement is, and, upon execution and delivery by
the Company and the Owners at the Closing, each of the other Company Documents
will be, a legal, valid and binding agreement of the Company and the Owners (to
the extent each is a party thereto), enforceable against the Company and the
Owners in accordance with their respective terms.

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3.3 Books and Records. The Company has made available to Buyer
and Issuer true, correct and complete copies of the Company's articles of
organization, operating agreement, minute books and member record books.

3.4 Title to Assets. The Company has good, valid and marketable
title to, or holds by valid and existing lease or license, all of the Assets
and owns, or holds by valid and existing lease or license, all of the Assets
free and clear of any liens, claims, security interests, encumbrances or
contingencies of any nature (collectively, "Liens"), other than (a) Liens for
current taxes not yet due; (b) minor imperfections of title and encumbrances
that do not materially detract from or interfere with the present use or value
of such properties; and (c) Liens securing Assumed Liabilities described in
Schedule 3.4 (the Liens referred to in clauses (a), (b) and (c) are
collectively, "Permitted Liens"). The execution and delivery of the Company
Documents by the Company and the Owners at the Closing will convey to and vest
in Buyer good and marketable title to the Assets, free and clear of any Liens
except for Permitted Liens.

3.5 Real Estate. Attached as Schedule 3.5 are true, correct and
complete copies of all leases relating to the real property used by the
Company, including all amendments, modifications and renewals thereof
(collectively, the "Leased Real Estate"). With respect to the Leased Real
Estate, except as identified in Schedule 3.5, (a) all necessary consents to the
assignment of such leases to Buyer have been obtained and each such lease will
continue to be binding against the landlord in accordance with its terms
following the Closing; (b) no party to any such lease has repudiated any
provision thereof; and (c) the Company has not received any notice of breach,
default or violation of any such lease. The Company does not own any real
property.

3.6 Accounts Receivable. All accounts receivable of the Company
constitute bona fide, valid and binding claims arising in the ordinary course
of the Company's business at the aggregate recorded amount thereof out of arms
length transactions with third parties unrelated to the Company or any Owner
and all of such accounts receivable, net of reserves for doubtful accounts,
will be collectible in the ordinary course of business.

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3.7 Inventories. The inventories of the Company do not include
any material amounts of items below standard quality, or any material amounts
of damaged or spoiled items or items not salable in the ordinary course of the
Company's business in excess of the value of the inventories written down or
reserved against in the unaudited balance sheet of the Company as of November
30, 1997. The quantities of each type of inventory are consistent with the
past practices of the Company and are reasonable and warranted in the present
circumstances of the Company. The Company has performed in the ordinary course
of its business regular tests in accordance with industry practice to determine
whether its products comply in all material respects with all applicable
requirements under applicable laws and regulations.

3.8 Condition and Sufficiency of Assets. Except as set forth in
Schedule 3.8, the Assets (a) are fit and usable for the purposes for which they
are presently being used; (b) are in good operating condition and repair,
ordinary wear and tear excepted; (c) to the knowledge of the Company and the
Owners, conform with all applicable laws, rules and regulations; (d) except for
the Excluded Assets, constitute all of the assets and properties used by the
Company in connection with the operation of its business as currently
conducted; and (e) except for the Excluded Assets, are sufficient to conduct
the business of the Company as currently conducted. The Assets that are of an
insurable character are insured against loss or damage to the extent and in the
manner customary for companies engaged in similar businesses and operating
similar properties.

3.9 No Violation. Except as set forth on Schedule 3.9, neither
the execution or delivery of any of the Company Documents nor the consummation
of the transactions contemplated thereby, including without limitation the
transfer of the Assets to Buyer and the assumption by Buyer of the Assumed
Liabilities, will conflict with or result in the breach of any term or
provision of, or violate, or constitute a default under, or result in the
creation of any Lien on the Assets pursuant to, or relieve any third party of
any obligation to the Company or give any third party the right to terminate or
accelerate any obligation under, any provision of the Company's articles of
organization or operating agreement, Material Agreement (as defined in Section
3.19), instrument, Permit (as defined in Section 3.18), or to the knowledge of
the Company and the Owners, any order, law or regulation to which the Company
or any Owner is a party or by which the Company, any Owner or any of the Assets
is in any way bound or obligated.

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3.10 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental or quasi-governmental agency, authority,
commission, board or other body (collectively, a "Governmental Body") is
required on the part of the Company or the Owners in connection with the
transactions contemplated by this Agreement, other than the filing of the
notification and report form required by the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx").

3.11 Financial Statements. Prior to the date hereof, the Company
has delivered to Buyer and Issuer (a) true and complete copies of the unaudited
balance sheet of the Company as of November 30, 1997 and the related statements
of operations and cash flow for the eleven months then ended and the comparable
period of the preceding year; (b) true and complete copies of the audited
balance sheet of the Company as of September 30, 1997 (the "Latest Balance
Sheet") and the related statements of operations and cash flow for the nine
months then ended; and (c) true and complete copies of the reviewed balance
sheets of the Company as of December 31, 1996 and 1995 and the related
statements of operations and cash flow for the twelve months then ended (the
financial statements referred to in clauses (a), (b) and (c) are collectively,
the "Financial Statements"). Except as described in Schedule 3.11, the
Financial Statements present fairly the financial condition of the Company at
the dates specified and the results of its operations for the periods specified
and have been prepared in accordance with generally accepted accounting
principles, consistently applied, subject in the case of the interim statements
to changes resulting from normal period-end adjustments for recurring accruals
(which will not be material individually or in the aggregate) and to the
absence of certain footnote disclosure and other presentation items. The
Financial Statements do not contain any items of a special or nonrecurring
nature, except as expressly stated therein. The Financial Statements have been
prepared from the books and records of the Company, which accurately and fairly
reflect all the transactions of, acquisitions and dispositions of assets by,
and incurrence of liabilities by the Company.

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3.12 Absence of Undisclosed Liabilities. The Company has no
material Liabilities except for (a) the Assumed Liabilities; (b) Liabilities
reflected in the Latest Balance Sheet; (c) Liabilities arising since the date
of the Latest Balance Sheet in the ordinary course of business consistent with
past practices; and (d) Liabilities disclosed on Schedule 3.12.

3.13 Absence of Material Adverse Change. Except as set forth in
Schedule 3.13, since the date of the Latest Balance Sheet there has not been
(a) a Material Adverse Effect; (b) any increase in salary, bonus or other
compensation to any officers, employees or agents of the Company, other than
annual increases and bonuses made in the ordinary course of business consistent
with past practices; (c) any payment (including without limitation any dividend
or other distribution, equity repurchase or repayment of indebtedness) to any
Owner, any manager, officer or employee of the Company or any relative or
affiliate of any of the foregoing, other than the regular payment of
compensation to employees of the Company and dividends to the Owners for the
payment of taxes on the income of the Company in the ordinary course of
business consistent with past practices; (d) any breach or default (or event
that with notice or lapse of time would constitute a breach or default),
termination or threatened termination under any Material Agreement (as defined
in Section 3.19(a)); (e) any theft, damage, destruction, casualty loss,
condemnation or eminent domain proceeding affecting any of the Assets with a
book or fair market value in excess of $10,000, whether or not covered by
insurance; (f) any sale, assignment or transfer of any of the assets of the
Company, except for inventory in the ordinary course of business consistent
with past practices and other assets with a book or fair market value less than
$10,000; (g) any waiver by the Company of any material rights related to the
Company's business or operations or any of the Assets or Assumed Liabilities;
(h) any change by the Company in its accounting or tax reporting methods,
principles or practices; (i) any other transaction, agreement or commitment
entered into by the Company or any Owner affecting the Company's business or
operations or any of the Assets or Assumed Liabilities, except in the ordinary
course of business consistent with past practices; (j) a loss of any customer
or supplier set forth on Schedule 3.23; or (k) any agreement or understanding
to do or resulting in any of the foregoing.

