Mig, Inc. – ‘PRES14A’ for 10/24/94

As of:  Thursday, 8/25/94   ·   For:  10/24/94   ·   Accession #:  950144-94-1580   ·   File #:  1-05706

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Preliminary Proxy Solicitation Material — Special Meeting   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Actava/Roadmaster Special N&Ps                       132    716K 

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES 
EXCHANGE ACT OF 1934 (AMENDMENT NO.   ) 

Filed by the Registrant /X/                                                     

Filed by a Party other than the Registrant / /                                  

Check the appropriate box:                                                      

/X/  Preliminary Proxy Statement                                                

/ /  Definitive Proxy Statement                                                 

/ /  Definitive Additional Materials                                            

/ /  Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12        

The Actava Group Inc. 
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)

The Actava Group Inc. 
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):                              

/ /  $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).

/ /  $500 per each party to the controversy pursuant to Exchange Act Rule       
14a-6(i)(3).                                                          

/X/  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.   

(1)  Title of each class of securities to which transaction applies:  

Common Stock of Roadmaster Industries, Inc.                 

(2)  Aggregate number of securities to which transaction applies:     

19,169,000                                                  

(3)  Per unit price or other underlying value of transaction computed 
pursuant to Exchange Act Rule 0-11:                         

$3.8125 per share of Roadmaster Common Stock                

(4)  Proposed maximum aggregate value of transaction:                 

$73,081,813                                                 

     Set forth the amount on which the filing fee is calculated and state how it
was determined.                                                       

/X/  Check box if any part of the fee is offset as provided by Exchange Act Rule
  0-11(a)(2) and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                   

(1)  Amount Previously Paid:                                          

$14,616.36                                                  

(2)  Form, Schedule or Registration Statement No.:                    

Schedule 14A (File No. unknown)                             

(3)  Filing Party:                                                    

Roadmaster Industries, Inc.                                 

(4)  Date Filed:                                                      

August 24, 1994                                             

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PRELIMINARY COPIES

(LOGO)                                                                          

THE ACTAVA GROUP INC. 
4900 GEORGIA PACIFIC CENTER 
ATLANTA, GEORGIA 30303

Dear Stockholder:                                                               

   Your Board of Directors cordially invites you to attend a Special Meeting
of Stockholders of The Actava Group Inc. ("Actava" ) to be held at              
                           , Atlanta, Georgia on October 24, 1994 at 10:00
a.m. local time. At this Special Meeting you will be asked to consider and vote 
upon an Agreement and Plan of Reorganization dated as of July 20, 1994, a copy  
of which is included in the attached Proxy Statement, pursuant to which Actava  
will transfer to Roadmaster Industries, Inc. ("Roadmaster") all of the issued   
and outstanding capital stock of Diversified Products Corporation, Hutch Sports 
USA Inc., Nelson/Weather-Rite, Inc., and Willow Hosiery Company, Inc.           
(collectively, the "Sports Subsidiaries") in exchange for an aggregate of       
19,169,000 shares of Common Stock, par value $0.01, of Roadmaster ("Roadmaster  
Common Stock"). Following the consummation of the transaction, Actava will own  
approximately 39.6% of the issued and outstanding shares of Roadmaster Common   
Stock (based on the number of shares of Roadmaster Common Stock outstanding as  
of the date of the attached Proxy Statement). The closing sale price of the     
Roadmaster Common Stock on the American Stock Exchange on August 19, 1994 was   
$3.875 per share. In connection with the transaction, four designees of Actava  
will be elected to serve on Roadmaster's nine member Board of Directors.        

   YOUR BOARD OF DIRECTORS CAREFULLY CONSIDERED AND UNANIMOUSLY APPROVED THE
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION AFTER CONCLUDING THAT THE     
TRANSACTIONS CONTEMPLATED THEREBY ARE IN THE BEST INTERESTS OF ACTAVA AND ITS   
STOCKHOLDERS AND ARE FAIR TO ACTAVA AND ITS STOCKHOLDERS FROM A FINANCIAL POINT 
OF VIEW. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE   
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION.                   

 On April 19, 1994, I was elected by your Board of Directors as Actava's
President and Chief Executive Officer. The Board of Directors has given me a    
mandate to improve your company's operating results and to increase the value of
your investment in Actava. We have already taken several steps to accomplish    
these goals. First, we negotiated with Roadmaster the transactions described in 
the attached Proxy Statement. Second, on August 12, 1994, we sold our 50%       
ownership interest in our photofinishing business, Qualex Inc., to Eastman Kodak
Company. Both of these transactions are designed to improve our operating       
results and financial condition and to enable Actava to pursue new business     
opportunities. Your management team will continue to pursue additional          
strategies to improve Actava's performance. These strategies may include        
possible acquisitions or business combinations involving other entities.        
Although Actava frequently engages in discussions involving possible            
transactions with other entities, it currently is not a party to any agreements 
with respect to such transactions except as described in the attached Proxy     
Statement. Stockholders will have an opportunity at the Special Meeting to      
comment on or to inquire about the affairs of Actava that may be of interest to 
stockholders generally.                                                         

  Roadmaster is one of the largest manufacturers of bicycles in the United
States and is a leading manufacturer of fitness equipment and junior products.  
The trademarks and brand names under which Roadmaster sells its products include
Roadmaster(R), Flexible Flyer(R), Vitamaster(R), MacGregor(R) and American      
Playworld(R). The combination of the Sports Subsidiaries with Roadmaster will   
create one of the largest manufacturers and suppliers of sporting goods products
in the United States, with approximately $750,000,000 in annual revenues, and   
should enable the combined company to expand its product lines and achieve      

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economies of scale that are necessary for Roadmaster to be a low-cost producer  
of competitively priced products.                                               

  Approval of the Agreement and Plan of Reorganization and consummation of
the transactions contemplated thereby by the stockholders of Actava is a        
condition to the consummation of the transactions. Accordingly, it is important 
that your shares be represented at the Special Meeting in order that the        
presence of a quorum may be assured. Whether or not you plan to attend the      
Special Meeting, you are urged to date, sign and mail the enclosed proxy card in
the envelope provided. If you later decide to attend the Special Meeting, you   
may vote in person even if you have previously returned your proxy card.        

Thank you for your support.                                           

              Sincerely,

                        /s/ John D. Phillips
                        --------------------
                    John D. Phillips
                                         President and Chief Executive Officer

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THE ACTAVA GROUP INC. 
4900 GEORGIA PACIFIC CENTER 
ATLANTA, GEORGIA 30303

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD ON OCTOBER 24, 1994

TO THE STOCKHOLDERS OF                                                          
THE ACTAVA GROUP INC.                                                           

NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the    
"Meeting") of The Actava Group Inc., a Delaware corporation ("Actava"), will be 
held on Monday, October 24, 1994, at 10:00 a.m., local time, at                 
 , Atlanta, Georgia               for the purpose of considering and
acting upon the following:                                                      

1. A proposal to approve and adopt the Agreement and Plan of
  Reorganization dated as of July 20, 1994 (the "Agreement"), by and among
  Actava, Diversified Products Corporation ("Diversified Products"), Hutch
Sports USA Inc. ("Hutch"), Nelson/Weather-Rite, Inc.                  
("Nelson/Weather-Rite"), Willow Hosiery Company, Inc. ("Willow"), and 
Roadmaster Industries, Inc. ("Roadmaster") and the consummation of the
transactions contemplated thereby. The Agreement, among other things, 
provides that Actava will transfer to Roadmaster all of the issued and
outstanding shares of capital stock of Diversified Products, Hutch,   
    Nelson/Weather-Rite and Willow, in exchange for an aggregate of 19,169,000
shares of Common Stock, par value $0.01 per share, of Roadmaster.     

         2. The transaction of such other business as may properly come before
     the Meeting or any adjournment thereof. The Board of Directors is not aware
of any other business that will be presented for consideration at the 
Meeting.                                                              

  The Board of Directors unanimously recommends that the stockholders vote
FOR the proposal to adopt and approve the Agreement and the transactions        
contemplated thereby.                                                           

     Only stockholders of record at the close of business on September 20, 1994,
will be entitled to notice of and to vote at the Meeting or any adjournment     
thereof. The Meeting may be adjourned from time to time without notice other    
than by announcement at the Meeting. A list of stockholders entitled to vote at 
the Meeting will be available for inspection by any stockholder, for any reason 
germane to the Meeting, during ordinary business hours, during the ten days     
prior to the Meeting, at 4900 Georgia Pacific Center, Atlanta, Georgia 30303.   

                                      By Order of the Board of Directors

                       /s/ Walter M. Grant
                       -------------------
                   Walter M. Grant
             Secretary

Atlanta, Georgia                                                                
September 23, 1994                                                              

    IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING, REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD, IN ORDER THAT A QUORUM MAY BE ASSURED. WHETHER
OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON, PLEASE COMPLETE, SIGN,  
DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED BY THE SENDER IF MAILED WITHIN THE UNITED STATES. IF YOU
RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT     
NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT
ALL OF YOUR SHARES WILL BE VOTED. THE PROXY SHOULD BE SIGNED BY ALL REGISTERED  
HOLDERS EXACTLY AS THE STOCK IS REGISTERED.                                     

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TABLE OF CONTENTS 

                                                        [Enlarge/Download Table]

                                                                                       PAGE
                                                                                       ----
                                                                                           
Introduction.........................................................................     1
Summary Information..................................................................     1
  The Special Meeting................................................................     1
  The Exchange Transaction...........................................................     1
  Vote Required......................................................................     1
  Effective Time of the Exchange Transaction.........................................     2
  Purpose and Reason for the Exchange Transaction....................................     2
  Certain Federal Income Tax Consequences............................................     2
  Regulatory Filings and Approvals...................................................     2
  Conduct of Business After the Exchange Transaction.................................     2
  Interests of Certain Persons in the Exchange Transaction...........................     3
  Consents from Holders of Senior Notes of Roadmaster................................     3
  Required Amendments to Certificate of Incorporation and By-laws of Roadmaster......     3
  Dissenters' Rights.................................................................     3
  Board of Directors' Recommendation.................................................     3
Information Regarding The Special Meeting............................................     4
  General............................................................................     4
  Vote By Proxy......................................................................     4
  Cost of Proxy Solicitation.........................................................     4
  Outstanding Shares and Voting Rights...............................................     4
The Exchange Transaction.............................................................     5
  Introduction.......................................................................     5
  The Exchange Transaction...........................................................     5
  Background of the Exchange Transaction.............................................     5
  Reasons for the Exchange Transaction; Board Recommendation.........................     5
  Management and Operations of Actava After the Exchange Transaction.................     7
  Management and Operations of Roadmaster After the Exchange Transaction.............     7
  Terms and Conditions of Agreement..................................................     8
  Regulatory Filings and Approvals...................................................    10
  Consents from Holders of Senior Notes of Roadmaster................................    10
  Accounting Treatment...............................................................    11
  Certain Federal Income Tax Consequences............................................    11
  Public Trading Market..............................................................    12
  Interests of Certain Persons in the Exchange Transaction...........................    12
  Registration Rights Agreement......................................................    13
  Shareholders Agreement.............................................................    13
  Dissenters' Rights.................................................................    14
  Conduct of Business of Actava After the Exchange Transaction.......................    15
  Conduct of Business of Roadmaster After the Exchange Transaction...................    15
Historical and Pro Forma Selected Financial Data of The Actava Group Inc.                  
  (Unaudited)........................................................................    16
Historical and Pro Forma Financial Information (Unaudited) of The Actava Group             
  Inc................................................................................    17
  General............................................................................    18
  Pro Forma Condensed Consolidated Statements of Operations..........................    18
  Pro Forma Condensed Consolidated Balance Sheet.....................................    21
Historical and Pro Forma Selected Consolidated Financial Data of Roadmaster                
  Industries, Inc....................................................................    23
Pro Forma Combined Financial Statements of Roadmaster Industries, Inc. and The Sports      
  Subsidiaries.......................................................................    25

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                                                        [Enlarge/Download Table]

                                                                                      PAGE
                                                                                      ----
                                                                                          
Roadmaster Management's Discussion and Analysis of the Roadmaster Pro Forma Combined      
  Financial Statements...............................................................   31
Business Information Regarding Roadmaster............................................   33
Business Information Regarding Actava and The Sports Subsidiaries....................   35
  General............................................................................   35
  Lawn and Garden Equipment..........................................................   35
  The Sports Subsidiaries............................................................   36
  Recent Developments................................................................   37
     Sale of Qualex..................................................................   38
     Sale of Real Estate Investment..................................................   38
     Change in Fiscal Year...........................................................   38
     Certain Transactions............................................................   39
Stock Ownership of Actava............................................................   39
  Ownership of Actava Common Stock by Directors and Officers.........................   39
  Ownership of Common Stock by Certain Holders.......................................   40
Independent Auditors.................................................................   41
Other Matters........................................................................   41
Available Information................................................................   41
Incorporation of Certain Documents by Reference......................................   41
Financial Statements of The Sports Subsidiaries......................................  F-1
Financial Statements of Flexible Flyer............................................... F-27
ANNEX A: Agreement and Plan of Reorganization........................................  A-1

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THE ACTAVA GROUP INC. 
4900 GEORGIA-PACIFIC CENTER 
ATLANTA, GEORGIA 30303

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

PROXY STATEMENT, DATED SEPTEMBER 23, 1994 
FOR SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD ON OCTOBER 24, 1994

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

INTRODUCTION

     This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of The Actava Group Inc. ("Actava" or the  
"Company") for use at a Special Meeting of Stockholders (the "Meeting") to be   
held on Monday, October 24, 1994, at 10:00 a.m., local time, and any adjournment
or adjournments thereof, for the purposes set forth in the accompanying Notice  
of Meeting and described in detail herein. This Proxy Statement, together with a
form of proxy, is first being mailed to stockholders of record on or about      
September 23, 1994.                                                             

SUMMARY INFORMATION 

   The following is a summary of certain information contained in this Proxy
Statement. This summary is not intended to be a complete statement of all       
material features of the transactions described herein and is qualified in its  
entirety by reference to the more detailed information appearing elsewhere in   
this Proxy Statement and the Annex attached hereto and the documents            
incorporated by reference herein. STOCKHOLDERS ARE URGED TO READ THIS PROXY     
STATEMENT AND THE ANNEX HERETO IN THEIR ENTIRETY.                               

THE SPECIAL MEETING                                                             

  At the Meeting, the stockholders of Actava will be asked to consider and
vote upon a proposal to approve and adopt the Agreement and Plan of             
Reorganization dated as of July 20, 1994 (the "Agreement") by and among Actava, 
Diversified Products Corporation ("Diversified Products"), Hutch Sports USA Inc.
("Hutch"), Nelson/Weather-Rite, Inc. ("Nelson/Weather-Rite"), Willow Hosiery    
Company, Inc. ("Willow") and Roadmaster Industries, Inc. ("Roadmaster") and     
consummation of the transactions contemplated thereby. A copy of the Agreement  
is attached to this Proxy Statement as Annex A and is incorporated herein by    
reference. Diversified Products, Hutch, Nelson/Weather-Rite and Willow are      
wholly-owned subsidiaries of Actava and are hereinafter referred to individually
as a "Sports Subsidiary" and collectively as the "Sports Subsidiaries." See "THE
EXCHANGE TRANSACTION."                                                          

THE EXCHANGE TRANSACTION                                                        

   The Agreement provides that, subject to the approval of the Agreement and
the transactions contemplated thereby by the stockholders of Actava and         
Roadmaster and the satisfaction of certain other conditions, Actava will        
transfer to Roadmaster all of the issued and outstanding capital stock of the   
Sports Subsidiaries in exchange for an aggregate consideration of 19,169,000    
shares (the "Exchange Shares") of Common Stock, $.01 par value per share, of    
Roadmaster ("Roadmaster Common Stock"). The transfer by Actava of the capital   
stock of the Sports Subsidiaries in exchange for the Exchange Shares hereinafter
is referred to as the "Exchange Transaction." See "THE EXCHANGE TRANSACTION."   

VOTE REQUIRED                                                                   

The affirmative vote of the holders of a majority of the shares of the
Common Stock, $1.00 par value per share, of Actava ("Actava Common Stock")      
outstanding on September 20, 1994 is required for approval and adoption of the  
Agreement and consummation of the transactions contemplated thereby. As a       
result,                                                                         

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abstentions and broker non-votes will have the effect of a negative vote at the 
Meeting. See "INFORMATION REGARDING THE SPECIAL MEETING -- Outstanding Shares   
and Voting Rights."                                                             

EFFECTIVE TIME OF THE EXCHANGE TRANSACTION                                      

The Exchange Transaction will become effective upon the closing of the
transactions as contemplated by the Agreement. The date of closing (the "Closing
Date") is expected to occur as soon as practicable following approval of the    
Agreement and the transactions contemplated thereby by the stockholders of      
Actava and Roadmaster.                                                          

PURPOSE AND REASONS FOR THE EXCHANGE TRANSACTION                                

  The purpose of the Exchange Transaction is to improve Actava's operating
results and financial condition and to enable Actava to pursue other business   
opportunities. The Board of Directors of Actava believes that the Exchange      
Transaction will create more value for the Company's stockholders than the      
Company could create by continuing to operate the Sports Subsidiaries. The      
combination of Roadmaster and the Sports Subsidiaries will create one of the    
largest manufacturers and suppliers of recreation and sporting goods products in
the United States with approximately $750 million in annual revenues. By virtue 
of its ownership of 19,169,000 shares of Roadmaster Common Stock, the Company   
will benefit from increases in the value of Roadmaster Common Stock. The Board  
of Directors believes that such increases will occur as a result of the cost    
savings and other benefits expected to be realized by Roadmaster as a result of 
the Exchange Transaction. See "THE EXCHANGE TRANSACTION -- Reasons for the      
Exchange Transaction" and "-- Conduct of Business of Actava After the Exchange  
Transaction."                                                                   

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

The Exchange Transaction is intended to be a tax-free reorganization  
pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as       
amended (the "Code"). See "THE EXCHANGE TRANSACTION -- Certain Federal Income   
Tax Consequences."                                                              

REGULATORY FILINGS AND APPROVALS                                                

    Consummation of the Exchange Transaction is contingent upon the expiration
of all waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 
1976, as amended (the "Hart-Scott-Rodino Act"). See "THE EXCHANGE               
TRANSACTION -- Regulatory Filings and Approvals."                               

CONDUCT OF BUSINESS AFTER THE EXCHANGE TRANSACTION                              

    Actava's management is attempting to redirect the Company's focus in order
to enhance stockholder value. In connection with these efforts, on August 12,   
1994, the Company sold its 50% ownership interest in Qualex Inc. ("Qualex") to  
Eastman Kodak Company ("Kodak") and, as a result, is no longer engaged in the   
photofinishing business. In exchange for the Company's 50% ownership interest in
Qualex, as well as a covenant not to compete and related releases from the      
Company, Kodak paid the Company $50 million in cash and agreed to pay the       
Company an additional $100 million without interest in two equal installments on
February 13, 1995 and August 11, 1995. If the proposed Exchange Transaction is  
approved, the Company will no longer own and operate the Sports Subsidiaries but
instead will own approximately 39.6% of the issued and outstanding shares of    
Roadmaster Common Stock (based on the number of shares of Roadmaster Common     
Stock outstanding as of the date of this Proxy Statement). The sales of the     
Company's photofinishing and sporting goods businesses are expected to improve  
the Company's operating results and financial condition and will enable the     
Company to pursue new business opportunities. The Company is presently exploring
new business opportunities and may need to obtain the approval of its           
stockholders for transactions proposed in the future. The proposed Exchange     
Transaction is not contingent upon any such additional transaction that may     
subsequently be proposed. See "THE EXCHANGE TRANSACTION -- Conduct of Business  
after the Exchange Transaction" and "Recent Developments."                      

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INTERESTS OF CERTAIN PERSONS IN THE EXCHANGE TRANSACTION                        

   Two executive officers and directors of Roadmaster, Henry Fong, its Chief
Executive Officer, and Edward E. Shake, its Chief Operating Officer, will, as of
the Closing Date, become parties to employment agreements with Roadmaster for a 
five-year term. In addition, Roadmaster will pay to Mr. Fong and Mr. Shake a    
completion fee of $595,000 and $63,000, respectively, upon the consummation of  
the Exchange Transaction. On the Closing Date, Actava will acquire certain      
rights pursuant to the terms of a Shareholders Agreement entitling it to        
nominate four persons to a nine-person Roadmaster Board of Directors and        
requiring Actava to vote in favor of Roadmaster's nominees to the Roadmaster    
Board of Directors. Roadmaster, Mr. Fong and Mr. Shake also will be parties to  
the Shareholders Agreement and will be similarly obligated to vote for Actava's 
nominees to the Roadmaster Board of Directors. Actava also will acquire certain 
rights pursuant to a Registration Rights Agreement to require Roadmaster to     
register, at either its or Actava's expense, the Exchange Shares and other      
shares of Roadmaster Common Stock that Actava may acquire. See "THE EXCHANGE    
TRANSACTION -- Interests of Certain Persons in the Exchange Transaction,"       
"-- Shareholders Agreements," and "-- Registration Rights Agreement."           

CONSENTS FROM HOLDERS OF SENIOR NOTES OF ROADMASTER                             

In order to consummate the Exchange Transaction, Roadmaster will be   
required to obtain the waiver or amendment of certain covenants and provisions  
of the indenture of trust (the "Indenture") governing its outstanding 11 3/4%   
Senior Subordinated Notes (the "Senior Notes"), principally the covenant        
governing the circumstances under which Roadmaster may incur additional         
indebtedness. See "THE EXCHANGE TRANSACTION -- Consents from Holders of Senior  
Notes of Roadmaster."                                                           

REQUIRED AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BY-LAWS OF ROADMASTER   

     As a condition to consummation of the Exchange Transaction, Roadmaster will
be required to amend and restate its Certificate of Incorporation and By-laws.  
Such amendments will, among other things, fix the number of directors of        
Roadmaster at nine, require that all stockholder action be taken at an annual or
special meeting, provide for advance notice of nominations, require certain     
super-majority votes under certain circumstances for the Board of Directors of  
Roadmaster to remove its Chief Executive Officer or Chief Operating Officer, and
require supermajority voting by the stockholders to amend certain provisions of 
the Certificate of Incorporation or By-laws. Among other things, the effect of  
these amendments will be to require a two-thirds vote of the members of the     
Board of Directors of Roadmaster to terminate Roadmaster's existing Chief       
Executive Officer and Chief Operating Officer, except that the Board of         
Directors will have the right to terminate such officers by a majority vote if  
Roadmaster has not reported positive net income from continuing operations for  
the preceding fiscal year.                                                      

DISSENTERS' RIGHTS                                                              

   Actava's stockholders are not entitled to dissenters' rights of appraisal
or other dissenters' rights under Delaware law with respect to the Exchange     
Transaction.                                                                    

BOARD OF DIRECTORS' RECOMMENDATION                                              

     At the meeting held to consider the Agreement and the proposed consummation
of the transactions contemplated thereby, the members of the Board of Directors 
of Actava carefully considered and unanimously approved the terms of the        
Agreement as being in the best interests of Actava and its stockholders. See    
"THE EXCHANGE TRANSACTION -- Reasons for the Exchange Transaction; Board        
Recommendation."                                                                

  THE BOARD OF DIRECTORS OF ACTAVA RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL TO APPROVE THE AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS  
CONTEMPLATED THEREBY.                                                           

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INFORMATION REGARDING THE SPECIAL MEETING 

GENERAL                                                                         

This Proxy Statement is being furnished to holders of Common Stock of 
Actava in connection with the solicitation of proxies by the Board of Directors 
of the Company for use at the Meeting. Each copy of this Proxy Statement being  
mailed or delivered to Actava's stockholders is accompanied by a proxy card and 
the Notice of Special Meeting of Stockholders.                                  

VOTE BY PROXY                                                                   

     All properly executed proxies in the form enclosed received in time for the
Meeting will be voted according to their voting rights in accordance with the   
instructions contained thereon. If no choice is specified, proxies will be voted
FOR the approval and adoption of the Agreement and consummation of the          
transactions contemplated thereby. The Board of Directors knows of no business  
that will be presented for consideration at the Meeting other than the matters  
described in this Proxy Statement.                                              

     Any person giving a proxy pursuant to this Proxy Statement may revoke it at
any time before it is voted at the Meeting or any adjournments thereof by filing
with the Secretary of the Company, at the address of the Company stated above, a
written notice of such revocation or by duly executing a proxy bearing a later  
date. In addition, if a person executing a proxy is present at the Meeting, he  
may, but need not, revoke his proxy, by notice of such revocation to the        
Secretary of the Meeting, and vote his shares in person. Proxies, if in the form
enclosed, duly signed and received in time for voting, and not revoked before   
they are voted, will be voted at the Meeting in accordance with the instructions
specified thereon.                                                              

COST OF PROXY SOLICITATION                                                      

     The cost of soliciting proxies will be borne by the Company. Proxies may be
solicited by the Company's directors, officers and regular employees, without   
remuneration, in person or by telephone, facsimile transmission, telegram or    
mail. It is anticipated that banks, brokerage houses and other custodians,      
nominees and fiduciaries will forward soliciting material to beneficial owners  
of stock entitled to vote at the Meeting, and such persons will be reimbursed   
for out-of-pocket expenses incurred by them in connection therewith in          
accordance with the regulations of the Securities and Exchange Commission (the  
"Commission") and the New York Stock Exchange for sending proxies and proxy     
materials to the beneficial owners of common stock.                             

  Proxies furnished to employees who participate in the Company's employee
stock purchase plan, if returned by such employees, will represent voting       
instructions to the plan trustee with respect to the shares credited to the plan
accounts of such employees.                                                     

OUTSTANDING SHARES AND VOTING RIGHTS                                            

     The Actava Common Stock presently is the Company's only class of securities
with general voting rights. Each share of Actava Common Stock is entitled to one
vote on each matter properly coming before the Meeting and cumulation of votes  
is not permitted. Only stockholders of record as of the close of business on    
September 20, 1994 (the "Record Date") will be entitled to vote at the Meeting. 
As of the Record Date, the Company had a total of        shares of Actava Common
Stock issued and outstanding. Holders of        of the outstanding shares, if   
present in person or represented by proxy, will constitute a quorum at the      
Meeting. Abstentions and "broker non-votes" are counted for purposes of         
determining the presence or absence of a quorum for the transaction of business.
The Agreement and the consummation of the transactions contemplated thereby must
be approved by a majority of the issued and outstanding Common Stock.           
Accordingly, abstentions and broker non-votes will have the effect of a "no"    
vote in all cases.                                                              

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THE EXCHANGE TRANSACTION

INTRODUCTION                                                                    

  Actava, each of the Sports Subsidiaries and Roadmaster have entered into
the Agreement which provides that, subject to certain conditions, Actava will   
transfer to Roadmaster all of the issued and outstanding shares of capital stock
of the Sports Subsidiaries in exchange for an aggregate of 19,169,000 shares of 
Roadmaster Common Stock.                                                        

  At the Meeting, the stockholders of Actava will be asked to consider and
vote upon a proposal to approve and adopt the Agreement and consummation of the 
transactions contemplated thereby. All descriptions and summaries of, or        
references to, the terms and conditions of the Agreement in this Proxy Statement
are qualified in their entirety by reference to the Agreement which is included 
as Annex A hereto and incorporated herein by reference. Following the Exchange  
Transaction, Actava will own approximately 39.6% of the issued and outstanding  
shares of Roadmaster Common Stock (based on the number of shares of Roadmaster  
Common Stock outstanding as of the date of this Proxy Statement).               

THE EXCHANGE TRANSACTION                                                        

   The Agreement provides that, subject to the approval of the Agreement and
the transactions contemplated thereby by the stockholders of Actava and         
Roadmaster and the satisfaction of certain other conditions, Actava will        
transfer to Roadmaster all of the issued and outstanding capital stock of the   
Sports Subsidiaries in exchange for 19,169,000 shares of Roadmaster Common      
Stock. See "-- Terms and Conditions of the Agreement."                          

BACKGROUND OF THE EXCHANGE TRANSACTION                                          

  On April 19, 1994, the Board of Directors of the Company elected John D.
Phillips as President, Chief Executive Officer and a director of the Company.   
The Board of Directors gave Mr. Phillips a mandate to improve the Company's     
operating results and to enhance stockholder value. Soon after the election of  
Mr. Phillips, Actava and Roadmaster began discussions with respect to the       
possible acquisition of the Sports Subsidiaries by Roadmaster. On May 31, 1994, 
the senior management of Actava and Roadmaster reached agreement on the basic   
terms of the Exchange Transaction and the parties signed a non-binding letter of
intent which provided for the acquisition by Roadmaster of all of the issued and
outstanding capital stock of the Sports Subsidiaries in exchange for 19,169,000 
shares of Roadmaster Common Stock. After Roadmaster and Actava executed the     
letter of intent, the Boards of Directors of the two companies directed their   
respective managements to undertake due diligence investigations and to begin   
negotiating the terms of a definitive agreement. From May 31, 1994 through July 
20, 1994, Actava, the Sports Subsidiaries and Roadmaster proceeded with their   
respective due diligence reviews and negotiated the terms of the Agreement and  
the various ancillary agreements. Actava's Board of Directors met on June 10,   
1994 and received a preliminary report on the proposed Exchange Transaction. On 
July 19, 1994, Actava's Board of Directors met and reviewed the Agreement, which
was substantially complete, and approved the Agreement and the consummation of  
the transactions contemplated thereby. The Board of Directors authorized the    
officers of Actava to resolve certain outstanding issues and to execute the     
Agreement. The Agreement was executed by all parties on July 20, 1994.          

REASONS FOR THE EXCHANGE TRANSACTION; BOARD RECOMMENDATION                      

    Actava.  The proposed transfer of the Sports Subsidiaries to Roadmaster is
one component of a major effort being undertaken by the Company's management    
during 1994 to improve the Company's operations and financial condition and to  
enhance stockholder value. The Board of Directors of Actava believes that the   
Exchange Transaction will create more value for the Company's stockholders than 
the Company could create through its continued operation of the Sports          
Subsidiaries. The combination of Roadmaster and the Sports Subsidiaries will    
create one of the largest manufacturers and suppliers of recreation and sporting
goods products in the United States with approximately $750 million in annual   
revenues.                                                                       

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   The Company has taken several steps, in addition to the proposed Exchange
Transaction, to enhance the Company's profitability, liquidity and stockholder  
value. On August 12, 1994, the Company sold its 50% ownership interest in Qualex
to Kodak and, as a result, is no longer engaged in the photofinishing business. 
In exchange for the Company's interest in Qualex and a covenant not to compete  
and related releases from the Company, Kodak paid the Company $50 million in    
cash and agreed to pay the Company an additional $100 million without interest  
in two equal installments on February 13, 1995 and August 11, 1995. The Company 
recorded a loss of $37,858,000 on the sale of its interest in Qualex and        
classified Qualex's results of operations to discontinued operations along with 
the loss upon disposition. The results of operations of Qualex were previously  
consolidated with the results of operations of the Company. The Company         
discontinued the practice of consolidating the results of operations of Qualex  
with those of the Company effective as of June 30, 1994 and began accounting for
its investment in Qualex under the equity method at that date. As a result, the 
Company's balance sheet, effective as of June 30, 1994, no longer included      
approximately $770 million of Qualex's assets, including approximately $367     
million of intangible assets, and approximately $398 million of Qualex's        
liabilities, including approximately $211 million of long-term debt and         
approximately $57 million of working capital debt. In addition to the sale of   
its interest in Qualex, the Company has entered into a contract to sell a real  
estate investment near Houston, Texas for $9 million in cash.                   

The Company is evaluating a number of other strategies to improve its 
operations and financial condition, including potential acquisitions or business
combinations involving entities in a wide range of industries. The Company does 
not currently have any agreements or understandings with respect to any specific
transaction other than the sale of the Sports Subsidiaries and the sale of the  
Texas real estate investment. There can be no assurance that any additional     
transactions will occur or that the Company's goals will be achieved.           

In reaching its decision to approve the Agreement and the transactions
contemplated thereby, the Board of Directors consulted with the Company's       
management and advisors and independently considered the material factors       
described below. Based upon this review and a review of the business, operations
and financial condition of Roadmaster, the Board of Directors approved the      
Agreement and the transactions contemplated thereby.                            

   - The Board of Directors believes that the Exchange Transaction is in the
    best interest of the Company and the Company's stockholders. As a result
    of the Exchange Transaction, the Company will own approximately 39.6% of
    the outstanding stock of a combined enterprise with substantially larger
annual revenues and greater financial resources than the Sports     
      Subsidiaries on an individual or combined basis. Furthermore, the combined
    enterprise will have an expanded market share and significantly expanded
managerial resources than the Sports Subsidiaries now possess. It is
   anticipated that cost reductions can be realized by taking advantage of
   economies of scale, increasing utilization of production facilities and
     improving the efficiency of operations through the combined expertise and
   experience of the management of Roadmaster and the Sports Subsidiaries.
    The Company will benefit from these cost savings through its significant
ownership interest in Roadmaster.                                   

- The transfer of the Sports Subsidiaries to Roadmaster will create a 
    larger and stronger competitor in the sporting goods industry. The Board
of Directors of the Company believes that Roadmaster, following the 
     Exchange Transaction, will be in a better position to pursue successfully
a strategy of internal growth coupled with the acquisition of       
      complimentary product lines and well established trade names. With respect
     to internal growth, it is expected that the expanded customer base of the
  combined organization will permit it to sell its products to a broader
range of customers and to offer wider product offerings to existing 
customers of the Sports Subsidiaries and Roadmaster.                

     - The Board of Directors believes that the Exchange Transaction will create
      more value for the Company's stockholders than the Company could create by
     continuing to operate the Sports Subsidiaries. By virtue of its ownership
     of 19,169,000 shares of Roadmaster Common Stock, the Company will benefit
from increases in the value of Roadmaster Common Stock. The Board of
     Directors believes that such increases will occur as a result of the cost
      savings and other benefits to be realized by Roadmaster as a result of the
Exchange Transaction.                                               

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Notwithstanding the expectations of Actava's Board of Directors and   
management regarding the benefits to be realized from the Exchange Transaction, 
including the Company's acquisition of a significant ownership interest in the  
combined enterprise, no assurance can be given that (i) the combined enterprise 
created by the Exchange Transaction will be able to realize the estimated cost  
savings or to compete more effectively against certain other competitors in the 
sporting goods industry, (ii) the value of the Roadmaster Common Stock to be    
owned by the Company will increase, or (iii) the Exchange Transaction will      
result in any improvement in the Company's profitability or any increase in the 
Company's stockholder value. In analyzing the Exchange Transaction and in its   
deliberations regarding approval of the Agreement and the transactions          
contemplated thereby, the Board of Directors focused its inquiry and examination
on the potential advantages to the Company's stockholders, including enhanced   
profitability and stockholder value. In this process, the Board of Directors    
reviewed historical information provided by management of Roadmaster and the    
Sports Subsidiaries concerning the financial performance, condition, business   
operations and prospects of Roadmaster and the Sports Subsidiaries, the proposed
structure of the transaction, the terms of the Agreement and the other documents
to be executed in connection with the Exchange Transaction. The Board of        
Directors determined that the Exchange Transaction represents a good opportunity
for the Company to acquire a significant ownership interest in one of the       
largest domestic suppliers of recreation and leisure products to mass           
merchandisers and to continue the process of redirecting the Company's focus to 
improve its operations and financial condition and to enhance profitability and 
stockholder value.                                                              

FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF DIRECTORS OF ACTAVA     
UNANIMOUSLY APPROVED THE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND
RECOMMENDS THAT THE STOCKHOLDERS OF ACTAVA VOTE "FOR" THE APPROVAL OF THE       
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY.                            

Roadmaster.  In reaching its decision to approve the Agreement and the
transactions contemplated thereby, the Board of Directors of Roadmaster         
consulted with its management team and advisors and independently considered a  
number of factors, including those described above. The Board of Directors of   
Roadmaster approved the Exchange Transaction based upon its independent review  
of such factors and its review of the business, operations and financial        
condition of the Sports Subsidiaries. The Board of Directors of Roadmaster also 
considered a report and analysis of the Sports Subsidiaries prepared by Jeffries
& Co., Inc. Jeffries & Co., Inc. provided the Board of Directors of Roadmaster  
with its opinion that the Exchange Transaction is fair to Roadmaster's          
stockholders from a financial point of view.                                    

MANAGEMENT AND OPERATIONS OF ACTAVA AFTER THE EXCHANGE TRANSACTION              

     Following consummation of the Exchange Transaction, Actava will continue to
be operated by its current management team and Board of Directors.              