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3.14 Taxes. All required federal, state, local and other tax
returns, notices and reports (including without limitation income, property,
sales, use, franchise, withholding, social security and unemployment tax
returns) relating to or involving transactions with the Company have been
accurately prepared and duly and timely filed, and all taxes required to be
paid with respect to the periods covered by any such returns have been timely
paid. No tax deficiency has been proposed or assessed against the Company, and
the Company has not executed any waiver of any statute of limitations on the
assessment or collection of any tax. No tax audit, action, suit, proceeding,
investigation or claim is now pending or, to the knowledge of the Company and
the Owners, threatened against the Company or any Owner, in its capacity as
such, and no issue or question has been raised (and is currently pending) by
any taxing authority in connection with any of the Company's or the Owners' tax
returns or reports. The Company has withheld or collected from each payment
made to each of its employees the full amount of all taxes required to be
withheld or collected therefrom and has paid the same to the proper tax
receiving authorities or authorized depositories. The Company currently is,
and has at all times been, duly qualified to be taxed as a partnership or
limited liability company, as applicable.

3.15 Litigation. Except as set forth on Schedule 3.15, there are
currently no pending or, to the knowledge of the Company and the Owners,
threatened lawsuits, administrative proceedings or reviews, arbitrations, or
formal complaints or investigations by any individual, corporation,
partnership, Governmental Body or other entity (each, a "Person") against or
relating to the Company or any of its members, employees or agents (in their
capacities as such) or any of the Assets or the Assumed Liabilities or to which
any of the Assets is subject, which if adversely determined could result in a
material Liability. Neither the Company, any Owner nor any of the Assets is
subject to or bound by any currently existing judgment, order, writ, injunction
or decree.

3.16 Compliance With Laws. The Company is currently complying in
all material respects with and at all times during the last five years has
complied in all material respects with, and the Assets and the use, operation
and maintenance thereof comply in all material respects with and have at all
times complied in all material respects with, and neither the Company nor any
of the Assets nor the use, operation or maintenance thereof is in violation or
contravention of, any applicable material statute,

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law, ordinance, decree, order, rule or regulation of any Governmental Body;
including without limitation, all material federal, state and local laws
relating to occupational health and safety, employment and labor matters.

3.17 Environmental Matters.

(a) Without limiting the generality of the other
representations and warranties set forth in this Article III, except as
described in Schedule 3.17: (i) the Company is in compliance in all material
respects with all applicable Environmental Laws (as defined in Section
3.17(b)), including without limitation by having all Permits (as defined in
Section 3.18) required under any Environmental Laws for the operation of its
business; (ii) to the knowledge of the Company and the Owners, none of the real
property leased by the Company contains any Hazardous Substance (as defined in
Section 3.17(b)) in violation of any applicable Environmental Laws; (iii) the
Company has not received any notices, demand letters or requests for
information from any Governmental Body or other Person indicating that the
Company may be in violation of, or liable under, any Environmental Law or
relating to any of the Assets; (iv) no reports have been filed, or are required
to be filed, by the Company concerning the release of any Hazardous Substance
or the threatened or actual violation of any Environmental Law; (v) to the
knowledge of the Company and the Owners, no Hazardous Substance has been
disposed of, released or transported in violation of any applicable
Environmental Law from any real property leased by the Company or as a result
of any activity of the Company; (vi) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses regarding
compliance or noncompliance with any Environmental Law conducted by or which
are in the possession of the Company relating to the activities of the Company
or any of real property leased by the Company that have not been delivered to
Buyer prior to the date hereof; (vii) to the knowledge of the Company and the
Owners, there are no underground storage tanks on, in or under any real
property leased by the Company, and no underground storage tanks have been
closed or removed from any of such properties; (viii) to the knowledge of the
Company and the Owners, neither the Company nor any of the Assets is subject to
any material Liabilities or expenditures relating to any suit, settlement,
court order, administrative order, regulatory requirement, judgment or claim

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asserted or arising under any Environmental Law; and (ix) no asbestos
containing materials on the real property leased by the Company have been
disturbed, broken or subject to mechanical abrasion to the extent to cause a
release of asbestos fibers as a result of any activity of the Company.

(b) As used herein, "Environmental Law" means any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
code, permit, license, authorization, approval, consent, order, judgment,
decree, injunction, requirement or agreement with any Governmental Body
relating to (i) the protection, preservation or restoration of the environment
(including without limitation air, water vapor, surface water, groundwater,
drinking water, surface land, subsurface land, plant and animal life or any
other natural resource) or to human health or safety; or (ii) the exposure to,
or the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of Hazardous
Substances, in each case as amended and in effect on the date of the Closing.
As used herein, "Hazardous Substance" means any substance listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law. Hazardous Substance includes
any substance to which exposure is regulated by any Governmental Body or any
Environmental Law, including without limitation any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste, industrial substance or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos or asbestos containing material,
urea formaldehyde, foam insulation, lead or polychlorinated biphenyls.

3.18 Permits. The Company owns or possesses from each appropriate
Governmental Body all right, title and interest in and to all permits,
licenses, authorizations, approvals, quality certifications, franchises or
rights (collectively, "Permits") issued by any Governmental Body material to
the conduct its business. Each of such material Permits is described on
Schedule 3.18. No loss or expiration of any such Permit is pending or, to the
knowledge of the Company and the Owners, threatened or reasonably foreseeable,
other than expiration in accordance with the terms thereof and that may be
renewed in the ordinary course of business without lapsing.

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3.19 Material Agreements.

(a) Schedule 3.19(a) lists each agreement and arrangement
to which (x) the Company is a party or a beneficiary or by which the Company or
any of the Assets is bound and (y) that is material to the Company or the
Assets, whether written or oral (collectively, the "Material Agreements"),
including without limitation (i) any supply, distribution or other agreements
or arrangements pursuant to which third parties are or will be entitled or
obligated to purchase or use any of the Assets with an aggregate purchase price
in excess of $25,000; (ii) any warranty agreements or arrangements under which
the Company has any Liability in excess of $25,000; (iii) any leases with a
term of one year or more or pursuant to which the Company is entitled to or
obligated to pay in excess of $25,000; (iv) any capital or operating leases or
conditional sales agreements relating to vehicles or equipment; (v) any supply
or manufacturing agreements or arrangements pursuant to which the Company is
entitled or obligated to acquire any assets from a third party with an
aggregate purchase price in excess of $25,000; (vi) insurance policies; (vii)
any employment, consulting, noncompetition, separation, collective bargaining,
union or labor agreements or arrangements; (viii) any agreement evidencing,
securing or otherwise relating to any indebtedness in excess of $25,000 for
which the Company has any Liability, (ix) any agreement with or for the benefit
of any member, manager, officer or employee of the Company, or any affiliate or
family member thereof; and (x) any other agreement or arrangement pursuant to
which the Company could be required to make or be entitled to receive aggregate
payments in excess of $25,000.

(b) The Company has performed all of its obligations
under each Material Agreement, and to the knowledge of the Company and the
Owners, there exists no breach or default (or event that with notice or lapse
of time would constitute a breach or default) under any Material Agreement.

(c) Each Material Agreement is valid, binding and in full
force and effect and enforceable in accordance with its respective terms.
There has been no termination or threatened termination or notice of default
under any Material Agreement. The Company has delivered to Buyer a copy of
each written Material Agreement and a written summary of all material terms of
each oral Material Agreement.

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(d) Except as set forth in Schedule 3.19(d), no consent
of any Person is required in connection with the transactions contemplated by
this Agreement in order to preserve the rights of the Company and Buyer under
or to prevent any disadvantage to the Company or Buyer in respect of any
Material Agreement. All consents set forth on Schedule 3.19(d) will be
obtained prior to the Closing Date.

3.20 Intellectual Property Rights. Set forth on Schedule 3.20 is a
complete list of all registered patents, trademarks, service marks, trade
names, copyrights, material and manufacturing specifications, drawings and
designs included in the Assets or necessary in connection with the operation of
the Company's business (collectively, the "Intellectual Property"), without
infringing on or otherwise acting adversely to the rights or claimed rights of
any Person, and neither the Company nor any Owner is obligated to pay any
royalty or other consideration to any Person in connection with the use of any
such Intellectual Property. To the knowledge of the Company and the Owners, no
other Person is infringing on the rights of the Company in any of its
Intellectual Property.

3.21 Members and Creditors. Set forth in Schedule 3.21 is a
complete list of each Person that owns any direct or indirect equity or debt
interest (other than accounts payable incurred in the ordinary course of the
Company's business) in the Company (including, without limitation, options or
warrants to purchase membership interests and any indebtedness for borrowed
money, whether or not evidenced by a note or other written instrument) and a
description of each such equity or debt interest.

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3.22 Subsidiaries and Investments. Except as set forth on Schedule
3.22, the Company does not own any direct or indirect equity or debt interest
in any other Person and is not obligated or committed to acquire any such
interest.

3.23 Principal Customers and Suppliers; Competing Interests. Set
forth in Schedule 3.23(a) are (a) a list of the ten largest customers of the
Company by dollar volume (with the amount of revenues attributable to each such
customer) for the 1997 fiscal year to date ended November 30, 1997, and (b) a
list of the ten largest suppliers of the Company by dollar volume (with the
amount of payments attributable to each such supplier) for the fiscal year
ended December 31, 1996 and the 1997 fiscal year to date ended December 17,
1997. Except as described in Schedule 3.23(b), none of the Company, the Owners
or any manager, officer, relative or affiliate of any of the foregoing owns,
directly or indirectly, an interest in any entity that is a competitor,
customer or supplier of the Company or that otherwise has material business
dealings with the Company.

3.24 Employee Matters. Set forth on Schedule 3.24 is a complete
list of all employees of the Company (other than clerical), including date of
employment, current title and compensation. The Company is in compliance in
all material respects with all applicable laws and regulations regarding
employment, wages, hours, equal opportunity, collective bargaining, unfair
labor practices and payment of Social Security and other taxes, and no
complaint alleging any violation of such laws or regulations by the Company has
been filed or, to the knowledge of the Company and the Owners, threatened to be
filed with or by any Governmental Body. The Company has not experienced, and
neither the Company nor any Owner knows or has reasonable grounds to know of
any basis for, any strike, material labor trouble, work stoppage, slow down or
other interference with or impairment of its business, including without
limitation, any such stoppage, slow down or interference as a result of any
announcement of or the consummation of the transactions contemplated hereby.

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3.25 Employee Benefit Plans.

(a) Schedule 3.25(a) lists all compensation and benefit
plans, contracts and arrangements maintained by or contributed to by the
Company (including, without limitation, all pension, profit sharing, savings
and thrift, bonus, incentive or deferred compensation, severance pay, stock
option, stock bonus, and parachute or special termination payments (including
any Section 280G payments) and medical, dental, disability, Section 125
cafeteria and life insurance plans, contracts and arrangements) in which any
employees of the Company or their respective dependents participate or have
participated, or with respect to which the Company may have any Liability
(collectively, the "Employee Benefit Plans").

(b) All Employee Benefit Plans in all material respects
are in compliance with and have been administered in compliance with all
applicable requirements of law, including but not limited to the Internal
Revenue Code of 1986, as amended (the "Code"), and the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and all contributions
required to be made to each such plan under the terms of such plan, ERISA or
the Code for all periods of time prior to the date hereof and the Closing Date
have been or will be, as the case may be, made.

(c) With respect to any Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Code (a "Pension Plan"), a
favorable determination letter as to the qualification under Section 401(a) of
the Code has been issued and the related trust has been determined to be exempt
from taxation under Section 501(a) of the Code and any amendment made or event
relating to any Pension Plan subsequent to the date of such determination
letter has not adversely affected the qualified status of any such plan. The
Company does not provide or contribute to nor is required to maintain or
contribute to a Pension Plan subject to Title IV of ERISA. Except as set forth
in Schedule 3.25(c), no Employee Benefit Plan is an "employee pension benefit
plan" as defined in Section 3(2) of ERISA. The Company has performed all
material obligations required to be performed by it under, and is not in
default under or in violation of, the terms of any of the Employee Benefit
Plans in any material respect. To the knowledge of the Company and the Owners,
neither the Company nor any other "disqualified

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person" (as defined in Section 4975 of the Code) has engaged in any "prohibited
transaction" (as defined in Section 4975 of the Code), which could subject any
Employee Benefit Plan (or the related trust), the Company or any officer,
manager or employee of the Company to a tax or penalty imposed under Section
4975 of the Code.

(d) Except as otherwise set forth in Schedule 3.25(d),
the Company is not required to contribute to, or during the six year period
ending on the Closing Date will not have been required to contribute to, any
"multiemployer plan," as such term is defined in Section 4001(a)(3) of ERISA,
and the Company is not subject to any withdrawal or partial withdrawal
liability within the contemplation of Section 4201 of ERISA and will not become
subject thereto as a result of the transactions contemplated by this Agreement.

(e) Except as otherwise set forth in Schedule 3.25(e),
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due from the Company under any Employee Benefit Plan or any
collective bargaining agreement or otherwise, (ii) increase any compensation or
benefits otherwise payable under any such Employee Benefit Plan or collective
bargaining agreement, or (iii) result in the acceleration of the time of
payment or vesting of any such compensation or benefits.

(f) With respect to each of the Employee Benefit Plans,
the Company has furnished to Buyer true and correct copies of (i) the plan
documents and summary plan description; (ii) the most recent IRS determination
letter and any Form 5500 filed; (iii) the last three annual reports; (iv) all
related trust agreements, insurance contracts, or funding agreements; and (v)
all other documents, records or other plan-related material reasonably
requested by Buyer.

3.26 No Misrepresentations. The representations, warranties and
statements made by the Company and the Owners in or pursuant to this Agreement
(including the Schedules hereto) are true, complete and correct in all material
respects and do not contain any untrue statement of a material fact

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or omit to state any material fact necessary to make any such representation,
warranty or statement, under the circumstances in which it is made, not
misleading.