MANAGEMENT AND OPERATIONS OF ROADMASTER AFTER THE EXCHANGE TRANSACTION          

Following consummation of the Exchange Transaction, Roadmaster will   
continue to be operated by its existing management team as well as by management
personnel from the Sports Subsidiaries. Henry Fong, the current Chief Executive 
Officer of Roadmaster, will continue as Chief Executive Officer of Roadmaster,  
and Edward E. Shake, the current Chief Operating Officer of Roadmaster, will    
continue as its Chief Operating Officer. The Agreement provides that, as of the 
Closing Date, the number of members of the Board of Directors of Roadmaster will
be fixed at nine persons, including the five existing directors of Roadmaster   
and four additional directors to be designated by Actava prior to the Closing   
Date. It is currently anticipated that John D. Phillips, who is President and   
Chief Executive Officer of Actava, will be one of the persons designated by     
Actava to serve as a director of Roadmaster. Actava has not identified the      
remaining three persons that it will designate to serve as directors of         
Roadmaster.                                                                     

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TERMS AND CONDITIONS OF THE AGREEMENT                                           

   Set forth below is a description of the principal terms and conditions of
the Agreement. The description is qualified in its entirety by reference to the 
Agreement, a copy of which is attached hereto as Annex A and incorporated herein
by reference.                                                                   

Conditions to the Exchange Transaction                                      

    MUTUAL CONDITIONS.  The respective obligations of Actava and Roadmaster to
consummate the Exchange Transaction are subject to the satisfaction or waiver of
certain mutual conditions including the following:                              

     1. All waiting periods under the Hart-Scott-Rodino Act shall have
expired or been terminated;                                           

    2. No injunction, order, decree or stay shall be in effect which
prevents the consummation of the Exchange Transaction;                

         3. The Agreement and the transactions contemplated thereby shall have
been approved by the requisite vote of the stockholders of Actava and 
Roadmaster;                                                           

4. Certain amendments to the Certificate of Incorporation of
     Roadmaster shall have been approved by the requisite vote of the Roadmaster
 stockholders, including amendments to increase the number of authorized
shares of Roadmaster Common Stock, to fix the number of directors of  
   Roadmaster at nine, to require that all stockholder action be taken at an
     annual or special meeting, to provide for advance notice of nominations, to
  require certain super-majority votes under certain circumstances for the
   Board of Directors of Roadmaster to remove its Chief Executive Officer or
Chief Operating Officer, and to require super-majority voting by the  
stockholders to amend certain provisions of the Certificate of        
Incorporation or By-laws;                                             

       5. All material consents or approvals of any person to the Exchange
Transaction shall have been obtained;                                 

          6. All consents or approvals of government agencies or bodies required
in connection with the Exchange Transaction shall have been obtained; 

         7. The Exchange Shares have been approved for listing on the New York
    Stock Exchange or the American Stock Exchange, as the case may be, subject
to notice of issuance; and                                            

 8. Actava and Roadmaster shall have executed and delivered an
  Environmental Indemnity Agreement relating to certain property presently
owned by Diversified Products.                                        

CONDITIONS TO OBLIGATIONS OF ACTAVA AND THE SPORTS SUBSIDIARIES.  The 
obligations of Actava and the Sports Subsidiaries to consummate the Exchange    
Transaction are subject to the satisfaction or waiver of certain other          
conditions, including the following:                                            

   1. The representations and warranties of Roadmaster made in the
Agreement shall be true and correct in all material respects as of the
    Closing Date, and all covenants and agreements required to be performed by
Roadmaster prior to the Closing Date shall have been performed in all 
material respects, and Roadmaster shall have delivered an officer's   
certificate stating the foregoing;                                    

          2. A legal opinion of counsel to Roadmaster, substantially in the form
called for by the Agreement, shall have been received by Actava;      

     3. No material adverse change in the business, assets, prospects,
conditions or results of operations of Roadmaster shall have occurred;

    4. Roadmaster shall have executed and delivered the Registration
Rights Agreement (see "-- Registration Rights Agreement" below);      

    5. Each of Roadmaster, Henry Fong and Edward E. Shake shall have
 executed and delivered the Shareholders Agreement (see "-- Shareholders
Agreement" below);                                                    

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6. Roadmaster shall have executed and delivered to Actava an
     unconditional guarantee of certain intercompany indebtedness of Diversified
     Products to another subsidiary of Actava in the amount of $10 million as of
September  , 1994 (the "Diversified Products Note");                  

         7. Four designees of Actava shall have been elected to the Roadmaster
Board of Directors;                                                   

     8. Each of Henry Fong and Edward E. Shake shall have entered into
employment agreements with Roadmaster;                                

         9. Actava shall have been released from any guarantee or assurance of
any obligation of the Sports Subsidiaries and their subsidiaries;     

     10. Actava shall have received certificates of insurance or other
 evidence reasonably satisfactory to Actava that Roadmaster has obtained
certain insurance coverage for the Sports Subsidiaries;               

CONDITIONS TO ROADMASTER'S OBLIGATIONS.  Roadmaster's obligation to   
consummate the Exchange Transaction is subject to the satisfaction and waiver of
certain other conditions, including the following:                              

  1. The representations and warranties of Actava and the Sports
Subsidiaries made in the Agreement shall be true and correct in all   
    material respects as of the Closing Date, and all covenants and agreements
     required to be performed by Actava and the Sports Subsidiaries prior to the
     Closing Date shall have been performed in all material respects, and Actava
   and the Sports Subsidiaries shall have delivered an officer's certificate
stating the foregoing;                                                

        2. A legal opinion of counsel to Actava and the Sports Subsidiaries,
substantially in the form called for by the Agreement, shall have been
received by Roadmaster;                                               

     3. No material adverse change in the business, assets, prospects,
   conditions or results of operations of the Sports Subsidiaries shall have
occurred;                                                             

          4. Actava shall have executed and delivered the Shareholders Agreement
(see "-- Shareholders Agreement" below);                              

     5. All liens, claims, encumbrances, security interests, equities,
charges and options on the Sports Subsidiaries' stock shall have been 
terminated or released; and                                           

         6. Roadmaster shall have received a certificate stating that no event
of default exists under the Diversified Products Note.                

   Amendment and Termination of the Agreement.  The Agreement, including all
of the provisions referred to herein, may be amended or modified in writing by  
the parties thereto or by action of Actava and Roadmaster at any time before the
Closing Date; provided, however, that if the amendment is one which requires    
stockholder approval, such amendment will not be effective without such         
approval. The Agreement may be terminated at any time prior to the Closing Date,
whether before or after approval by the stockholders of Actava or Roadmaster, by
the mutual consent of Actava and Roadmaster. In addition, Actava or Roadmaster  
may terminate the Agreement (i) if the other fails to perform in any material   
respect any covenant in the Agreement and does not cure such failure within 30  
business days after the terminating party delivers written notice of the alleged
failure, or (ii) if any condition to the obligations of the non-performing party
is not satisfied (other than by reason of a breach by that party of its         
obligations under the Agreement) and it reasonably appears that the condition   
cannot be satisfied prior to December 31, 1994. The Agreement also may be       
terminated by either Actava or Roadmaster if the Exchange Transaction has not   
been consummated on or before December 31, 1994.                                

Upon termination of the Agreement in accordance with its terms, the   
Agreement will become void and there will be no liability on the part of either 
Actava, the Sports Subsidiaries or Roadmaster, except for certain expense and   
confidentiality obligations and breakup fees, if any.                           

 In the event that either Actava or Roadmaster refuses to consummate the
Exchange Transaction, either in breach of the Agreement or as a result of the   
failure of such party to obtain the approval of its stockholders and such breach
or failure to obtain stockholder approval is the result of Actava's or          
Roadmaster's decision to                                                        

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pursue or recommend to its respective stockholders an alternative transaction   
with a third party, then the party that has refused or is unable to consummate  
the Exchange Transaction is obligated to pay to the other party a breakup fee of
$1.5 million as liquidated damages. Upon such payment there will be no further  
liability on the part of either Roadmaster or Actava and the Sports Subsidiaries
with respect to the Exchange Transaction, except for certain expenses and       
confidentiality obligations.                                                    

    Conduct of Business by Roadmaster and the Sports Subsidiaries Prior to the
Exchange Transaction. Except as otherwise provided in the Agreement, each of    
Roadmaster and the Sports Subsidiaries have agreed, pending consummation of the 
Exchange Transaction, to conduct their operations in the ordinary course of     
business, consistent with past practice, and not enter into or cause their      
subsidiaries to enter into certain material transactions unless agreed to by    
Actava, in the case of a Roadmaster transaction, or agreed to by Roadmaster, in 
the case of a Sports Subsidiary transaction. The Sports Subsidiaries will be    
permitted to declare and pay to Actava, prior to the Closing Date, a cash       
dividend in an aggregate amount of $300,000 less expenses of the Exchange       
Transaction paid by the Sports Subsidiaries.                                    

     Environmental Indemnity Agreement.  Diversified Products owns approximately
123 acres of land in Opelika, Alabama on which Diversified Products' main       
manufacturing facility and other peripheral facilities are located. On the      
southwestern corner of this land is a storage area used to stockpile cement,    
sand and mill scale materials (the "Materials Storage Area") which were being   
used in connection with or were by-products of the manufacture of exercise      
weights. In June 1994, Diversified Products discontinued the manufacture of     
exercise weights at its facility in Opelika, Alabama,. The exercise weights are 
now being produced for Diversified Products by Roadmaster at Roadmaster's Olney,
Illinois facility on a contract basis. Since Diversified Products' facility at  
Opelika is no longer used to manufacture and produce the weights, Actava and    
Roadmaster agreed that, prior to the Closing Date, 17 acres of land on which the
Materials Storage Area is located will be conveyed by Diversified Products to a 
newly-formed, wholly-owned subsidiary ("Newco") along with any permits,         
licenses, and other authorizations held by Diversified Products under federal,  
state and local laws governing pollution or protection of the environment       
associated with such land. On the Closing Date, Diversified Products will       
declare and pay to Actava an in-kind dividend of all the outstanding capital    
stock of Newco, and Roadmaster and Actava will enter into an Environmental      
Indemnity Agreement under which Actava will indemnify Roadmaster for costs and  
liabilities resulting from the presence on or migration of regulated materials  
from the Materials Storage Area.                                                

    Agreement Not To Solicit Other Offers.  Pursuant to the Agreement, Actava,
the Sports Subsidiaries and Roadmaster have agreed that they will not directly  
or indirectly, solicit, encourage or participate in any way in discussions or   
negotiations with, or provide any information or assistance to, any third party 
regarding the acquisition or purchase of any of the shares of capital stock of  
Roadmaster and its respective subsidiaries or the Sports Subsidiaries and their 
respective subsidiaries, or any substantial part of the business or assets of   
Roadmaster and its respective subsidiaries or the Sports Subsidiaries and their 
respective subsidiaries. See "-- Amendment and Termination of the Agreement"    
above.                                                                          

 Expenses.  The Agreement provides that each of the parties will pay its
expenses incurred in connection with the Exchange Transactions.                 

REGULATORY FILINGS AND APPROVALS                                                

Actava and Roadmaster have filed with the Federal Trade Commission the
appropriate applications for governmental and regulatory notices or approvals   
required as a condition to the consummation of the Exchange Transaction. The    
parties presently anticipate that all regulatory approvals required, if any,    
will be obtained.                                                               

CONSENTS FROM HOLDERS OF SENIOR NOTES OF ROADMASTER                             

 In connection with the Exchange Transaction, Roadmaster will indirectly
assume approximately $39.2 million of indebtedness of the Sports Subsidiaries   
under finance and security agreements with various financial institutions. In   
addition, Roadmaster will indirectly assume approximately $26.0 million of trade

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payables and other accrued expenses incurred in the ordinary course of business 
of the Sports Subsidiaries and approximately $10.0 million of indebtedness under
the Diversified Products Note.                                                  

The Indenture pursuant to which Roadmaster's Senior Notes were issued,
among other things, limits Roadmaster's ability to incur additional indebtedness
that exceeds an indebtedness ratio set forth in the Indenture. According to     
Roadmaster's calculations, and accounting for the Exchange Transaction on a pro 
forma basis, Roadmaster's indebtedness will exceed that allowed by the          
Indenture. Consequently, a waiver from compliance with the applicable covenant  
of the Indenture or an amendment to such Indenture provisions will be required  
in order to consummate the Exchange Transaction.                                

ACCOUNTING TREATMENT                                                            

     The accounting treatment of the Exchange Transaction for Actava will depend
upon the value of the Exchange Shares as of the Closing Date (the "Stock Value")
and Actava's book value in the Sports Subsidiaries as of the Closing Date as    
adjusted for certain indebtedness owed by Diversified Products to an Actava     
affiliate to be repaid following the Closing Date (the "Book Value"). If the    
Stock Value exceeds the Book Value as of the Closing Date, no gain will be      
realized by Actava for accounting purposes, and Actava will record the Exchange 
Shares on its books at an amount equal to the Book Value. On the other hand, if 
the Book Value exceeds the Stock Value as of the Closing Date, then Actava will 
record a loss upon consummation of the Exchange Transaction in an amount equal  
to the difference between the Book Value and the Stock Value. The Book Value of 
the Sports Subsidiaries was $70.7 million as of June 30, 1994 and               
$       million as of September           , 1994. The Stock Value would be      
approximately $70.7 million based on the $3.6875 closing price for Roadmaster   
Common Stock on June 30, 1994 and approximately $     million based on the      
$       closing price for Roadmaster Common Stock on September   , 1994.        

Actava has not accounted for the Sports Subsidiaries as discontinued  
operations due to the interest in Roadmaster to be retained by Actava following 
consummation of the Exchange Transaction. Actava will begin accounting for its  
investment in Roadmaster under the equity method upon consummation of the       
Exchange Transaction.                                                           

The Exchange Transaction will be accounted for by Roadmaster as a     
"purchase" as that term is used under generally accepted accounting principles  
for accounting and financial reporting purposes. A final determination of       
required purchase accounting adjustments and of the fair market value of the    
assets and liabilities of the Sports Subsidiaries has not been made. Following  
consummation of the Exchange Transaction, Roadmaster will undertake a study to  
determine the fair market value of the specific assets and liabilities of the   
Sports Subsidiaries and will make appropriate purchase accounting adjustments.  

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

The following is a summary of certain anticipated federal income tax  
consequences of the Exchange Transaction to Actava. This summary is based on the
Code, regulations and rulings as now in effect or proposed thereunder, current  
administrative rulings and practice, and judicial precedent, all of which are   
subject to change. Any such change, which may or may not be retroactive, could  
alter the tax consequences discussed herein.                                    

    If the Exchange Transaction occurs in accordance with the Agreement, it is
expected that the Exchange Transaction will constitute a "reorganization" for   
federal income tax purposes under Section 368(a)(1)(B) of the Code, with the    
following federal income tax consequences to the Company:                       

       1. No gain or loss will be recognized by the Company as a result of
  the receipt of the Exchange Shares in exchange for all of the issued and
outstanding capital stock of the Sports Subsidiaries.                 

        2. The tax basis of the Exchange Shares acquired by the Company will
     be the same as its aggregate adjusted tax basis in the capital stock of the
Sports Subsidiaries.                                                  

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        3. The holding period of the Exchange Shares received by the Company
  in the Exchange Transaction will include the holding period during which
the Company held the capital stock of the particular Sports Subsidiary
exchanged for such Exchange Shares.                                   

          4. No gain or loss will be recognized by the Company's stockholders as
a result of the receipt by the Company of the Exchange Shares in the  
Exchange Transaction.                                                 

PUBLIC TRADING MARKET                                                           

  The outstanding shares of Actava Common Stock are listed on The New York
Stock Exchange and the Pacific Stock Exchange (Symbol: ACT). On May 27, 1994,   
the last business day preceding the public announcement of the proposed Exchange
Transaction, the high and low sales prices of Actava's Common Stock on The New  
York Stock Exchange were $9.00 and $8.625, respectively. On August 19, 1994, the
high and low sales prices of Actava Common Stock on The New York Stock Exchange 
were $11.625 and $11.375, respectively. There currently is no trading market in 
the capital stock of the Sports Subsidiaries.                                   

   The outstanding shares of Roadmaster Common Stock are currently listed on
the American Stock Exchange (Symbol: RDM). Roadmaster is considering the filing 
of an application to list its Common Stock on The New York Stock Exchange to    
become effective on or before the Closing Date, but no application has been     
filed and there are no assurances that the Roadmaster Common Stock will be      
approved for listing on The New York Stock Exchange if an application is filed. 
In the event the Roadmaster Common Stock is not listed on the New York Stock    
Exchange, Actava and Roadmaster anticipate that the Exchange Shares will be     
listed on the American Stock Exchange and that the listing of the existing      
outstanding shares on the American Stock Exchange will be unaffected by         
consummation of the Exchange Transaction. On May 27, 1994, the last business day
preceding public announcement of the proposed Exchange Transaction, the high and
low sales prices of the Roadmaster Common Stock on the American Stock Exchange  
were $3.875 and $3.625, respectively. On August 19, 1994, the high and low sales
prices of the Roadmaster Common Stock were $3.9375 and $3.6875, respectively.   

INTERESTS OF CERTAIN PERSONS IN THE EXCHANGE TRANSACTION                        

    Certain members of Roadmaster's management and its Board of Directors have
interests in the Exchange Transaction that are in addition to the interests of  
Roadmaster's stockholders generally. Henry Fong, who currently serves as        
President, Chief Executive Officer and a director of Roadmaster, and Edward E.  
Shake, who currently serves as Chief Operating Officer and a director of        
Roadmaster, are each prospective parties to employment agreements with          
Roadmaster to be dated as of the Closing Date. Pursuant to the employment       
agreements, which will have five year terms, Mr. Fong and Mr. Shake will receive
annual salaries of $600,000 and $450,000, respectively.                         

     In addition, Roadmaster will pay to Mr. Fong and Mr. Shake a completion fee
of $595,000 and $63,000, respectively, for their services in connection with    
structuring and negotiating the Exchange Transaction. Prior to the Exchange     
Transaction, Mr. Fong received no salary or other compensation from Roadmaster  
other than directors' fees and fees paid in connection with and upon completion 
of Roadmaster's acquisitions of various entities. Upon completion of the        
Exchange Transaction, Mr. Fong will be paid an annual salary under his          
employment agreement. Roadmaster will pay additional completion fees aggregating
$42,000 to certain other officers of Roadmaster in connection with the          
structuring and negotiating of the Exchange Transaction.                        

In connection with the Exchange Transaction, Roadmaster will amend and
restate its Certificate of Incorporation and By-laws to provide, among other    
things, for certain super-majority voting requirements under certain            
circumstances for the Board of Directors of Roadmaster to remove the Chief      
Executive Officer and Chief Operating Officer. The effect of these amendments   
will be to require a two-thirds vote of the members of the Board of Directors of
Roadmaster to terminate Roadmaster's existing Chief Executive Officer and Chief 
Operating Officer, except that the Board of Directors will have the right to    
terminate such officers by a majority vote if Roadmaster has not reported       
positive net income from continuing operations for the fiscal year preceding the
Board's election to terminate such officers.                                    

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    Pursuant to the Agreement, Actava, Roadmaster, Mr. Fong and Mr. Shake will
enter into a Shareholders Agreement that provides, among other things, that     
Actava shall have the right to designate four individuals who will be elected to
Roadmaster's nine-member Board of Directors. It is anticipated that John D.     
Phillips, the President and Chief Executive Officer of Actava, will be one of   
the individuals designated by Actava to serve as a director of Roadmaster. The  
Company has not identified the remaining three persons that it will designate   
for election to Roadmaster's Board of Directors. The Shareholders Agreement also
provides that Actava will use its best efforts to cause the nomination for      
election of the five directors designated by Roadmaster and will vote its shares
of Roadmaster Common Stock in favor of such designees. See "-- Shareholders     
Agreement."                                                                     

REGISTRATION RIGHTS AGREEMENT                                                   

     As a condition to consummation of the Exchange Transaction, Roadmaster must
enter into a Registration Rights Agreement with Actava. Such Agreement will     
grant to Actava and its affiliates and any transferee who acquires at least     
1,000,000 of the Exchange Shares the right to require Roadmaster to register the
Exchange Shares and any other shares of Roadmaster Common Stock held by Actava  
(collectively, "Registrable Stock") under the Securities Act of 1933, as amended
(the "Securities Act"). Registration may be demanded at any time during a       
ten-year period beginning as of the Closing Date (the "Registration Period") by 
the holders of at least 50% of the Registrable Stock if a "long-form"           
registration statement (i.e., a registration statement on Form S-1, S-2 or other
similar form) is requested or by the holders of Registrable Stock with a value  
of at least $500,000 if a "short-form" registration statement (i.e., a          
registration statement on Form S-3 or other similar form) is requested.         
Roadmaster is required to pay all expenses incurred (other than the expenses of 
counsel, if any, for the holders of Registrable Stock and the expenses of       
underwriters' counsel) for any two registrations requested by the holders of    
Registrable Stock during the Registration Period. Roadmaster will become        
obligated to pay the expenses of two additional registrations if Roadmaster is  
not eligible to use a short-form registration statement to register the         
Registrable Stock at any time during the Registration Period. All other         
registrations will be at the expense of the holders of the Registrable Stock.   
While no assurances can be given with respect to its qualification in the       
future, Roadmaster currently is eligible to use a short-form registration       
statement to register the Registrable Stock.                                    

In addition to the demand registration rights described above, if     
Roadmaster at any time proposes to register under the Securities Act any of its 
securities for sale for its own account or for the account of any person,       
subject to certain exceptions, it is required to provide the holders of         
Registrable Stock with the opportunity to sell some or all of their Registrable 
Stock pursuant to such registration. Roadmaster, however, is not required to    
grant any concession or additional rights to any other person to secure the     
right of any holder of Registrable Stock to participate in such incidental      
registrations. In addition, Roadmaster will have the right at least once during 
each twelve-month period to defer filing any demand registration statement for a
period of up to 90 days after a request for registration by the holders of the  
requisite number of shares of Registrable Stock.                                

 Any future registration rights granted by Roadmaster may not impair the
priority of the registration rights granted to the holders of Registrable Stock 
but Roadmaster may grant registration rights that are substantially similar to  
or that rank on a parity with the registration rights granted under the         
Registration Rights Agreement.                                                  

SHAREHOLDERS AGREEMENT                                                          

 Pursuant to the Agreement, Actava, Roadmaster, Henry Fong and Edward E.
Shake will enter into a Shareholders Agreement as of the Closing Date. Such     
agreement will expire on the fifth anniversary of the Closing Date unless it is 
earlier terminated in accordance with its terms. Pursuant to the Shareholders   
Agreement, the parties thereto will agree to take all necessary action to cause 
Roadmaster's Board of Directors to be fixed at nine members during the life of  
such agreement. Concurrently with the execution and delivery of the Shareholders
Agreement, four individuals designated by Actava (the "Actava Designated        
Directors") will be elected to Roadmaster's Board of Directors. Two of the four 
Actava Designated Directors must be persons who are not employees, officers, or 
affiliates of Roadmaster or Actava. The parties to the Shareholders             

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Agreement are required to use their best efforts to cause the nomination for    
election of the four Actava Designated Directors and five directors designated  
by Roadmaster (the "Roadmaster Designated Directors"). Three of the Roadmaster  
Designated Directors also must be persons who are not employees, officers or    
affiliates of Roadmaster or Actava. The Shareholders Agreement obligates the    
parties to use their best efforts to cause at least one of the Actava Designated
Directors to serve on each committee of Roadmaster's Board of Directors and to  
cause at least two Actava Designated Directors to serve on any committee which  
consists of five or more members.                                               

    The number of Actava Designated Directors may be reduced in the event that
Actava sells or otherwise disposes of shares of Roadmaster Common Stock. If, as 
a result of Actava's sale, transfer or assignment of Roadmaster Common Stock,   
the number of shares of Roadmaster Common Stock owned by Actava is reduced to a 
number less than 12,000,000 but equal to or more than 8,000,000, then Actava    
will become entitled to designate only three members to Roadmaster's Board of   
Directors; if the number of shares of Roadmaster Common Stock owned by Actava is
reduced to less than 8,000,000 but equal to or more than 5,000,000, then Actava 
shall be entitled to designate only two members to Roadmaster's Board of        
Directors; and if the number of shares of Roadmaster Common Stock owned by      
Actava is reduced to less than 5,000,000 but equal to or more than 2,000,000,   
then Actava shall be entitled to designate only one member to Roadmaster's Board
of Directors.                                                                   

     Subject to the limitations described above, the parties to the Shareholders
Agreement have agreed that they will at all times and upon every opportunity    
affirmatively vote all of their shares of Roadmaster Common Stock to cause the  
Board of Directors to be composed of five Roadmaster Designated Directors and   
four Actava Designated Directors. In addition, Mr. Fong is obligated to use his 
best efforts to cause Equitex, Inc. to support the nomination and election of   
the Actava Designated Directors. Mr. Fong is the President and Chief Executive  
Officer and a director of Equitex, Inc., which currently owns 17.3% of the      
outstanding shares of Roadmaster Common Stock (10.5% after giving effect to the 
issuance of the Exchange Shares).                                               

Actava's obligation to support the nomination and election of the     
Roadmaster Designated Directors will terminate if (i) Roadmaster has not        
reported positive net income from continuing operations for its last fiscal     
year, (ii) the Actava Designated Directors have not been nominated and supported
by the other parties to the Shareholders Agreement, or (iii) the Actava         
Designated Directors have not been elected to, and are not then serving on, the 
Roadmaster Board of Directors. The obligation of Roadmaster, Mr. Fong and Mr.   
Shake to support the nomination and election of the Actava Designated Directors 
will terminate if the Roadmaster Designated Directors have not been supported by
Actava or if the Roadmaster Designated Directors have not been elected to, and  
are not then serving on, the Roadmaster Board of Directors.                     

 In addition to the voting provisions, the Shareholders Agreement grants
Roadmaster a right of first refusal with respect to any proposed sale of the    
Exchange Shares by Actava for as long as the Actava Designated Directors have   
been nominated and elected to the Roadmaster Board of Directors. Such right of  
first refusal will not apply to any proposed sale, transfer or assignment of    
Exchange Shares to any person who would, after consummation of such transaction,
own less than ten percent (10%) of the outstanding shares of Roadmaster Common  
Stock or to any sale of Exchange Shares pursuant to a registration statement    
filed under the Securities Act if Actava has used its reasonable best efforts   
not to make any sales pursuant to such registration statement to any single     
purchaser or "Acquiring Person" who would after the consummation of such        
transaction own ten percent or more of the outstanding shares of Roadmaster     
Common Stock. "Acquiring Person" generally is defined to mean any person or     
group which together with all affiliates is the owner or beneficial owner of    
five percent or more of the outstanding shares of Roadmaster Common Stock. The  
right of first refusal also would not apply to any proposed sale, transfer or   
assignment of Exchange Shares to an affiliate of Actava.                        

DISSENTER'S RIGHTS                                                              

   Actava's stockholders are not entitled to dissenters' rights of appraisal
or other dissenters' rights under Delaware law with respect to the proposed     
Exchange Transaction.                                                           

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CONDUCT OF BUSINESS OF ACTAVA AFTER THE EXCHANGE TRANSACTION                    

   Since April 1994, Actava's management has taken several steps to redirect
the Company's focus in order to improve the Company's operating results and     
financial condition and to enable it to pursue other business operations.       
Following the Exchange Transaction, the Company will no longer be directly      
involved in the sporting goods business but will own approximately 39.6% of the 
issued and outstanding shares of Roadmaster Common Stock. The Company will      
continue to be engaged in the lawn and garden industry through operation of its 
Snapper division, which manufactures Snapper brand power lawnmowers, lawn       
tractors, garden tillers and snow throwers and distributes blowers, string      
trimmers and edgers. Following the Exchange Transaction, Actava intends to      
pursue new business opportunities, including the possible acquisition of one or 
more businesses in the near future. The Company may need to obtain the approval 
of its stockholders for transactions to be proposed in the future. The proposed 
Exchange Transaction is not contingent upon any such additional transaction that
may subsequently be proposed.                                                   

CONDUCT OF BUSINESS OF ROADMASTER AFTER THE EXCHANGE TRANSACTION                

It is anticipated that Roadmaster, following the consummation of the  
Exchange Transaction, will continue for a period of time to operate the Sports  
Subsidiaries as wholly-owned subsidiaries. One or more of the Sports            
Subsidiaries may, however, be consolidated with other Roadmaster operations or  
subsidiaries to achieve operating efficiencies by consolidating overhead, in    
connection with borrowing arrangements, or for other business reasons. See      
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE PRO FORMA COMBINING FINANCIAL      
STATEMENTS OF ROADMASTER."                                                      

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HISTORICAL AND PRO FORMA SELECTED FINANCIAL DATA
OF THE ACTAVA GROUP INC.
(UNAUDITED) 

    The following information sets forth the historical and pro forma selected
financial data of Actava for the year ended December 31, 1993 and the six months
ended June 30, 1994.                                                            

 The historical pro forma selected financial data as of and for the year
ended December 31, 1993 and as of and for the six months ended June 30, 1994    
reflects the historical financial data of the Company as reported in the        
Company's Consolidated Financial Statements included in the Company's Annual    
Report on Form 10-K and the Company's Consolidated Financial Statements included
in the Company's Form 10-Q for the quarter ended June 30, 1994, as adjusted for 
the Company's Form 8-K filed with the Securities and Exchange Commission (the   
"Commission") on August 25, 1994 to report the sale of the Company's interest in
Qualex. In connection with the sale of Qualex, the Company received $50,000,000 
in cash and a promissory note in the principal amount of $100,000,000. The      
promissory note is payable in two installments of $50,000,000 each, without     
interest, on February 13, 1995 and August 11, 1995. Because the principal amount
due under the note does not bear interest, the Company discounted the value of  
the note to $92,832,000 and will record imputed interest income of $7,168,000   
over the term of the note. These amounts are reflected in the historical        
selected income statement data as if the transaction had occurred as of January 
1, 1993 and in the historical selected balance sheet data as if the transaction 
had occurred on the date indicated.                                             

    The pro forma selected financial data for the year ended December 31, 1993
and the six months ended June 30, 1994 reflects the historical financial data   
discussed above as adjusted for the Exchange Transaction. The Exchange          
Transaction is reflected in the pro forma selected income statement data as of  
January 1, 1993 and in the pro forma selected balance sheet data as if it had   
been consummated on June 30, 1994.                                              

   The pro forma selected historical financial data reflects, in the opinion
of the Company, all adjustments necessary for a fair presentation of the        
information set forth herein. This data should be read in conjunction with, and 
is qualified in its entirety by, the Company's Consolidated Financial Statements
on Form 10-K for the year ended December 31, 1993 and the notes thereto, the    
Company's Consolidated Financial Statements on Form 10-Q for the quarter ended  
June 30, 1994 and the notes thereto, the Company's Form 8-K filed with the      
Commission on August 25, 1994, and the Pro Forma Financial Information, and the 
Combined Financial Statements of the Sports Subsidiaries included elsewhere in  
this Proxy Statement or incorporated herein by reference. The pro forma selected
financial data is presented for illustrative purposes only and is not           
necessarily indicative of the operating results or financial position that      
actually would have occurred, nor is it necessarily indicative of future        
operating results or financial position. See "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE."                                                                  

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THE ACTAVA GROUP INC. AND SUBSIDIARIES

HISTORICAL AND PRO FORMA SELECTED FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                             SIX MONTHS                                       
                                                                ENDED          SIX MONTHS ENDED JUNE 30,      
                         YEAR ENDED DECEMBER 31, 1993       JUNE 30, 1993                1994                 
                         -----------------------------      -------------    -----------------------------    
                         HISTORICAL(1)       PRO FORMA      HISTORICAL(1)    HISTORICAL(1)       PRO FORMA    
                         -------------       ---------      -------------    -------------       ---------    
                                                                                                              
INCOME STATEMENT DATA:                                                                                        
Net sales..............    $ 465,812         $ 224,960        $ 212,454        $ 279,214         $ 130,169    
Gross profit...........       64,341            30,829           41,980           45,726            25,467    
Loss from continuing                                                                                          
  operations...........      (44,548)          (41,696)          (5,009)         (18,263)          (14,053)   
Net loss...............      (48,952)              N/A           (9,413)         (18,263)              N/A    
Loss per common share:                                                                                        
  Primary -- continuing                                                                                       
     operations........        (2.60)(2)         (2.43)(2)        (0.30)(2)        (1.02)(2)         (0.78)(2)
  Primary -- net                                                                                              
     loss..............        (2.85)              N/A            (0.56)           (1.02)              N/A    
Cash dividends declared                                                                                       
  per common share.....         0.36              0.36             0.18             0.00              0.00    

                                                                [Download Table]

                              DECEMBER 31, 1993                JUNE 30, 1994        
                        -----------------------------  -----------------------------
                        HISTORICAL(1)                  HISTORICAL(1)       PRO FORMA
                        -------------                  -------------       ---------
                                                                                    
BALANCE SHEET DATA:                                                                 
Total assets...........    696,374                        587,606           522,231 
Total current                                                                       
  liabilities..........    272,740                        221,172           154,897 
Subordinated debt......    190,551                        187,787           187,787 
Redeemable common                                                                   
  stock................     12,000                         12,000            12,000 
Long term debt and                                                                  
  other long term                                                                   
  liabilities..........     37,169                         35,728            36,628 
                        -------------                  -------------       ---------
          Total                                                                     
          liabilities..    512,460                        456,687           391,312 
Book value.............    183,914                        130,919           130,919 
Book value per common                                                               
  share:                                                                            
  Primary..............      10.72(2)                        7.31              7.31 

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

(1) Historical financial data reflects the pro forma effects of the sale of the 
   Company's 50% interest in Qualex. Income statement data has been restated
    to reflect the sale of Qualex as if it had occurred on January 1, 1993 and
   Balance Sheet Data reflects Actava's sale of Qualex as if it had occurred
     on the date indicated. Pro forma information relating to the sale of Qualex
    is incorporated herein by reference from Actava's Form 8-K filed on August
25, 1994.                                                             
(2) The impact of common stock equivalents is not reflected due to their        
anti-dilutive effect.                                                 

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THE ACTAVA GROUP INC. AND SUBSIDIARIES

PRO FORMA FINANCIAL INFORMATION 
(UNAUDITED) 

GENERAL                                                                         

The following unaudited pro forma condensed consolidated financial    
information sets forth, for the respective periods and as of the dates          
indicated, the results of operations and the financial position of the Company  
after giving effect to the proposed Exchange Transaction, as if the transaction 
had been consummated as of the respective dates included. Historical financial  
information reflects the financial statements as adjusted for the classification
of Qualex's operating results to discontinued operations and as adjusted for the
sale of the Company's 50% interest in Qualex as described in the Company's Form 
8-K filed with the Commission on August 25, 1994. This unaudited pro forma      
financial information should be read in conjunction with the Company's audited  
and unaudited historical consolidated financial statements and notes thereto    
which are incorporated by reference herein. The unaudited pro forma financial   
information is presented for illustrative purposes only and is not necessarily  
indicative of the operating results or financial position that actually would   
have occurred if the Exchange Transaction had been consummated as of such dates 
in accordance with the assumptions set forth below, nor is it necessarily       
indicative of future operating results or financial position.                   

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                       

The following unaudited pro forma condensed consolidated statements of
continuing operations for the year ended December 31, 1993 and for the six      
months ended June 30, 1994 present the operating results of the Company as if   
the Exchange Transaction had occurred at January 1, 1993. The statements are    
based on the previously described financial information of the Company for the  
respective periods and the pro forma adjustments described in the notes thereto.

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THE ACTAVA GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS 
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                              (2)                                 
                                                             ACTAVA                               
                                                            SPORTING                              
                                                (1)          GOODS      PRO FORMA                 
                                               ACTAVA        GROUP     ADJUSTMENTS   PRO FORMA    
                                              --------      --------   -----------   ---------    
                                                                                                  
Net sales.................................... $465,812      $240,852                 $ 224,960    
Costs and Expenses                                                                                
  Costs of products sold.....................  401,471       207,340                   194,131    
  Selling, general and administrative........   88,975        34,510                    54,465    
                                              --------      --------   -----------   ---------    
          Total operating expenses...........  490,446       241,850                   248,596    
                                              --------      --------                              
Operating loss...............................  (24,634)         (998)                  (23,636)   
  Interest expense...........................   26,811         3,392                    23,419    
                                                                         $   900(4)               
  Equity in net loss of equity investee......                                705(3)      1,605    
  Other (income) expense, net................   (5,462)           67                    (5,529)   
                                              --------      --------   -----------   ---------    
Loss before income taxes, discontinued                                                            
  operations and cumulative effect of change                                                      
  in accounting principle....................  (45,983)       (4,457)     (1,605)      (43,131)   
Income taxes (benefit).......................   (1,435)        2,324       2,324(5)     (1,435)   
                                              --------      --------   -----------   ---------    
Loss from continuing operations.............. $(44,548)     $ (6,781)    $(3,929)    $ (41,696)   
                                              ========      ========   =========      ========    
Average common shares:                                                                            
  Primary....................................   17,163(6)                               17,163(6) 
Loss per share of common stock:                                                                   
  Primary -- loss from continuing                                                                 
     operations.............................. $  (2.60)(6)                           $   (2.43)(6)

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

(1) Historical financial data reflects the pro forma effects of the sale of the 
   Company's 50% interest in Qualex. The financial data has been restated to
  reflect the sale of Qualex as if it had occurred on January 1, 1993. Pro
    forma information relating to the sale of Qualex is incorporated herein by
reference from Actava's Form 8-K filed on August 25, 1994.            
(2) Represents the combined operations of Diversified Products Corporation and  
Subsidiary, Nelson/Weather-Rite, Inc. and Subsidiary, Hutch Sports USA
Inc., and Willow Hosiery Company, Inc.                                
(3) Represents the Company's equity in the unaudited pro forma net loss of      
Roadmaster Industries, Inc. for the year ending December 31, 1993.    
(4) Reflects amortization expense of $900,000 relating to the excess of the     
 carrying amount of Actava's equity investment in Roadmaster Industries,
Inc. over Actava's portion of the underlying net assets of Roadmaster.
   Amortization was calculated using the straight-line method over 40 years.
(5) Represents elimination of income tax effect associated with Actava Sporting 
Goods Group.                                                          
(6) The impact of common stock equivalents is not reflected due to their        
anti-dilutive effect.                                                 

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THE ACTAVA GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS 
SIX MONTHS ENDED JUNE 30, 1994
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                              (2)                                 
                                                             ACTAVA                               
                                                            SPORTING                              
                                                   (1)       GOODS      PRO FORMA                 
                                                  ACTAVA     GROUP     ADJUSTMENTS   PRO FORMA    
                                                 --------   --------   -----------   ---------    
                                                                                                  
Net sales......................................  $279,214   $149,045                 $130,169     
Costs and expenses                                                                                
  Costs of products sold.......................   233,488    128,786                  104,702     
  Selling, general and administrative                                                             
     expenses..................................    49,908     21,922                   27,986     
                                                 --------   --------   -----------   ---------    
          Total operating expenses.............   283,396    150,708                  132,688     
Operating loss.................................    (4,182)    (1,663)                  (2,519 )   
  Interest expense.............................    14,822      2,570                   12,252     
                                                                          $(217)(3)               
  Equity in net loss of equity investee........                             450(4)        233     
  Other expense (income), net..................      (741)       210                     (951 )   
                                                 --------   --------   -----------   ---------    
Loss before income taxes, discontinued                                                            
  operations and cumulative effect of change in                                                   
  accounting principle.........................   (18,263)    (4,443)      (233)      (14,053 )   
Income taxes (expense).........................                 (191)      (191)(5)               
                                                 --------   --------   -----------   ---------    
Loss from continuing operations................  $(18,263)  $ (4,634)     $(424)     $(14,053 )   
                                                 ========   ========   ===========   =========    
Average common shares:                                                                            
  Primary......................................    17,918(6)                           17,918 (6) 
Loss per share of common stock:                                                                   
  Primary -- Loss from continuing operations...  $  (1.02)(6)                        $  (0.78 )(6)

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

(1) Historical financial data reflects the pro forma effects of the sale of the 
   Company's 50% interest in Qualex. The financial data has been restated to
  reflect the sale of Qualex as if it had occurred on January 1, 1993. Pro
    forma information relating to the sale of Qualex is incorporated herein by
reference from Actava's Form 8-K filed on August 25, 1994.            
(2) Represents the combined operations of Diversified Products Corporation and  
    Subsidiary, Nelson/ Weather-Rite and Subsidiary, Hutch Sports USA Inc. and
Willow Hosiery Company, Inc.                                          
(3) Represents the Company's equity in the unaudited pro forma net income of    
Roadmaster Industries, Inc. for the six months ending June 30, 1994.  
(4) Reflects amortization expense of $450,000 relating to the excess of the     
 carrying amount of Actava's equity investment in Roadmaster Industries,
Inc. over Actava's portion of the underlying net assets of Roadmaster.
   Amortization was calculated using the straight-line method over 40 years.
(5) Represents elimination of income tax effect associated with Actava Sporting 
Goods Group.                                                          
(6) The impact of common stock equivalents is not reflected due to their        
anti-dilutive effect.                                                 

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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET                                  

   The unaudited pro forma condensed consolidated balance sheet gives effect
to the Exchange Transaction as if it had occurred on June 30, 1994. The         
unaudited pro forma condensed consolidated balance sheet is based on previously 
described financial information of the Company as of June 30, 1994 and the pro  
forma adjustments described in the notes thereto.                               

THE ACTAVA GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1994 
(IN THOUSANDS)
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                                       (2)                                 
                                                                      ACTAVA                               
                                                                     SPORTING                              
                                                            (1)       GOODS      PRO FORMA                 
                                                           ACTAVA     GROUP     ADJUSTMENTS      PRO FORMA 
                                                          --------   --------   -----------      --------- 
                                                                                                           
ASSETS                                                                                                     
Current assets:                                                                                            
  Cash................................................... $ 64,015   $  2,000                    $ 62,015  
  Short-term investments.................................   31,922                                 31,922  
  Receivables, net.......................................  177,272     45,608                     131,664  
  Inventories............................................   67,051     46,821                      20,230  
  Prepaid expenses.......................................    4,710      2,356                       2,354  
  Receivable from Eastman Kodak..........................   92,832                                 92,832  
  Income tax benefits....................................   25,343                                 25,343  
                                                          --------   --------   -----------      --------- 
         Total Current Assets............................  463,145     96,785                     366,360  
Investment in Roadmaster Industries, Inc.................                         $70,545(3)(4)    70,545  
Property, plant & equipment: ............................  113,455     41,947         137(4)       71,645  
  Less allowances for depreciation.......................  (44,351)    (7,264)                    (37,087 )
                                                          --------   --------   -----------      --------- 
                                                            69,104     34,683         137          34,558  
Notes receivable from Triton Group Ltd...................   19,226                                 19,226  
Receivable from Diversified Products Corporation.........                          10,000(3)       10,000  
Other assets.............................................    5,610        340                       5,270  
Long-term investments....................................   15,473                                 15,473  
Intangibles, net.........................................   15,048     14,249                         799  
                                                          --------   --------   -----------      --------- 
         Total Assets.................................... $587,606   $146,057     $80,682        $522,231  
                                                          =========  =========  ===========      ==========
LIABILITIES & STOCKHOLDERS' EQUITY                                                                         
Current Liabilities:                                                                                       
  Accounts payable, accrued expenses and other current                                                     
    liabilities.......................................... $116,121   $ 28,900     $ 1,865(4)     $ 89,086  
  Notes Payable..........................................  100,447     39,240                      61,207  
  Current portion of long-term debt......................    4,604                                  4,604  
                                                          --------   --------   -----------      --------- 
         Total Current Liabilities.......................  221,172     68,140       1,865         154,897  
Deferred Income Taxes....................................   33,621       (900)                     34,521  
Long-Term debt...........................................    2,107                                  2,107  
Subordinated Debt........................................  187,787                                187,787  
Redeemable common stock..................................   12,000                                 12,000  
Stockholders' Equity:                                                                                      
  Common stock...........................................   22,768         51          51(3)       22,768  
  Additional capital.....................................   36,310     81,471      81,471(3)       36,310  
  Retained earnings......................................  179,719     (2,273)     (2,273)(3)     179,719  
  Intercompany...........................................                (432)       (432)(3)              
  Less treasury stock -- at cost......................... (107,878)                              (107,878 )
                                                          --------   --------   -----------      --------- 
         Total Stockholders' Equity......................  130,919     78,817      78,817         130,919  
                                                          --------   --------   -----------      --------- 
         Total Liabilities and Stockholders' Equity...... $587,606   $146,057     $80,682        $522,231  
                                                          =========  =========  ===========      ==========

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Notes to Pro Forma Information                                                  
---------------                                                                 

(1) Historical financial data reflects the pro forma effect of the sale of the  
  Company's 50% interest in Qualex as if the sale had occurred on June 30,
    1994, including receipt of the first installment of proceeds from the sale
     in the amount of $50 million. Pro forma information relating to the sale of
 Qualex is incorporated herein by reference from Actava's Form 8-K filed
August 25, 1994.                                                      
(2) Represents the combined financial position of Diversified Products          
     Corporation and Subsidiary, Nelson/ Weather-Rite, Inc and Subsidiary, Hutch
Sports USA Inc, and Willow Hosiery Company, Inc.                      
(3) Represents adjustment to eliminate the effect of Actava Sporting Goods Group
shareholders' equity accounts and record Actava's equity investment in
    Roadmaster Industries, Inc. and a receivable due from Diversified Products
Corporation.                                                          
(4) Reflects adjustment to transfer amounts from the accounts of Diversified    
Products Corporation to Actava which are related to the retention of  
certain real estate and associated environmental liabilities.         

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HISTORICAL AND PRO FORMA SELECTED CONSOLIDATED FINANCIAL DATA 
OF
ROADMASTER INDUSTRIES, INC. 
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)

The following table sets forth historical and pro forma selected      
consolidated financial data of Roadmaster for the year ended December 31, 1993  
and the six months ended July 3, 1993 and July 2, 1994. The historical data for 
the fiscal year ended December 31, 1993 has been derived from Roadmaster's      
Consolidated Financial Statements incorporated herein by reference. The         
historical selected consolidated financial data for the six-month periods ended 
July 3, 1993 and July 2, 1994 are derived from Roadmaster's unaudited           
consolidated financial statements and reflect, in the opinion of Roadmaster, all
adjustments necessary to present fairly the results for such periods (all of    
which adjustments were of a normal recurring nature). The pro forma selected    
consolidated income statement data for the year ended December 31, 1993 and the 
six months ended July 2, 1994 reflects the combined operations of Roadmaster,   
Flexible Flyer and the Actava Sporting Goods Group as if the acquisition of     
Flexible Flyer and the Exchange Transaction had occurred at the beginning of the
respective periods. The pro forma selected balance sheet data has been prepared 
based on the historical balance sheets of Roadmaster and the Actava Sporting    
Goods Group as of December 31, 1993 and June 30, 1994 and give effect to the    
Exchange Transaction as though it was consummated at those respective dates.    
This data should be read in conjunction with "Management's Discussion and       
Analysis of Financial Condition and Results of Operations," the Pro Forma       
Consolidated Financial Statements and the Notes thereto, and the other financial
data incorporated by herein reference, and with the Pro Forma Combined Financial
Statements and the Notes thereto, and the other financial data concerning the   
Sports Subsidiaries set forth elsewhere in this Proxy Statement. The unaudited  
pro forma combined financial information is not necessarily indicative of actual
or future operating results or financial position that would have occurred or   
will occur as a consequence of such transactions.                               

                                                        [Enlarge/Download Table]

                                                                               HISTORICAL                       
                                            HISTORICAL                         ROADMASTER            PRO FORMA  
                                            ROADMASTER    PRO FORMA         SIX MONTHS ENDED        SIX MONTHS  
                                            YEAR ENDED    YEAR ENDED    -------------------------      ENDED    
                                           DECEMBER 31,  DECEMBER 31,     JULY 3,       JULY 2,       JULY 2,   
                                               1993          1993          1993          1994          1994     
                                           ------------  ------------   -----------   -----------   ----------- 
                                                         (UNAUDITED)           (UNAUDITED)          (UNAUDITED) 
                                                                                                                
INCOME STATEMENT DATA:                                                                                          
Net sales................................  $   312,160   $   634,882    $   132,652   $   200,854   $   349,899 
Cost of sales............................      262,890       555,435        113,454       172,079       300,865 
                                           ------------  ------------   -----------   -----------   ----------- 
Gross profit.............................       49,270        79,447         19,198        28,775        49,034 
Selling, general and administrative                                                                             
  expenses...............................       26,375        63,916         11,422        15,219        34,578 
                                           ------------  ------------   -----------   -----------   ----------- 
Operating income.........................       22,895        15,531          7,776        13,556        14,456 
Interest expense, net....................       10,366        16,116          3,516         9,657        12,227 
Other expense, net.......................          867         1,384          1,394           938         1,311 
                                           ------------  ------------   -----------   -----------   ----------- 
Earnings (loss) before income tax expense                                                                       
  (benefit) and cumulative effect of                                                                            
  change in accounting principle.........       11,662        (1,969 )        2,866         2,961           918 
Net earnings (loss)......................  $     7,633   $    (1,783 )  $     1,812   $     1,835   $       569 
                                           ============  ============   ============  ============  ============
Net earnings (loss) before cumulative                                                                           
  effect of change in accounting                                                                                
  principle per common share:                                                                                   
  Primary................................  $       .26   $      (.03 )  $       .06   $       .06   $       .01 
                                           ============  ============   ============  ============  ============
  Fully-diluted..........................  $       .25   $       N/A    $       .06   $       .06   $       .01 
                                           ============  ============   ============  ============  ============
Weighted average number of shares                                                                               
  outstanding:                                                                                                  
  Primary................................       29,693        46,096         29,272        30,443        49,602 
  Fully-diluted..........................       42,851           N/A         29,580        30,443        49,602 
Book Value per common share:                                                                                    
  Primary................................  $       .55   $       N/A    $       .41   $       .70   $      1.90 
                                           ============  ============   ============  ============  ============
  Fully-diluted..........................  $       .38   $       N/A    $       .40   $       .70   $      1.90 
                                           ============  ============   ============  ============  ============

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                                                        [Enlarge/Download Table]

                                                                                    AT JULY 2, 1994    
                                                               AT DECEMBER 31,   ----------------------
                                                                     1993         ACTUAL      PRO FORMA
                                                               ----------------  --------     ---------
                                                                                      (UNAUDITED)      
                                                                                                       
BALANCE SHEET DATA:                                                                                    
Working capital...............................................     $122,005      $101,372     $146,871 
Total assets..................................................      281,609       267,719      426,450 
Total short-term debt.........................................       22,899        39,574       60,814 
Long-term debt and other long-term liabilities (excluding                                              
  convertible debentures).....................................      109,499       100,250      135,811 
Convertible debentures........................................       51,742        51,742       51,742 
Total long-term debt and other long-term liabilities..........      161,241       151,992      189,553 
Stockholders' equity..........................................       16,376        21,279       93,163 

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PRO FORMA COMBINED FINANCIAL STATEMENTS 
OF
ROADMASTER INDUSTRIES, INC. 
AND 
THE SPORTS SUBSIDIARIES 

The following unaudited pro forma combined financial information gives
effect to the consummation of (i) the Flexible Flyer Acquisition and (ii) the   
Exchange Transaction. The pro forma combined financial statement of operations  
for the year ended December 31, 1993 gives effect to such transactions as if    
they had occurred on January 1, 1993 and combines the operations of Roadmaster, 
Flexible Flyer and the Sports Subsidiaries for the year ended December 31, 1993.
The pro forma combined statement of operations for the six months ended July 2, 
1994 gives effect to such transactions as if they had occurred on January 1,    
1994 and combines the operations of Roadmaster for the six months ended July 2, 
1994 with the operations of the Sports Subsidiaries for the period from January 
1, 1994 to June 30, 1994. This pro forma combined financial information should  
be read in conjunction with the Consolidated Financial Statements of Roadmaster 
and the Financial Statements of the Sports Subsidiaries included elsewhere in   
this Proxy Statement or incorporated herein by reference. The pro forma combined
financial information is not necessarily indicative of actual or future         
operating results or financial position that would have occurred or will occur  
as a consequence of such transactions.                                          

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ROADMASTER INDUSTRIES, INC. AND SUBSIDIARIES

PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                           THE SPORTS        THE SPORTS                
                                            ROADMASTER    SUBSIDIARIES      SUBSIDIARIES               
                                             FOR SIX         FOR SIX          PRO FORMA                
                                           MONTHS ENDED   MONTHS ENDED       ADJUSTMENTS     PRO FORMA 
                                           JULY 2, 1994   JUNE 30, 1994      (UNAUDITED)    (UNAUDITED)
                                           ------------  ---------------   ---------------  -----------
                                                                                                       
Net sales.................................   $200,854       $ 149,045          $     0       $ 349,899 
Cost of sales.............................    172,079         128,786                0         300,865 
                                           ------------  ---------------   ---------------  -----------
          Gross profit....................     28,775          20,259                0          49,034 
Selling, general, and administrative                                                                   
  expenses................................     15,219          21,922           (2,563)(1)      34,578 
                                           ------------  ---------------   ---------------  -----------
          Operating income (loss).........     13,556          (1,663)           2,563          14,456 
                                           ------------  ---------------   ---------------  -----------
Interest expense..........................      9,657           2,570                0          12,227 
Other expense (income), net:                                                                           
          Other, net......................        938             210              163(2)        1,311 
                                           ------------  ---------------   ---------------  -----------
                                               10,595           2,780              163          13,538 
                                           ------------  ---------------   ---------------  -----------
Earnings (loss) before income tax                                                                      
  expense.................................      2,961          (4,443)(5)        2,400             918 
Income tax expense (benefit)..............      1,126             191             (968)(3)         349 
                                           ------------  ---------------   ---------------  -----------
          Net earnings (loss) from                                                                     
            continuing operations.........      1,835          (4,634)           3,368             569 
          Cumulative effect of change in                                                               
            accounting principle, net of                                                               
            tax...........................          0               0                0               0 
                                           ------------  ---------------   ---------------  -----------
          Net earnings (loss).............   $  1,835       $  (4,634)         $ 3,368       $     569 
                                           ===========    ===========      ===========       ========= 
                                                                [Download Table]

                                             PRIMARY     PRIMARY     
                                           -----------  ----------   
                                                                     
Net earnings before cumulative effect of                             
  change in accounting principle per                                 
  common share:...........................       $0.06       $0.01   
                                                 -----       -----   
                                                 -----       -----   
Weighted average number of shares                                    
  outstanding:............................      30,433      49,602(4)


                                              FULLY       FULLY      
                                             DILUTED     DILUTED     
                                           -----------  ----------   
                                                                     
Net earnings before cumulative effect of                             
  change in accounting principle per                                 
  common share............................       $0.06       $0.01   
                                                 -----       -----   
                                                 -----       -----   
Weighted average number                                              
  of shares outstanding...................      30,433      49,602   

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

(1) Roadmaster's adjustment represents elimination of management fees of        
   $2,400,000 and elimination of legal fees and settlements related to prior
disputes between the companies of $163,000.                           
(2) Represents the amortization of goodwill and deferred acquisition costs over 
40 years.                                                             
(3) Represents the equalization of tax expense/(benefit) based on the statutory 
   rate of 38%. Roadmaster believes that the realization of the deferred tax
asset is more likely than not.                                        
(4) Includes the effect of 19,169,000 shares to be issued in connection with the
Exchange Transaction.                                                 
(5) Represents the combined operations of Diversified Products; Nelson/         
    Weather-Rite; Hutch and Willow. Earnings before income tax expense for the
Sports Subsidiaries, excluding Diversified Products were $1,712,000.  

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ROADMASTER INDUSTRIES, INC. AND SUBSIDIARIES

PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                                        THE SPORTS                     
                                                               (2)             (3)      SUBSIDIARIES                   
                                                (1)            THE         DIVERSIFIED   PRO FORMA                     
                                           FLEXIBLE FLYER     SPORTS        PRODUCTS    ADJUSTMENTS     PRO FORMA      
                               ROADMASTER   (UNAUDITED)    SUBSIDIARIES    (UNAUDITED)  (UNAUDITED)    (UNAUDITED)     
                               ----------  --------------  ------------    -----------  -----------    -----------     
                                                                                                                       
Net sales....................   $312,160      $ 24,256       $240,852       $  57,614     $     0       $ 634,882      
Cost of sales................    262,890        21,023        207,340          64,182           0         555,435      
                               ----------  --------------  ------------    -----------  -----------    -----------     
         Gross profit........     49,270         3,233         33,512          (6,568)          0          79,447      
Selling, general, and                                                                                                  
  administrative expenses....     26,375         1,252         34,510           6,065      (4,286)(4)      63,916      
                               ----------  --------------  ------------    -----------  -----------    -----------     
         Operating income                                                                                              
           (loss)............     22,895         1,981           (998)        (12,633)      4,286          15,531      
                               ----------  --------------  ------------    -----------  -----------    -----------     
Other expense (income), net:                                                                                           
         Interest expense....     10,366         1,496          3,392             862           0          16,116      
         Other, net..........        867           124             67               0         326(5)        1,384      
                               ----------  --------------  ------------    -----------  -----------    -----------     
                                  11,233         1,620          3,459             862         326          17,500      
                               ----------  --------------  ------------    -----------  -----------    -----------     
Earnings (loss) before income                                                                                          
  tax expense and cumulative                                                                                           
  effect of change in                                                                                                  
  accounting principle.......     11,662           361         (4,457)(6)     (13,495)      3,960          (1,969)     
Income tax expense                                                                                                     
  (benefit)..................      4,029           137          2,324          (2,026)     (5,212)(7)        (748)     
                               ----------  --------------  ------------    -----------  -----------    -----------     
Earnings (loss) before                                                                                                 
  cumulative effect of change                                                                                          
  in accounting principle....      7,633           224         (6,781)        (11,469)      9,172          (1,221)     
Cumulative effect of change                                                                                            
  in accounting principle,                                                                                             
  net of tax.................          0             0            371             191           0             562      
                               ----------  --------------  ------------    -----------  -----------    -----------     
Net earnings (loss)..........   $  7,633      $    224       $ (7,152)      $ (11,660)    $ 9,172       $  (1,783)     
                               ==========  ============    ===========     ===========  ===========    ===========     


                                PRIMARY                                                                  PRIMARY       
                               ----------                                                              -----------     
                                                                                                                       
Net earnings (loss) before                                                                                             
  cumulative effect of change                                                                                          
  in accounting principle per                                                                                          
  common share...............   $   0.26                                                                $   (0.03)     
                               ==========                                                              ===========     
Weighted average number of                                                                                             
  shares outstanding: .......     29,693                                                                   46,096(8)(9)

                                 FULLY                                                                                 
                                DILUTED                                                                                
                               ----------                                                                              
                                                                                                                       
Net earnings before                                                                                                    
  cumulative effect of change                                                                                          
  in accounting principle per                                                                                          
  common share...............   $   0.25                                                                      N/A      
                               ==========                                                                              
Weighted average number of                                                                                             
  shares outstanding: .......     42,851                                                                               

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

(1) Represents the unaudited pre-acquisition, pro forma results of Flexible     
Flyer operations from January 1, 1993 through September 14, 1993.     
(2) Includes Diversified Products audited data from June 8, 1993 through        
December 31, 1993.                                                    
(3) Unaudited data from January 1, 1993 through June 7, 1993 extracted from the 
   audited consolidated financial statements of Diversified Products for the
period from June 28, 1992 to June 7, 1993.                            
(4) Roadmaster's adjustment represents elimination of management fees of        
   $3,664,000 and elimination of legal fees and settlements related to prior
disputes between the companies of $622,000.                           
(5) Represents amortization of goodwill and deferred acquisition charges over 40
years.                                                                
(6) Represents the combined operations of Diversified Products;                 
   Nelson/Weather-Rite; Hutch and Willow. Earnings before income tax expense
and cumulative effect of change in accounting principle for the Sports
Subsidiaries excluding Diversified Products, were $3,535,000.         
(7) Represents the equalization of tax expense/(benefit) based on the statutory 
   rate of 38%. Roadmaster believes that the realization of the deferred tax
asset is more likely than not.                                        
(8) Includes the effect of 19,169,000 shares to be issued in connection with the
Exchange Transaction.                                                 
(9) The impact of common stock equivalents is not assumed because the effect of 
their inclusion would be anti-dilutive.                               

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ROADMASTER INDUSTRIES, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
DOLLARS IN THOUSANDS

The following unaudited pro forma consolidated balance sheet has been 
prepared based on the historical consolidated balance sheet of Roadmaster and   
the historical combined balance sheet of the Actava Sporting Goods Group as of  
July 2, 1994, and gives effect to the Exchange Transaction. This data should be 
read in conjunction with the Consolidated Financial Statements of Roadmaster and
the Combined Financial Statements of the Actava Sporting Goods Group included   
elsewhere in this Proxy Statement or incorporated herein by reference and the   
notes to the unaudited pro forma consolidated balance sheets.                   

                                                        [Enlarge/Download Table]

                                                            ACTAVA SPORTING                           
                                              ROADMASTER      GOODS GROUP     PURCHASE                
                                                AS OF            AS OF       ACCOUNTING               
                                             JULY 2, 1994    JUNE 30, 1994   ADJUSTMENTS    PRO FORMA 
                                             ------------   ---------------  -----------    --------- 
                                                                                                      
                                                 ASSETS:                                              
Current Assets:                                                                                       
  Cash and cash equivalents................    $  8,227        $   2,000                    $  10,227 
  Marketable equity securities.............       5,102                0                        5,102 
  Accounts and notes receivable, net.......      94,358           45,608                      139,966 
  Inventories..............................      74,397           46,821                      121,218 
  Prepaid expenses and other assets........       6,410            2,356                        8,766 
  Cash in escrow...........................       4,315                0                        4,315 
  Deferred income taxes....................       1,011                0                        1,011 
                                             ------------   ---------------  -----------    --------- 
          Total current assets.............     193,820           96,785       $     0        290,605 
Net property, plant, and equipment.........      35,023           34,683        (2,741)(1)     66,965 
Deferred financing and acquisition                                                                    
  charges..................................      17,704                0         3,500(2)      21,204 
Goodwill...................................      15,713           16,620         9,544(3)      41,877 
Other assets...............................       5,459              340                        5,799 
                                             ------------   ---------------  -----------    --------- 
TOTAL ASSETS...............................    $267,719        $ 148,428       $10,303      $ 426,450 
                                              =========      ===========     =========       ======== 
                                  LIABILITIES AND STOCKHOLDERS' EQUITY:                               
Current Liabilities:                                                                                  
  Accounts payable.........................    $ 31,891        $  14,027                    $  45,918 
  Accrued expenses.........................      20,499           12,119       $ 3,900(4)      36,518 
  Income taxes.............................         484                0                          484 
  Revolving lines of credit................      37,781                0                       37,781 
  Current portion of notes payable.........           0           21,240                       21,240 
  Current portion of long-term debt........       1,793                0                        1,793 
                                             ------------   ---------------  -----------    --------- 
          Total current liabilities........      92,448           47,386         3,900        143,734 
Long-term debt and other liabilities.......     100,250           23,865                      124,115 
Convertible Debentures.....................      51,742                0                       51,742 
Subordinated note payable to parent........           0           10,000                       10,000 
Obligation for post retirement benefits....           0            1,696                        1,696 
Redeemable common stock....................       2,000                0                        2,000 
Stockholders' equity:                                                                                 
  Common/preferred stock...................         314               51           141(5)         506 
  Additional paid-in capital...............      18,588           81,471        (9,779)(6)     90,280 
  Retained earnings........................      13,000            5,184        (5,184)(7)     13,000 
  Deferred compensation....................      (2,082)               0                       (2,082)
  Cumulative translation adjustments.......        (417)               0                         (417)
  Intercompany.............................           0          (21,225)       21,225(7)           0 
  Treasury stock, at cost..................      (8,124)               0                       (8,124)
                                             ------------   ---------------  -----------    --------- 
          Total stockholders' equity.......      21,279           65,481         6,403         93,163 
                                             ------------   ---------------  -----------    --------- 
          TOTAL LIABILITIES & STOCKHOLDERS'                                                           
            EQUITY.........................    $267,719        $ 148,428       $10,303      $ 426,450 
                                              =========      ===========     =========       ======== 

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

(1) Represents the write-off of plant and equipment associated with Roadmaster's
     planned rationalization of plastic weight production to its Olney, Illinois
facility.                                                             
(2) Represents estimated costs associated predominantly with legal, accounting, 
   printing, investment banking and other out-of-pocket costs related to the
Exchange Transaction.                                                 
(3) Represents adjustment needed to reflect the excess of total purchase        
considerations over the net tangible book value of the acquired       
subsidiaries.                                                         
(4) Reflects $400,000 to reserve for costs associated with the integration of   
 general corporate services and employee benefit plans and $3,500,000 to
reflect the estimated costs associated with the legal, accounting,    
   printing, investment banking and other out-of-pocket costs related to the
Exchange Transaction.                                                 
(5) Reflects the increase in Roadmaster Common Stock of 19,169,000 shares at a  
par value of $.01 offset by the elimination of the Sports Subsidiaries
common stock totalling $51,000.                                       
(6) Represents the elimination of the Sports Subsidiaries additional paid in    
    capital of $81,471,000 and the issuance of 19,169,000 shares of Roadmaster
  Common Stock at a price of $3.75 per share based on the closing price of
 the Roadmaster Common Stock as quoted on the American Stock Exchange on
August 19, 1994.                                                      
(7) Represents the elimination of the Sports Subsidiaries stockholders' equity  
accounts.                                                             

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ROADMASTER MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE ROADMASTER 
PRO FORMA COMBINED FINANCIAL STATEMENTS 

     The pro forma combining financial statements reflecting the acquisitions of
the Sports Subsidiaries by Roadmaster have been presented as required by the    
rules of the Commission. The related methodology assumes only the issuance of   
additional shares of Roadmaster Common Stock as part of the Exchange            
Transaction, payment of certain expenses in connection with the Exchange        
Transaction and the corresponding accounting adjustments to recognize the       
foregoing. It is the opinion of management of Roadmaster that the pro forma     
combining financial statements are not necessarily indicative of the results to 
be expected in periods following the Exchange Transaction. In particular, the   
pro forma results for the first six months may not be indicative of results for 
the entire year because approximately 60% of Diversified Products' sales        
historically occur in the second six months of the year. Any analysis of the pro
forma combined financial statements should also take into account the results of
operations of the Sports Subsidiaries other than Diversified Products.          
Nevertheless, no assurances can be given by Roadmaster that the changes to      
Diversified Products' operations discussed below can be effected or that even if
such changes are effected that such changes will have any effect on the         
financial performance of Diversified Products.                                  

  This discussion of pro forma combined financial statements of Roadmaster
and the Sports Subsidiaries should be read in conjunction with the historical   
financial statements and related management's discussion and analysis of        
financial condition and results of operations of Roadmaster and the Sports      
Subsidiaries included elsewhere herein or incorporated by reference herein. See 
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "FINANCIAL STATEMENTS OF  
SPORTS SUBSIDIARIES."                                                           

   Management believes that the selling, general and administrative expenses
of Diversified Products may be substantially reduced as a percent of sales.     
Diversified Products' Opelika, Alabama manufacturing facility consists of       
1,000,000 square feet of space. During Diversified Products' peak manufacturing 
season, from September to February, it utilizes only 60% of such space with such
space devoted exclusively to the production of fitness products. During non-peak
periods, Diversified Products utilizes only 30% of its production space. During 
the peak production months, Diversified Products employs approximately 1,000 to 
1,200 employees. During non-peak periods, substantial layoffs occur reducing the
work force to 500 to 700 employees.                                             

Roadmaster plans to substantially increase the utilization of the     
Diversified Products production space by shifting to a focused factory          
production approach, producing bicycles, fitness equipment and junior products  
at the Opelika facility. Management expects to open a bicycle production line   
which would employ 250 to 500 employees. The peak production for such line is   
anticipated to occur in March, April and May. Management also expects to open   
swingset and trampoline production lines at the Opelika facility. The peak      
production periods for such lines are anticipated to be in the first and second 
quarters. In the case of all three lines, production would be counter-seasonal  
to fitness equipment production. By employing a focused factory approach,       
Roadmaster anticipates that the Opelika production facility would ultimately    
employ approximately 1,200 employees on a year-round basis with current seasonal
employees being converted into year-round employees.                            

In addition to more efficient utilization of the Opelika production   
facility, Roadmaster anticipates a reduction in the level of its unemployment   
insurance premiums and other seasonal employment related costs following any    
seasonal employment decreases. In 1993, Diversified Products incurred expenses  
associated with one seasonal decrease in operations of approximately $1.1       
million.                                                                        

Management of Roadmaster also anticipates that it may be able to lower
certain fitness equipment production costs by employing certain domestic sources
currently utilized by Roadmaster which may enable it to negotiate greater volume
discounts and reduce return rates. In such event, the percentage of imported    
goods sold by Diversified Products would decrease from its historic 30% to 40%  
to the extent Roadmaster is able to competitively source fitness equipment      
components domestically. While no assurances can be given that domestic sourcing
can be increased at Diversified Products or that such sourcing will result in   
lower costs,                                                                    

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Roadmaster has historically sourced approximately 98% of its existing fitness   
equipment products domestically.                                                

   Similarly, while no assurances can be given that utilization rates at the
Opelika facility can be increased in the near term, Roadmaster historically has 
high utilization rates at all its facilities, including its West Point,         
Mississippi production facility acquired in September 1993 as part of the       
acquisition of the assets of Flexible Flyer assets. Following Roadmaster's      
acquisition of these assets, plant operations in West Point increased during its
peak production period (first and second quarters) from an 80% utilization rate 
for normal operating hours to a 110% rate (utilizing overtime). Non-peak        
production utilization rates similarly increased from 30% in the third and      
fourth quarters to 60% in the third and fourth quarters following the Flexible  
Flyer acquisition. See "BUSINESS INFORMATION REGARDING ROADMASTER."             

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BUSINESS INFORMATION REGARDING ROADMASTER 

Roadmaster, through its operating subsidiaries, is one of the largest 
manufacturers of bicycles and a leading manufacturer of fitness equipment and   
junior products in the United States. Roadmaster's major product lines consist  
of bicycles for the adult, teen and juvenile markets, fitness equipment,        
including stationary aerobic equipment, multi-station weight systems and        
benches, and junior products such as tricycles, wagons, toy horses, bulk plastic
toys, sleds and swing sets. Roadmaster markets its products, primarily through  
mass merchandisers, under well established trade names with widespread consumer 
recognition and long operating histories, including Roadmaster(R) (1935),       
Vitamaster(R) (1950), Flexible(R) Flyer (1889) and MacGregor(R) (1870). In 1993,
Roadmaster had sales greater than $1 million to each of over 20 leading mass    
merchandisers including Toys "R" Us Inc. ("Toys "R" Us"), Wal-Mart Stores, Inc. 
("Wal-Mart") and Target Stores, Inc. ("Target"). Roadmaster received Vendor of  
the Year awards from Toys "R" Us in 1992 and 1993, Wal-Mart in 1991 and Target  
in 1990.                                                                        

   Roadmaster has developed successful relationships with mass merchandisers
by providing a low cost product that Roadmaster believes is differentiated from 
the competition based on superior features, and by supplying just-in-time       
inventory with proven reliability. Low costs are achieved through modern and    
efficient manufacturing facilities, low selling, general and administrative     
costs, and an experienced workforce. Savings from manufacturing are reinvested  
into higher quality components for Roadmaster products, thus providing a higher 
value product at a competitive cost. Roadmaster emphasizes quality through      
strict design criteria to ensure high standards for all its products. In        
addition, Roadmaster has developed flexible and efficient manufacturing         
operations that enable it to shift production runs to match demand.             