3.27 Construction of Certain Provisions. It is understood and
agreed that the specification of any dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Schedules is not intended to imply that such amounts or higher or lower
amounts, or the items so included or other items, are or are not material, and
no party hereto will use the fact of the setting of such amounts or the fact of
the inclusion of any such item in the Schedules in any dispute or controversy
between the parties as to whether any obligation, item or matter not described
herein or included in a Schedule is or is not material for purposes of this
Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER AND ISSUER

Buyer and Issuer each represent and warrant to the Company and the
Owners as follows:

4.1 Organization. Buyer and Issuer are corporations duly
organized, validly existing and in good standing under the laws of Texas.

4.2 Authority. Each of Buyer and Issuer have all requisite power
and authority to execute, deliver and perform under this Agreement and all
other agreements and instruments required to be executed and delivered by it
hereunder (together with this Agreement, as each may be amended, modified or
supplemented, the "Buyer Documents"). The execution, delivery and performance
by Buyer and Issuer of each Buyer Document to which it is a party have been
duly authorized by all necessary action, corporate or otherwise, on the part of
Buyer and Issuer. This Agreement has been, and at the Closing the other Buyer
Documents will be, duly executed and delivered by Buyer and Issuer (to the
extent each is a party thereto). This Agreement is, and, upon execution and
delivery by Buyer and Issuer (to the extent each is a party thereto) at the
Closing, each of the other Buyer

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Documents will be, a legal, valid and binding agreement of Buyer and Issuer (to
the extent each is a party thereto), enforceable against Buyer and Issuer in
accordance with their respective terms.

4.3 No Violation. The execution, delivery and performance of this
Agreement by Buyer and Issuer will not conflict with or result in the breach of
any term or provision of, or violate or constitute a default under any charter
provision, bylaw, agreement, instrument, order, law or regulation to which
Buyer or Issuer is a party or by which Buyer or Issuer is in any way bound or
obligated, other than the credit agreement of Issuer with Bank of America of
Texas, N.A. in effect on the date hereof (the "Credit Agreement").

4.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Body is required on the part of Buyer or Issuer
in connection with the transactions contemplated by this Agreement, other than
(a) Buyer's obtaining a license under the Perishable Agricultural Commodities
Act, (b) the filing of the notification and report form required by the HSR Act
and (c) the filing of registration statements with the Securities and Exchange
Commission (the "SEC") as contemplated by Section 11.3.

4.5 SEC Filings. Issuer has delivered to the Company and the
Owners true and complete copies (excluding exhibits) of the following
documents, in each case as filed with the SEC: (a) Issuer's Annual Report on
Form 10-K for its 1996 fiscal year; (b) Issuer's Quarterly Report on Form 10-Q
for the quarter ended September 26, 1997; and (c) Issuer's Proxy Statement for
its Annual Meeting of Shareholders held in 1997 (collectively, the "SEC
Filings"). The SEC Filings when made did not contain any untrue statement of a
material fact or omit to state any material fact necessary to make any
statement contained therein, under the circumstances in which it was made, not
misleading. Except as otherwise disclosed in writing to the Company and the
Owners, since September 26, 1997 there has been no change or effect that
individually or when taken together with all other such changes or effects,
would be materially adverse to the business, operations, assets, condition
(financial or otherwise), results of operations, liabilities or prospects of
Buyer or Issuer.

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4.6 No Misrepresentations. The representations, warranties and
statements made by Buyer and Issuer in or pursuant to this Agreement are true,
complete and correct in all material respects. None of such representations,
warranties or statements contains any untrue statement of a material fact or
omits to state any material fact necessary to make any such representation,
warranty or statement, under the circumstances in which it is made, not
misleading.

ARTICLE V

COVENANTS OF THE COMPANY AND THE OWNERS

5.1 Conduct of Business Prior to Closing. Prior to the Closing
Date, the Company will, and the Owners will cause the Company to, (a) operate
only in the ordinary course of business consistent with past practices and use
its best efforts to preserve the goodwill of the Company and of its employees,
customers, suppliers, distributors, Governmental Bodies and others having
business dealings with the Company; (b) not engage in any transaction outside
the ordinary course of business, including without limitation by making any
material expenditure, investment or commitment or entering into any Material
Agreement or arrangement of any kind; (c) maintain all insurance policies and
all Permits that are required for the Company to carry on its business; and (d)
maintain books of account and records in the usual, regular and ordinary manner
and consistent with past practices.

5.2 Access and Information. The Company and the Owners will
permit Buyer, Issuer and their representatives to have reasonable access to the
Company's officers, employees, agents, assets and properties and all relevant
books, records and documents of or relating to the Assets during normal
business hours and will furnish to Buyer and Issuer, at the cost and expense of
Buyer or Issuer, such information, financial records and other documents
relating to the Company and its operations and business as Buyer and Issuer may
reasonably request. The Company and the Owners will permit Buyer and Issuer
and their representatives reasonable access to the Company's accountants,
auditors, customers, suppliers and Governmental Bodies having dealings with the
Company for consultation or verification of any information obtained by Buyer
and Issuer and upon reasonable request, will use their respective best efforts
to cause such Persons to cooperate with Buyer and Issuer and their
representatives in such consultation and in verifying such information.

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5.3 Repair and Casualty. Prior to the Closing Date, the Company
will make all normal and customary repairs to the Assets. If any loss, damage,
destruction, theft or other casualty affecting any of the Assets occurs other
than normal wear and tear, the Company will promptly advise Buyer and Issuer
thereof and will commence and diligently pursue the repair or replacement of
such Assets with similar assets of like quality. If such repair or replacement
of any Assets with an aggregate fair market value equal to or in excess of
$10,000 is not completed prior to the Closing Date, Buyer may elect either to
terminate this Agreement or to proceed with the Closing. If Buyer elects to
proceed with the Closing or if other Assets with an aggregate fair market value
below $10,000 are not repaired or replaced, then, notwithstanding any contrary
provisions of this Agreement, the Cash Payment will be reduced by the full cost
of replacing any such Assets with similar assets of like quality as determined
by Buyer in good faith, and the Company will be entitled to retain the Assets
affected by such casualty and any insurance proceeds or other claims in respect
thereof.

5.4 WARN Act. Subject to Buyer's obligations in Section 6.4, the
Company will have full responsibility for providing any notice to its employees
and appropriate government officials which may be required pursuant to the
Worker Adjustment and Retraining Notification Act of 1988, as amended, or any
similar state law with respect to any employees terminated by the Company prior
to or on the Closing Date. The Company will bear any Liability which may
accrue to such employees or any unit of local government under such Act or any
similar state law as a result of improper or untimely notice.

5.5 Supplemental Disclosure. From time to time prior to the
Closing, the Company and the Owners will promptly supplement or amend each of
the Schedules hereto with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date hereof, would have been required
to be set forth or listed in the Schedules hereto or which is necessary to
complete or correct any information in the Schedules; provided, that, for
purposes of determining the satisfaction of the conditions set forth in Section
8.1, no such supplement or amendment will be given effect.

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5.6 Further Assurances. At or promptly after the Closing, and
without further consideration, the Company and the Owners will execute and
deliver to Buyer and Issuer such further instruments of conveyance and transfer
as Buyer may reasonably request in order to more effectively convey and
transfer to Buyer any of the Assets or the Assumed Agreements, or for aiding,
assisting, collecting and reducing to possession any of the Assets and
exercising rights with respect thereto.

5.7 Name Change. From and after the Closing, neither the Company
nor any of its affiliates will employ the term "Francisco Distributing" or a
confusingly similar term in its business, and within five business days of the
Closing the Company will amend all necessary documents and make any necessary
filings to change its name to a name bearing no similarity to "Francisco
Distributing Company, LLC," including, without limitation, an amendment to the
Company's articles of organization.

5.8 Guaranty of Accounts Receivable. If any accounts receivable
constituting Assets are not collected by Buyer within ninety days after the
Closing Date in the ordinary course of business, without resort to third-party
collection efforts or litigation, then the Company and the Owners, jointly and
severally, will purchase such accounts receivable from Buyer for cash at a
purchase price equal to the difference of (a) the face amount thereof, less (b)
any portion previously collected by Buyer, less (c) the aggregate amount
reserved for uncollectible accounts on the Closing Date. The amount reserved
for uncollectible accounts on the Closing Date shall be calculated in
accordance with the same practice and procedures used to calculate such reserve
amount on the Latest Balance Sheet.

5.9 Information for Filings. Upon prior written request and at
the expense of Buyer and Issuer, the Owners and the Company will furnish Buyer
and Issuer with all information concerning the Company as is required for
inclusion in any application or filing made by Buyer or Issuer to the SEC or
any other Governmental Body in connection with the transactions contemplated by
this Agreement.

5.10 Nondisclosure. The Company and the Owners acknowledge and
agree that all customer, prospect and marketing lists, sales data, Intellectual
Property, proprietary information and

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trade secrets of the Company (collectively, the "Confidential Information") are
valuable, special and unique assets constituting part of the Assets and,
following the Closing, will be owned exclusively by Buyer. Prior to and after
the Closing, the Company and each Owner agree to treat the Confidential
Information as confidential and not to disclose any Confidential Information to
any Person or make use of any Confidential Information for its own purposes or
for the benefit of any other Person (other than Buyer or Issuer), except to the
extent required by applicable laws and regulations or by any subpoena or
similar legal process, or to the extent such Confidential Information becomes
publicly available (other than as a result of a breach of this Agreement).

ARTICLE VI

COVENANTS OF BUYER AND ISSUER

6.1 Conduct of Business After Closing. During the two fiscal
years of Buyer after the Closing, without the prior written consent of the
Owners, Buyer will not, and Issuer will cause Buyer not to, make any
acquisitions or investments out of the ordinary course of business inconsistent
with the Company's past practice.

6.2 Year End Balance Sheet. Promptly after receipt, Buyer will
deliver to the Company a true and complete copy of the Year End Balance Sheet
which will be prepared in accordance with generally accepted accounting
principles consistent with the Company's past practice.

6.3 Issuance of Shares. On the date that all or any portion of a
Contingent Payment is converted into shares of Common Stock, the Company will
be deemed for all purposes to be a holder of such shares of Common Stock
issuable to the Company. Promptly after the conversion date Issuer will
deliver to the Company the stock certificates evidencing the shares of Common
Stock issued to the Company on such date.

6.4 Employment. Effective as of the Closing Date, Buyer shall
offer employment to the employees of the Company at the same or higher salary
or wage rates and with medical insurance and other benefits that are in the
aggregate, comparable to (except as otherwise provided for in

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any employment agreements between any such employees and Buyer), those provided
by the Company to such employees as of the date of this Agreement. Neither
Buyer nor Issuer shall be liable for any severance payments asserted against
the Company, Buyer or Issuer by, or other liability, including, without
limitation, any liability with respect to health care continuation coverage
under COBRA, or obligation to, any employees or former employees of the Company
who do not accept such offers of employment from Buyer.

6.5 Payment of Certain Liabilities. Within three business days of
the Closing Date, Buyer or Issuer will pay in full the Assumed Liabilities
owing to National Bank of Southern California specifically identified on
Schedule 1.3(c).

ARTICLE VII

MUTUAL COVENANTS

7.1 Fulfillment of Conditions. Each of the parties hereto agree
not to take any action that would cause the conditions on the obligations of
the parties hereto to effect the transactions contemplated by this Agreement
not to be fulfilled, including without limitation by taking or causing to be
taken any action that would cause the representations and warranties made by
such party herein not to be true and correct as of the Closing. Each of the
parties hereto will take all reasonable steps within its power to cause to be
fulfilled the conditions precedent to the other parties' obligations to
consummate the transactions contemplated hereby that are dependent on the
actions of such party.

7.2 Publicity. Issuer will obtain the prior consent of the
Company (which consent will not be unreasonably withheld or delayed) before
issuing, or permitting any agent or affiliate to issue, any press release or
otherwise making, or permitting any agent or affiliate to make, any public
statements with respect to this Agreement and the transactions contemplated
hereby. The Company and the Owners will obtain the prior consent of Issuer
(which consent will not be unreasonably withheld or delayed) before issuing, or
permitting any agent or affiliate to issue, any press releases or otherwise
making, or permitting any agent or affiliate to make, any public statements
with respect to this Agreement and the transactions contemplated hereby.

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7.3 Transaction Costs. The Owners and the Company will pay all
attorneys', accountants', finders', brokers', financial advisors' investment
banking and other fees, costs and expenses incurred by the Company or the
Owners in connection with the preparation, negotiation, execution and
performance of this Agreement or any of the transactions contemplated by this
Agreement. Buyer and Issuer will pay all attorneys', accountants', finders',
brokers', financial advisors' investment banking and other fees, costs and
expenses incurred by Buyer or Issuer in connection with the preparation,
negotiation, execution and performance of this Agreement or any of the
transactions contemplated by this Agreement. Notwithstanding the foregoing,
Buyer and Issuer, on the one hand, and the Company and the Owners, on the other
hand, each agree to pay fifty percent of the filing fee required by the HSR Act
and all sales, use, transfer, excise or other taxes arising out of the sale of
the Assets. The parties hereto will promptly pay such fees and taxes after
written notice thereof. All sales, use, excise, transfer or other taxes
payable as a result of transferring the Assets to Buyer at the Closing are
described in Schedule 7.3.

7.4 Allocation of Purchase Price. Buyer and the Company agree
that the Purchase Price will be allocated among the Assets in accordance with
Schedule 7.4, and such allocation of the Purchase Price will be used, reported
and implemented by both the Company and Buyer for federal, state, local and
other tax purposes.

7.5 Confidentiality. Prior to the Closing, each of the parties to
this Agreement agrees to use all reasonable efforts to keep confidential any
information from time to time supplied to it by or on behalf of any of the
other parties hereto; provided, however, that the foregoing shall not apply:
(a) to any information already known to such party receiving the information at
the time of the receipt thereof, other than any such information which is
already known by virtue of any breach by any third party of any confidentiality
obligation; (b) to any information which is or becomes publicly available
(other than as a result of a breach of this Agreement); (c) to the extent the
receiving party is required to disclose the information in question pursuant to
applicable laws and regulations or by any subpoena or similar legal process; or
(d) to the extent that the receiving party needs to disclose the information in

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question for the protection or enforcement of any of its rights or interests
against the other parties hereto, whether under this Agreement or otherwise.