     Bicycle and fitness products together accounted for 85% of Roadmaster's net
sales in 1993. Roadmaster has experienced sales growth in bicycles and fitness  
products of 426% and      %, respectively, from 1990 to 1993. Roadmaster's      
management believes that Roadmaster's share of bicycles sold through mass       
merchandisers, who sell approximately 80% of all bicycles in the United States, 
has grown from 5% in 1990 to 25% in 1993. Roadmaster's total sales for the year 
ended December 31, 1993 increased by 39.6% to $312 million from the year ended  
December 31, 1992, primarily due to increased sales in Roadmaster's existing    
product lines. Due to the seasonality of its business, Roadmaster's fourth      
quarter sales over the past four years have accounted for approximately 35% of  
its total annual sales.                                                         

Although international sales are not currently a significant part of  
Roadmaster's consolidated operations, Roadmaster plans to expand its existing   
distribution in Canada and Europe.                                              

Roadmaster was formed on June 1, 1987 for the purpose of acquiring    
Roadmaster Corporation ("RMC"), a manufacturer of bicycles, fitness equipment   
and junior products. This acquisition was completed on August 10, 1987. On      
August 31, 1988, Roadmaster acquired Ajay Enterprises Corporation ("Ajay        
Enterprises"), a manufacturer of fitness equipment and sports accessories which 
was subsequently merged with Roadmaster. In June 1989, RMC sold its sports      
product line to Ajay Sports, Inc. ("Ajay Sports") and its wholly owned          
subsidiary Ajay Leisure, Inc. This sale was not recorded for financial statement
purposes until May 1992. On October 19, 1989, Roadmaster acquired, through a    
wholly-owned subsidiary, substantially all of the assets of Hamilton            
Corporation, a designer, manufacturer and distributor of a variety of lamps for 
residential use. In August 1992, RMC sold a 35% interest in its export sales    
subsidiary, International Sports & Fitness, Inc. In September 1993, Roadmaster  
acquired certain assets of Flexible Flyer, a division of Par Industries, Inc.,  
("Par") a manufacturer of a variety of junior products. Immediately following   
such acquisition, Roadmaster began operating these assets through its Flexible  
Flyer, Inc. subsidiary. In September 1993, Roadmaster, in a separate            
transaction, also acquired all of the capital stock of Flexible Flyer Europe,   
Ltd. (now "Roadmaster, Limited"), a United Kingdom company and distributor of   
Flexible Flyer products which now distributes Roadmaster's products in Europe.  
In October 1993, RMC entered into a distribution agreement with MacGregor Sports
Products, Inc. ("MSP"), a wholly-owned subsidiary of MacGregor Sports and       
Fitness, Inc. ("MacGregor"), a publicly held company engaged in the business of 
marketing and distributing a broad range of sports, recreational and fitness    
products under the MacGregor trademark. Pursuant to such distribution agreement,
RMC became the exclusive worldwide distributor of MacGregor(TM) brand baseball, 
softball, basketball, football, soccer, hockey, volleyball, racquet sports, and 
other products, for                                                             

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a term of five years, with a five-year renewal option. In late 1993, Roadmaster 
reacquired all of the outstanding minority interest in International Sports &   
Fitness, Inc. and consolidated its Hamilton Lamp Corporation and its Flexible   
Flyer, Inc. operating subsidiaries with its RMC subsidiary. In February 1994,   
Roadmaster acquired substantially all of the assets of American Playworld, Inc.,
a leading manufacturer of trampolines distributed mainly to mass merchants.     
American Playworld's operations are now conducted by RMC.                       

  In March 1994, Roadmaster furnished proposed post-closing adjustments to
Par to reduce the purchase price paid by Roadmaster based on Roadmaster's       
preliminary investigations of the value of the Flexible Flyer assets purchased  
by Roadmaster and the understatement of the amount of the Flexible Flyer        
liabilities assumed by Roadmaster. The effect of such adjustments would be to   
reduce the purchase price paid by Roadmaster by an amount of up to approximately
$3.8 million. Par has disputed the amount of post-closing adjustments calculated
by Roadmaster. Roadmaster believes the post-closing adjustments it has proposed 
are reasonable based on the information available to date. The disputed         
adjustments have been submitted to the parties' respective accountants for      
analysis pursuant to a multi-stage alternative dispute resolution procedure     
provided by the purchase agreement. In the event the parties' accountants are   
unable to agree on the proper adjustments, the dispute resolution mechanism     
ultimately provides for disputed adjustments to be resolved by a nationally     
recognized firm of certified public accountants mutually acceptable to          
Roadmaster's accountants and Par's accountants. Pending resolution of the       
dispute, Roadmaster intends to offset the amount of adjustments against any     
future payments remaining due to Par under the purchase note ($1.5 million), the
remaining $1.2 million due as consideration for the non-compete agreement,      
rental payments of approximately $0.4 million per year and any other obligations
of Roadmaster to Par. The effect of any purchase price adjustments will be to   
reduce the intangible asset value associated with the acquisition in receipt of 
the settlement consideration.                                                   

Roadmaster intends to continue to pursue acquisitions of complementary
product lines in order to exploit economies of scale and to leverage its        
existing relationships with mass merchandisers.                                 

   Roadmaster's principal executive offices currently are located at 7315 E.
Peakview Avenue, Englewood, Colorado 80111, and its telephone number is (303)   
290-8150. In the event the Exchange Transaction is consummated, Roadmaster      
expects to relocate its principal executive offices to Atlanta, Georgia.        
Roadmaster and each of its domestic subsidiaries are incorporated under Delaware
law.                                                                            

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BUSINESS INFORMATION REGARDING ACTAVA AND THE SPORTS SUBSIDIARIES 

GENERAL                                                                         

     The Company is a provider of branded consumer products through distribution
channels to retail markets across the United States. Following the sale of its  
50% equity interest in Qualex to Kodak on August 12, 1994, the Company operates 
in two distinct businesses: lawn and garden equipment and sporting goods.       
Following the Exchange Transaction, the Company will be involved in the sporting
goods business only through its ownership interest in Roadmaster. Information   
regarding the Company's sale of its 50% equity interest in Qualex to Kodak is   
set forth in "-- Recent Developments -- Sale of Qualex" below. Information      
regarding the photofinishing business conducted by Qualex prior to August 12,   
1994 is set forth in Item 1 of the Company's Annual Report on Form 10-K for the 
year ended December 31, 1993 and Quarterly Report on Form 10-Q for the quarter  
ended June 30, 1994, which are incorporated herein by reference. Actava's       
principal executive offices are located at 4900 Georgia Pacific Center, Atlanta,
Georgia 30303, and its telephone number is (404) 658-9000.                      

LAWN AND GARDEN EQUIPMENT                                                       

     The Company's Snapper Division (which is operated as a division, and not as
a subsidiary, of the Company) manufactures Snapper(TM) brand power lawnmowers,  
lawn tractors, garden tillers, snow throwers, and related parts and accessories 
and distributes blowers, string trimmers and edgers. The lawnmowers include rear
engine riding mowers, front engine riding mowers or lawn tractors, and          
self-propelled and push-type walk-behind mowers. Snapper also manufactures a    
line of commercial lawn and turf equipment and a Blackhawk(TM) line of mowers   
and markets a fertilizer line under the Snapper(TM) brand.                      

    Snapper products are premium priced, generally selling at retail from $250
to $8,200. They are sold exclusively through 54 independent distributors to     
approximately 7,800 dealers throughout the United States. In addition, Snapper  
products are exported to 27 independent distributors and four company-owned     
distributors covering 41 foreign countries. Snapper does no private label       
manufacturing of lawn and garden equipment and does not sell directly to        
multi-unit retailers or mass merchandisers. While the ultimate consumers        
generally purchase lawnmowers in the spring and early summer, Snapper sells to  
its distributors nearly year-round utilizing accounts receivable dating         
programs, with the greatest volume of production and shipment preceding ultimate
consumer purchasing periods. Accounts receivable dating programs establish the  
due dates for distributor accounts receivable to coincide with the anticipated  
sales to the ultimate consumer. Therefore, Snapper's cash flow needs are        
seasonal, with the greatest need for funds being in the first quarter of the    
year.                                                                           

Snapper manufactures its products in McDonough, Georgia at facilities 
totaling approximately 1,000,000 square feet. A substantial portion of the      
component parts for Snapper products is manufactured by Snapper, excluding      
engines and tires.                                                              

  The lawn and garden business is highly competitive, with the competition
being based upon price, image, quality and service. While no one company        
dominates the market, the Company believes Snapper is one of the significant    
manufacturers of lawn and garden products. There are approximately 50           
manufacturers in competition with Snapper. Snapper's principal brand name       
competitors in the sale of power lawnmowers include The Toro Company, Lawn-Boy  
(a product group of the Toro Company), Sears, Roebuck and Co., Deere & Company, 
Ariens Company, Honda Corporation and Murray Ohio Manufacturing, Inc. Some of   
the Company's competitors have greater financial resources than the Company.    

The Company is actively seeking to identify synergistic business      
combinations for Snapper and would ultimately like for Snapper to operate as or 
as part of a publicly held company in which the Company has an interest. The    
Company currently is not a party to any agreements with respect to any          
acquisitions or business combinations regarding Snapper nor does it have any    
immediate plans or agreements that would cause Snapper to become publicly owned.
No assurances can be given that the Company in the future will engage in such a 
transaction or effect such a plan.                                              

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THE SPORTS SUBSIDIARIES                                                         

Diversified Products.  Diversified Products is a leading domestic     
manufacturer of a variety of fitness equipment, such as stationary exercise     
bicycles, treadmills, weight benches, free weight systems, ski machines, and    
stair steppers. Its principal manufacturing facility is located in Opelika,     
Alabama. Actava acquired the assets of Diversified Products in June 1993 for a  
net purchase price of $11,629,500 in cash, the issuance of 1,090,909 shares of  
Actava Common Stock valued at $12,000,000, and the indirect assumption of       
approximately $40.1 million in liabilities. Diversified Products' principal     
customers include mass merchandisers, such as Sears Roebuck & Co., Wal-Mart,    
Target and K-Mart Corporation, as well as other retailers such as the Home      
Shopping Network and USA Direct/Fingerhut. Management of the Company believes   
that Diversified Products has a strong product brand name, complimentary        
distribution channels and substantial unused manufacturing capacity. In addition
to traditional mass merchandiser markets, Diversified Products has implemented  
programs for the sale of its products through various home shopping television  
channels. Diversified Products' sales in most product categories declined in    
1993 as a result of a cautious retail environment and production problems caused
by late delivery of electronic components for treadmills.                       

    Approximately 65% of the sales of Diversified Products consist of products
manufactured or purchased domestically. The remaining 35% of sales come from    
imported merchandise sourced from a large number of suppliers located primarily 
in the Far East. Approximately 2% of Diversified Products' products are sold in 
Europe through a United Kingdom subsidiary.                                     

 Diversified Products maintains a modern fleet of leased tractor-trailer
trucks which are utilized in its shipping operations. This fleet, which is      
operated in a separate trucking subsidiary, includes nearly 100 tractors and 200
trailers. Currently, approximately 70% of the trucking capacity (including      
backhaul operations) is utilized by parties other than Diversified Products     
during non-peak periods. Diversified Products' research and development         
department employs a 32-person in-house design staff which continuously         
evaluates new product concepts and materials to determine consumer acceptance of
its products and seeks to respond vigorously to the desires and needs of        
consumers.                                                                      

The management of Actava believes that the operating performance of   
Diversified Products will be substantially improved after the consummation of   
the Exchange Transaction. As a result of the combination of Roadmaster and the  
Sports Subsidiaries, the Company believes that the selling, general and         
administrative expenses of Diversified Products will be substantially reduced as
a percent of sales. Diversified Products' Opelika, Alabama manufacturing        
facility consists of 1,000,000 square feet of space. During Diversified         
Products' peak manufacturing season, from September to February, it utilizes    
only 60% of such space with such space devoted exclusively to the production of 
fitness products. During non-peak periods, Diversified Products utilizes only   
30% of its production space. During the peak production months, Diversified     
Products employs approximately 1,000 to 1,200 employees. During non-peak        
periods, substantial layoffs occur reducing the work force to 500 to 700        
employees.                                                                      

 Following consummation of the Exchange Transaction, Roadmaster plans to
substantially increase the utilization of the Diversified Products production   
space by shifting to a focused factory production approach, producing bicycles, 
fitness equipment and junior products at the Opelika facility. Roadmaster plans 
to open a bicycle production line which would employ 250 to 500 employees. The  
peak production for such line is anticipated to occur in March, April and May.  
Roadmaster also expects to open swingset and trampoline production lines at the 
Opelika facility. The peak production periods for such lines are anticipated to 
be in the first and second quarters. In the case of all three lines, production 
would be counter-seasonal to fitness equipment production. By employing a       
focused factory approach, Roadmaster anticipates that the Opelika production    
facility would ultimately employ approximately 1,200 employees on a year-round  
basis with current seasonal employees being converted into year-round employees.

In addition to more efficient utilization of the Opelika production   
facility, Roadmaster anticipates a reduction in the level of its unemployment   
insurance premiums and other seasonal employment related costs following any    
seasonal employment decreases. In 1993, Diversified Products incurred expenses  
associated with one seasonal decrease in operations of approximately $1.1       
million.                                                                        

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Management of Roadmaster also anticipates that it may be able to lower
certain fitness equipment production costs by employing certain domestic sources
currently utilized by Roadmaster which may enable it to negotiate greater volume
discounts and reduce return rates. In such event, the percentage of imported    
goods sold by Diversified Products would decrease from its historic 30% to 40%  
to the extent Roadmaster is able to competitively source fitness equipment      
components domestically. While no assurances can be made that domestic sourcing 
can be increased at Diversified Products or that such sourcing will result in   
lower costs, Roadmaster has historically sourced approximately 98% of its       
existing fitness equipment products domestically.                               

   Similarly, while no assurances can be given that utilization rates at the
Opelika facility can be increased in the near term, Roadmaster historically has 
high utilization rates at all its facilities, including its West Point,         
Mississippi production facility acquired in September 1993 as part of the       
Flexible Flyer Acquisition. Following Roadmaster's acquisition of the Flexible  
Flyer assets, plant operations in West Point increased during its peak          
production period (first and second quarters) from an 80% utilization rate for  
normal operating hours to a 110% rate (utilizing overtime). Non-peak production 
utilization rates similarly increased from 30% in the third and fourth quarters 
to 60% in the third and fourth quarters following the Flexible Flyer            
Acquisition.                                                                    

 Nelson/Weather-Rite, Inc.  Nelson/Weather-Rite is a leading supplier of
outdoor and camping equipment to mass merchandisers and specialty stores through
its American Camper(R), Weather-Rite(R) and Remington(R) brands. Products are   
sourced from the Far East by its World Trade Corporation subsidiary, which      
maintains offices in China, Taiwan, Hong Kong and Korea. Nelson/Weather-Rite,   
which has been consistently profitable over the last three years, has similar   
distribution channels to Roadmaster and established brand names. Its major      
product lines include camping equipment, rainwear, footwear, hunting apparel and
inflatables and it is believed to be the leading or second leading supplier in  
most of its product lines. Principal customers for Nelson/Weather-Rite include  
Wal-Mart, K-Mart, Montgomery Ward Holding Corp., The Sports Authority, Inc. and 
FingerHut Companies, Inc. Historically, Nelson/Weather-Rite's sales have been   
counter-seasonal to Roadmaster's, peaking in the second quarter. Actava has     
owned and operated Nelson/Weather-Rite since 1972.                              

Hutch Sports USA Inc.  Hutch is a national marketer and distributor of
products for team sports and is an official licensee for The National Football  
League ("NFL"), The National Basketball Association, The National Hockey League,
Major League Baseball and various colleges and universities. Its major product  
lines include basketballs, footballs and football outfits. Hutch's principal    
customers include Hardee's Food Systems, Inc., K-Mart, Toys "R" Us, J.C. Penney,
Inc., and Wal-Mart. Like Nelson/Weather-Rite, Hutch has been consistently       
profitable over the last three years and employs similar distribution channels  
to Roadmaster. Roadmaster believes Hutch's distribution channels, especially for
inflatables, are complimentary with Roadmaster's Distribution Agreement with    
MacGregor Sports Products, Inc., pursuant to which Roadmaster became the        
exclusive worldwide distributor of MacGregor(TM) brand baseball, softball,      
basketball, football, soccer, hockey, volleyball, racquet sports and other      
products through 1998 with a renewal option through 2003. Actava has owned and  
operated Hutch since 1971.                                                      

     Willow Hosiery Company, Inc.  Willow, headquartered in New York City, has a
nationally distributed line of hosiery and is a licensee for the officially     
licensed socks of the NFL, Keds(R), Pro Keds(R), Outdoor Life(R), English       
Leather(R) and Franklin(R), as well as various colleges and universities. Keds  
Hosiery was the leading brand sold by Willow in 1993, Willow's largest customer 
in 1993 was Wal-Mart. Its other principal customers include Hills Stores Co.,   
Jamesway, Bill's Dollar Stores and 50%-Off Stores. Like Nelson/ Weather-Rite and
Hutch, Willow employs similar distribution channels to those employed by        
Roadmaster. Actava has owned and operated Willow since 1974.                    

RECENT DEVELOPMENTS                                                             

Election of John D. Phillips as Chief Executive Officer of Actava           

  On April 19, 1994, the Board of Directors of the Company elected John D.
Phillips as President, Chief Executive Officer and a director of the Company.   
The Company on the same date sold 700,000 shares of Actava Common Stock to      
Renaissance Partners, a partnership for which Mr. Phillips serves as a general  

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partner, for a cash price of $4,462,500, and the Company issued to Mr. Phillips 
seven-year options for the purchase of 300,000 additional shares of Actava      
Common Stock at a price of $6.375 per share. As a result of these transactions, 
Mr. Phillips, as of August 19, 1994, was the beneficial owner of 5.37% of the   
outstanding Actava Common Stock. From 1989 to 1993, Mr. Phillips was President  
and a director of Resurgens Communications Group, Inc., which transmitted       
operator-assisted long distance telephone calls and provided operator services  
and billing and collection services to other long distance telephone companies. 
Resurgens Communications Group, Inc. merged with Metromedia Company and LDDS    
Communications, Inc. in September 1993, and the combined company now operates as
a long distance telecommunications company under the name LDDS Communications,  
Inc.                                                                            

 Mr. Phillips was given a mandate by the Company's Board of Directors to
improve the Company's operations and earnings and to increase stockholder value.
Consistent with this mandate, the Company, acting on a proposal by Mr. Phillips 
which was approved by the Board of Directors, sold its 50% interest in a        
photofinishing business on August 12, 1994. See "Sale of Qualex" below and "Pro 
Forma Financial Information of Actava." Similarly, Mr. Phillips proposed and the
Board of Directors has approved the Exchange Transaction. The sales of the      
Company's photofinishing and sporting goods businesses are expected to improve  
the Company's operating results and financial condition and will enable the     
Company to pursue other business opportunities. The Company is presently        
exploring new business opportunities, and the Company may need to obtain the    
approval of its stockholders for transactions that may be proposed in the       
future.                                                                         

Sale of Qualex                                                              

   On August 12, 1994, the Company sold its 50% ownership interest in Qualex
to Kodak and, as a result, is no longer engaged in the photofinishing business. 
Kodak owned the remaining 50% interest in Qualex prior to the transaction. In   
exchange for the Company's ownership interest in Qualex, as well as a covenant  
not to compete and related releases from the Company, Kodak paid the Company $50
million in cash and agreed to pay the Company an additional $100 million without
interest in two equal installments on February 13, 1995 and August 11, 1995. The
Company recorded a loss of $37,858,000 on the sale of its interest in Qualex and
classified Qualex's results of operations to discontinued operations along with 
the loss upon disposition. The results of Qualex were previously consolidated   
with the results of the Company. The Company discontinued this practice         
effective as of June 30, 1994 and began accounting for its investment in Qualex 
in accordance with the equity method on that date. As a result, the Company's   
balance sheet, effective as of June 30, 1994, no longer includes approximately  
$770 million of Qualex's assets, including approximately $367 million of        
intangible assets, and approximately $398 million of Qualex's liabilities,      
including approximately $211 million of long-term debt and approximately $57    
million of working capital debt. The cash received and to be received by the    
Company from the sale of its interest in Qualex improved the Company's liquidity
and the Company's ability to take advantage of future business opportunities.   
See "Pro Forma Financial Information of The Actava Group Inc."                  

Sale of Real Estate Investment                                              

   The Company has entered into an agreement, subject to certain conditions,
to sell a parcel of real property located near Houston, Texas to an investment  
group for $9 million in cash, which approximates the Company's book value in the
property. The property, which is known as Sienna Plantation, was purchased by   
the Company as an investment in 1973. The sale of the property will enable the  
Company to recover its book value in the property and to be relieved of the     
recurring costs of owning and maintaining the property. The Company anticipates 
that this transaction will be closed before December 31, 1994.                  

Change in Fiscal Year                                                       

 The Company's Board of Directors has approved a change in the Company's
fiscal year end from December 31 to August 31, effective August 31, 1994. The   
principal reason for the change in the Company's fiscal year is to provide      
investors with a more accurate view of the Company's financial performance.     

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Certain Transactions                                                        

     In August 1994, Roadmaster began manufacturing free weights for Diversified
Products pursuant to purchase orders placed by Diversified Products. Such       
weights are marketed by Diversified Products under its Orbitron(R) brand name.  

STOCK OWNERSHIP OF ACTAVA 

OWNERSHIP OF ACTAVA COMMON STOCK BY DIRECTORS AND OFFICERS                      

    The following table sets forth, as of August 19, 1994, certain information
concerning ownership of Actava Common Stock by each director and executive      
officer of the Company, and by all directors and executive officers of the      
Company as a group. The determinations of "beneficial ownership" of Actava      
Common Stock are based upon Rule 13d-3 under the Securities Exchange Act of     
1934, as amended (the "Exchange Act").                                          

                                                        [Enlarge/Download Table]

                                                                 NUMBER OF                    
                                                                   SHARES                     
                                                                BENEFICIALLY                  
                       BENEFICIAL OWNER                           OWNED(1)    PERCENT OF CLASS
--------------------------------------------------------------  ------------  ----------------
                                                                                              
John E. Aderhold..............................................        6,280           *       
Michael E. Cahr(2)............................................          -0-           *       
John M. Darden, III(3)........................................       16,000           *       
John P. Imlay, Jr.............................................       10,000           *       
Clark A. Johnson(3)...........................................       11,000           *       
Anthony F. Kopp(3)............................................       17,500           *       
Richard Nevins(2).............................................        1,000           *       
John D. Phillips(4)...........................................    1,000,000          5.3%     
Carl E. Sanders(3)(5)(6)......................................       31,497           *       
Charles R. Scott(3)(6)(7).....................................      122,155           *       
Frederick B. Beilstein, III(3)................................       72,050           *       
Walter M. Grant(3)(6).........................................       20,455           *       
Paul N. Kiel(3)(8)............................................        4,554           *       
Michael A. Lustig(3)(6)(9)....................................       23,609           *       
All directors and executive officers as a Group (14                                           
  persons)(10)................................................    1,336,100          7.3%     

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

* Less than 1%. See footnotes below.                                      
(1) Unless otherwise indicated, the named individual or entity has sole voting
     and investment power with respect to all shares shown as beneficially owned
     by such person. For each beneficial owner, the number of shares outstanding
 and the percentage of stock ownership includes the number of common and
     common equivalent shares (including options and warrants exercisable within
60 days owned by such individual or entity).                          
(2) Excludes shares owned by Triton Group Ltd. ("Triton") (which is the       
beneficial owner of approximately 24% of the outstanding shares of the
    Actava Common Stock). Mr. Cahr and Mr. Nevins were designated by Triton to
   fill the two positions on the Company's Board of Directors that Triton is
   entitled to fill under a Stockholder Agreement between Triton and Actava.
(3) Includes shares subject to purchase within the next 60 days under the     
   Company's 1989 Stock Option Plan and under the 1991 Non-Employee Director
Stock Option Plan.                                                    
(4) Includes 700,000 shares owned by Renaissance Partners, a Georgia general  
    partnership in which Mr. Phillips is a general partner, and 300,000 shares
     subject to purchase by Mr. Phillips within the next 60 days pursuant to the
    exercise of a stock option. Mr. Phillips disclaims beneficial ownership of
the shares owned by Renaissance Partners except to the extent of his  
interest in Renaissance Partners. See "BUSINESS INFORMATION REGARDING 
ACTAVA AND THE SPORTS SUBSIDIARIES -- Recent Developments".           

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(5) In addition, Mr. Sanders beneficially owns $25,000 face amount (less than 
1%) of the Company's 6 1/2% Convertible Subordinated Debentures due in
    2002, which are convertible into Actava Common Stock at a conversion price
of $41 5/8 per share.                                                 
(6) Includes shares allocated to the individual employee's accounts under the 
Company's Employees Stock Purchase Plan as of June 30, 1994.          
(7) Mr. Scott served as President and Chief Executive Officer of the Company  
    from February 1991 until April 19, 1994. He resigned from this position on
April 19, 1994 but is continuing to serve as a Senior Officer of the  
Company.                                                              
(8) Mr. Kiel's employment with the Company was terminated in March 1994.      
(9) Mr. Lustig ceased to be an executive officer of the Company when he became
Executive Vice President and Chief Financial Officer of Diversified   
Products in November 1993.                                            
(10) The number of shares shown for directors and executive officers as a group 
     includes an aggregate of shares which are subject to purchase by members of
the group within the next 60 days pursuant to the exercise of stock   
options.                                                              

OWNERSHIP OF ACTAVA COMMON STOCK BY CERTAIN HOLDERS                             

   The following table sets forth, as of the close of business on August 19,
1994, information as to those stockholders known to the Company to be the       
beneficial owners of more than 5% of the outstanding shares of Actava Common    
Stock (based solely upon filings by each of such stockholders with the          
Commission on Schedule 13D or Schedule 13G):                                    

                                                        [Enlarge/Download Table]

                                                           NUMBER OF                     
                                                            SHARES                       
                                                           BENEFICIALLY                  
                    NAME AND ADDRESS                         OWNED       PERCENT OF CLASS
---------------------------------------------------------  ---------     ----------------
                                                                                         
Triton Group Ltd.(1).....................................  4,413,598           24.1%     
  550 West C                                                                             
  18th Floor                                                                             
  San Diego, California 92101                                                            
Mellon Bank, as Trustee of the Westinghouse Executive                                    
  Pension Trust Fund(2)..................................  1,090,909            5.9%     
  11 Stanwix Street                                                                      
  Pittsburgh, Pennsylvania 15222                                                         
John D. Phillips(3)......................................  1,000,000            5.3%     
  945 E. Paces Ferry Road                                                                
  Suite 2210, Resurgens Plaza                                                            
  Atlanta, Georgia 30326                                                                 

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

(1) Mr. Nevins serves as a financial advisor to Triton, and Mr. Cahr serves as a
  director of Triton. Messrs. Nevins and Cahr were designated by Triton to
   fill the two positions on the Company's Board of Directors that Triton is
  entitled to fill under the Stockholder Agreement between the Company and
     Triton. Mr. Nevins and Mr. Cahr disclaim beneficial ownership of the Actava
Common Stock owned by Triton.                                         
(2) Westinghouse Electric Corporation ("Westinghouse") acquired these shares on 
June 8, 1993 in connection with the acquisition by the Company of     
 substantially all of the assets of Diversified Products. According to a
Schedule 13D filed by Westinghouse, the shares were transferred to the
     Trustee of the Westinghouse Executive Pension Trust Fund (the "Trustee") on
August 31, 1993.                                                      
(3) Mr. Phillips was elected president, chief executive officer and a director  
  of the Company on April 19, 1994. See " Recent Developments." The shares
  shown in the table as beneficially owned by Mr. Phillips include 700,000
shares owned by Renaissance Partners, a Georgia general partnership in
which Mr. Phillips is a general partner, and 300,000 shares subject to
   purchase by Mr. Phillips within the next 60 days pursuant to the exercise
of a stock option. Mr. Phillips disclaims beneficial ownership of the 
   shares owned by Renaissance Partners except to the extent of his interest
in Renaissance Partners.                                              

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INDEPENDENT AUDITORS

Ernst & Young LLP serves as the Company's independent auditors. A     
representative of Ernst & Young LLP is expected to be present at the Meeting,   
will have an opportunity to make a statement if he or she so desires to do so,  
and is expected to be available to respond to appropriate questions which       
stockholders might have.                                                        

OTHER MATTERS 

 Management of the Company does not intend to present to the Meeting any
business other than the items stated in the "Notice of Meeting of Stockholders" 
and does not know of any matters to be brought before the Meeting other than    
those referred to above. If any other matters properly come before the Meeting, 
the persons designated as proxies will vote on each such matter in accordance   
with their best judgment.                                                       

     Whether or not you expect to be at the Meeting in person, please sign, date
and return promptly the enclosed proxy. No postage is necessary if the proxy is 
mailed in the United States.                                                    

AVAILABLE INFORMATION 

    Actava and Roadmaster are subject to the informational requirements of the
Exchange Act, and in accordance therewith file reports, proxy statements and    
other information with the Commission. Such reports, proxy statements and other 
information can be inspected and copied during normal business hours at         
prescribed rates at the public reference facilities of the Commission at Room   
1024, 450 Fifth Street, N.W., Washington, D.C. and at the following regional    
offices of the Commission: New York Regional Office, 7 World Trade Center, Suite
1300, New York, New York 10048 and Chicago Regional Office, 500 West Madison    
Street, 14th Floor, Chicago, Illinois 60661-2511. Copies of such material can   
also be obtained from the public reference section of the Commission at 450     
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock
of the Company is publicly traded on The New York Stock Exchange and the Pacific
Stock Exchange and reports and other information also can be inspected at the   
offices of The New York Stock Exchange, 20 Broad Street, 17th Floor, New York,  
New York 10005 or at the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 30303.                                                               

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

    The following documents filed with the Commission pursuant to the Exchange
Act are incorporated by reference in this Proxy Statement:                      

          (a) Actava's Annual Report on Form 10-K, as amended by Form 10-K/A No.
1 and Form 10-K/A No. 2, for the fiscal year ended December 31, 1993; 

      (b) Actava's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994 and June 30, 1994;                                     

         (c) Actava's Current Reports on Form 8-K filed April 14, 1994, May 4,
1994 and August 25, 1994;                                             

         (d) Roadmaster's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993;                                                    

          (e) Roadmaster's Quarterly Reports on Form 10-Q for the quarters ended
April 2, 1994 and July 2, 1994; and                                   

      (f) Roadmaster's Current Report on Form 8-K filed August 24, 1994.

   All documents filed by Actava and Roadmaster with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date 
of this Proxy Statement and prior to the date of the Meeting shall be deemed    
incorporated by reference in this Proxy Statement and to be a part hereof as of 
the date of filing such documents. Any statement contained in a document        
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for the purpose of this Proxy Statement to the extent 
that a statement contained herein or in any other subsequently filed document   
that is or is deemed to be incorporated by reference herein modifies or         
supersedes such previous statement. Any such                                    

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statement so modified or superseded shall not be deemed, except as so modified  
or superseded, to constitute a part of this Proxy Statement.                    

    This Proxy Statement incorporates certain documents by reference which are
not presented herein or delivered herewith. All information appearing in this   
Proxy Statement is qualified in its entirety by the information and financial   
statements (including the notes thereto) appearing in the documents incorporated
herein by reference. These documents as filed with the Commission (exclusive of 
documents incorporated therein by reference) are available without charge to    
stockholders who make oral or written request therefor addressed to: The Actava 
Group Inc., 4900 Georgia-Pacific Center, Atlanta, Georgia 30303, Attention:     
Walter M. Grant, Secretary (telephone (404) 658-9000). Such documents will be   
mailed by first class mail or other equally prompt means within one business day
of receipt of such request. Copies of exhibits and basic documents filed with   
the Form 10-K or Form 10-Q or referenced therein will be furnished to           
stockholders upon written request and payment of the Company's expenses in      
furnishing such documents.                                                      

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED FINANCIAL STATEMENTS 
YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
AND THE SIX MONTHS ENDED JUNE 30, 1993 (UNAUDITED) AND 1994 (UNAUDITED) 

INDEX TO FINANCIAL STATEMENTS 

                                                        [Enlarge/Download Table]
                                                                                           
Report of Independent Auditors......................................................... F-2
Audited and Unaudited Combined Financial Statements --                                     
  Combined Balance Sheets.............................................................. F-3
  Combined Statements of Operations.................................................... F-4
  Combined Statements of Cash Flows.................................................... F-5
  Combined Statements of Shareholder's Equity.......................................... F-6
  Combined Notes to Financial Statements............................................... F-8

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors                                                          
The Actava Group Inc.                                                           

     We have audited the accompanying combined balance sheets of Actava Sporting
Goods Group, wholly-owned subsidiaries of The Actava Group Inc., as of December 
31, 1992 and 1993, and the related combined statements of operations,           
shareholder's equity, and cash flows for each of the three years in the period  
ended December 31, 1993. These financial statements are the responsibility of   
the Group's management. Our responsibility is to express an opinion on these    
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

     In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Actava     
Sporting Goods Group at December 31, 1992 and 1993, and the combined results of 
their operations and their cash flows for each of the three years in the period 
ended December 31, 1993 in conformity with generally accepted accounting        
principles.                                                                     

     As discussed in Notes 3 and 6 to the combined financial statements, in 1993
the Group changed its method of accounting for income taxes and other           
postretirement benefits, respectively.                                          

March 3, 1994 except for Note 12, as                                            
to which the date is July 20, 1994                                          

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED BALANCE SHEETS 

                                                        [Enlarge/Download Table]

                                                                   DECEMBER 31,                  
                                                               --------------------    JUNE 30,  
                                                                 1992        1993        1994    
                                                               --------    --------   -----------
                                                                  (IN THOUSANDS)      (UNAUDITED)
                                                                                                 
ASSETS                                                                                           
CURRENT ASSETS:                                                                                  
  Cash.......................................................  $    420    $  1,951    $   2,000 
  Accounts receivable, less allowance of $2,525,000 and                                          
     $7,863,000 at December 31, 1992 and 1993 and $3,138,000                                     
     (unaudited) at June 30, 1994............................    17,200      63,430       45,608 
  Inventories................................................    22,993      47,040       46,821 
  Prepaid expenses...........................................       611       1,699        2,356 
                                                               --------    --------   -----------
          TOTAL CURRENT ASSETS...............................    41,224     114,120       96,785 
PROPERTY, PLANT, AND EQUIPMENT:                                                                  
  Land and buildings.........................................        --      12,310       12,310 
  Furniture, fixtures and office equipment...................       875       2,602        3,080 
  Construction in progress...................................        --       1,813        1,397 
  Leasehold improvements.....................................       565         634          456 
  Machinery and equipment....................................     1,725      23,393       24,704 
                                                               --------    --------   -----------
                                                                  3,165      40,752       41,947 
  Less allowance for depreciation............................    (2,133)     (4,880)      (7,264)
                                                               --------    --------   -----------
                                                                  1,032      35,872       34,683 
OTHER ASSETS:                                                                                    
  Excess of costs over net assets acquired, net of                                               
     accumulated amortization of $2,625,000 and $2,939,000 at                                    
     December 31, 1992 and 1993 and $3,152,000 (unaudited) at                                    
     June 30, 1994, respectively.............................     3,305      16,777       16,620 
Other assets.................................................       772       1,060          340 
                                                               --------    --------   -----------
          TOTAL ASSETS.......................................  $ 46,333    $167,829    $ 148,428 
                                                               ========    ========    ========= 
LIABILITIES AND SHAREHOLDER'S EQUITY                                                             
CURRENT LIABILITIES:                                                                             
  Trade accounts payable.....................................  $  1,314    $ 21,114    $  14,027 
  Accrued expenses...........................................     3,348      19,102       12,119 
  Current portion of notes payable...........................       302      22,724       21,240 
                                                               --------    --------   -----------
          TOTAL CURRENT LIABILITIES..........................     4,964      62,940       47,386 
Other liabilities............................................        --       5,865        5,865 
Subordinated note payable to Parent..........................        --       8,000       10,000 
Long-term portion of note payable............................        --      18,000       18,000 
Obligation for postretirement benefits.......................        --       1,696        1,696 
Contingent liabilities and commitments.......................        --          --           -- 
SHAREHOLDER'S EQUITY:                                                                            
  Capital....................................................    42,892      81,522       81,522 
  Retained earnings..........................................    19,383       9,818        5,184 
  Due from Parent............................................   (20,906)    (20,012)     (21,225)
                                                               --------    --------   -----------
          TOTAL SHAREHOLDER'S EQUITY.........................    41,369      71,328       65,481 
                                                               --------    --------   -----------
          TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.........  $ 46,333    $167,829    $ 148,428 
                                                               ========    ========    ========= 

See accompanying notes. 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED STATEMENTS OF OPERATIONS 

                                                        [Enlarge/Download Table]

                                                                              SIX MONTHS ENDED   
                                              YEAR ENDED DECEMBER 31,             JUNE 30,       
                                          --------------------------------   ------------------- 
                                            1991        1992        1993      1993        1994   
                                          --------    --------    --------   -------    -------- 
                                                   (IN THOUSANDS)                (UNAUDITED)     
                                                                                                 