ARTICLE VIII

CLOSING CONDITIONS

8.1 Conditions to Obligations of Buyer and Issuer. The
obligations of Buyer and Issuer under this Agreement are subject to the
satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived by Buyer and Issuer in
writing; provided, however, such waiver will not waive or diminish Buyer's or
Issuer's right for indemnification pursuant to Section 9.2, unless so stated:

(a) All representations and warranties of the Company and
the Owners contained in this Agreement are true and correct in all
material respects at and as of the Closing with the same effect as
though such representations and warranties were made at and as of the
Closing, except for representations and warranties that speak as of a
specific date or time other than the Closing Date (which need only be
true and correct in all material respects as of such date or time).

(b) The Company and the Owners have performed and
complied in all material respects with all the covenants and
agreements and satisfied all the conditions required by this Agreement
to be performed, complied with or satisfied by them at or prior to the
Closing, including without limitation the delivery of all the
documents specified in Section 2.2(c).

(c) There is no pending or threatened litigation in any
court or any proceeding before or by any Governmental Body against any
Owner, the Company, Buyer or Issuer to restrain or prohibit or obtain
damages or other relief with respect to this Agreement or the
consummation of the transactions contemplated hereby.

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(d) All necessary company, contractual and governmental
consents, approvals, orders, authorizations or notices have been
obtained or given, as applicable, on terms reasonably satisfactory to
Buyer and Issuer.

(e) All necessary consents, approvals or authorizations
from Bank of America of Texas, N.A. required to consummate the
transactions contemplated hereby without violating the Credit
Agreement have been obtained on terms satisfactory to Buyer and
Issuer.

(f) All applicable waiting periods under the HSR Act will
have expired or been terminated.

(g) Buyer, Issuer and Cancellieri have executed and
delivered an Employment Agreement substantially in the form of Exhibit
A.

(h) Buyer, Issuer and Xxxxxx have executed and delivered
an Employment Agreement substantially in the form of Exhibit B.

(i) Issuer and Buyer will have received a legal opinion
from counsel to the Company and the Owners substantially in the form
of Exhibit C.

8.2 Conditions to Obligations of the Company and the Owners. The
obligations of the Company and the Owners under this Agreement are subject to
the satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived by the Company and the Owners
in writing; provided, however, such waiver will not waive or diminish the
Company's or the Owners' right for indemnification pursuant to Section 9.3
unless so stated:

(a) All representations and warranties of Buyer and
Issuer contained in this Agreement are true and correct in all
material respects at and as of the Closing with the same effect as
though such representations and warranties were made at and as of the
Closing, except for representations and warranties that speak as of a
specific date or time other than the Closing Date (which need only be
true and correct in all material respects as of such date or time).

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(b) Buyer and Issuer have performed and complied in all
material respects with all the covenants and agreements and satisfied
all the conditions required by this Agreement to be performed,
complied with or satisfied by them at or prior to the Closing,
including without limitation the delivery of the documents specified
in Sections 2.2(a) and (b).

(d) All necessary corporate, contractual and governmental
consents, approvals, orders, authorizations or notices have been
obtained or given, as applicable, on terms reasonably satisfactory to
the Company and the Owners.

(f) All applicable waiting periods under the HSR Act will
have expired or been terminated.

(g) The Company will have received a legal opinion from
counsel to Buyer and Issuer substantially in the form of Exhibit D.

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ARTICLE IX

SURVIVAL; INDEMNIFICATION

9.1 Survival of Representations and Warranties. Notwithstanding
any investigation by the parties hereto, the representations and warranties
contained in this Agreement will survive the Closing for two years after the
Closing Date; provided, however, that the representations and warranties of the
Company and the Owners set forth in (a) Section 3.14 will survive until the
expiration of the applicable period of limitation; (b) Sections 3.17 and 3.25
will survive until four years after the Closing Date; and (c) Section 3.4 will
survive indefinitely after the Closing. If written notice of a Claim (as
defined in Section 9.2) has been given prior to the expiration of the
applicable representations and warranties, then such representations and
warranties will survive as to such Claim until such Claim has been finally
resolved.

9.2 Indemnification of Buyer and Issuer. The Company and each
Owner will jointly and severally indemnify and hold Buyer, Issuer and their
respective directors, officers, shareholders, employees and agents harmless
from any and all liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys' fees and costs of investigation (collectively,
"Claims") that any such Person may suffer or incur as a result of or relating
to:

(a) the breach or inaccuracy, or any allegation by a
third party that, if true, would constitute a breach or inaccuracy, of
any of the representations or warranties made by the Company or any
Owner in this Agreement or in the other Company Documents;

(b) the breach or inaccuracy, or any allegation by a
third party that if true, would constitute a breach or inaccuracy, of
any covenant or agreement made by the Company or any Owner in this
Agreement or in the other Company Documents; or

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9.3 Indemnification of the Company and the Owners. Buyer and
Issuer will, jointly and severally, indemnify and hold the Company and each
Owner and their respective officers, employees and agents harmless from any and
all Claims that any such Person may suffer or incur as a result of or relating
to:

(a) the breach or inaccuracy, or any allegation by a
third party that, if true, would constitute a breach or inaccuracy, of
any of the representations or warranties made by Buyer or Issuer in
this Agreement;

(b) the breach or inaccuracy, or any allegation by a
third party that if true, would constitute a breach or inaccuracy, of
any covenant or agreement made by Buyer or Issuer in this Agreement;
or

9.4 Limitations on Indemnification. Notwithstanding any contrary
provisions of Section 9.2, the Company and the Owners will not be obligated to
indemnify Buyer or Issuer with respect to any Claim unless the aggregate amount
of such Claims exceeds $75,000 and in such event, the Company and the Owners
will only be obligated for the amount in excess of $75,000, and the Company and
the Owners will not be obligated to indemnify Buyer or Issuer with respect to
any Claims, the aggregate amount of which exceeds $7,500,000.

9.5 Right of Setoff. The Company and the Owners hereby agree that
with respect to any Claim for indemnification under this Article IX or any
other breach of contract claim under this Agreement or any other Company
Document, Buyer and Issuer are hereby authorized to setoff and apply any and
all indemnifiable Claims owing to Buyer or Issuer against the obligations, if
any, owing to the Company under the Contingent Payments. Such setoff is not
the sole and exclusive remedy of Buyer or Issuer.

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9.6 Exclusivity of Indemnification. The parties hereto agree that
the indemnification provisions of this Article IX will be the exclusive remedy
for Claims any party may have for misrepresentation, breach of warranty or
breach of covenant or agreement (except for such Claims arising under Section
5.8, Article X or Article XI or as a result of fraud or other intentional
misconduct) and each party hereby waives, to the extent it may do so, any other
rights or remedies that may arise under any applicable statute, rule or
regulation; provided, however, that the foregoing shall not limit the types of
remedies, including specific performance or other equitable remedies, which may
be sought by an indemnified party in connection with a breach of any covenant
or agreement contained herein.