Net sales...............................  $116,407    $129,693    $240,852   $69,519    $149,045 
Cost of products sold...................    90,864     102,489     207,340    54,080     128,786 
Selling, general and administrative.....    22,387      22,437      33,456    13,126      21,449 
Provision for doubtful accounts.........       646         545       1,054       383         473 
                                          --------    --------    --------   -------    -------- 
                                             2,510       4,222        (998)    1,930      (1,663)
Interest expense........................      (149)       (476)     (3,392)     (837)     (2,570)
Other (expense) income, net.............      (218)         40         (67)      (14)       (210)
                                          --------    --------    --------   -------    -------- 
(Loss) income before income taxes and                                                            
  cumulative effect of change in                                                                 
  accounting principle..................     2,143       3,786      (4,457)    1,079      (4,443)
Income tax (benefit) expense............       796       1,459       2,324       625         191 
                                          --------    --------    --------   -------    -------- 
(Loss) income before cumulative effect                                                           
  of change in accounting principle.....     1,347       2,327      (6,781)      454      (4,634)
Cumulative effect of change in                                                                   
  accounting principle for                                                                       
  post-retirement benefits (net of taxes                                                         
  of $191,000 in 1993)..................        --          --        (371)     (371)         -- 
                                          --------    --------    --------   -------    -------- 
Net (loss) income.......................  $  1,347    $  2,327    $ (7,152)  $    83    $ (4,634)
                                          ========    ========    ========   =======    ======== 

See accompanying notes. 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED STATEMENTS OF CASH FLOWS 

                                                        [Enlarge/Download Table]

                                                                                   SIX MONTHS      
                                                 YEAR ENDED DECEMBER 31,         ENDED JUNE 30,    
                                              -----------------------------   -------------------- 
                                                1991      1992       1993       1993       1994    
                                              --------   -------   --------   --------   --------- 
                                                     (IN THOUSANDS)               (UNAUDITED)      
                                                                                                   
OPERATING ACTIVITIES                                                                               
  Net (loss) income.........................  $  1,347   $ 2,327   $ (7,152)  $     83   $  (4,634)
  Adjustments to reconcile net (loss) income                                                       
     to net cash (used in) provided by                                                             
     operating activities:                                                                         
     Cumulative effect of change in                                                                
       accounting for postretirement                                                               
       benefits.............................        --        --        562        562          -- 
     Loss on sale of plant, property and                                                           
       equipment............................        95         4         --         --          -- 
     Depreciation and amortization..........       429       449      3,265        556       2,597 
     Changes in operating assets and                                                               
       liabilities:                                                                                
       Accounts receivable..................     1,376      (248)   (37,623)    (9,878)     17,822 
       Inventories..........................       102    (3,424)   (11,030)    (6,957)        219 
       Prepaid assets.......................      (111)      (64)      (499)    (1,449)       (657)
       Accounts payable and accrued                                                                
          expenses..........................     2,144      (866)     3,508     (3,458)    (14,070)
       Other assets.........................       (66)     (512)      (145)       890         663 
                                              --------   -------   --------   --------   --------- 
          NET CASH (USED IN) PROVIDED BY                                                           
            OPERATING ACTIVITIES............     5,316    (2,334)   (49,114)   (19,651)      1,940 
INVESTING ACTIVITIES                                                                               
  Purchases of property, plant, and                                                                
     equipment..............................      (193)     (214)    (1,413)      (406)     (1,194)
  Proceeds from disposal of plant, property                                                        
     and equipment..........................        83        31        146         --          -- 
  Issuance of long-term receivables.........      (147)       --         --         --          -- 
  Proceeds from long-term receivables.......        --        45         34         --          -- 
  Other investing activities................        --        --        (45)        --          -- 
                                              --------   -------   --------   --------   --------- 
          NET CASH USED IN INVESTING                                                               
            ACTIVITIES......................      (257)     (138)    (1,278)      (406)     (1,194)
FINANCING ACTIVITIES                                                                               
  Due from (to) Parent......................   (10,339)    7,251        894       (930)     (1,213)
  Capital contribution from Parent..........        --        --     18,054      7,217          -- 
  Proceeds from subordinated note payable to                                                       
     Parent.................................        --        --      8,000         --       2,000 
  Dividends paid to Parent..................        --        --     (2,413)        --          -- 
  Proceeds from notes payable...............     5,000        --     80,165     47,022     152,139 
  Payment on notes payable..................        --    (5,000)   (54,322)   (32,171)   (153,623)
  Net proceeds from revolving lines of                                                             
     credit.................................        --       302      1,545         --          -- 
                                              --------   -------   --------   --------   --------- 
          NET CASH PROVIDED BY (USED IN)                                                           
            FINANCING ACTIVITIES............    (5,339)    2,553     51,923     21,138        (697)
                                              --------   -------   --------   --------   --------- 
          NET INCREASE (DECREASE) IN CASH...      (280)       81      1,531      1,081          49 
          CASH AT BEGINNING OF YEAR.........       619       339        420        420       1,951 
                                              --------   -------   --------   --------   --------- 
          CASH AT END OF YEAR...............  $    339   $   420   $  1,951   $  1,501   $   2,000 
                                              ========   =======   ========   ========   ========= 

See accompanying notes. 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY 

                                                        [Enlarge/Download Table]

                                  DIVERSIFIED PRODUCTS                                     NELSON/WEATHER-RITE                   
                  -----------------------------------------------------  ------------------------------------------------------- 
                      COMMON STOCK                                           COMMON STOCK                                        
                  --------------------   ADDITIONAL   RETAINED    DUE    --------------------   ADDITIONAL   RETAINED    DUE TO  
                  OUTSTANDING             PAID-IN     EARNINGS    FROM   OUTSTANDING             PAID-IN     EARNINGS    (FROM)  
                   SHARES(1)    AMOUNT    CAPITAL     (DEFICIT)  PARENT   SHARES(1)    AMOUNT    CAPITAL     (DEFICIT)   PARENT  
                  -----------   ------   ----------   --------   ------  -----------   ------   ----------   --------   -------- 
                                     (IN THOUSANDS)                                          (IN THOUSANDS)                      
                                                                                                                                 
Balance at                                                                                                                       
  January 1,                                                                                                                     
  1991...........      --        $ --     $     --    $     --   $   --        1        $  1     $ 12,204    $  7,225   $  2,136 
  (Increase)                                                                                                                     
    decrease in                                                                                                                  
    due from                                                                                                                     
    Parent,                                                                                                                      
    net..........      --          --           --          --       --       --          --           --          --     (5,544)
  Net income for                                                                                                                 
    1991.........      --          --           --          --       --       --          --           --         315         -- 
                      ---       ------   ----------   --------   ------      ---       ------   ----------   --------   -------- 
Balance at                                                                                                                       
  December 31,                                                                                                                   
  1991...........      --          --           --          --       --        1           1       12,204       7,540     (3,408)
  (Increase)                                                                                                                     
    decrease in                                                                                                                  
    due from                                                                                                                     
    Parent,                                                                                                                      
    net..........      --          --           --          --       --       --          --           --          --      3,021 
  Net income for                                                                                                                 
    1992.........                  --           --          --       --       --          --           --       1,451         -- 
  Contribution                                                                                                                   
    from                                                                                                                         
    Parent.......      --          --           --          --       --       --          --       15,944          --    (15,944)
                      ---       ------   ----------   --------   ------      ---       ------   ----------   --------   -------- 
Balance at                                                                                                                       
  December 31,                                                                                                                   
  1992...........      --          --           --          --       --        1           1       28,148       8,991    (16,331)
  Contribution                                                                                                                   
    from Parent                                                                                                                  
    at June 8,                                                                                                                   
    1993 (Note                                                                                                                   
    2)...........       1           1       23,629          --       --       --          --           --          --         -- 
  (Increase)                                                                                                                     
    decrease in                                                                                                                  
    due from                                                                                                                     
    Parent,                                                                                                                      
    net..........      --          --           --          --    1,743       --          --           --          --        685 
  Net income                                                                                                                     
    (loss) for                                                                                                                   
    1993.........      --          --           --      (8,728)      --       --          --           --       1,442         -- 
  Dividends                                                                                                                      
    paid.........      --          --           --          --       --       --          --           --      (1,400)        -- 
  Contribution                                                                                                                   
    from                                                                                                                         
    Parent.......      --          --       15,000          --       --       --          --           --          --         -- 
                      ---       ------   ----------   --------   ------      ---       ------   ----------   --------   -------- 
Balance at                                                                                                                       
  December 31,                                                                                                                   
  1993...........       1        $  1     $ 38,629    $ (8,728)  $1,743        1        $  1     $ 28,148    $  9,033   $(15,646)
                  ========      =====      =======     =======   ======  ========      =====      =======     =======   ======== 

                                                  (Table continued on next page)

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY -- (CONTINUED)

                                                        [Enlarge/Download Table]

                                   WILLOW HOSIERY CO.                                          HUTCH SPORTS USA   
-----------------------------------------------------------------------------------------   ----------------------
     COMMON STOCK             PREFERRED STOCK                                                    COMMON STOCK     
----------------------     ----------------------     ADDITIONAL                  DUE TO    ----------------------
OUTSTANDING                OUTSTANDING                 PAID-IN       RETAINED     (FROM)    OUTSTANDING           
 SHARES(2)      AMOUNT      SHARES(3)      AMOUNT      CAPITAL       EARNINGS     PARENT     SHARES(1)      AMOUNT
-----------     ------     -----------     ------     ----------     --------     -------   -----------     ------
                                     (IN THOUSANDS)                                             (IN THOUSANDS)    
                                                                                                                  
     46          $ 46            2          $  2        $1,370        $2,460      $ 4,690         1         $    1
     --            --           --            --            --            --       (2,408)       --             --
     --            --           --            --            --           733           --        --             --
                                --                                                               --               
    ---         ------                     ------     ----------     --------     -------                   ------
     46            46            2             2         1,370         3,193        2,282         1              1
     --            --           --            --            --            --        3,374        --             --
     --            --           --            --            --           205           --        --             --
     --            --           --            --         5,688            --       (5,688)       --             --
                                --                                                               --               
    ---         ------                     ------     ----------     --------     -------                   ------
     46            46            2             2         7,058         3,398          (32)        1              1
     --            --           --            --            --            --           --        --             --
     --            --           --            --            --            --       (2,448)       --             --
     --            --           --            --            --          (588)          --        --             --
     --            --           --            --            --          (364)          --        --             --
     --            --           --            --            --            --           --        --             --
                                --                                                               --               
    ---         ------                     ------     ----------     --------     -------                   ------
     46          $ 46            2          $  2        $7,058        $2,446      $(2,480)        1         $    1
========        =====      ========        =====       =======        ======      =======   ========        ======



  ADDITIONAL                  DUE TO                                                                              
   PAID-IN       RETAINED     (FROM)                                                                              
   CAPITAL       EARNINGS     PARENT         COMBINED                                                             
  ----------     --------     -------     --------------                                                          
                                          (IN THOUSANDS)                                                          
                                                                                                                  
    $  552        $6,024      $ 4,072        $ 40,783                                                             
        --            --       (2,387)        (10,339)                                                            
        --           299           --           1,347                                                             

  ----------     --------     -------     --------------                                                          
       552         6,323        1,685          31,791                                                             
        --            --          856           7,251                                                             
        --           671           --           2,327                                                             
     7,084            --       (7,084)             --                                                             

  ----------     --------     -------     --------------                                                          
     7,636         6,994       (4,543)         41,369                                                             
        --            --           --          23,630                                                             
        --            --          914             894                                                             
        --           722           --          (7,152)                                                            
        --          (649)          --          (2,413)                                                            
        --            --           --          15,000                                                             

  ----------     --------     -------     --------------                                                          
    $7,636        $7,067      $(3,629)       $ 71,328                                                             
   =======        ======      =======      ==========                                                             

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

(1) 1,000 shares authorized                                                     
(2) 100,000 shares authorized                                                   
(3) 10,000 shares authorized                                                    

See accompanying notes. 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS
(INCLUDING NOTES APPLICABLE TO THE UNAUDITED PERIOD)
DECEMBER 31, 1992 AND 1993

1. ACCOUNTING POLICIES                                                          

Description of Business                                                     

   Actava Sporting Goods Group (the "Group" or the "Companies") is comprised
of four wholly-owned subsidiaries of The Actava Group Inc. (the "Parent"). These
subsidiaries are Diversified Products Corporation and Subsidiary ("DP"),        
Nelson/Weather-Rite, Inc. and Subsidiary ("NWR"), Hutch Sports USA Inc.         
("Hutch"), and Willow Hosiery Company, Inc. ("Willow"). The Group manufactures  
and distributes sporting goods primarily to mass merchants and sporting goods   
retailers located throughout the United States. The Companies within the Group  
perform periodic credit evaluations of their customers' financial condition and 
generally do not require collateral. Receivables generally are due within 30-60 
days, but some extended payment terms are granted. Credit losses have generally 
been within management's expectations.                                          

  The Group has one major customer which comprised 28%, 26% and 19% of the
Group's net sales for the years ended December 31, 1991, 1992 and 1993,         
respectively.                                                                   

Principles of Combination                                                   

  The combined financial statements include the accounts of DP, NWR, Hutch
and Willow. All significant intercompany transactions and accounts have been    
eliminated in combination.                                                      

Interim Financial Information                                               

    The financial statements as of June 30, 1994 and for the six month periods
ending June 30, 1993 and 1994 are unaudited but include all adjustments         
consisting of normal recurring adjustments that the Company considers necessary 
for a fair presentation of its financial position, results of operations and    
cash flows for the interim periods. Results for interim periods are not         
necessarily indicative of results for the entire year.                          

Inventories                                                                 

Inventories at NWR, all of which are finished goods, are stated at the
lower of cost or market. The last-in, first-out (LIFO) method of determining    
cost is used for valuing these inventories. Inventories at DP, Hutch, and Willow
are stated at the lower of cost or market using the first-in, first-out (FIFO)  
method.                                                                         

Inventory balances are summarized below:                              

                                                        [Enlarge/Download Table]

                                                                    DECEMBER 31,      
                                                                --------------------- 
                                                                 1992          1993   
                                                                -------       ------- 
                                                                   (IN THOUSANDS)     
                                                                                      
Inventories recorded under LIFO:                                                      
  Finished goods............................................... $16,614       $16,381 
  LIFO reserve.................................................  (4,319)       (4,079)
                                                                -------       ------- 
                                                                 12,295        12,302 
Inventories recorded under FIFO:                                                      
  Raw materials and supplies...................................     892         3,634 
  Work-in-progress.............................................       5         1,895 
  Finished goods...............................................   9,801        29,209 
                                                                -------       ------- 
          Total inventories.................................... $22,993       $47,040 
                                                                =======       ======= 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

Property, Plant, and Equipment                                              

 Property, plant, and equipment are recorded at cost and are depreciated
over their expected useful lives. Generally, depreciation is provided on the    
straight-line method for financial reporting purposes and on accelerated methods
for tax purposes.                                                               

Excess of Costs Over Net Assets Acquired                                    

Excess of costs over net assets acquired represents the excess of the 
purchase price over the net assets of the Companies on the date they were       
acquired by the Parent and are amortized over a 40-year period using the        
straight-line method.                                                           

Postemployment Benefits                                                     

The Group provides benefits to former or inactive employees after     
employment, but before retirement, such as severance benefits, continuation of  
health care benefits and life insurance coverage. The costs of these are        
currently accounted for on a pay-as-you-go (cash) basis. The Financial          
Accounting Standards Board has issued Statement of Financial Accounting         
Standards No. 112, "Employers' Accounting for Postemployment Benefits," which   
requires employers to recognize the obligation to provide these benefits when   
certain conditions are met. The Group is required to adopt the new method of    
accounting for these benefits no later than January 1, 1994. The adoption of    
Statement No. 112 will not have a significant effect on the Group's combined    
financial position or results of operations.                                    

Accounting Change                                                           

    In accordance with Accounting Principles Board Opinion No. 20, "Accounting
Changes," and SEC Staff Accounting Bulletin No. 55, "Allocation of Expenses and 
Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser 
Components of Another Entity," income taxes and management fees charged by the  
Parent (see Note 7) have been retroactively restated in the Combined Financial  
Statements of the Group for all periods presented.                              

2. ACQUISITION                                                                  

On June 8, 1993, a wholly-owned subsidiary of the Parent acquired     
substantially all the assets of DP for a net purchase price of $23,629,500      
consisting of $11,629,500 in cash and the issuance of 1,090,909 shares of the   
Parent's Common Stock valued at $12,000,000, and the assumption or payment of   
certain liabilities including trade payables and a revolving credit facility.   
The purchase price resulted in an excess of costs over net assets acquired of   
approximately $13,786,000.                                                      

     This transaction was accounted for using the purchase method of accounting;
accordingly, the purchased assets and liabilities have been recorded at their   
estimated fair value at the date of the acquisition. As of the date of          
acquisition, DP was combined with the Group. Accordingly, the results of        
operations of DP have been included in the combined financial statements of the 
Group since the date of acquisition.                                            

     This transaction has been reflected in the combined financial statements of
the Group as a capital contribution from the Parent. The following data         
represents the effect of this capital contribution:                             

                                                        [Enlarge/Download Table]

                                                                        (IN THOUSANDS)
                                                                                      
Total Assets Acquired..................................................    $ 71,693   
Total Liabilities Assumed..............................................      48,063   
                                                                        --------------
                                                                           $ 23,630   
                                                                        ===========   

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

   The following data represents the combined unaudited operating results of
the Group on a pro forma basis as if the above transaction had taken place at   
January 1, 1992. The pro forma information does not necessarily reflect the     
results of operations as they would have been had the transaction actually taken
place at that time. Adjustments include amounts of depreciation to reflect the  
fair value and economic lives of property, plant and equipment and amortization 
of intangible assets.                                                           

                                                        [Enlarge/Download Table]

                                                                       PRO FORMA YEAR ENDED   
                                                                           DECEMBER 31,       
                                                                        1992           1993   
                                                                      --------       -------- 
                                                                          (IN THOUSANDS)      
                                                                                              
Sales................................................................ $281,993       $298,466 
Net loss............................................................. $(31,028)      $(18,812)

3. INCOME TAXES                                                                 

  Effective January 1, 1993, the Companies adopted FASB Statement No. 109,
"Accounting for Income Taxes." Under Statement 109, the liability method is used
in accounting for income taxes: deferred tax assets and liabilities are         
determined based on differences between financial reporting and tax basis of    
assets and liabilities and are measured using the enacted tax rates and laws    
that will be in effect when the differences are expected to reverse. Prior to   
the adoption of Statement 109, income tax expense was determined using the      
deferred method: deferred tax expense was based on items of income and expense  
that were reported in different years in the financial statements and tax       
returns and were measured at the tax rate in effect in the year the difference  
originated.                                                                     

  As permitted by Statement 109, the Companies have elected not to restate
the financial statements of any prior years. The cumulative effect of the change
in accounting principle on pre-tax income, net income and financial position was
not material.                                                                   

     The results of operations of the Companies are included in the consolidated
Federal income tax return of the Parent. Current and deferred taxes have been   
computed as if the Companies filed a separate income tax return.                

Income tax expense (benefit) is composed of the following:            

                                                        [Enlarge/Download Table]

                                                              YEAR ENDED DECEMBER 31,    
                                                          -------------------------------
                                                              DEFERRED                   
                                                               METHOD           LIABILITY
                                                          -----------------      METHOD  
                                                           1991       1992        1993   
                                                          ------     ------     ---------
                                                                  (IN THOUSANDS)         
                                                                                         
Current federal.......................................... $1,036     $1,271      $ 2,027 
Current state............................................     96        199          260 
Deferred federal and state...............................   (336)       (11)          37 
                                                          ------     ------     ---------
                                                          $  796     $1,459      $ 2,324 
                                                          ======     ======       ====== 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

   Income tax expense (benefit) computed by applying federal statutory rates
to income (loss) before income taxes is reconciled to the actual income tax     
expense (benefit) as follows:                                                   

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED DECEMBER 31,  
                                                               ------------------------- 
                                                                 DEFERRED                
                                                                  METHOD       LIABILITY 
                                                               -------------    METHOD   
                                                               1991    1992      1993    
                                                               ----   ------   --------- 
                                                                    (IN THOUSANDS)       
                                                                                         
Computed tax at statutory rates............................... $730   $1,287    $ (1,561)
State tax, net of federal benefit.............................   33      131         175 
Deferred tax valuation allowance..............................   --       --       3,654 
Amortization of goodwill......................................   54       54          81 
Other.........................................................  (21)     (13)        (25)
                                                               ----   ------   --------- 
                                                               $796   $1,459    $  2,324 
                                                               ====   ======     ======= 

   Significant components of deferred tax assets and liabilities at December
31, 1993, are as follows:                                                       

                                                        [Enlarge/Download Table]

                                                              DEFERRED TAX   DEFERRED TAX
                                                                 ASSETS      LIABILITIES 
                                                              ------------   ------------
                                                                    (IN THOUSANDS)       
                                                                                         
Product warranty, self-insurance, advertising and other                                  
  reserves and accruals......................................    $4,114         $   --   
Provision for loss on loans and receivables..................     2,252             --   
Obligation for postretirement benefits.......................       588             --   
Capitalized inventory costs..................................       441             --   
Other........................................................       476             --   
Basis differences in fixed as sets...........................        --            298   
                                                              ------------   ------------
Total deferred taxes.........................................     7,871            298   
Valuation allowance..........................................     3,654                  
                                                              ------------               
                                                                 $4,217         $  298   
                                                              =========      =========   
Net deferred taxes...........................................                   $3,919   
                                                                             =========   

     The components of deferred income tax expense (benefit) for the years ended
December 31, 1991 and 1992 are as follows:                                      

                                                        [Enlarge/Download Table]

                                                                         YEAR ENDED  
                                                                        DECEMBER 31, 
                                                                        ------------ 
                                                                        1991    1992 
                                                                        -----   ---- 
                                                                            (IN      
                                                                         THOUSANDS)  
                                                                                     
Provision for loss on loans and receivables............................ $(114)  $ 16 
Product warranty, self-insurance, advertising and other reserves and                 
  accruals.............................................................  (182)    -- 
Increase in valuation allowance........................................    --     -- 
Other..................................................................   (40)   (27)
                                                                        -----   ---- 
                                                                        $(336)  $(11)
                                                                        =====   ==== 

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

  The components of income tax included in Due from Parent in the Combined
Balance Sheets are as follows:                                                  

                                                        [Enlarge/Download Table]

                                                                      1992      1993  
                                                                     ------    ------ 
                                                                      (IN THOUSANDS)  
                                                                                      
Current income tax assets (liabilities)............................. $  (29)   $1,880 
Current deferred income tax assets (liabilities)....................  1,853    (1,072)
Deferred income tax assets (liabilities)............................   (235)      226 
                                                                     ------    ------ 
Net current and deferred income tax assets.......................... $1,589    $1,034 
                                                                     ======    ====== 

4. NOTES PAYABLE                                                                

Notes payable represent revolving credit facilities for each of the   
Companies in the Group. The provisions of the agreements and related            
outstandings are described below.                                               

                                                        [Enlarge/Download Table]

                                                                     DECEMBER 31,              
                                                                    --------------    JUNE 30  
                                                                    1992    1993       1994    
                                                                    ----   -------  -----------
                                                                    (IN THOUSANDS)  (UNAUDITED)
                                                                                               
Borrowings under a $50,000,000 revolving credit facility expiring                              
  December 15, 1996, interest payable monthly at prime + 1 1/2%                                
  (7.5% at December 31, 1993 and 8.75% at June 30, 1994)........... $ --   $36,178    $21,087  
Borrowings under a $35,000,000 revolving credit facility expiring                              
  December 29, 1995, interest payable monthly at prime + 1 1/4%                                
  (7.25% at December 31, 1992 and 1993 and 8.5% at June 30,                                    
  1994)............................................................  302     1,846      9,200  
Borrowings under a $10,000,000 revolving credit facility expiring                              
  April 29, 1995, interest payable monthly at the prevailing base                              
  rate (6% at December 31, 1993 and 7.25% at June 30, 1994)........   --        --      6,037  
Borrowings under a $5,000,000 revolving credit facility expiring                               
  August 31, 1994, interest payable monthly at prime (6% at                                    
  December 31, 1992 and 1993 and 7.25% at June 30, 1994)...........   --     2,700      2,916  
                                                                    ----   -------  -----------
Total notes payable................................................  302    40,724     39,240  
Less current portion of notes payable..............................  302    22,724     39,240  
                                                                    ----   -------  -----------
                                                                    $ --   $18,000    $    --  
                                                                    ====   =======  =========  

   The loans are principally secured by certain receivables and inventory of
the Companies. The assets which serve as collateral are determined by reference 
to the outstanding balances under the credit agreements and the qualification of
the assets as collateral as defined in the credit agreements; however,          
substantially all of the Groups assets are potentially available as collateral  
to secure borrowings under the above facilities. Availability of borrowings     
under the agreements are subject to certain percentage limitations on eligible  
collateral.                                                                     

   The agreements contain numerous restrictive covenants, including, but not
limited to, maintenance of financial ratios, a specified tangible net worth,    
minimum earnings, and limitations on capital additions and borrowings. Certain  
of the agreements also restrict the transferring of dividends to the Parent to  
70% of the respective Company's net income in any fiscal year.                  

    The fair value of the Groups notes payable is estimated to approximate its
carrying value in the combined financial statements as notes payable have       
variable interest rates.                                                        

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

   Interest payments were approximately $-0-, $13,000, and $3,155,600 during
the years ended December 31, 1991, 1992 and 1993, respectively.                 

5. SUBORDINATED NOTE PAYABLE TO PARENT                                          

The subordinated note payable to Parent balance represents the amount 
outstanding under a revolving credit agreement between DP and the Parent. Under 
this revolving credit agreement, DP may borrow up to $20,000,000. Balances      
outstanding under this agreement bear interest at the Chase Manhattan Bank prime
rate plus 1 1/2% (7.5% at December 31, 1993). Balances outstanding under this   
revolving credit agreement are payable only to the extent payment is permitted  
under the $50,000,000 revolving credit facility (see Note 4) and the related    
subordination agreement. The balance outstanding at December 31, 1993 has been  
classified as long-term as repayment prior to December 31, 1994 is not          
permissible under the terms of the $50,000,000 revolving credit facility.       

6. EMPLOYEE BENEFITS                                                            

Effective January 1, 1993 the Group adopted FASB Statement No. 106,   
"Accounting for Retirement Benefits Other than Pensions."                       

   The Group sponsors two plans that provide postretirement medical, dental,
and life insurance benefits for certain employees subsequent to retirement. One 
plan covers eligible employees of NWR, Hutch and Willow. A separate plan covers 
eligible employees of DP. The plans have been funded on a pay-as-you-go (cash)  
basis. The plans are contributory, with retiree contributions adjusted annually,
and contain other cost-sharing features such as deductibles, coinsurance and    
life-time maximums.                                                             

     The accounting for the plans anticipates future cost-sharing changes to the
written plan that are consistent with the Group's expressed intent to increase  
the retiree contribution rate annually for the expected medical trend rate for  
that year. The Companies fund the excess of the cost of benefits under the plans
over the participant's contributions as the costs are incurred. The combination 
of benefits with Medicare uses a supplemental, or exclusion of benefits,        
approach.                                                                       

As permitted by Statement No. 106, the Group elected to immediately   
recognize the effect in the statement of operations in 1993 as a $562,000       
pre-tax charge to net income as the cumulative effect of a change in accounting 
principle. The change in annual net periodic postretirement benefit expense for 
1993 as a result of adopting the new rules was not material. Postretirement     
benefit expense for 1991 and 1992, recorded on a cash basis, has not been       
restated.                                                                       

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

The following table presents the plans status reconciled with amounts 
recognized in the Combined Balance Sheet:                                       

                                                        [Enlarge/Download Table]

                                                                     DECEMBER 31,    
                                                                   ----------------- 
                                                                   1992       1993   
                                                                   -----     ------- 
                                                                   (IN THOUSANDS)    
                                                                                     
Accumulated postretirement benefit obligation:                                       
  Retirees........................................................ $ (78)    $  (472)
  Fully eligible active plan participants.........................  (244)       (465)
  Other active plan participants..................................  (176)       (821)
                                                                   -----     ------- 
                                                                    (498)     (1,758)
Plan assets.......................................................    --          -- 
                                                                   -----     ------- 
  Accumulated postretirement benefit obligation in excess of plan                    
     assets.......................................................  (498)     (1,758)
  Unrecognized net (gain) or loss.................................    --          62 
  Unrecognized transition obligation..............................   498          -- 
                                                                   -----     ------- 
  Accrued postretirement benefit cost............................. $  --     $(1,696)
                                                                   =====     ======= 

     Net periodic postretirement benefit cost includes the following components:

                                                        [Enlarge/Download Table]

                                                                       DECEMBER 31,   
                                                                    ------------------
                                                                    1991   1992   1993
                                                                    ----   ----   ----
                                                                    (IN THOUSANDS)    
                                                                                      
Service cost....................................................... $--    $--    $ 63
Interest cost......................................................  --     --      88
Cash basis expense.................................................  10     13      --
                                                                    ----   ----   ----
Net periodic postretirement benefit cost........................... $10    $13    $151
                                                                    ====   ====   ====

     The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e., health care cost trend rate) for 1994 is 10.7% for   
the DP Plan and 13% for the plan covering employees of NWR, Hutch and Willow.   
For the DP Plan this trend rate is expected to decrease in .2% to .3% decrements
to 5.5% in 2012 and remain at that level thereafter. For the plan covering NWR, 
Hutch and Willow employees, this trend rate is expected to decrease in 1%       
decrements to 6% in 2001 and years thereafter. The weighted average discount    
rate used in determining the accumulated postretirement benefit obligation as of
December 31, 1993 was 7.25% for the DP Plan and 7% for the plan covering NWR,   
Willow and Hutch employees, as compared to 9% for January 1, 1993. A 1% increase
in the assumed health care cost trend rates would increase the accumulated      
postretirement benefit obligation as of December 31, 1993 by 15% and the net    
periodic post retirement benefit cost by 18%.                                   

NWR and Willow have a profit sharing plan covering substantially all  
non-union employees. The plans are noncontributory defined contribution plans.  
Contributions are made at the discretion of NWR and Willow. Cost recognized for 
the years ended December 31, 1991, 1992 and 1993 amounted to $564,500, $465,300,
and $537,900, respectively.                                                     

    Hutch participates in the Parent's noncontributory defined benefit pension
plan which is "qualified" under Federal tax law and covers substantially all    
non-union employees. Benefits under the plan are based upon the employee's years
of service and level of compensation. Hutch's funding policy for the plan is to 
contribute annually such amounts as are necessary to provide assets sufficient  
to meet the benefits to be paid to the plan's members and to keep the plan      
actuarially sound. Contributions are intended to provide not only for benefits  
attributed to service to date but also for those expected to be earned in the   
future.                                                                         

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

The components of net periodic pension cost are as follows:           

                                                        [Enlarge/Download Table]

                                                                     1991   1992   1993 
                                                                     ----   ----   ---- 
                                                                     (IN THOUSANDS)     
                                                                                        
Service cost........................................................ $71    $75    $73  
Interest cost on projected benefit obligation.......................   6     14     33  
Actual return on plan assets........................................  (4 )   (4 )  (11 )
Net amortization and deferral.......................................   2     (2 )   --  
                                                                     ----   ----   ---- 
                                                                     $75    $83    $95  
                                                                     ====   ====   ==== 

Assumptions used in the accounting for the defined benefit plan are as
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                                        DECEMBER 31,  
                                                                        ------------- 
                                                                        1992     1993 
                                                                        ----     ---- 
                                                                                      
Discount rate.......................................................... 9.0 %    7.0 %
Rates of increase in compensation levels............................... 6.3 %    5.0 %

     The expected long-term rate of return on assets was 8.6%, 8.6% and 7.0% for
December 31, 1991, 1992 and 1993, respectively.                                 

    The following tables set forth the funded status and amounts recognized in
the Combined Balance Sheets for the defined benefit pension plan:               

                                                        [Enlarge/Download Table]

                                                                        DECEMBER 31,  
                                                                        ------------- 
                                                                        1992    1993  
                                                                        -----   ----- 
                                                                       (IN THOUSANDS) 
                                                                                      
Actuarial present value of benefit obligations:                                       
  Vested benefit obligation...........................................  $ (64)  $(152)
                                                                        =====   ===== 
  Accumulated benefit obligation......................................  $(122)  $(216)
                                                                        =====   ===== 
Projected benefit obligation..........................................   (250)  $(470)
Plan assets at fair value.............................................    112     112 
                                                                        -----   ----- 
Funded status -- projected benefit obligation in excess of plan                       
  assets..............................................................  $(138)  $(358)
                                                                        =====   ===== 
Comprised of:                                                                         
  Accrued pension cost................................................   (114)  $(114)
  Unrecognized net (loss).............................................    (24)   (244)
                                                                        -----   ----- 
                                                                        $(138)  $(358)
                                                                        =====   ===== 

Substantially all of the plan assets at December 31, 1992 and 1993 are
invested in government bonds, mutual funds and temporary investments.           

    DP sponsors a profit sharing/401(k) plan for all employees who meet stated
length of service requirements. Contributions under the profit sharing feature  
of the plan are made at the discretion of management up to the maximum amount   
deductible by DP. No profit sharing contribution was made for the period ended  
December 31, 1993. Under the 401(k) feature of the plan, DP matches 25% of      
employee contributions up to six percent of the employee's compensation. Expense
under the 401(k) feature of the Plan was $103,601 for the period ended December 
31, 1993.                                                                       

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

7. RELATED PARTIES                                                              

  The Parent charged a management fee of $1,965,000 in 1991, $1,939,000 in
1992, $3,664,000 in 1993, $1,364,000 (unaudited) for the six months ended June  
30, 1993, and $2,400,000 (unaudited) for the six months ended June 30, 1994 for 
various expenses it incurred for corporate services. These costs are reflected  
in selling, general and administrative expenses of the Group. These services    
included accounting, legal, and other central operating functions. These costs  
are allocated on the basis of various factors, including equity, total revenue, 
and total number of employees. The Parent considers its allocation policy to be 
reasonable.                                                                     

  During 1993, the Parent contributed $38,630,000 in additional capital to
the Group. During 1991, 1992, 1993, and the six months ended June 30, 1993 and  
1994, the Group was charged approximately $149,000, $444,000, $265,000, $137,000
(unaudited) and $322,000 (unaudited), respectively, in intercompany interest    
expense. Intercompany interest expense is calculated based on actual cash       
payments to/from the Parent (includes subordinated note payable to Parent of    
$8,000,000 at December 31, 1993) and on operating expenses paid by the Parent on
behalf of the Group. The interest-bearing balances in the Due from Parent       
account totalled $1,935,000 and zero dollars at December 31, 1992 and 1993,     
respectively. Intercompany interest rates on funds borrowed ranged from 5.75% to
9% during 1991, 8% to 8.5% during 1992, 8% during 1993 and 8% to 8.75% during   
the six months ended June 30, 1994.                                             

    The Due from Parent account is included in the Combined Balance Sheet as a
reduction of shareholder's equity as this amount will not be paid by the Parent.
This amount will be forgiven by the Group through a dividend distribution to the
Parent in the future.                                                           

8. COMMITMENTS                                                                  

    At December 31, 1992 and 1993, the Group has irrevocable letters of credit
outstanding for the purchase of inventory amounting to $14,594,000 and          
$17,176,300, respectively.                                                      

9. LEASES                                                                       

The Group leases office and warehouse facilities and equipment under  
noncancelable operating leases. Rental expense was approximately $1,551,000,    
$1,779,000 and $2,826,000, in 1991, 1992 and 1993, respectively.                

   Future minimum payments under noncancelable operating leases with initial
or remaining terms of one year or more are summarized as follows:               

                                                        [Enlarge/Download Table]

                       YEAR ENDING DECEMBER 31,                          (IN THOUSANDS)
-----------------------------------------------------------------------                
                                                                                       
     1994..............................................................     $  2,908   
     1995..............................................................        1,999   
     1996..............................................................        1,780   
     1997..............................................................          879   
     1998..............................................................          713   
     Thereafter........................................................        2,928   
                                                                         --------------
          Total minimum lease payments.................................     $ 11,207   
                                                                         ===========   

10. LITIGATION AND CLAIMS                                                       

     There are various claims and pending actions against the Group with respect
to commercial matters arising out of the normal course of business. However, the
Group is not aware of any action which, in the opinion of management, would     
materially affect its combined financial position or results of operations.     