ARTICLE X

NONCOMPETITION AGREEMENT

10.1 Noncompetition. The Company and the Owners hereby agree that
during the Noncompetition Period (as hereinafter defined) applicable to such
Person, none of the Company, the Owners or any Affiliate (as hereinafter
defined) of the Company or any such Owner will, directly or indirectly, on its
own behalf or as an employee or other agent of or an investor in another
Person:

(a) engage in the business of selling, distributing or
otherwise transporting fresh produce (collectively, the "Business") in
any geographic area where the Company has historically engaged in the
Business (the "Territory");

(b) influence or attempt to influence any customer or
supplier of Buyer or Issuer that is located, purchases or sells in the
Territory, as applicable, to purchase goods or services related to the
Business from any Person other than Buyer or Issuer; or

(c) employ or attempt to employ any individuals who are
then or have been during the preceding nine months employees of Buyer
or Issuer or influence or seek to influence any such employees to
leave Buyer's or Issuer's employment;

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provided, however, that nothing herein shall preclude any Person from (x)
making an investment in Issuer or any other entity which may engage in the
Business so long as such investment interest in such other entity does not
exceed five percent of the outstanding voting securities of such entity, or (y)
investing and participating in the operation and affairs of PIC International,
LLC, which is engaged solely in the business of importing and exporting fresh
produce or (z) investing and participating in growing ventures so long as Buyer
or Issuer is offered the first opportunity to sell the fresh produce of such
growing ventures; provided, that, such investment and/or participation does not
require such Person making the investment and/or participation to provide
material services with respect to the operation and affairs of such other
entity and such investment and/or participation does not interfere with the
performance of any such Person's duties to either Issuer or Buyer as an
employee, if applicable.

If any provision of this Section 10.1 should be found by any court of
competent jurisdiction to be unenforceable by reason of its being too broad as
to the period of time, territory, and/or scope, then, and in that event, such
provision will nevertheless remain valid and fully effective, but will be
considered to be amended so that the period of time, territory, and/or scope
set forth will be changed to be the maximum period of time, the largest
territory, and/or the broadest scope, as the case may be, which would be found
enforceable by such court. Any violation of the provisions of this Section
10.1 shall automatically toll and suspend the Noncompetition Period for the
duration of such violation.

As used herein, "Noncompetition Period" means, (i) with respect to the
Company and Cancellieri, the period beginning on the Closing Date and ending on
the fifth anniversary of the Closing Date and (ii) with respect to Xxxxxx, the
period beginning on the Closing Date and ending on the second anniversary of
the Closing Date, and "Affiliate" means, with respect to any Person, any other
Person controlling, controlled by, or under common control with such Person.
For purposes of this Agreement, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with" as used
with respect to any Person) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person whether through ownership of voting securities, by contract or
otherwise.

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10.2 Agreement and Acknowledgment. Each Owner and the Company
acknowledges that its obligations under Section 10.1 are a material inducement
and condition to Buyer's and Issuer's entering into this Agreement, purchasing
the Assets, assuming the Assumed Liabilities and performing the other
transactions contemplated hereby. Each Owner and the Company acknowledges and
agrees that the restrictions set forth in Section 10.1 are reasonable as to
time, geographic area and scope of activity and do not impose a greater
restraint than is necessary to protect the goodwill and other business
interests of Buyer and Issuer, and each Owner and the Company agree that Buyer
and Issuer are justified in believing the foregoing.

10.3 Specific Performance. In the event of a violation of this
Article X, Buyer and Issuer will be entitled to seek injunctive relief against
the Company or such Person in addition to any other legal or equitable remedies
that may be available.

ARTICLE XI

AGREEMENT TO REGISTER THE SHARES

11.1 Exemption. The Company and the Owners acknowledge that the
shares of Common Stock issuable to the Company on the Closing Date and the
shares of Common Stock issuable to the Company upon conversion of the
Contingent Payments (collectively, the "Shares") have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") in reliance upon
the exemption provided by Section 4(2) of the Securities Act for transactions
by an issuer not involving a public offering.

11.2 Investment Intent and Access. The Company and the Owners
hereby represent and warrant that (a) the Shares will be acquired for
investment for their accounts, not as nominees or agents, and not with a view
to the resale or distribution of any part thereof in a manner which would
violate the registration provisions of the Securities Act or any applicable
state securities laws, (b) the

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Company and the Owners have received the SEC Filings from Issuer, and (c) the
Company and the Owners have had sufficient access to Issuer and its officers to
ask questions related to the SEC Filings and Issuer's business and operations
and to review such information, financial records and other documents relating
to the SEC Filings and the Issuer's operations and business as the Company or
the Owners have requested.

11.3 Registration. Issuer will register the Shares issuable at the
Closing for resale under the Securities Act on a shelf registration statement
on Form S-3 as promptly as practicable after receipt of the audited financial
statements of Seller that are required for such registration statement. After
the conversion of any Contingent Payment into Shares, the Company may request
that Issuer register such Shares pursuant to a shelf registration statement on
Form S-3 (the proposed registration statements are collectively, the
"Registration Statements"). Issuer may defer the filing (but not the
preparation) of a Registration Statement for a period of up to 120 days if at
the time Issuer or any of its subsidiaries is engaged in confidential
negotiations or other confidential business activities, disclosure of which
would be required in such registration statement (but would not be required if
such registration statement were not filed), and the Board of Directors of
Issuer determines in good faith that such disclosure would be materially
detrimental to Issuer and its shareholders or would have a material adverse
effect on any such confidential negotiations or other confidential business
activities. Except as otherwise disclosed in writing to the Owners, Issuer
does not intend to be engaged in any such confidential negotiations or other
confidential business activities on the Closing Date. A deferral of the filing
of a Registration Statement will be lifted, and the Registration Statement
shall be filed forthwith, if the negotiations or other activities are disclosed
or terminated. In order to defer the filing of a Registration Statement,
Issuer will promptly (but in any event within 10 days), upon determining to
seek such deferral, deliver to the Company and the Owners a certificate signed
by an executive officer of Issuer setting forth a statement of the reason for
such deferral and an approximation of the anticipated delay, which information
the Company shall treat as confidential. Within 20 days after receiving such
certificate, the Company may withdraw such request by giving notice to Issuer.

11.4 Best Efforts. Issuer will use its reasonable best efforts to
cause the Registration Statements to be become effective as promptly after
filing as is practicable, and will use its reasonable

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best efforts to keep such Registration Statements current after it becomes
effective. Issuer may include shares of other shareholders having registration
rights in the Registration Statements.

11.5 Orderly Dispositions. The Company or the Owners will provide
Issuer with written notice at least three business days prior to any proposed
sale of Shares and, at Issuer's request, will delay such sale for up to 45 days
if necessary to insure that the disclosure in the Registration Statements is
current. If the Company and the Owners desire during any consecutive three
month period to collectively sell more than 25% of the aggregate number of
Shares issued pursuant to this Agreement (as determined at the date of such
proposed sale), the Company or the Owners will provide Issuer with reasonable
written notice prior to such proposed sale setting forth the amount of Shares
to be sold and method of sale, and will cooperate with Issuer to sell such
Shares in a manner consistent with maintaining an orderly market for the Common
Stock.

11.6 Cooperation and Expenses. The Company and the Owners will
cooperate with Issuer in the preparation and filing of the Registration
Statements and any amendments thereto. Issuer will pay all costs and expenses
incidental to preparing and filing the Registration Statements and any
amendments and supplements thereto, except that the Company and the Owners will
pay (a) underwriting discounts or selling commissions respecting sales of such
Shares, (b) all applicable stock transfer taxes relating to any Shares
transferred, and (c) all fees and expenses of their counsel, if any.

11.7 Indemnification. Issuer, the Company and the Owners selling
Shares under the Registration Statements agree, severally and jointly, that it
or they will indemnify and hold harmless the other parties and any underwriter
(as defined in the Securities Act), if any, against any losses, claims, damages
or liabilities, joint or several, to which it or the other parties may become
subject, whether under the Securities Act or otherwise, insofar as such are
caused by an untrue statement or alleged untrue statement of any material fact
contained in a Registration Statement filed pursuant to Section 11.3, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading, to the extent that the inclusion or omission was with respect to
data relating to Issuer, for which Issuer will be responsible,

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or the Company or the Owners or its or their stock holdings or manner of sale,
for which the Company or the Owners will be responsible, as the case may be.