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ACTAVA SPORTING GOODS GROUP 
(WHOLLY-OWNED SUBSIDIARIES OF THE ACTAVA GROUP INC.)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

11. ENVIRONMENTAL MATTERS                                                       

  The Group's manufacturing plants are subject to federal, state and local
pollution laws and regulations. Compliance with such laws and regulations has   
not materially affected, and is not expected to have a material effect on the   
Group's competitive position, financial condition or results of operations.     

  DP is complying with various requirements under a compliance order under
the Resource Conservation Recovery Act as administered by the State of Alabama. 
A reserve of approximately $5.9 million has been established for expected       
clean-up costs by DP and is reflected in accrued expenses on the balance sheet  
as of December 31, 1993. This estimate was based on discussions with legal      
counsel and a review of the compliance order as administered by the State of    
Alabama. Depending on the results of the assessment activities, costs in excess 
of the amount accrued could be incurred; however, in the opinion of management, 
any additional costs in excess of the amount accrued would not be material to   
the combined financial position of the Group.                                   

12. SUBSEQUENT EVENT                                                            

 On July 20, 1994, The Actava Group Inc. and Roadmaster Industries, Inc.
entered into a definitive agreement to combine the Actava Sporting Goods Group  
with Roadmaster. Under the terms of the agreement, Actava will transfer the     
Actava Sporting Goods Group to Roadmaster in exchange for approximately 19.2    
million unregistered shares of Roadmaster's common stock, representing an       
approximate 39% ownership interest in Roadmaster. Completion of the transaction 
is subject to a number of conditions, including approval by the stockholders of 
Roadmaster and Actava.                                                          

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

CONSOLIDATED FINANCIAL STATEMENTS 
YEARS ENDED JUNE 29, 1991, JUNE 27, 1992 AND
PERIOD FROM JUNE 28, 1992 TO JUNE 7, 1993 

INDEX TO FINANCIAL STATEMENTS 

                                                        [Enlarge/Download Table]
                                                                                          
Report of Independent Auditors....................................................... F-19
Audited Consolidated Financial Statements--                                               
  Consolidated Statements of Operations.............................................. F-21
  Consolidated Statements of Cash Flows.............................................. F-22
  Notes to Consolidated Financial Statements......................................... F-23

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholder                                          
Diversified Products Corporation                                                

    We have audited the accompanying consolidated statements of operations and
cash flows of Diversified Products Corporation and subsidiary for the period    
from June 28, 1992 to June 7, 1993. These financial statements are the          
responsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audit.                       

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash flows 
of Diversified Products Corporation and subsidiary for the period from June 28, 
1992 to June 7, 1993 in conformity with generally accepted accounting           
principles.                                                                     

March 3, 1994, except for Note 10                                               
as to which the date is July 20, 1994                                           

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INDEPENDENT AUDITOR'S REPORT

The Board of Directors                                                          
Diversified Products Corporation                                                

    We have audited the accompanying consolidated statements of operations and
cash flows of Diversified Products Corporation and subsidiary for the years     
ended June 29, 1991 and June 27, 1992. These consolidated financial statements  
are the responsibility of the Company's management. Our responsibility is to    
express an opinion on these consolidated financial statements based on our      
audits.                                                                         

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

As discussed in note 1 to the consolidated financial statements, the  
Company's stockholder consented to a quasi-reorganization plan effective at the 
beginning of 1992.                                                              

 In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of operations
and cash flows of Diversified Products Corporation and subsidiary for the years 
ended June 29, 1991 and June 27, 1992, in conformity with generally accepted    
accounting principles.                                                          

                         KPMG PEAT MARWICK LLP

Atlanta, Georgia                                                                
August 14, 1992                                                                 

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

CONSOLIDATED STATEMENTS OF OPERATIONS 

                                                        [Enlarge/Download Table]

                                                                                      PERIOD FROM  
                                                               YEAR ENDED            JUNE 28, 1992 
                                                      -----------------------------       TO       
                                                      JUNE 29, 1991   JUNE 27, 1992  JUNE 7, 1993  
                                                      -------------   -------------  ------------- 
                                                                                                   
Net sales (Note 1)................................... $ 195,310,447   $ 175,501,647  $ 151,942,091 
Costs of products sold (Note 7)......................   184,322,706     147,320,495    151,525,042 
Selling and administrative expenses..................    17,492,840      14,370,449     17,660,457 
Provision for doubtful accounts......................     1,608,000         500,000        482,600 
Property, plant and equipment impairment charge......     2,309,455              --             -- 
Provision for environmental clean-up costs...........            --              --      5,865,000 
Write down of unamortized patents (Note 8)...........            --              --     15,944,981 
Research and development expenses....................     1,936,000       1,881,000      1,464,278 
                                                      -------------   -------------  ------------- 
                                                        (12,358,554)     11,429,703    (41,000,267)
Interest expense and amortization of debt discount...    12,798,920       5,571,461      3,942,852 
Amortization of deferred loan costs and debt                                                       
  restructuring fees.................................       946,301         494,752             -- 
Management fee (Note 6)..............................       600,000         300,000        270,696 
                                                      -------------   -------------  ------------- 
Income (loss) from continuing operations before                                                    
  income taxes.......................................   (26,703,775)      5,063,490    (45,213,815)
Income tax expense (Note 2)..........................            --       1,854,000        145,879 
                                                      -------------   -------------  ------------- 
Income (loss) from continuing operations.............   (26,703,775)      3,209,490    (45,359,694)
Discontinued operations (Note 9):                                                                  
  Loss from operations of discontinued U.K.                                                        
     operation.......................................    (3,798,948)             --             -- 
  Loss on disposal of discontinued U.K. operation                                                  
     including provision of $282,000 For operating                                                 
     losses during phase-out period..................    (5,800,680)             --             -- 
                                                      -------------   -------------  ------------- 
Net income (loss).................................... $ (36,303,403)  $   3,209,490  $ (45,359,694)
                                                        ===========     ===========    =========== 

See accompanying notes. 

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

                                                        [Enlarge/Download Table]

                                                                                       PERIOD FROM  
                                                               YEAR ENDED             JUNE 28, 1992 
                                                      -----------------------------        TO       
                                                      JUNE 29, 1991   JUNE 27, 1992   JUNE 7, 1993  
                                                      -------------   -------------   ------------- 
                                                                                                    
OPERATING ACTIVITIES                                                                                
Net income (loss).................................... $ (36,303,403)  $   3,209,490   $ (45,359,694)
Adjustments to reconcile net income (loss) to net                                                   
  cash provided/(used) by operating activities:                                                     
  Depreciation and amortization......................    13,597,665       5,195,042       4,586,416 
  Provision for environmental clean-up costs.........            --              --       5,865,000 
  Write down of patents..............................            --              --      15,944,981 
  Property, plant & equipment impairment charge......     2,309,455              --              -- 
  Loss (gain) on disposal of property, plant, and                                                   
     equipment.......................................            --        (103,203)        627,509 
  Discontinued operations............................     7,805,112        (469,556)             -- 
  Charge in lieu of income taxes.....................            --       1,554,000              -- 
  Deferred taxes.....................................            --         100,000              -- 
  Changes in operating assets and liabilities:                                                      
     Accounts receivable.............................     5,072,622       6,520,561      (1,046,214)
     Inventories.....................................     8,057,131       3,956,044       4,430,529 
     Prepaid expenses and other assets...............        14,379        (198,205)      1,269,260 
     Accounts payable................................     7,329,268     (13,049,223)      4,402,088 
     Accrued expenses and other......................     7,892,045      (1,804,079)      1,281,772 
     Refundable income taxes.........................            --      (1,444,368)      1,444,368 
                                                      -------------   -------------   ------------- 
Net cash provided/(used) by operating activities.....    15,774,274       3,466,503      (6,553,985)
INVESTING ACTIVITIES                                                                                
Increase in investments..............................            --      (1,500,000)        (99,380)
Purchases of property, plant, and equipment..........    (4,445,745)     (3,977,576)     (2,722,933)
Proceeds from disposal of property, plant, and                                                      
  equipment..........................................        28,000         346,655         312,200 
                                                      -------------   -------------   ------------- 
Net cash used in investing activities................    (4,417,745)     (5,130,921)     (2,510,113)
FINANCING ACTIVITIES                                                                                
Payments on industrial development bonds.............      (150,000)       (100,000)       (100,000)
Payment of capital lease.............................            --              --         (31,971)
Net payments on revolving note.......................    (8,637,763)     (8,250,168)             -- 
Proceeds from notes payable..........................            --              --      11,588,779 
Principal payments on notes payable..................    (2,568,766)       (308,414)       (178,800)
Proceeds from issuance of common and preferred                                                      
  stock..............................................            --      10,510,000              -- 
Purchase of treasury stock...........................            --        (187,000)             -- 
                                                      -------------   -------------   ------------- 
Cash provided/(used) by financing activities.........   (11,356,529)      1,664,418      11,278,008 
                                                      -------------   -------------   ------------- 
Net increase in cash.................................            --              --       2,213,910 
Cash at beginning of period..........................            --              --              -- 
                                                      -------------   -------------   ------------- 
Cash at end of period................................ $          --   $          --   $   2,213,910 
                                                        ===========     ===========     =========== 
SUPPLEMENTAL CASH FLOW INFORMATION                                                                  
Interest paid........................................ $  10,548,454   $   5,942,348   $   3,942,852 
                                                        ===========     ===========     =========== 
Income taxes paid.................................... $          --   $   1,644,368   $     678,531 
                                                        ===========     ===========     =========== 

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 29, 1991, JUNE 27, 1992 AND
PERIOD FROM JUNE 28, 1992 TO JUNE 7, 1993 

1. ACCOUNTING POLICIES                                                          

Description of Business                                                     

 Diversified Products Corporation (the "Company") manufactures and sells
home fitness equipment to mass merchandisers and small retailers primarily      
within the United States. Prior to June 29, 1991 the Company was a wholly-owned 
subsidiary of Shape Holdings, Inc. The Company utilizes a 52/53-week fiscal     
year. The consolidated financial statements for 1992 reflect a 52-week year.    
Effective June 29, 1991, the Company completed a plan of debt and stockholders' 
equity restructuring under which the Company's lender ultimately assumed control
of the Company.                                                                 

   Effective as of the beginning of 1992, Diversified Products Corporation's
Class B voting common stockholder consented to a quasi-reorganization plan.     
Prior to the quasi-reorganization plan, Diversified Products Corporation        
recorded an asset impairment of $2,309,455 in the 1991 consolidated statement of
operations. As of the beginning of 1992, Diversified Products Corporation       
believed the carrying value of its assets and liabilities approximated their    
fair values; therefore no additional fair value adjustments were recorded as of 
the beginning of 1992.                                                          

     The Company had three major customers (defined as customers comprising more
than 10% of net sales) in 1991 and 1992 which comprised approximately 44% and   
53% of the Company's net sales for the years ended June 29, 1991 and June 27,   
1992, respectively. The Company had two major customers in 1993 which comprised 
approximately 29% of the Company's net sales for the period from June 28, 1992  
to June 7, 1993; however, during this same period, sales to the five largest    
customers comprised 57% of net sales for the period.                            

Principles of Consolidation                                                 

   The consolidated financial statements include the accounts of Diversified
Products Corporation and its wholly-owned subsidiary, Diversified Trucking Corp.
Significant intercompany accounts and transactions have been eliminated in      
consolidation.                                                                  

Inventories                                                                 

   Inventories are stated at the lower of cost or market using the first-in,
first-out (FIFO) method.                                                        

Property, Plant, and Equipment                                              

 Property, plant, and equipment are recorded at cost and are depreciated
over their expected useful lives. Generally, depreciation is provided on the    
straight-line method for financial reporting purposes and on accelerated methods
for tax purposes. Leasehold improvements are amortized using the straight-line  
basis over the shorter of the lease term or estimated useful life of the        
respective asset.                                                               

Deferred Loan Costs                                                         

 Deferred loan costs represent origination fees and expenses incurred to
originate the credit facility. These costs are being amortized over the         
remaining term of the finance and security agreement.                           

Income Taxes                                                                

    Deferred income taxes are recognized for income and expense items that are
reported in different years for financial reporting purposes and income tax     
purposes under the "deferred" method of APB Opinion 11.                         

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

    In February 1992 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" that is
effective for fiscal years beginning after December 15, 1992. Statement No. 109 
affects the manner and rates at which deferred income taxes are reflected on the
balance sheet and therefore, possibly the amount of taxes reflected in the      
statement of operations. The adoption of Statement No. 109 prospectively is not 
expected to have a significant effect on the Company's results of operations.   

Postretirement Benefits Other Than Pensions                                 

     The Company sponsors plans that provide postretirement medical, dental, and
life insurance benefits to full-time employees who retire with 20 years of      
service. The costs of these plans are currently accounted for on a pay-as-you-go
(cash) basis. The Financial Accounting Standards Board has issued Statement of  
Financial Accounting Standards No. 106, "Employers' Accounting for              
Postretirement Benefits Other Than Pensions" that is effective for fiscal years 
beginning after December 15, 1992. The adoption of Statement No. 106 will result
in an approximate $1,135,000 charge to operations as the cumulative effect of an
accounting change. Statement No. 106 requires the cost of postretirement        
benefits to be recognized in the financial statements over an employee's active 
working career to the date of eligibility for benefits.                         

Reclassifications                                                           

 Certain amounts reported for the years ended June 29, 1991 and June 27,
1992 have been reclassified to conform with the current year presentation in the
accompanying consolidated financial statements.                                 

2. INCOME TAXES                                                                 

     The results of operations of the Company for the period from March 31, 1993
to June 7, 1993 are included in the consolidated Federal income tax return of   
the lender who controlled the Company. Current and deferred taxes have been     
computed as if the Company filed a separate income tax return.                  

The significant components of the provision for income taxes are as   
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                                                  PERIOD FROM 
                                                           YEAR ENDED            JUNE 28, 1992
                                                  -----------------------------       TO      
                                                  JUNE 29, 1991   JUNE 27, 1992  JUNE 7, 1993 
                                                  -------------   -------------  -------------
                                                                                              
Current..........................................      $--         $   200,000     $ 145,879  
Deferred.........................................       --             100,000            --  
Charge in lieu of income taxes                          --           1,554,000            --  
                                                       ---        -------------  -------------
                                                       $--         $ 1,854,000     $ 145,879  
                                                  ==========        ==========    ==========  

   Actual income tax expense differs from the expected income tax that would
result from applying the Federal statutory income tax rate of 34% to income     
(loss) from continuing operations before income taxes as follows:               

                                                        [Enlarge/Download Table]

                                                                                PERIOD FROM  
                                                         YEAR ENDED            JUNE 28, 1992 
                                                -----------------------------       TO       
                                                JUNE 29, 1991   JUNE 27, 1992  JUNE 7, 1993  
                                                -------------   -------------  ------------- 
                                                                                             
Expected income tax expense (benefit)..........  $ (9,079,284)   $ 1,721,587   $ (14,293,197)
State income taxes, net of Federal income tax                                                
  benefit......................................            --        132,000         145,879 
Net operating losses...........................     9,079,284             --      14,293,197 
Other..........................................            --            413              -- 
                                                -------------   -------------  ------------- 
                                                 $         --    $ 1,854,000   $     145,879 
                                                   ==========     ==========     =========== 

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DIVERSIFIED PRODUCTS CORPORATION AND SUBSIDIARY 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

Due to the quasi-reorganization plan and debt/equity restructuring    
resulting in a change in ownership in excess of 50% for income tax purposes,    
limitations resulted on the future utilization of net operating loss            
carryforwards generated in 1991 and prior periods. As a result, the Company has 
bases differences between its financial statement carrying amounts and its      
income tax reporting amounts. The 1992 effect of certain financial and tax      
reporting differences have been reflected as permanent items as presented above.

   The significant differences between financial and taxable income/loss are
primarily due to depreciation and inventory lower of cost or market provisions. 

3. PROFIT SHARING/401(K) PLAN                                                   

 The Company sponsors a profit sharing/401(k) plan for all employees who
meet stated length of service requirements. Contributions under the profit      
sharing feature of the plan are made at the discretion of the Board of Directors
up to the maximum amount deductible by the Company. Profit sharing expense was  
$1,113,000 and $850,000 for the years ended June 29, 1991 and June 27, 1992,    
respectively, and no profit sharing contribution was made for the period from   
June 28, 1992 to June 7, 1993. Under the 401(k) feature of the plan, the Company
matches 25% of employee contributions up to six percent of the employee's       
compensation. Expense under the 401(k) feature of the Plan was $74,000 for the  
period from June 28, 1992 to June 7, 1993.                                      

4. LEASES                                                                       

The Company is obligated under various operating leases for machinery,
transportation equipment and computer equipment. These leases expire at various 
dates over the next five years. Rental expense under operating leases was       
approximately $1,524,000, $1,559,000 and $1,776,000 for the years ended June 29,
1991, June 27, 1992 and the period from June 28, 1992 to June 7, 1993,          
respectively.                                                                   

5. LITIGATION, CLAIMS AND ENVIRONMENTAL MATTERS                                 

There are various claims and pending actions against the Company with 
respect to commercial matters arising out of the normal course of business.     
However, the Company is not aware of any action which, in the opinion of        
management, would materially affect its consolidated results of operations.     

The Company is working with the Alabama Department of Environmental   
Management to complete certain compliance and assessment activities required    
under the Federal Resource Conservation and Recovery Act. The Company has       
accrued the total estimated costs expected to be incurred related to these      
environmental matters.                                                          

   Depending on the results of the assessment activities, costs in excess of
the amount accrued could be incurred; however, in the opinion of management, any
additional costs in excess of the amount accrued would not be material to the   
consolidated financial position of the Company.                                 

6. RELATED PARTY TRANSACTIONS                                                   

The Company paid management fee expenses to stockholders of $600,000, 
$300,000 and $270,696 for the years ended June 29, 1991, June 27, 1992 and the  
period from June 28, 1992 to June 7, 1993, respectively. The Company paid an    
affiliate for marketing services $163,000 and $125,000 for the years ended June 
29, 1991 and June 27, 1992. Such payments were pursuant to a consulting         
agreement.                                                                      

7. CHANGE IN ESTIMATED USEFUL LIVES                                             

     Effective June 30, 1991, the Company revised the estimated useful lives for
all categories of its property, plant and equipment based upon management's     
expectations of the extended economic benefit. The change in                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

estimated useful lives had the effect of reducing depreciation expense by       
$3,198,000 and increasing net income by $2,998,000 had the Company not revised  
its useful lives for property, plant and equipment but after giving effect to   
the quasi-reorganization plan.                                                  

8. PATENTS                                                                      

    Patents were stated at cost and were amortized over their estimated useful
lives on the straight line method during the years ended June 29, 1991 and June 
27, 1992. These lives ranged from six to sixteen years. During the period from  
June 28, 1992 to June 7, 1993, sales of the products related to these patents   
unexpectedly declined dramatically indicating that the value of these patents   
was substantially impaired. New technology and new product developments were the
primary causes of this decline in sales. As a result, the Company reevaluated   
the value of these patents based on discounted future cash flows and determined 
that their future value was nominal and wrote off the remaining unamortized     
patent balance of approximately $15,940,000.                                    

9. DISCONTINUED OPERATIONS                                                      

Until February 1992 the Company operated a wholly owned subsidiary,   
Diversified Products Corporation-U.K., in the United Kingdom and a majority     
owned subsidiary, Diversified Products Corporation GmbH in Western Europe. As of
June 29, 1991, the Company intended to phase out these operations. The cost of  
phasing out these operations, including the loss from operations until          
phase-out, was $5,800,680. The phase-out was completed during February 1992 by a
sale of the operations in consideration for preferred stock in the purchaser's  
new entity. The sale resulted in a gain of $472,000 which was accounted for as a
reduction in the basis of the preferred stock investment since the new entity   
was highly leveraged.                                                           

10. SUBSEQUENT EVENTS                                                           

 On June 8, 1993, the Company was acquired by The Actava Group Inc. (the
"Parent") from its lender (the "Seller") for a net purchase price of $23,629,500
consisting of 1,090,900 shares of Parent common stock valued at $12,000,000 and 
$11,629,500 in cash, and the assumption or payment of certain liabilities       
including trade payables and a revolving credit facility. The Parent also       
entered into an agreement which provided the Seller with the rights to receive  
additional payments, or additional shares of the Parent's common stock,         
depending upon the value of the issued shares over a period of not longer than  
one year from the purchase date. This option however was not exercised by the   
Seller.                                                                         

On July 20, 1994, the Parent entered into a definitive agreement with 
Roadmaster Industries, Inc. under which the Parent would transfer ownership of  
the Company together with the rest of the Parent's Sporting Goods Group to      
Roadmaster Industries, Inc. in exchange for 19.2 million shares (39%) of common 
stock in Roadmaster Industries, Inc. Completion of the transaction is subject to
a number of conditions, including approval by the stockholders of Roadmaster and
Actava.                                                                         

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

INDEX TO FINANCIAL STATEMENTS 

                                                        [Enlarge/Download Table]

                                                                                    PAGE NO.
                                                                                    --------
                                                                                            
Report of Independent Public Accountants...........................................   F-29  
Financial Statements --                                                                     
  Balance Sheets -- As of September 14, 1993 (Unaudited) and December 31, 1992              
     and 1991......................................................................   F-30  
  Statements of Income (Loss) and Divisional Equity -- For the period January 1 to          
     September 14, 1993 and Nine Months Ended September 30, 1992 (Unaudited) and            
     for the years ended December 31, 1992 and 1991................................   F-31  
  Statements of Cash Flows -- For the period January 1 to September 14, 1993 and            
     Nine Months Ended September 30, 1992 (Unaudited) and for the years ended               
     December 31, 1992 and 1991....................................................   F-32  
  Notes to Financial Statements....................................................   F-33  

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

Flexible Flyer Company                                                          
A Division of Par Industries, Inc.                                              
West Point, Mississippi                                                         

We have audited the accompanying balance sheets of the Flexible Flyer 
Company, a division of Par Industries, Inc. (an S Corporation), as of December  
31, 1992 and 1991, and the related statements of loss and divisional equity, and
cash flows for the years then ended. These financial statements are the         
responsibility of the Flexible Flyer Company's management. Our responsibility is
to express an opinion on these financial statements based on our audits.        

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Flexible Flyer Company  
as of December 31, 1992 and 1991, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.                                                                     

     As discussed in Note 11 to the financial statements, on September 14, 1993,
Par Industries, Inc. sold substantially all assets of the Flexible Flyer Company
for an amount in excess of book value.                                          

                                LEWANDOWSKI ZALICK & COMPANY

July 1, 1993 except for Notes 11 and 12,                                        
for which the date is October 22, 1993.                                     
Cleveland, Ohio                                                             

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

BALANCE SHEETS

                                                        [Enlarge/Download Table]


                                                               DECEMBER 31,          SEPTEMBER 14, 
                                                         -------------------------       1993      
                                                            1991          1992       ------------- 
                                                         -----------   -----------    (UNAUDITED)  
                                                                                                   
                                              ASSETS                                               
CURRENT ASSETS                                                                                     
  Cash.................................................  $   394,864   $    51,407   $     125,286 
  Trade accounts receivable, less allowance for                                                    
     doubtful accounts of $232,082, $94,772, and                                                   
     $84,772 at September 14, 1993 and December 31,                                                
     1992 and 1991, respectively.......................    8,668,218     9,716,612       5,661,221 
  Accounts receivable -- related party.................           --            --       1,397,177 
  Other receivables....................................      392,574       278,374          75,482 
  Inventories..........................................   11,347,264    11,677,399       8,692,584 
  Prepaid expenses and other...........................      346,997       224,037         340,327 
  Assets held for sale.................................    1,209,711     1,177,657       1,153,959 
                                                         -----------   -----------   ------------- 
          TOTAL CURRENT ASSETS.........................   22,359,628    23,125,486      17,446,036 
PROPERTY, PLANT AND EQUIPMENT                                                                      
  Land.................................................      217,092       217,092         190,503 
  Buildings............................................    3,783,551     3,969,888       3,746,418 
  Building improvements................................       98,848       123,422         123,422 
  Machinery and equipment..............................   11,373,633    12,621,753      12,989,692 
  Office furniture and equipment.......................      880,678       949,567         967,941 
  Transportation equipment.............................      533,153       527,345          91,063 
  Construction-in-progress.............................      769,581       185,688          47,443 
                                                         -----------   -----------   ------------- 
                                                          17,656,536    18,594,755      18,156,482 
  Accumulated depreciation.............................   (8,683,387)   (9,874,352)    (10,546,478)
                                                         -----------   -----------   ------------- 
                                                           8,973,149     8,720,403       7,610,004 
OTHER ASSETS...........................................      274,262       241,264         236,354 
                                                         -----------   -----------   ------------- 
                                                         $31,607,039   $32,087,153   $  25,292,394 
                                                          ==========    ==========     =========== 
                                LIABILITIES AND DIVISIONAL EQUITY                                  
CURRENT LIABILITIES                                                                                
  Line of credit.......................................  $ 9,804,407   $ 6,496,755   $   7,183,703 
  Short-term note payable..............................           --            --         500,000 
  Current portion of long-term debt....................    2,083,201     1,630,557       1,330,673 
  Trade accounts payable -- related parties............    2,055,313     6,135,887         762,441 
  Trade accounts payable -- other......................    3,210,516     4,463,988       3,224,279 
  Accrued advertising..................................       86,269       330,926         209,869 
  Accrued payroll and vacation.........................      233,147       194,148         190,236 
  Accrued insurance....................................       81,533       100,642          86,669 
  Accrued payroll taxes................................       81,515        51,467          47,898 
  Accrued other taxes..................................       11,665         9,786          55,924 
  Accrued income taxes.................................      248,983            --              -- 
  Other current liabilities............................       76,278        97,501          72,129 
                                                         -----------   -----------   ------------- 
          TOTAL CURRENT LIABILITIES....................   17,972,827    19,511,657      13,663,821 
LONG-TERM DEBT, LESS CURRENT PORTION...................    4,740,687     3,925,557       2,825,639 
DIVISIONAL EQUITY......................................    8,893,525     8,649,939       8,802,934 
                                                         -----------   -----------   ------------- 
                                                         $31,607,039   $32,087,153   $  25,292,394 
                                                          ==========    ==========     =========== 

See accompanying notes. 

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

STATEMENTS OF INCOME (LOSS) AND DIVISIONAL EQUITY 

                                                        [Enlarge/Download Table]

                                                                                             FOR THE    
                                                                           NINE MONTHS       PERIOD     
                                               YEAR ENDED DECEMBER 31,        ENDED       JANUARY 1, TO 
                                              -------------------------   SEPTEMBER 30,   SEPTEMBER 14, 
                                                 1991          1992           1992            1993      
                                              -----------   -----------   -------------   ------------- 
                                                                                   (UNAUDITED)          
                                                                                                        
NET SALES.................................... $41,571,060   $42,065,069    $ 33,809,657    $ 23,781,365 
COST OF GOODS SOLD, including $2,695,745 and                                                            
  $4,781,227 in 1993 and 1992, respectively,                                                            
  and $7,364,734 and $4,872,282 in the years                                                            
  ended 1992 and 1991, respectively, to                                                                 
  related companies..........................  36,589,140    37,590,789      29,851,330      20,931,757 
                                              -----------   -----------   -------------   ------------- 
GROSS PROFIT.................................   4,981,920     4,474,280       3,958,327       2,849,608 
SELLING EXPENSES.............................   2,146,586     2,204,835       1,699,353       1,148,849 
ADMINISTRATIVE EXPENSES......................   1,354,220     1,327,396         978,922         832,948 
RESTRUCTURING CHARGE.........................     196,968            --              --              -- 
                                              -----------   -----------   -------------   ------------- 
                                                3,697,774     3,532,231       2,678,275       1,981,797 
                                              -----------   -----------   -------------   ------------- 
INCOME FROM OPERATIONS.......................   1,284,146       942,049       1,280,052         867,811 
Other Income (Expense)                                                                                  
  Interest expense...........................  (1,759,498)   (1,565,321)     (1,176,742)     (1,005,973)
Other income:                                                                                           
  Rent from related company..................     163,200       163,200         122,400         115,600 
  Other rent.................................      82,749       138,588              --              -- 
  Other......................................      34,421        77,898         182,830         175,557 
                                              -----------   -----------   -------------   ------------- 
                                               (1,479,128)   (1,185,635)       (871,512)       (714,816)
NET INCOME (LOSS)............................    (194,982)     (243,586)        408,540         152,995 
DIVISIONAL EQUITY AT BEGINNING OF PERIOD.....   9,088,507     8,893,525       8,893,525       8,649,939 
                                              -----------   -----------   -------------   ------------- 
DIVISIONAL EQUITY AT END OF PERIOD........... $ 8,893,525   $ 8,649,939    $  9,302,065    $  8,802,934 
                                               ==========    ==========      ==========      ========== 

See accompanying notes. 

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

STATEMENTS OF CASH FLOWS

                                                        [Enlarge/Download Table]

                                                                                                    PERIOD    
                                                                                                     ENDED    
                                                           YEAR ENDED            NINE MONTHS      JANUARY 1,  
                                                          DECEMBER 31,              ENDED             TO      
                                                   --------------------------   SEPTEMBER 30,    SEPTEMBER 14,
                                                      1991           1992           1992             1993     
                                                   -----------    -----------   -------------    -------------
                                                                                         (UNAUDITED)          
                                                                                                              
CASH FLOWS FROM OPERATING ACTIVITIES                                                                          
  Net loss.......................................  $  (194,982)   $  (243,586)   $   408,540      $   152,995 
                                                   -----------    -----------   -------------    -------------
  Adjustments to reconcile net income (loss) to                                                               
    net cash provided by operating activities:                                                                
    Depreciation.................................    1,491,338      1,498,565      1,130,665        1,026,076 
    Amortization.................................       17,529         30,332             --               -- 
    (Gain) loss on sale of property and                                                                       
      equipment..................................       17,752        (48,437)       (48,383)        (158,968)
    (Increase) decrease in assets:                                                                            
      Receivables................................     (150,031)      (934,194)     1,856,857        4,258,283 
      Receivable -- related party................           --             --             --       (1,397,177)
      Inventories................................    4,291,956       (330,135)      (167,466)       2,984,815 
      Prepaid expenses and other.................      140,644        122,960       (295,612)        (116,290)
      Other assets...............................     (113,934)         2,666         89,714          (17,286)
    Increase (decrease) in liabilities:                                                                       
      Trade accounts payable.....................   (2,695,367)     1,253,472        776,154       (1,239,709)
      Trade accounts payable -- related party....      (53,467)     4,080,574      3,811,760       (5,373,446)
      Accrued expenses...........................     (555,455)       (56,143)        63,012          (96,373)
      Other current liabilities..................       22,122         21,223         15,983          (25,372)
                                                   -----------    -----------   -------------    -------------
                                                     2,413,087      5,640,883      7,232,684         (155,447)
                                                   -----------    -----------   -------------    -------------
         NET CASH PROVIDED BY (USED BY) OPERATING                                                             
           ACTIVITIES............................    2,218,105      5,397,297      7,641,224           (2,452)
CASH FLOWS FROM INVESTING ACTIVITIES                                                                          
  Purchases of property and equipment............   (1,436,382)    (1,217,235)      (940,819)        (407,114)
  Proceeds from sale of property and equipment...       57,587         51,907         51,907          696,299 
                                                   -----------    -----------   -------------    -------------
         NET CASH USED BY INVESTING ACTIVITIES...   (1,378,795)    (1,165,328)      (888,912)         289,185 
CASH FLOWS FROM FINANCING ACTIVITIES                                                                          
  Net borrowings (payments) on line of credit....       (9,874)    (3,307,652)    (6,206,878)              -- 
  Proceeds of short-term note payable............           --             --             --          500,000 
  Proceeds from long-term debt...................      816,813        343,377        343,377        1,186,948 
  Principal payments on long-term debt...........   (1,508,513)    (1,611,151)    (1,212,497)      (1,899,802)
                                                   -----------    -----------   -------------    -------------
         NET CASH PROVIDED BY (USED BY) FINANCING                                                             
           ACTIVITIES............................     (701,574)    (4,575,426)    (7,075,998)        (212,854)
         NET INCREASE (DECREASE) IN                                                                           
           CASH..................................      137,736       (343,457)      (323,686)          73,879 
CASH AT BEGINNING OF PERIOD......................      257,128        394,864        394,864           51,407 
                                                   ============   ============  ============     ============ 
CASH AT END OF PERIOD............................  $   394,864    $    51,407    $    71,178      $   125,286 
                                                   ============   ============  ============     ============ 

See accompanying notes. 

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

NOTES TO FINANCIAL STATEMENTS 
(INCLUDING NOTES APPLICABLE TO THE UNAUDITED PERIOD)

1. ORGANIZATION AND NATURE OF OPERATIONS                                        

The Flexible Flyer Company ("Flexible Flyer") and Blazon Tube Company 
("Blazon Tube") comprise the Flexible Flyer Division (the "Division") of Par    
Industries, Inc. ("Par"), an Ohio corporation. These financial statements       
present only the operations of Flexible Flyer. Flexible Flyer is a manufacturer 
of toy products whose sales are primarily to retailers located throughout the   
United States.                                                                  

  Management of Flexible Flyer believes that all appropriate expenses have
been included in these financial statements. Substantially all operating        
expenses of Flexible Flyer are incurred directly by Flexible Flyer. No          
allocations of expenses between divisions of Par are necessary.                 

     The information for the period January 1 to September 14, 1993 and the nine
month period ended September 30, 1992, respectively, included herein is         
unaudited; however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of management,       
necessary for a fair statement of results for the interim period.               

  The results of operations for period January 1 to September 14, 1993 are
not necessarily indicative of the results to be reported for the full year.     

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

Inventories                                                                 

     Inventories are stated at the lower of cost or market, with cost determined
by the first-in, first-out (FIFO) method. Inventories consist of the following: 

                                                        [Enlarge/Download Table]

                                                       DECEMBER 31,                      
                                                 -------------------------  SEPTEMBER 14,
                                                    1991          1992          1993     
                                                 -----------   -----------  -------------
                                                                             (UNAUDITED) 
                                                                                         
Raw materials................................... $ 5,597,174   $ 5,426,978   $ 4,283,493 
Work-in-process.................................   1,113,980       923,755       612,394 
Finished goods..................................   4,636,110     5,326,666     3,796,697 
                                                 -----------   -----------  -------------
                                                 $11,347,264   $11,677,399   $ 8,692,584 
                                                  ==========    ==========    ========== 

Property, Plant and Equipment                                               

 Property, plant and equipment are recorded at cost. Additions and major
renewals are capitalized. Maintenance and repairs are charged to expense as     
incurred. Upon disposal, the asset cost and related accumulated depreciation are
removed from the accounts and any gain or loss is included in income.           

Depreciation is computed primarily by the straightline method over the
following estimated useful lives:                                               

                                                        [Enlarge/Download Table]
                                                                                     
Buildings.............................................................. 20 - 40 years
Building improvements..................................................  5 - 18 years
Machinery and equipment................................................  3 - 16 years
Office furniture and fixtures..........................................  5 - 10 years
Transportation equipment...............................................   3 - 5 years

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Supplemental Cash Flow Information                                          

 The following is supplemental cash flow information for the years ended
December 31:                                                                    

                                                                [Download Table]

                                                                1991        1992   
                                                             ----------  ----------
                                                                                   
Cash paid for:                                                                     
  Interest.................................................. $1,741,484  $1,586,765
  Income taxes..............................................    248,984     248,983

3. RESTRUCTURING                                                                

On November 1, 1990, the Board of Directors of Par announced a        
restructuring plan for the Division involving the closing of the Division's     
DuQuoin, Illinois plant facility. The purpose of the restructuring was to reduce
costs by consolidating the product lines of the DuQuoin facility with those of  
the West Point, Mississippi facility. In conjunction with this plan, related    
charges of $196,968 were incurred in 1991. Further, Par has taken action to sell
the DuQuoin facility; accordingly, the net book value of the facility is        
classified as a current asset at December 31, 1992 and 1991.                    

4. LINE OF CREDIT                                                               

The Division has a revolving credit agreement with a bank. The maximum
amount outstanding cannot exceed the lesser of $20,000,000 or a percentage of   
combined eligible accounts receivable and certain inventories. The total amount 
outstanding was $14,828,152 at December 31, 1992 and $11,891,819 at December 31,
1991, of which $6,496,755 and $9,804,407 was the balance applicable to Flexible 
Flyer at December 31, 1992 and 1991, respectively. Borrowings under the line    
provide for interest at the bank's prime rate plus 1.5% and are due on demand.  
The line is subject to renewal on July 31, 1993.                                