ARTICLE XII

MISCELLANEOUS

12.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated and abandoned (a) at any time prior to the Closing
Date by mutual written consent of Buyer and Issuer, on the one hand, and the
Company and the Owners, on the other hand; or (b) by Buyer and Issuer, on the
one hand, and the Company and the Owners, on the other hand, if a condition to
its performance hereunder has not been satisfied or waived prior to January 31,
1998. Notwithstanding the foregoing, a party may not terminate this Agreement
if the event giving rise to the termination right results from the willful
failure of such party to perform or observe any of the covenants or agreements
set forth herein to be performed or observed by such party or if such party is,
at such time, in material breach of this Agreement.

12.2 Notices. All notices that are required or may be given
pursuant to this Agreement must be in writing and delivered personally, by a
recognized courier service, by a recognized overnight delivery service, by
facsimile or by registered or certified mail, postage prepaid, to the parties
at the following addresses (or to the attention of such other person or such
other address as any party may provide to the other parties by notice in
accordance with this Section 12.2):

If to Buyer or Issuer:

Francisco Acquisition Corp.
Fresh America Corp.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx

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with a copy to:

Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx

If to the Company or the Owners:

Francisco Distributing Company, LLC
00000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxxxx

with a copy to:

Xxxxxx, Xxxx & Xxxxxxxx
0 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxx

Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or by facsimile
or, if mailed, when actually received.

12.3 Attorneys' Fees and Costs. If attorneys' fees or other costs
are incurred to secure performance of any obligations hereunder, or to
establish damages for the breach thereof or to obtain any other appropriate
relief, whether by way of prosecution or defense, the prevailing party will be
entitled to recover reasonable attorneys' fees and costs incurred in connection
therewith. A party will be considered the prevailing party if (a) it initiated
the litigation and substantially obtains the relief it sought, either through a
judgment or arbitration award or the losing party's voluntary action before
arbitration, trial, or judgment, (b) the other party withdraws its action
without substantially obtaining the relief it sought, or (c) such party did not
initiate the litigation and judgment is entered into for any party, but without
substantially granting the relief sought by the initiating

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party or granting more substantial relief to the non-initiating party with
respect to any counterclaim asserted by the non-initiating party in connection
with such litigation.

12.4 No Brokers. Except for the Company's agreement with National
Business Brokers, each party to this Agreement represents to the other parties
that it has not incurred and will not incur any liability for brokerage fees or
agents' commissions in connection with this Agreement or the transactions
contemplated hereby. Each party hereto agrees that it will indemnify and hold
harmless the other parties hereto against any claim for brokerage and finders'
fees or agents' commissions in connection with the negotiation or consummation
of the transactions contemplated by this Agreement.

12.5 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which together
will constitute one and the same instrument.

12.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned or delegated by the
Company, any Owner, Buyer or Issuer, without the prior written consent of the
other parties; except that Buyer may assign its rights and obligations under
this Agreement to Issuer or any entity controlled by Issuer. This Agreement is
not intended to confer any rights or benefits to any Person (including without
limitation employees of the Company) other than the parties hereto.

12.7 Entire Agreement. This Agreement and the related documents
contained as Exhibits and Schedules hereto or expressly contemplated hereby
contain the entire understanding of the parties relating to the subject matter
hereof and supersede all prior written or oral and all contemporaneous oral
agreements and understandings relating to the subject matter hereof. This
Agreement cannot be modified or amended except in writing signed by the party
against whom enforcement is sought. The Exhibits and Schedules to this
Agreement are hereby incorporated by reference into and made a part of this
Agreement for all purposes.

12.8 Knowledge. Whenever a statement regarding the existence or
absence of facts in this Agreement is qualified by a phrase such as "to such
person's knowledge" or "known to such person" it

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is intended by the parties that the information to be attributed to such person
is information actually or constructively known to (a) the person in the case
of an individual or (b) in the case of a corporation or other entity an officer
or members of senior management as a result of his/or her employment by the
employer. The person has constructive knowledge of those matters which the
individual involved could reasonably be expected to have as a result of
undertaking an investigation of such a scope and extent as a reasonably prudent
person would undertake concerning the particular subject matter.

12.9 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT
MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

12.10 Arbitration.

(a) To the extent that the parties hereto are unable to
resolve their disputes or controversies arising out of or relating to this
Agreement, or the performance, breach, validity, interpretation or enforcement
of this Agreement, through discussion and negotiation, all such disputes and
controversies will be resolved by binding arbitration in accordance with Title
9 of the United States Code (the Federal Arbitration Act) and the Commercial
Arbitration Rules of the America Arbitration Association (the "AAA"), and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. A party hereto may initiate arbitration by
sending written notice of its intention to arbitrate to the other parties
hereto and to the AAA office located in Dallas, Texas. Such written notice
will contain a description of the dispute and the remedy sought. The
arbitration will be conducted at the offices of the AAA in Dallas, Texas before
an independent and impartial arbitrator acceptable to all parties hereto. In
the event that the parties have not mutually agreed on an acceptable arbitrator
within thirty (30) days after the demand for arbitration is filed, the
arbitrator shall be appointed in the manner provided by Section 13 of the
Commercial Arbitration Rules of the AAA. The decision of the arbitrator

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will be final and binding on the parties hereto and their successors and
assignees. The parties hereto intend that this agreement to arbitrate be
irrevocable.

(b) Notwithstanding the foregoing, in advance of the
institution of any arbitration proceeding, but in aid thereof, an application
may be filed for order or orders to be entered by any court of competent
jurisdiction (i) invoking the jurisdiction of the court over the controversy in
rem, by attachment, garnishment, sequestration, or (ii) seeking to restrain or
enjoin the destruction of the subject matter of the controversy or any
essential part thereof, or the destruction or alteration of books, records,
documents, or evidence needed for the arbitration proceeding. No such judicial
proceeding by a party shall be deemed a waiver of the party's right to
arbitrate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

BUYER:

FRANCISCO ACQUISITION CORP.

/s/ XXXXX X. XXXXXXXXX
---------------------------------------------
Xxxxx X. Xxxxxxxxx,
Chairman of the Board

ISSUER:

FRESH AMERICA CORP.

/s/ XXXXX X. XXXXXXXXX
---------------------------------------------
Xxxxx X. Xxxxxxxxx,
Chairman of the Board, Chief Executive
Officer and Secretary

COMPANY:

FRANCISCO DISTRIBUTING COMPANY, LLC

/s/ XXXX XXXXXXXXXXX
---------------------------------------------
Xxxx Xxxxxxxxxxx,
Managing Member

OWNERS:

F.J.V., INC.

/s/ XXXXXXXX XXXXXX
---------------------------------------------
Xxxxxxxx Xxxxxx,
President

/s/ XXXX XXXXXXXXXXX
---------------------------------------------
Xxxx Xxxxxxxxxxx

/s/ XXXXXXXX XXXXXX
---------------------------------------------
Xxxxxxxx Xxxxxx

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EXHIBIT 2.1 ASSET PURCHASE AGREEMENT

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