In addition to the above, the same bank has extended credit to the    
Division, on a revolving credit basis, for amounts which exceed the Division's  
total borrowing base. These "permitted overadvances" provide for interest at the
bank's prime rate plus 3.5%, and were repaid by the due date of March 15, 1993. 
At December 31, 1992, the permitted overadvance was $1,700,000, of which        
$1,341,218 had been used by the Division.                                       

The line of credit and promissory note payable to bank (Note 5) are   
collateralized by substantially all assets of the Division.                     

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT                                                               

     Flexible Flyer had the following long-term debt obligations at December 31,
1992 and 1991:                                                                  

                                                        [Enlarge/Download Table]

                                                                       1991          1992     
                                                                    -----------   ----------- 
                                                                                              
A promissory note payable to bank (total balance outstanding was                              
  $5,000,000 at December 31, 1992 and $6,000,000 at December 31,                              
  1991, of which $500,000 and $600,000, respectively, was                                     
  applicable to Blazon Tube) in monthly installments of $75,000                               
  ($83,333 for the Division), plus interest at 1% over the bank's                             
  prime rate, through January 1, 1995, at which time the remaining                            
  principal balance of $2,511,000 ($2,700,000 for the Division) is                            
  due. The note is secured by substantially all assets of the                                 
  Division. The current portion of this note includes $300,000 as                             
  the estimated additional amount which will have to be repaid in                             
  1993 as a result of the intended sale of the Division's DuQuoin                             
  plant facility, which has been classified as an asset held for                              
  sale............................................................  $ 5,400,000   $ 4,500,000 
A promissory note payable to finance company in monthly                                       
  installments of $18,214, including interest at 10.7% through                                
  December 15, 1994. The note is secured by certain molds with an                             
  original cost of $560,419.......................................      560,419       391,880 
A promissory note payable to bank in monthly installments of                                  
  $9,250, including interest at 1% over the bank's prime rate,                                
  through May 8, 1995. The note is secured by machinery and                                   
  equipment with an original cost of $1,339,069...................           --       244,392 
A promissory note payable to bank in monthly installments of                                  
  $4,675, including interest at 10%, through July 1, 1996. The                                
  note is secured by certain transportation equipment with an                                 
  original cost of $307,485.......................................      205,802       168,608 
A note payable in monthly installments of $3,773, including                                   
  interest at 11.6% through December 1995. The note is secured by                             
  certain office equipment with an original cost of $170,131......      149,927       120,877 
A promissory note payable to bank in monthly installments of                                  
  $2,950, including interest at 9.75%, through April 1, 1994. The                             
  note is secured by certain real estate with an original cost of                             
  $220,277........................................................       75,046        45,673 
A promissory note payable to bank in monthly installments of                                  
  $13,590, including interest at 1% over the bank's prime rate,                               
  through June 2, 1992, at which time the remaining principal                                 
  balance of $283,491 was paid....................................      347,374            -- 
Other.............................................................       85,320        84,684 
                                                                    -----------   ----------- 
     TOTAL........................................................    6,823,888     5,556,114 
     CURRENT PORTION..............................................   (2,083,201)   (1,630,557)
     LONG-TERM PORTION............................................  $ 4,740,687   $ 3,925,557 
                                                                     ==========    ========== 

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term debt for the next five years are as follows:  

                                                                [Download Table]
                                                                                    
1993..................................................................... $1,630,557
1994.....................................................................  1,326,797
1995.....................................................................  2,851,242
1996.....................................................................     47,518
1997.....................................................................         --

    Certain of the above agreements contain loan covenants that require Par to
maintain specific levels of working capital, net worth, and debt to equity      
ratios, among others. Par did not meet the net worth covenant at December 31,   
1992; however, the bank issued a waiver of this loan covenant violation on April
5, 1993, at which time the amount of the required net worth was reduced.        

6. FEDERAL INCOME TAXES                                                         

The Division's merger into Par, effective July 1, 1989, resulted in a 
change in their tax status from a C Corporation to an S Corporation.            
Accordingly, the Division does not pay income taxes on its taxable income.      
Instead, all income, losses and tax credits pass through to the shareholders of 
Par for inclusion on their personal income tax returns. Accordingly, no         
provision for income taxes has been recognized in the statements of loss.       

 Also, as a result of the change in tax status in 1989, the Division was
required to recognize as income the LIFO reserve existing at the date of the    
change in tax status. Tax regulations allowed the Division to pay the tax       
liability for the LIFO reversal over a period of four years, with the last      
installment of $248,983 being paid in 1992.                                     

7. RETIREMENT PLAN                                                              

Flexible Flyer has a 401(k) retirement plan covering all eligible     
employees. In addition to elective wage deferrals by employees, the plan also   
calls for a matching contribution by Flexible Flyer. Total expense under this   
plan was $59,291 and $33,145 in 1992 and 1991, respectively.                    

8. OPERATING LEASES                                                             

  Flexible Flyer leases certain office space, vehicles and equipment under
noncancelable operating leases. The following is a schedule of the future       
minimum rental payments required under these leases:                            

                                                                [Download Table]
                                                                                   
1993...................................................................... $122,300
1994......................................................................  122,900
1995......................................................................   96,200
1996......................................................................   96,200
1997......................................................................  101,200
Thereafter................................................................  138,400

Total 1992 and 1991 rent expense for these leases was $137,421 and    
$106,494, respectively.                                                         

9. RELATED PARTY TRANSACTIONS                                                   

  Flexible Flyer purchased raw materials inventory totalling $5,815,320 in
1992 and $2,979,355 in 1991 from Blazon Tube. Trade accounts payable to Blazon  
Tube totalled $5,716,020 at December 31, 1992 and                               

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FLEXIBLE FLYER COMPANY
A DIVISION OF PAR INDUSTRIES, INC.
(AN S CORPORATION)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

$1,502,440 at December 31, 1991. Flexible Flyer pays interest at 9.5% on this   
account payable balance. Total interest expense incurred to Blazon Tube was     
approximately $350,000 in 1992 and $110,000 in 1991.                            

     Flexible Flyer also purchases raw materials inventory from another division
of Par. Total purchases were $1,493,925 in 1992 and $1,515,640 in 1991. Trade   
accounts payable to that division were $419,867 at December 31, 1992 and        
$552,873 at December 31, 1991. No interest is charged on this accounts payable  
balance.                                                                        

Blazon Tube pays rent of $13,600 per month to Flexible Flyer on a     
month-to-month basis for use of a manufacturing and office facility. Total rent 
income was $163,200 in 1992 and 1991.                                           

  Trade accounts receivable includes $196,677 in 1992 and $111,439 in 1991
due from a company affiliated by common ownership. Sales to this affiliate      
totaled $758,215 and $372,804 in 1992 and 1991, respectively. In addition, other
accounts receivable includes $219,607 in 1992 and $366,747 in 1991 from this    
related company for certain operating advances.                                 

10. MAJOR CUSTOMERS                                                             

Sales to three major customers totaled $18,701,980 and $16,714,118, or
44.5% and 40.2%, of 1992 and 1991 total net sales, respectively.                

11. SUBSEQUENT EVENT                                                            

  On September 14, 1993, substantially all of the assets of Flexible Flyer
were sold for an amount in excess of book value.                                

12. CONTINGENCY                                                                 

    On June 10, 1993, the Environmental Protection Agency ("EPA") notified the
Division that it is a potentially responsible party ("PRP") as a generator of   
hazardous substances under the Comprehensive Environmental Response,            
Compensation, and Liability Act of 1980, as amended. Governmental agencies have 
alleged that the Division contributed to contamination problems to soil and     
ground water at an eight acre site located in Marshall, Mississippi. The EPA has
requested that the Division, along with other PRP's, voluntarily perform the    
work necessary to prevent any releases or threatened releases of hazardous      
substances from the site. On August 6, 1993, a PRP agreement was signed by the  
vast majority of major generators, including Flexible Flyer. The initial        
allocation of total costs assigned to Flexible Flyer is approximately 1.55%. The
total cost of the project, including site cleanup, soil remediation,            
establishment of potable water to residential wells, and cleanup of ground water
contamination, has not been determined. Any potential liability related to this 
agreement was retained by Par pursuant to the sale of assets referred to in Note
11.                                                                             

 Because of the status of this matter, it is impossible to determine any
potential liability that may result; accordingly, no provision has been made in 
the accompanying financial statements. Management does not believe, based on    
information available at this time, that the final disposition of this matter   
will adversely affect Flexible Flyer's financial position.                      

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ANNEX A   
AGREEMENT AND PLAN OF REORGANIZATION  

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AGREEMENT AND PLAN OF REORGANIZATION  

DATED AS OF JULY 20, 1994   

BY AND AMONG  

THE ACTAVA GROUP INC.,  

DIVERSIFIED PRODUCTS CORPORATION,   

HUTCH SPORTS USA, INC.,   

NELSON/WEATHER-RITE, INC.,  

WILLOW HOSIERY COMPANY, INC.,   

AND   

ROADMASTER INDUSTRIES, INC.   

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TABLE OF CONTENTS   

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ARTICLE I                                                                             
THE EXCHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1  
         Section 1.1      The Exchanges . . . . . . . . . . . . . . . . . . . . .  1  
         Section 1.2      Transfer of Shares  . . . . . . . . . . . . . . . . . .  2  
         Section 1.3      Closing . . . . . . . . . . . . . . . . . . . . . . . .  2  

ARTICLE II                                                                            
REPRESENTATIONS AND WARRANTIES OF ACTAVA  . . . . . . . . . . . . . . . . . . . .  2  
         Section 2.1      Organization and Qualification  . . . . . . . . . . . .  2  
         Section 2.2      Authority; Non-Contravention; Approvals . . . . . . . .  3  
         Section 2.3      Ownership of the Sports Subsidiaries Stock  . . . . . .  4  

ARTICLE III                                                                           
REPRESENTATIONS AND WARRANTIES OF ACTAVA AND                                          
THE SPORTS SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4  
         Section 3.1      Organization and Qualification  . . . . . . . . . . . .  5  
         Section 3.2      Capitalization  . . . . . . . . . . . . . . . . . . . .  5  
         Section 3.3      Subsidiaries  . . . . . . . . . . . . . . . . . . . . .  6  
         Section 3.4      Authority; Non-Contravention; Approvals . . . . . . . .  7  
         Section 3.5      Reports and Financial Statements  . . . . . . . . . . .  8  
         Section 3.6      Absence of Undisclosed Liabilities  . . . . . . . . . .  9  
         Section 3.7      Absence of Certain Changes or Events  . . . . . . . . . 10  
         Section 3.8      Litigation  . . . . . . . . . . . . . . . . . . . . . . 10  
         Section 3.9      Transfer Claims . . . . . . . . . . . . . . . . . . . . 10  
         Section 3.10     No Violation of Law . . . . . . . . . . . . . . . . . . 11  
         Section 3.11     Compliance with Agreements  . . . . . . . . . . . . . . 11  
         Section 3.12     Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 12  
         Section 3.13     Employee Benefit Plans; ERISA . . . . . . . . . . . . . 13  
         Section 3.14     Investment Company Act  . . . . . . . . . . . . . . . . 15  
         Section 3.15     Labor Controversies . . . . . . . . . . . . . . . . . . 15  
         Section 3.16     Environmental Matters . . . . . . . . . . . . . . . . . 15  
         Section 3.17     Certain Agreements  . . . . . . . . . . . . . . . . . . 16  
         Section 3.18     Properties  . . . . . . . . . . . . . . . . . . . . . . 16  
         Section 3.19     Affiliate Transactions  . . . . . . . . . . . . . . . . 17  
         Section 3.20     Proxy Statement . . . . . . . . . . . . . . . . . . . . 17  
         Section 3.21     Materiality . . . . . . . . . . . . . . . . . . . . . . 17  

ARTICLE IV                                                                            
REPRESENTATIONS AND WARRANTIES OF ROADMASTER  . . . . . . . . . . . . . . . . . . 18  
         Section 4.1      Organization and Qualification  . . . . . . . . . . . . 18  
         Section 4.2      Capitalization  . . . . . . . . . . . . . . . . . . . . 18  
         Section 4.3      Subsidiaries  . . . . . . . . . . . . . . . . . . . . . 19  
         Section 4.4      Authority; Non-Contravention; Approvals . . . . . . . . 19  

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         Section 4.5      Reports and Financial Statements  . . . . . . . . . . . 21 
         Section 4.6      Absence of Undisclosed Liabilities  . . . . . . . . . . 22 
         Section 4.7      Absence of Certain Changes or Events  . . . . . . . . . 22 
         Section 4.8      Litigation  . . . . . . . . . . . . . . . . . . . . . . 22 
         Section 4.9      Transfer Claims . . . . . . . . . . . . . . . . . . . . 23 
         Section 4.10     No Violation of Law . . . . . . . . . . . . . . . . . . 23 
         Section 4.11     Compliance with Agreements  . . . . . . . . . . . . . . 24 
         Section 4.12     Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 24 
         Section 4.13     Employee Benefit Plans; ERISA . . . . . . . . . . . . . 25 
         Section 4.14     Investment Company Act  . . . . . . . . . . . . . . . . 26 
         Section 4.15     Labor Controversies . . . . . . . . . . . . . . . . . . 26 
         Section 4.16     Environmental Matters . . . . . . . . . . . . . . . . . 27 
         Section 4.17     Certain Agreements  . . . . . . . . . . . . . . . . . . 27 
         Section 4.18     Properties  . . . . . . . . . . . . . . . . . . . . . . 28 
         Section 4.19     Affiliate Transactions  . . . . . . . . . . . . . . . . 28 
         Section 4.20     Proxy Statement . . . . . . . . . . . . . . . . . . . . 28 
         Section 4.21     Materiality . . . . . . . . . . . . . . . . . . . . . . 29 

ARTICLE V                                                                            
CONDUCT OF BUSINESS PENDING THE EXCHANGES . . . . . . . . . . . . . . . . . . . . 29 
         Section 5.1      Conduct of Business by the Sports                          
                                  Subsidiaries Pending the Exchanges  . . . . . . 29 
         Section 5.2      Conduct of Business by Roadmaster                          
                                  Pending the Exchanges . . . . . . . . . . . . . 30 
         Section 5.3      Acquisition Transactions  . . . . . . . . . . . . . . . 32 
         Section 5.4      Access to Information . . . . . . . . . . . . . . . . . 32 

ARTICLE VI                                                                           
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 
         Section 6.1      Public Announcements  . . . . . . . . . . . . . . . . . 34 
         Section 6.2      Shareholders' Approval; Proxy Statement . . . . . . . . 34 
         Section 6.3      Expenses  . . . . . . . . . . . . . . . . . . . . . . . 35 
         Section 6.4      Agreement to Cooperate  . . . . . . . . . . . . . . . . 35 
         Section 6.5      Stock Exchange Listing  . . . . . . . . . . . . . . . . 35 
         Section 6.6      Insurance Coverage  . . . . . . . . . . . . . . . . . . 36 
         Section 6.7      Releases  . . . . . . . . . . . . . . . . . . . . . . . 36 
         Section 6.8      Additional Income Tax Matters . . . . . . . . . . . . . 37 
         Section 6.9      Intercompany Accounts . . . . . . . . . . . . . . . . . 44 
         Section 6.10     Employee Benefits Matters . . . . . . . . . . . . . . . 45 
         Section 6.11     Financial Statements  . . . . . . . . . . . . . . . . . 49 
         Section 6.12     Products Liability  . . . . . . . . . . . . . . . . . . 49 
         Section 6.13     Satisfaction of Indemnity With Roadmaster                  
                                  Common Stock  . . . . . . . . . . . . . . . . . 50 
         Section 6.14     Certain Environmental Matters . . . . . . . . . . . . . 51 

ARTICLE VII                                                                          
CONDITIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 
         Section 7.1      Conditions to Each Party's Obligation to                   
                                  Effect the Exchanges  . . . . . . . . . . . . . 51 

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         Section 7.2      Conditions to Obligation of Actava to                      
                                  Effect the Exchanges  . . . . . . . . . . . . . 52 
         Section 7.3      Conditions to Obligations of Roadmaster to                 
                                  Effect the Exchanges  . . . . . . . . . . . . . 53 

ARTICLE VIII                                                                         
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . 54 
         Section 8.1      Termination . . . . . . . . . . . . . . . . . . . . . . 54 
         Section 8.2      Effect of Termination . . . . . . . . . . . . . . . . . 55 
         Section 8.3      Amendment . . . . . . . . . . . . . . . . . . . . . . . 56 
         Section 8.4      Waiver  . . . . . . . . . . . . . . . . . . . . . . . . 56 

ARTICLE IX                                                                           
GENERAL PROVISIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 
         Section 9.1      Survival  . . . . . . . . . . . . . . . . . . . . . . . 56 
         Section 9.2      Brokers . . . . . . . . . . . . . . . . . . . . . . . . 56 
         Section 9.3      Notices . . . . . . . . . . . . . . . . . . . . . . . . 56 
         Section 9.4      Interpretation  . . . . . . . . . . . . . . . . . . . . 57 
         Section 9.5      Miscellaneous . . . . . . . . . . . . . . . . . . . . . 57 
         Section 9.6      Counterparts  . . . . . . . . . . . . . . . . . . . . . 58 
         Section 9.7      Parties in Interest . . . . . . . . . . . . . . . . . . 58 
         Section 9.8      Schedules . . . . . . . . . . . . . . . . . . . . . . . 58 

EXHIBITS                                                                             

Exhibit A                 Opinion of Counsel to Roadmaster                           
Exhibit B                 Registration Rights Agreement                              
Exhibit C                 Shareholders Agreement                                     
Exhibit D                 Employment Agreement for Henry Fong                        
Exhibit E                 Employment Term Sheet for Edward E. Shake                  
Exhibit F                 Roadmaster Restated Certificate of Incorporation           
Exhibit G                 Roadmaster Amended and Restated By-laws                    
Exhibit H                 Environmental Indemnity Agreement                          
Exhibit I                 Opinion of Counsel to Actava                               

SCHEDULES                                                                            

1.1              Allocation of Exchange Shares                                       
2.2(b)           Actava Required Third Party Approvals                               
2.2(c)           Actava Required Statutory Approvals                                 
2.3              Sports Subsidiaries Stock Encumbrances                              
3.2(b)           Sports Subsidiaries Preemptive Rights and Options                   
3.3              Subsidiaries of the Sports Subsidiaries                             
3.4(b)           Sports Subsidiaries Required Third Party Approvals                  
3.6              Sports Subsidiaries Undisclosed Liabilities                         
3.8              Sports Subsidiaries Litigation                                      
3.10             Sports Subsidiaries Legal Compliance                                
3.11             Sports Subsidiaries Defaults                                        
3.12             Sports Subsidiaries Tax Matters                                     

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3.13(a)  Sports Subsidiaries Employee Benefits Plans                
3.13(b)  Sports Subsidiaries Employee Benefits Liabilities          
3.13(c)  Sports Subsidiaries Insurance Arrangements                 
3.15     Sports Subsidiaries Labor Controversies                    
3.16     Sports Subsidiaries Environmental Matters                  
3.17     Sports Subsidiaries Employment and Consulting Agreements   
3.18(a)  Sports Subsidiaries Property Matters                       
3.18(b)  Sports Subsidiaries Intellectual Property                  
3.19     Sports Subsidiaries Affiliate Transactions                 
4.2(b)   Roadmaster Preemptive Rights and Options                   
4.3      Subsidiaries of Roadmaster                                 
4.4(b)   Roadmaster Required Third Party Approvals                  
4.4(c)   Roadmaster Required Statutory Approvals                    
4.6      Roadmaster Undisclosed Liabilities                         
4.8      Roadmaster Litigation                                      
4.10     Roadmaster Legal Compliance                                
4.11     Roadmaster Defaults                                        
4.12     Roadmaster Tax Matters                                     
4.13(a)  Roadmaster Employee Benefits Plans                         
4.13(b)  Roadmaster Employee Benefits Liabilities                   
4.13(c)  Roadmaster Insurance Arrangements                          
4.15     Roadmaster Labor Controversies                             
4.16     Roadmaster Environmental Matters                           
4.17     Roadmaster Employment and Consulting Agreements            
4.18(a)  Roadmaster Property Matters                                
4.18(b)  Roadmaster Intellectual Property                           
4.19     Roadmaster Affiliate Transactions                          
5.1      Exceptions to Conduct of the Sports Subsidiaries Businesses
5.2      Exceptions to Conduct of Roadmaster Business               
6.9(e)   Actava Intercompany Balances as of July 1, 1994            
6.14     Description of Orbitron Parcel                             
9.2      Brokers Receiving Fees from Roadmaster                     

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AGREEMENT AND PLAN OF REORGANIZATION  

      AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of
July 20, 1994 (the "Agreement"), by and among The Actava Group Inc., a Delaware 
corporation ("Actava"), Diversified Products Corporation, an Alabama            
corporation ("DP"), Hutch Sports USA, Inc., a Delaware corporation ("Hutch"),   
Nelson/Weather-Rite Inc., a Delaware corporation ("NWR"), Willow Hosiery        
Company, Inc., a New York corporation ("Willow"), and Roadmaster Industries,    
Inc., a Delaware corporation ("Roadmaster").  DP, Hutch, NWR and Willow are     
referred to herein individually as a "Sports Subsidiary" and collectively as    
the "Sports Subsidiaries."                                                      

      WHEREAS, Actava owns all of the issued and outstanding shares of the
capital stock of each of the Sports Subsidiaries (the "Sports Subsidiaries      
Stock");                                                                        

WHEREAS, the Boards of Directors of Actava and Roadmaster have
approved the exchange of the Sports Subsidiaries Stock for shares of            
Roadmaster's common stock, $.01 par value ("Roadmaster Common Stock"), pursuant 
to this Agreement (individually an "Exchange" and collectively, the             
"Exchanges") and the transactions contemplated hereby upon the terms and        
subject to the conditions set forth herein; and                                 

        WHEREAS, Actava, Roadmaster and each of the Sports Subsidiaries intend
that this Agreement constitute a plan of reorganization and that the separate   
exchanges of all of the Sports Subsidiaries Stock by Actava solely for          
Roadmaster Common Stock each qualify for federal income tax purposes as a       
separate "reorganization" within the meaning of Section 368(a)(1)(B) of the     
Internal Revenue Code of 1986, as amended (the "Code") with respect to DP,      
Hutch, NWR and Willow;                                                          

NOW, THEREFORE, in consideration of the premises and the      
representations, warranties, covenants and agreements contained herein, the     
parties hereto, intending to be legally bound hereby, agree as follows:         

ARTICLE I 
THE EXCHANGES 

    Section 1.1      THE EXCHANGES.  Upon the terms and subject to the
conditions of this Agreement, at the Closing (as hereinafter defined), Actava   
shall exchange the Sports Subsidiaries Stock for a total of 19,169,000 validly  
issued, fully paid and nonassessable shares of Roadmaster Common Stock (the     
"Exchange Shares").  The Exchange Shares shall be allocated in the manner set   
forth below unless Actava and Roadmaster, prior to the Closing Date, have       
agreed on and attached as Schedule 1.1 hereto an allocation of the Exchange     
Shares which is different from that set forth below:                            

            (a)      all of the issued and outstanding shares of DP in
exchange for 6,709,150 of the Exchange Shares;                                  

               (b)      all of the issued and outstanding shares of Hutch in
exchange for 5,654,855 of the Exchange Shares;                                  

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             (c)      all of the issued and outstanding shares of NWR in
exchange for 4,061,902 of the Exchange Shares; and                              

                (d)      all of the issued and outstanding shares of Willow in
exchange for 2,743,093 of the Exchange Shares.                                  

    Section 1.2      TRANSFER OF SHARES.  At the Closing, Actava shall
deliver to Roadmaster certificates evidencing the Sports Subsidiaries Stock,    
duly endorsed in blank or accompanied by duly executed stock transfer powers.   
At the Closing, Roadmaster shall deliver to Actava certificates evidencing the  
Exchange Shares.                                                                

Section 1.3      CLOSING.  The closing (the "Closing") of the 
transactions contemplated by this Agreement shall take place at the offices of  
Smith, Gambrell & Russell, Suite 3100, Promenade II, 1230 Peachtree Street,     
Atlanta, Georgia 30303, on the date on which the last of the conditions set     
forth in Article VII hereof is fulfilled or waived, or at such other time and   
place as Actava and Roadmaster shall agree (the date on which the Closing       
occurs being the "Closing Date").                                               

ARTICLE II  

REPRESENTATIONS AND WARRANTIES OF ACTAVA  

Actava represents and warrants to Roadmaster as follows:      

Section 2.1      ORGANIZATION AND QUALIFICATION.  Actava is a 
corporation duly organized, validly existing and in good standing under the     
laws of the State of Delaware and has the requisite corporate power and         
authority to own, lease and operate its assets and properties and to carry on   
its business as it is now being conducted.  Actava is qualified to do business  
and is in good standing in each jurisdiction in which the properties owned,     
leased or operated by it or the nature of the business conducted by it makes    
such qualification necessary, except where the failure to be so qualified and   
in good standing will not, when taken together with all other such failures,    
have a material adverse effect on the business, condition (financial or other)  
or results of operations of Actava and its subsidiaries, taken as a whole.      

Section 2.2      AUTHORITY; NON-CONTRAVENTION; APPROVALS.     

               (a)  Actava has full corporate power and authority to enter
into this Agreement and, subject to obtaining the Actava Shareholders' Approval 
(if required and as defined in Section 6.2(b)) and the Actava Required          
Statutory Approvals (as defined in Section 2.2(c)), to consummate the           
transactions contemplated hereby.  The execution and delivery of this           
Agreement, and the consummation by Actava of the transactions contemplated      
hereby, have been duly authorized by Actava's Board of Directors and no other   
corporate proceedings on the part of Actava is necessary to authorize the       
execution and delivery of this Agreement and the consummation by Actava of the  
transactions contemplated hereby, except for obtaining the Actava Shareholders' 
Approval (if required) and the Actava Required Statutory Approvals.  This       
Agreement has been duly and validly executed and delivered by Actava, and,      
assuming the due authorization, execution and delivery hereof by Roadmaster,    
constitutes a valid and binding Agreement of Actava enforceable in accordance   
with its terms.                                                                 

          (b)      The execution and delivery of this Agreement by
Actava do not, and the consummation by Actava of the transactions contemplated  
hereby will not as of the Closing Date, violate,                                

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conflict with or result in a breach of any provision of, or constitute a        
default (or an event which, with notice or lapse of time or both, would         
constitute a default) under, or result in the termination of, or accelerate the 
performance required by, or result in a right of termination or acceleration    
under, or result in the creation of any lien, security interest, charge or      
encumbrance upon any of the properties or assets of Actava or any of its        
subsidiaries under any of the terms, conditions or provisions of (i) the        
respective charters or by-laws of Actava or any of its subsidiaries, (ii)       
subject to obtaining the Actava Required Statutory Approvals and the receipt of 
the Actava Shareholders' Approval (if required), any statute, law, ordinance,   
rule, regulation, judgment, decree, order, injunction, writ, permit or license  
of any court or governmental authority applicable to Actava or any of its       
subsidiaries or any of their respective properties or assets, or (iii) subject  
to obtaining the required approvals set forth in Schedule 2.2(b) any note,      
bond, mortgage, indenture, deed of trust, license, franchise, permit,           
concession, contract, lease or other instrument, obligation or agreement of any 
kind to which Actava or any of its subsidiaries is now a party or by which      
Actava or any of its subsidiaries or any of their respective properties or      
assets may be bound or affected, excluding from the foregoing clauses (ii) and  
(iii) such violations, conflicts, breaches, defaults, terminations,             
accelerations or creations of liens, security interests, charges or             
encumbrances that would not, in the aggregate, have a material adverse effect   
on the business, condition (financial or other) or results of operations of     
Actava and its subsidiaries, taken as a whole.                                  

              (c)      Except for (i) the filings by Actava and Roadmaster
required by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of     
1976, as amended, (the "HSR Act"), and (ii) the required filings with or        
approvals set forth in Schedule 2.2(c) (the filings and approvals referred to   
in clauses (i) and (ii) are collectively referred to as the "Actava Required    
Statutory Approvals"), no declaration, filing or registration with, or notice   
to, or authorization, consent or approval of, any governmental or regulatory    
body or authority is necessary for the execution and delivery of this Agreement 
by Actava or the consummation by Actava of the transactions contemplated        
hereby, other than such declarations, filings, registrations, notices,          
authorizations, consents or approvals which, if not made or obtained, as the    
case may be, would not, in the aggregate, have a material adverse effect on the 
business, condition (financial or other) or results of operations of Actava and 
its subsidiaries, taken as a whole.                                             

      Section 2.3  OWNERSHIP OF THE SPORTS SUBSIDIARIES STOCK.  All of the
shares of Sports Subsidiaries Stock are validly issued, fully paid and          
nonassessable and free of preemptive rights, and, except as set forth in        
Schedule 2.3, are owned by Actava free and clear of any liens, claims,          
encumbrances, security interests, equities, charges and options of any nature   
whatsoever.  Except as set forth in Schedule 2.3, there are no subscriptions,   
options, warrants, rights, calls, contracts, voting trusts, proxies or other    
commitments, understandings, restrictions or arrangements relating to the       
issuance, sale, voting, transfer, ownership or other rights with respect to any 
shares of the Sports Subsidiaries Stock, including any right of conversion or   
exchange under any outstanding security, instrument or agreement.               

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF ACTAVA  
AND THE SPORTS SUBSIDIARIES 

        Actava and the Sports Subsidiaries represent and warrant to Roadmaster
as follows:                                                                     

Section 3.1      ORGANIZATION AND QUALIFICATION.  Each Sports 
Subsidiary is a corporation duly organized, validly existing and in good        
standing under the laws of the state of its incorporation and has               

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the requisite corporate power and authority to own, lease and operate its       
assets and properties and to carry on its business as it is now being           
conducted.  Each Sports Subsidiary is qualified to do business and is in good   
standing in each jurisdiction in which the properties owned, leased or operated 
by it or the nature of the business conducted by it makes such qualification    
necessary, except where the failure to be so qualified and in good standing     
will not, when taken together with all other such failures, have a material     
adverse effect on the business, condition (financial or other) or results of    
operations of the Sports Subsidiaries and their subsidiaries, taken as a whole. 
True, accurate and complete copies of each Sports Subsidiary's certificate of   
incorporation and by-laws, in each case as in effect on the date hereof,        
including all amendments thereto, have heretofore been delivered to Roadmaster. 

        Section 3.2      CAPITALIZATION.  (a) The authorized capital stock of:
(i) DP consists of 1,000 shares of common stock, $1.00 par value per share, all 
of which shares are issued and outstanding, and (ii) NWR consists of 1,000      
shares of common stock, $1.00 par value per share, all of which shares are      
issued and outstanding, and (iii) Hutch consists of 1,000 shares of common      
stock, $1.00 par value per share, all of which shares are issued and            
outstanding; and (iv) Willow consists of 100,000 shares of common stock, $1.00  
par value per share, of which 46,000 shares are issued and outstanding, and     
10,000 shares of preferred stock, $1.00 par value per share, of which 2,052     
shares are issued and outstanding.  All of the issued and outstanding shares of 
Sports Subsidiaries Stock are validly issued and are fully paid, nonassessable  
and free of preemptive rights.  No subsidiary of any Sports Subsidiary holds    
any shares of the capital stock of any Sports Subsidiary.                       

               (b)      Except as set forth in Schedule 3.2(b) hereof, as of
the date hereof, there are no outstanding subscriptions, options, calls,        
contracts, commitments, understandings, restrictions, arrangements, rights or   
warrants, including any right of conversion or exchange under any outstanding   
security, instrument or other agreement, obligating any Sports Subsidiary or    
any subsidiary of any Sports Subsidiary to issue, deliver or sell, or cause to  
be issued, delivered or sold, additional shares of the capital stock of any     
Sports Subsidiary or obligating any Sports Subsidiary or any subsidiary of any  
Sports Subsidiary to grant, extend or enter into any such agreement or          
commitment.  Except as set forth in Schedule 3.2(b), there are no voting        
trusts, proxies or other agreements or understandings to which any Sports       
Subsidiary or any subsidiary of a Sports Subsidiary is a party or is bound with 
respect to the voting of any shares of capital stock of any Sports Subsidiary.  

Section 3.3      SUBSIDIARIES.  Schedule 3.3 sets forth every 
subsidiary of each of the Sports Subsidiaries and the jurisdiction of its       
incorporation.  Each direct and indirect corporate subsidiary of each of the    
Sports Subsidiaries is a corporation duly organized, validly existing and in    
good standing under the laws of its jurisdiction of incorporation and has the   
requisite power and authority to own, lease and operate its assets and          
properties and to carry on its business as it is now being conducted.  Each     
subsidiary of each of the Sports Subsidiaries is qualified to do business, and  
is in good standing, in each jurisdiction in which the properties owned, leased 
or operated by it or the nature of the business conducted by it makes such      
qualification necessary, except where the failure to be so qualified and in     
good standing will not, when taken together with all such other failures, have  
a material adverse effect on the business, condition (financial or other) or    
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole.  Except as set forth in Schedule 3.3, all of the outstanding shares 
of capital stock of each corporate subsidiary of each of the Sports             
Subsidiaries are validly issued, fully paid, nonassessable and except, with     
respect to wholly owned subsidiaries, free of preemptive rights and those       
shares owned directly or indirectly by the Sports Subsidiaries are owned free   
and clear of any liens, claims, encumbrances, security interests, equities,     
charges and options of any nature whatsoever.  Except as set forth in Schedule  
3.3, the Sports Subsidiaries own directly or indirectly all of the issued and   
outstanding shares of the capital stock of each of their corporate              
subsidiaries.  Except as set forth in                                           

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Schedule 3.3, there are no subscriptions, options, warrants, rights, calls,     
contracts, voting trusts, proxies or other commitments, understandings,         
restrictions or arrangements relating to the issuance, sale, voting, transfer,  
ownership or other rights with respect to any shares of capital stock of any    
corporate subsidiary of any Sports Subsidiary, including any right of           
conversion or exchange under any outstanding security, instrument or agreement. 
As used in this Agreement, the term "subsidiary" shall mean any corporation,    
partnership, joint venture or other entity of which the specified entity,       
directly or indirectly, controls or which the specified entity (either acting   
alone or together with its other subsidiaries) owns, directly or indirectly,    
more than 50% of the stock or other voting interests, the holders of which are, 
ordinarily or generally, in the absence of contingencies (which contingencies   
have not occurred) or understandings (which understandings have not yet been    
required to be performed) entitled to vote for the election of a majority of    
the board of directors or any similar governing body.                           

     Section 3.4      AUTHORITY; NON-CONTRAVENTION; APPROVALS.  (a) Each
Sports Subsidiary has full corporate power and authority to enter into this     
Agreement and to consummate the transactions contemplated hereby.  The          
execution and delivery of this Agreement, and the consummation by each Sports   
Subsidiary of the transactions contemplated hereby, have been duly authorized   
by each Sports Subsidiary's Board of Directors and no other corporate           
proceedings on the part of any Sports Subsidiary are necessary to authorize the 
execution and delivery of this Agreement and the consummation by the Sports     
Subsidiaries of the transactions contemplated hereby.  This Agreement has been  
duly and validly executed and delivered by each Sports Subsidiary, and,         
assuming the due authorization, execution and delivery hereof by Roadmaster,    
constitutes a valid and binding agreement of each Sports Subsidiary,            
enforceable against each Sports Subsidiary in accordance with its terms.        

               (b)      The execution and delivery of this Agreement by each
Sports Subsidiary do not, and the consummation by each Sports Subsidiary of the 
transactions contemplated hereby will not as of the Closing Date, violate,      
conflict with or result in a breach of any provision of, or constitute a        
default (or an event which, with notice or lapse of time or both, would         
constitute a default) under, or result in the termination of, or accelerate the 
performance required by, or result in a right of termination or acceleration    
under, or result in the creation of any lien, security interest, charge or      
encumbrance upon any of the properties or assets of any Sports Subsidiary or    
any of their subsidiaries under any of the terms, conditions or provisions of   
(i) the respective charters or by-laws of each Sports Subsidiary or any of      
their subsidiaries, (ii) any statute, law, ordinance, rule, regulation,         
judgment, decree, order, injunction, writ, permit or license of any court or    
governmental authority applicable to any Sports Subsidiary or any of their      
subsidiaries or any of their respective properties or assets, or (iii) subject  
to obtaining the required approvals set forth in Schedule 3.4(b) any note,      
bond, mortgage, indenture, deed of trust, license, franchise, permit,           
concession, contract, lease or other instrument, obligation or agreement of any 
kind to which any Sports Subsidiary or any of their subsidiaries is now a party 
or by which any Sports Subsidiary or any of their subsidiaries or any of their  
respective properties or assets may be bound or affected, excluding from the    
foregoing clauses (ii) and (iii) such violations, conflicts, breaches,          
defaults, terminations, accelerations or creations of liens, security           
interests, charges or encumbrances that would not, in the aggregate, have a     
material adverse effect on the business, condition (financial or other) or      
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole.                                                                     

     (c)      Except as set forth on Schedule 2.2(c), no
declaration, filing or registration with, or notice to, or authorization,       
consent or approval of, any governmental or regulatory body or authority is     
necessary for the execution and delivery of this Agreement by the Sports        
Subsidiaries or the consummation by the Sports Subsidiaries of the transactions 
contemplated hereby, other than such declarations, filings, registrations,      
notices, authorizations, consents or approvals which, if not made or obtained,  
as the case may be, would not, in the aggregate, have a material adverse effect 
on the business,                                                                

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condition (financial or other) or results of operations of the                  
Sports Subsidiaries and their subsidiaries, taken as a whole.                   

      Section 3.5      REPORTS AND FINANCIAL STATEMENTS.  Since January 1,
1991, Actava and each of its subsidiaries required to make filings under the    
Securities Act of 1933, as amended (the "Securities Act") and the Securities    
Exchange Act of 1934, as amended (the "Exchange Act") have filed with the       
Securities and Exchange Commission (the "SEC") all material forms, statements,  
reports and documents (including all exhibits, amendments and supplements       
thereto) required to be filed by them under each of the Securities Act, the     
Exchange Act, and the Trust Indenture Act of 1939, as amended (the "Trust       
Indenture Act") and the respective rules and regulations thereunder, all of     
which complied in all material respects with all applicable requirements of the 
appropriate act and the rules and regulations thereunder, except where such     
failure to file or non-compliance would not have a material adverse effect on   
the business, condition (financial or other) or results of operations of the    
Sports Subsidiaries and their subsidiaries, taken as a whole.  Actava has       
previously delivered to Roadmaster copies of its (a) Annual Reports on Form     
10-K for the fiscal year ended December 31, 1993 and for each of the two        
immediately preceding fiscal years, including the exhibits and schedules        
thereto, all as filed with the SEC, (b) Quarterly Report on Form 10-Q for the   
quarter ended March 31, 1994, including the exhibits and schedules thereto, as  
filed with the SEC, (c) proxy and information statements, to the extent         
required, relating to (i) all meetings of its shareholders (whether annual or   
special) and (ii) actions by written consent in lieu of a shareholders meeting  
from January 1, 1991 until the date hereof, and (d) all other reports or        
registration statements (which have been declared effective) including the      
exhibits and schedules thereto, all as filed by Actava with the SEC since       
January 1, 1991 (other than registration statements filed on Form S-8)          
(collectively, the "Actava SEC Reports").  As of their respective dates, Actava 
SEC Reports did not contain any untrue statement of a material fact or omit to  
state a material fact regarding the Sports Subsidiaries required to be stated   
therein or necessary to make the statements regarding the Sports Subsidiaries   
therein, in light of the circumstances under which they were made, not          
misleading.  Actava has also delivered to Roadmaster copies of (X)(1) an        
audited balance sheet of each Sports Subsidiary as of December 31, 1993 and,    
except with respect to DP, for each of the two immediately preceding fiscal     
years, and the related audited statements of income (excluding the income       
statement for the fiscal year ended December 31, 1991 which shall be            
unaudited), retained earnings, and cash flows for the years then ended, and the 
related notes thereto and (2) an unaudited balance sheet of DP as of June 7,    
1993 and the related unaudited statements of income, retained earnings, and     
cash flows for the period then ended, and audited balance sheets as of June 27, 
1992 and June 29, 1991 and the related audited statements of income, retained   
earnings and cash flows for the years then ended (collectively, the "Sports     
Subsidiaries Annual Financial Statements") and (Y) an unaudited balance sheet   
of each Sports Subsidiary as of March 31, 1994, and the related unaudited       
statements of income, retained earnings, and cash flows for the three-month     
period then ended (the "Sports Subsidiaries Interim Financial Statements").     
The Sports Subsidiaries Annual Financial Statements and the Sports Subsidiaries 
Interim Financial Statements are referred to herein collectively as the "Sports 
Subsidiaries Financial Statements."  The Sports Subsidiaries Financial          
Statements have been prepared in accordance with generally accepted accounting  
principles applied on a consistent basis (except as may be indicated therein or 
in the notes thereto) and fairly present in all material respects the financial 
position of the Sports Subsidiaries and their subsidiaries, taken as a whole,   
as of the dates thereof and the results of their operations and changes in      
financial position for the periods then ended, subject, in the case of the      
Sports Subsidiaries Interim Financial Statements or any of the unaudited        
financial statements included in the Sports Subsidiaries Annual Financial       
Statements, to normal year-end and audit adjustments and any other adjustments  
described therein.                                                              

 Section 3.6      ABSENCE OF UNDISCLOSED LIABILITIES.  Except as
disclosed in Actava's Annual                                                    

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Report on Form 10-K for the year ended December 31, 1993 and the exhibits and   
schedules thereto (the "Actava 10-K"), Actava's Quarterly Report on Form 10-Q   
for the quarter ended March 31, 1994 and the exhibits and schedules thereto     
(the "Actava 10-Q"), any Form 8-K filed by Actava after December 31, 1993 (the  
"Actava 8-Ks") or in Schedule 3.6, neither the Sports Subsidiaries nor any of   
their subsidiaries had at March 31, 1994, or has incurred since that date, any  
liabilities or obligations (whether absolute, accrued, contingent or otherwise) 
of any nature, (a) except liabilities, obligations or contingencies (i) which   
are accrued or reserved against in the Sports Subsidiaries Financial Statements 
or reflected in the notes thereto or (ii) which were incurred after March 31,   
1994 in the ordinary course of business and consistent with past practices and  
(b) except for any liabilities, obligations or contingencies which (i) would    
not, in the aggregate, have a material adverse effect on the business,          
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole, or (ii) have been        
discharged or paid in full prior to the date hereof.                            

       Section 3.7      ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as set
forth in the Actava 10-Q or the other Actava SEC Reports, from March 31, 1994   
through the date hereof, (i) there has not been any material adverse change in  
the business, condition (financial or other) or results of operations of the    
Sports Subsidiaries and their subsidiaries, taken as a whole and (ii) no Sports 
Subsidiary has made any declaration, setting aside or payment of any dividend   
or other distribution with respect to the Sports Subsidiaries Stock.            

       Section 3.8      LITIGATION.  Except as disclosed in the Actava 10-K,
the Actava 10-Q, the Actava 8-Ks, the Sports Subsidiaries Financial Statements  
or Schedule 3.8, there are no claims, suits, actions or proceedings pending or, 
to the knowledge of Actava or any Sports Subsidiary, threatened against,        
relating to or affecting the Sports Subsidiaries or any of their subsidiaries,  
before any court, governmental department, commission, agency, instrumentality  
or authority, or any arbitrator, which could reasonably be expected, either     
alone or in the aggregate with all such claims, actions or proceedings, to      
materially and adversely affect the business, condition (financial or other) or 
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole.  Except as set forth in Schedule 3.8, neither the Sports            
Subsidiaries nor any of their subsidiaries is subject to any judgment, decree,  
injunction, rule or order of any court, governmental department, commission,    
agency, instrumentality or authority, or of any arbitrator which prohibits or   
restricts the consummation of the transactions contemplated hereby or would     
have a material adverse effect on the business, condition (financial or other)  
or results of operations of the Sports Subsidiaries and their subsidiaries,     
taken as a whole.                                                               

       Section 3.9      TRANSFER CLAIMS.  No prior offer, issue, redemption,
call, purchase, sale, transfer, negotiation or other transaction of any nature  
or kind with respect to any capital stock (including shares, offers, options,   
warrants, or debt convertible into shares, options or warrants) of the Sports   
Subsidiaries or any of their subsidiaries, or any corporation which has been    
merged into the Sports Subsidiaries or any of their subsidiaries, has given or  
may give rise to any claim or action by any person which is enforceable against 
any Sports Subsidiary, and, to the knowledge of the Sports Subsidiaries, no     
fact or circumstance exists which could give rise to any such claim or action   
on behalf of any person, except for claims or actions which would not have, in  
the aggregate, a material adverse effect on the business, condition (financial  
or other) or results of operations of the Sports Subsidiaries and their         
subsidiaries, taken as a whole.                                                 

   Section 3.10     NO VIOLATION OF LAW.  Except as disclosed in the
Actava 10-K, the Actava 10-Q, the Actava 8-Ks, the Sports Subsidiaries          
Financial Statements or Schedule 3.10, neither the Sports Subsidiaries nor any  
of their subsidiaries is in violation of or has been given notice or been       
charged with any violation of any law, statute, order, rule, regulation,        
ordinance or judgment (including, without                                       

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limitation, any applicable environmental law, ordinance or regulation) of any   
governmental or regulatory body or authority, except for violations which, in   
the aggregate, do not have a material adverse effect on the business, condition 
(financial or other) or results of operations of the Sports Subsidiaries and    
their subsidiaries, taken as a whole.  Except as disclosed in the Actava 10-K,  
the Actava 10-Q, the Actava 8-Ks, the Sports Subsidiaries Financial Statements  
or Schedule 3.10, as of the date of this Agreement, to the knowledge of Actava  
and the Sports Subsidiaries no investigation or review by any governmental or   
regulatory body or authority is pending or threatened, nor has any governmental 
or regulatory body or authority indicated an intention to conduct the same,     
other than, in each case, those the outcome of which, as far as reasonably can  
be foreseen, will not have a material adverse effect on the business, condition 
(financial or other) or results of operations of the Sports Subsidiaries and    
their subsidiaries, taken as a whole.  The Sports Subsidiaries and their        
subsidiaries have all permits, licenses, franchises, variances, exemptions,     
orders and other governmental authorizations, consents and approvals necessary  
to conduct their businesses as presently conducted (the "Sports Subsidiaries    
Permits"), except for permits, licenses, franchises, variances, exemptions,     
orders, authorizations, consents and approvals the absence of which, alone or   
in the aggregate, would not have a material adverse effect on the business,     
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole.  The Sports Subsidiaries 
and their subsidiaries (a) have duly and currently filed all reports and other  
information required to be filed with any governmental or regulatory authority  
in connection with the Sports Subsidiaries Permits, and (b) are not in          
violation of the terms of any Sports Subsidiaries Permit, except for delays in  
filing reports or violations which, alone or in the aggregate, would not have a 
material adverse effect on the business, condition (financial or other) or      
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole.                                                                     

      Section 3.11     COMPLIANCE WITH AGREEMENTS.  Except as disclosed in
the Actava 10-K, the Actava 10-Q, the Actava 8-Ks, the Sports Subsidiaries      
Financial Statements or Schedule 3.11, the Sports Subsidiaries and each of      
their subsidiaries are not in breach or violation of or in default in the       
performance or observance of any term or provision of, and no event has         
occurred which, with lapse of time or action by a third party, could result in  
a default under, (a) the respective charters, by-laws or similar organizational 
instruments of the Sports Subsidiaries or any of their subsidiaries or (b) any  
contract, commitment, agreement, indenture, mortgage, loan agreement, note,     
lease, bond, license, approval or other instrument to which the Sports          
Subsidiaries or any of their subsidiaries is a party or by which any of them is 
bound or to which any of their property is subject, which breaches, violations  
and defaults, in the case of clause (b) of this Section 3.11, would have, in    
the aggregate, a material adverse effect on the business, condition (financial  
or other) or results of operations of the Sports Subsidiaries and their         
subsidiaries, taken as a whole.                                                 

    Section 3.12     TAXES.  (a) Except as set forth on Schedule 3.12,
each of the Sports Subsidiaries and their subsidiaries has, or prior to the     
Closing Date, will have (i) timely filed (or have or, prior to the Closing      
Date, will have obtained valid extensions of time to file) with the appropriate 
governmental authorities all Tax Returns required to be filed by them for all   
periods ending on or prior to the Closing Date, other than those Tax Returns    
the failure of which to file would not have a material adverse effect on the    
business, condition (financial or other) or results of operations of the Sports 
Subsidiaries and their subsidiaries, taken as a whole, and such Tax Returns are 
true, correct and complete in all material respects, and (ii) duly paid in full 
or made adequate provision for the payment of all Taxes for all periods ending  
on or prior to the Closing Date, except where the failure to have paid or to    
have made adequate provision for the payment of Taxes would not, in the         
aggregate, have a material adverse effect on the business, condition (financial 
or other) or results of operations of the Sports Subsidiaries and their         
subsidiaries, taken as a whole.  Except as set forth on Schedule 3.12, the      
liabilities and reserves for Taxes reflected in the balance sheets contained in 
the Sports Subsidiaries Financial Statements and in the Sports                  

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Subsidiaries Interim Statements are adequate to cover all Taxes for all periods 
ending on or prior to March 31, 1994, except where the inadequacy of such       
balance sheet liabilities and reserves in covering all Taxes for all periods    
ending on or prior to March 31, 1994 would not, in the aggregate, have a        
material adverse effect on the business, condition (financial or other) or      
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole, and there are no material liens for Taxes upon any property or      
assets of the Sports Subsidiaries or their subsidiaries, except for liens for   
Taxes not yet due and payable.  There are no unresolved issues of law or fact   
arising out of a notice of deficiency, proposed deficiency or assessment from   
the IRS or any other governmental taxing authority with respect to Taxes of the 
Sports Subsidiaries or their subsidiaries which, if decided adversely, singly   
or in the aggregate, would have a material adverse effect on the business,      
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole.                          

              (b)      Except as set forth on Schedule 3.12, no waivers of
statutes of limitation with respect to Tax Returns have been given by or        
requested from the Sports Subsidiaries or their subsidiaries.  Except as set    
forth on Schedule 3.12, neither the Sports Subsidiaries nor any of their        
subsidiaries, nor to the knowledge of the Sports Subsidiaries any predecessor   
in interest to any of them, has filed a consent to the application of Section   
341(f) of the Code or filed, or shall be deemed to have filed, any election     
under Section 338 or Section 197 of the Code.  For Actava's taxable year ending 
December 31, 1993, each of the Sports Subsidiaries and their subsidiaries, will 
have been a member of and will join in the filing of a consolidated federal     
income tax return of an affiliated group of corporations, as that term is       
defined in Section 1504(a) of the Code, of which Actava is the common parent    
(the "Affiliated Group").                                                       

           (c)      For purposes of this Agreement, the term "Taxes"
shall mean all taxes, charges, fees, levies or other assessments, including,    
without limitation, net income, gross income, gross receipts, excise, premium,  
property, environmental, sales, withholding, backup withholding, social         
security, occupation, stamp, use, service, service use, license, lease,         
payroll, employment, workers' compensation, franchise, severance, transfer and  
recording taxes, customs, duties or other taxes, fees, assessments or charges   
of any kind whatever, imposed by the United States, or any state, local or      
foreign government or subdivision or agency thereof whether computed on a       
separate, consolidated, unitary, combined or any other basis; and such term     
shall include any interest, fines, penalties or additional amounts attributable 
or imposed or with respect to any such taxes, charges, fees, levies or other    
assessments.  For purposes of this Agreement, the term "Tax Return" shall mean  
any return, report or other document or information required to be supplied to  
a taxing authority in connection with Taxes.                                    

       Section 3.13     EMPLOYEE BENEFIT PLANS; ERISA.  (a) Schedule 3.13(a)
hereof lists all Employee Arrangements under which the Sports Subsidiaries      
could incur any material liability (the "Material Subsidiary Arrangements").    
For purposes of the preceding sentence, the term "Employee Arrangement" shall,  
with respect to a person, mean all plans, programs or arrangements providing    
any benefits to any individual which is sponsored, maintained or contributed to 
by such person, including employee benefit plans within the meaning of Section  
3(3) of the Employee Retirement Income Security Act of 1974, as amended,        
("ERISA"), any arrangement involving shares of stock, or any other similar      
arrangements.  Schedule 3.13(a) hereto also separately lists all such Material  
Subsidiary Arrangements which are "Multiemployer Plans" within the meaning of   
Section 3(37) and 4001(3) of ERISA or "Multiple Employer Plans" within the      
meaning of Section 413(c) of the Code.  For purposes of this Section 3.13, the  
term "ERISA Affiliate" shall, with respect to the Sports Subsidiaries, mean any 
person or entity required to be aggregated with the Sports Subsidiaries under   
Sections 414(b), (c), (m) or (o) of the Code.                                   

                (b)      Except as disclosed in Schedule 3.13(b), (i) there is
no liability (a) under Title IV of ERISA, (b) arising out of any communication  
or failure to communicate, or (c) by reason of the                              

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transactions contemplated by this Agreement, with respect to any Employee       
Arrangement which would have a material adverse effect on the business,         
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole, (ii) the current present 
value of all projected benefit obligations under each of the Material           
Subsidiary Arrangements which is subject to Title IV of ERISA did not, as of    
its latest valuation date, exceed the then current value of the assets of such  
Employee Arrangement allocable to such benefit liabilities (based upon          
actuarial assumptions used by the Pension Benefit Guaranty Corporation for      
valuing benefits in single-employer plans on termination), (iii) each of the    
Material Subsidiary Arrangements has been written, operated and administered in 
all respects in accordance with applicable laws and regulations during the      
period of time covered by the applicable statute of limitations, except where   
noncompliance would not have a material adverse effect on the business,         
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole, (iv) each of the         
Material Subsidiary Arrangements which is intended to be "qualified" within the 
meaning of Section 401(a) of the Code has been determined by the IRS to be so   
qualified (or if not, the remedial amendment period for filing an application   
for determination has not yet expired) and such determination has not been      
modified, revoked or limited by failure to satisfy any condition thereof, (v)   
there are no liens arising under ERISA or the Code and there are no claims,     
suits, actions, audits or proceedings pending or, to the knowledge of Actava or 
the Sports Subsidiaries, threatened against, relating to or affecting any       
Employee Arrangement or any person affiliated therewith which could have a      
material adverse effect on the business, condition (financial or other) or      
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole, and (vi) each Material Subsidiary Arrangement may be terminated at  
any time and for any reason by one of the Sports Subsidiaries, an ERISA         
Affiliate of the Sports Subsidiaries, or an officer or employee thereof.        

           (c) Schedule 3.13(c) separately sets forth a complete and
accurate list and description of all material insurance contracts or            
agreements, annuity contracts, fidelity bonds and fiduciary liability policies, 
investment manager or investment advisory contracts, and administrative         
services contracts or agreements with respect to all Material Subsidiary        
Arrangements.                                                                   

Section 3.14     INVESTMENT COMPANY ACT.  Actava, the Sports  
Subsidiaries and each of their subsidiaries either (a) is not an "investment    
company", or a company "controlled" by, or an "affiliated company" with respect 
to, an "investment company", within the meaning of the Investment Company Act   
of 1940, as amended (the "Investment Company Act"), or (b) satisfies all        
conditions for an exemption from the Investment Company Act, and, accordingly,  
neither Actava, the Sports Subsidiaries nor any of their subsidiaries is        
required to be registered under the Investment Company Act.                     

   Section 3.15     LABOR CONTROVERSIES.  Except as set forth in the
Actava 10-K, the Actava 10-Q, the Actava 8-Ks, the Sports Subsidiaries          
Financial Statements or Schedule 3.15, (a) there are no significant             
controversies pending or, to the knowledge of Actava and the Sports             
Subsidiaries, threatened between any Sports Subsidiary or its subsidiaries and  
any representatives of any of their employees, (b) to the knowledge of Actava   
and the Sports Subsidiaries there are no organizational efforts presently being 
made involving any of the presently unorganized employees of the any Sports     
Subsidiary or its subsidiaries, (c) the Sports Subsidiaries and their           
subsidiaries have complied in all material respects with all laws relating to   
the employment of labor, including, without limitation, any provisions thereof  
relating to wages, hours, collective bargaining, immigration and the payment of 
social security and similar Taxes, and (d) no person has, to the knowledge of   
Actava and the Sports Subsidiaries, asserted that the Sports Subsidiaries or    
any of their subsidiaries is liable in any material amount for any arrears of   
wages or any Taxes or penalties for failure to comply with any of the           
foregoing, except for such controversies, organizational efforts, noncompliance 
and liabilities which, singly or in the aggregate, could not reasonably be      
expected to materially and adversely affect the business, condition (financial  
or other) or                                                                    

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results of operations of the Sports Subsidiaries and their subsidiaries taken   
as a whole.                                                                     

      Section 3.16     ENVIRONMENTAL MATTERS.  The Sports Subsidiaries and
their subsidiaries (i) have obtained all permits, licenses and other            
authorizations and filed all notices which are required to be obtained or filed 
by the Sports Subsidiaries or any of their subsidiaries for the operation of    
its business under federal, state and local laws relating to pollution or       
protection of the environment; (ii) are in compliance with all terms and        
conditions of such required permits, licenses and authorizations; (iii) are in  
compliance with all other applicable limitations, restrictions, conditions,     
standards, prohibitions, requirements, obligations, schedules and timetables    
contained in those laws or contained in any law, regulation, code, plan, order, 
decree, judgment, notice or demand letter issued, entered, promulgated or       
approved thereunder, except, under (i), (ii) or (iii) above, where              
noncompliance would not have a material adverse effect on the business,         
condition (financial or other) or results of operations of the Sports           
Subsidiaries and their subsidiaries, taken as a whole.  Except as disclosed on  
Schedule 3.16 or where it would not have a material adverse effect on the       
business, condition (financial or other) or results of operations of the Sports 
Subsidiaries and their subsidiaries, taken as a whole, there are no past or     
present events, conditions, circumstances, activities, practices, incidents,    
actions or plans which may interfere with or prevent continued compliance, or   
which may give rise to any common law or statutory liability, or otherwise form 
the basis of any claim, action, suit, proceeding, hearing or investigation,     
based on or related to the manufacture, processing, distribution, use,          
treatment, storage, disposal, transport, or handling, or the emission,          
discharge, release or threatened release into the environment, of any           
pollutant, contaminant, or hazardous or toxic material or waste with respect to 
the Sports Subsidiaries or any of their subsidiaries.                           

  Section 3.17     CERTAIN AGREEMENTS.  Except as set forth in the
Actava 10-K, the Actava 10-Q, the Actava 8-Ks or Schedule 3.17, and except for  
this Agreement, as of the date hereof, neither the Sports Subsidiaries nor any  
of their subsidiaries is a party to any oral or written (a) consulting or       
similar agreement with any present or former director, officer or employee or   
any entity controlled by any such person involving the payment of remuneration  
more than $50,000 per annum or $200,000 in the aggregate, (b) agreement with    
any director, officer or employee of the Sports Subsidiaries or any of their    
subsidiaries the benefits of which are contingent, or the terms of which are    
materially altered, upon the occurrence of a transaction involving the Sports   
Subsidiaries of the nature contemplated by this Agreement, or (c) agreement     
with respect to any officer or employee of the Sports Subsidiaries or any of    
their subsidiaries providing any term of employment or compensation guarantee   
extending for a period longer than one year and for the payment of remuneration 
in excess of $50,000 per annum or $200,000 in the aggregate.                    

Section 3.18     PROPERTIES.                                  

      (a) Except as disclosed in Schedule 3.18(a), the Sports Subsidiaries
and their subsidiaries have good title to each of their material properties set 
forth in the Sports Subsidiaries Financial Statements, free and clear of all    
security interests, liens, encumbrances, encroachments and condemnation         
notices, except liens for current Taxes not yet due and payable, security       
interests securing indebtedness reflected in the Sports Subsidiaries Financial  
Statements and imperfections of title and agreements of record which do not     
materially detract from the value or materially interfere with the current use  
of such properties.                                                             

    (b) Schedule 3.18(b) sets forth a list of all patents, trademarks,
service marks, trade names and copyrights owned or licensed by the Sports       
Subsidiaries or their subsidiaries that are material to the business of the     
Sports Subsidiaries and their subsidiaries taken as a whole.                    

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        Section 3.19  AFFILIATE TRANSACTIONS.  Except as set forth in Schedule
3.19, there are no contracts, agreements, understandings or arrangements        
pursuant to which any goods or services are provided or obtained with any       
director, officer or shareholder of any Sports Subsidiary, or with any person   
related to or affiliated with any such person or with any company or other      
organization in which any director, officer or shareholder of any Sports        
Subsidiary, or any such person, has a direct or indirect financial interest.    

        Section 3.20     PROXY STATEMENT.  If Actava Shareholders' Approval is
required, none of the information relating to the Sports Subsidiaries and their 
subsidiaries included in the Actava Proxy Statement (as defined in Section 6.2) 
will be false or misleading with respect to any material fact, or omit to state 
any material fact required to be stated therein or necessary in order to make   
the statements therein, in light of the circumstances under which they were     
made, not misleading.  Except for information supplied or to be supplied by     
Roadmaster and its subsidiaries in writing for inclusion therein, as to which   
no representation is made, the Actava Proxy Statement will comply in all        
material respects with the Securities Act and in the rules and regulations      
thereunder.                                                                     

       Section 3.21     MATERIALITY.  The representations and warranties set
forth in this Article III would in the aggregate be true and correct even       
without the materiality exceptions or qualifications contained therein except   
for such exceptions and qualifications which, in the aggregate for all such     
representations and warranties, are not materially adverse to the business,     
condition (financial or other), results of operations of the Sports             
Subsidiaries and their subsidiaries, taken as a whole.                          

ARTICLE IV  

REPRESENTATIONS AND WARRANTIES OF ROADMASTER  

Roadmaster represents and warrants to Actava and the Sports   
Subsidiaries as follows:                                                        

   Section 4.1      ORGANIZATION AND QUALIFICATION.  Roadmaster is a
corporation duly organized, validly existing and in good standing under the     
laws of the State of Delaware and has the requisite power and authority to own, 
lease and operate its assets and properties and to carry on its business as it  
is now being conducted.  Roadmaster is qualified to do business and is in good  
standing in each jurisdiction in which the properties owned, leased or operated 
by it or the nature of the business conducted by it makes such qualification    
necessary, except where the failure to be so qualified and in good standing     
will not, when taken together with all other such failures, have a material     
adverse effect on the business, condition (financial or other) or results of    
operations of Roadmaster and its subsidiaries, taken as a whole.  True,         
accurate and complete copies of Roadmaster's Certificate of Incorporation and   
By-laws, as in effect on the date hereof, including all amendments thereto,     
have heretofore been delivered to Actava.                                       

       Section 4.2      CAPITALIZATION.  (a) The authorized capital stock of
Roadmaster consists of 60,000,000 shares of Roadmaster Common Stock and         
10,000,000 shares of preferred stock, $.01 par value ("Roadmaster Preferred     
Stock").  As of July 20, 1994, 29,419,444 shares of Roadmaster Common Stock and 
no shares of Roadmaster Preferred Stock were issued and outstanding.  All of    
the issued and outstanding shares of Roadmaster Common Stock are validly issued 
and are fully paid, nonassessable and free of preemptive rights.  Except for    
3,586,222 shares of Roadmaster Common Stock owned by Roadmaster Corporation, no 
subsidiary of Roadmaster holds any shares of capital stock of Roadmaster.       

               (b)      Except as set forth in Schedule 4.2(b) hereof, as of
the date hereof, there are no outstanding subscriptions, options, calls,        
contracts, commitments, understandings, restrictions,                           

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arrangements, rights or warrants, including any right of conversion or exchange 
under any outstanding security, instrument or other agreement obligating        
Roadmaster or any subsidiary of Roadmaster to issue, deliver or sell, or cause  
to be issued, delivered or sold, additional shares of the capital stock of      
Roadmaster or obligating Roadmaster or any subsidiary of Roadmaster to grant,   
extend or enter into any such agreement or commitment, except for this          
Agreement.  Except as set forth in Schedule 4.2(b), there are no voting trusts, 
proxies or other agreements or understandings to which Roadmaster or any        
subsidiary of Roadmaster is a party or is bound with respect to the voting of   
any shares of capital stock of Roadmaster.  The Exchange Shares will be at the  
Closing duly authorized, validly issued, fully paid and nonassessable and free  
of preemptive rights.                                                           

Section 4.3      SUBSIDIARIES.  Schedule 4.3 sets forth every 
subsidiary of Roadmaster and the jurisdiction of its incorporation.  Each       
direct and indirect corporate subsidiary of Roadmaster is a corporation duly    
organized, validly existing and in good standing under the laws of its          
jurisdiction of incorporation and has the requisite power and authority to own, 
lease and operate its assets and properties and to carry on its business as it  
is now being conducted.  Each subsidiary of Roadmaster is qualified to do       
business, and is in good standing, in each jurisdiction in which the properties 
owned, leased or operated by it or the nature of the business conducted by it   
makes such qualification necessary, except where the failure to be so qualified 
and in good standing will not, when taken together with all such other          
failures, have a material adverse effect on the business, condition (financial  
or other) or results of operations of Roadmaster and its subsidiaries, taken as 
a whole.  Except as set forth in Schedule 4.3, all of the outstanding shares of 
capital stock of each corporate subsidiary of Roadmaster are validly issued,    
fully paid, nonassessable and except with respect to wholly owned subsidiaries, 
free of preemptive rights, and those shares owned directly or indirectly by     
Roadmaster are owned free and clear of any liens, claims, encumbrances,         
security interests, equities, charges and options of any nature whatsoever.     
Except as set forth in Schedule 4.3, Roadmaster owns directly or indirectly all 
of the issued and outstanding shares of the capital stock of each of its        
corporate subsidiaries.  Except as set forth in Schedule 4.3, there are no      
subscriptions, options, warrants, rights, calls, contracts, voting trusts,      
proxies or other commitments, understandings, restrictions or arrangements      
relating to the issuance, sale, voting, transfer, ownership or other rights     
with respect to any shares of capital stock of any corporate subsidiary of      
Roadmaster, including any right of conversion or exchange under any outstanding 
security, instrument or agreement.                                              

Section 4.4      AUTHORITY; NON-CONTRAVENTION; APPROVALS.  (a)
Roadmaster has full corporate power and authority to enter into this Agreement  
and, subject to obtaining the Roadmaster Shareholder's Approval (as defined in  
Section 6.2(a)), and the Roadmaster Required Statutory Approvals (as defined in 
Section 4.4(c)), to consummate the transactions contemplated hereby.  The       
execution and delivery of this Agreement, and the consummation by Roadmaster of 
the transactions contemplated hereby, have been duly authorized by Roadmaster's 
Board of Directors, and no other corporate proceedings on the part of           
Roadmaster are necessary to authorize the execution and delivery of this        
Agreement and the consummation by Roadmaster of the transactions contemplated   
hereby, except for obtaining the Roadmaster Shareholder's Approval and the      
Roadmaster Required Statutory Approvals.  This Agreement has been duly and      
validly executed and delivered by Roadmaster, and, assuming the due             
authorization, execution and delivery hereof by Actava and the Sports           
Subsidiaries, constitutes a valid and binding agreement of Roadmaster           
enforceable against it in accordance with its terms.                            

          (b)      The execution and delivery of this Agreement by
Roadmaster does not, and the consummation by Roadmaster of the transactions     
contemplated hereby will not as of the Closing Date, violate, conflict with or  
result in a breach of any provision of, or constitute a default (or an event    
which, with notice or lapse of time or both, would constitute a default) under, 
or result in the termination of,                                                

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or accelerate the performance required by, or result in a right of termination  
or acceleration under, or result in the creation of any lien, security          
interest, charge or encumbrance upon any of the properties or assets of         
Roadmaster or any of its subsidiaries under any of the terms, conditions or     
provisions of (i) the respective charters or by-laws of Roadmaster or any of    
its subsidiaries, (ii) subject to obtaining the Roadmaster Required Statutory   
Approvals and the Roadmaster Shareholders' Approval, any statute, law,          
ordinance, rule, regulation, judgment, decree, order, injunction, writ, permit  
or license of any court or governmental authority applicable to Roadmaster or   
any of its subsidiaries or any of their respective properties or assets, or     
(iii) subject to obtaining the approvals set forth in Schedule 4.4(b), any      
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,     
concession, contract, lease or other instrument, obligation or agreement of any 
kind to which Roadmaster or any of its subsidiaries is now a party or by which  
Roadmaster or any of its subsidiaries or any of their respective properties or  
assets may be bound or affected, excluding from the foregoing clauses (ii) and  
(iii) such violations, conflicts, breaches, defaults, terminations,             
accelerations or creations of liens, security interests, charges or             
encumbrances that would not, in the aggregate, have a material adverse effect   
on the business, condition (financial or other) or results of operations of     
Roadmaster and its subsidiaries, taken as a whole.                              

              (c)      Except for (i) the filings by Roadmaster and Actava
required by Title II of the HSR Act, and (ii) the required filings with or      
approvals set forth in Schedule 4.4(c) (the filings and approvals referred to   
in clauses (i) and (ii) are collectively referred to as the "Roadmaster         
Required Statutory Approvals"), no declaration, filing or registration with, or 
notice to, or authorization, consent or approval of, any governmental or        
regulatory body or authority is necessary for the execution and delivery of     
this Agreement by Roadmaster or the consummation by Roadmaster of the           
transactions contemplated hereby, other than such declarations, filings,        
registrations, notices, authorizations, consents or approvals which, if not     
made or obtained, as the case may be, would not, in the aggregate, have a       
material adverse effect on the business, condition (financial or other) or      
results of operations of Roadmaster and its subsidiaries, taken as a whole.     

      Section 4.5      REPORTS AND FINANCIAL STATEMENTS.  Since January 1,
1991, Roadmaster and each of its subsidiaries required to make filings under    
the Securities Act or the Exchange Act have filed with the SEC all material     
forms, statements, reports and documents (including all exhibits, amendments    
and supplements thereto) required to be filed by them under the Securities Act, 
the Exchange Act and the Trust Indenture Act, and the respective rules and      
regulations thereunder, all of which complied in all material respects with all 
applicable requirements of the appropriate act and the rules and regulations    
thereunder, except where such failure to file or non-compliance would not, in   
the aggregate, have a material adverse effect on the business, condition        
(financial or other) or results of operations of Roadmaster or its              
subsidiaries, taken as a whole.  Roadmaster has previously delivered to the     
Actava copies of its (a) Annual Reports on Form 10-K for the fiscal year ended  
December 31, 1993 and for each of the two immediately preceding fiscal years,   
including the exhibits and schedules thereto, all as filed with the SEC, (b)    
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, including   
the exhibits and schedules thereto, as filed with the SEC, (c) proxy and        
information statements, to the extent required, relating to (i) all meetings of 
its shareholders (whether annual or special) and (ii) actions by written        
consent in lieu of a shareholders meeting from January 1, 1991, until the date  
hereof, and (d) all other reports or registration statements (which have been   
declared effective) including the exhibits and schedules thereto, all as filed  
by Roadmaster with the SEC since January 1, 1991 (other than registration       
statements filed on Form S-8) (collectively, the "Roadmaster SEC Reports").  As 
of their respective dates, the Roadmaster SEC Reports did not contain any       
untrue statement of a material fact or omit to state a material fact required   
to be stated therein or necessary to make the statements therein, in light of   
the circumstances under which they were made, not misleading.  The audited      
consolidated financial statements and unaudited interim consolidated financial  
statements of Roadmaster included in such reports                               

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(the "Roadmaster Financial Statements") have been prepared in accordance with   
generally accepted accounting principles applied on a consistent basis (except  
as may be indicated therein or in the notes thereto) and fairly present, in all 
material respects, the financial position of Roadmaster and its subsidiaries on 
a consolidated basis as of the dates thereof and the results of their           
operations and changes in financial position for the periods then ended,        
subject, in the case of the unaudited interim financial statements, to normal   
year-end and audit adjustments and any other adjustments described therein.     

 Section 4.6      ABSENCE OF UNDISCLOSED LIABILITIES.  Except as
disclosed in Roadmaster's Annual Report on Form 10-K for the year ended         
December 31, 1993 and the exhibits and schedules thereto (the "Roadmaster       
10-K"), or Roadmaster's Quarterly Report on Form 10-Q for the quarter ended     
March 31, 1994 and the exhibits and schedules thereto (the "Roadmaster 10-Q")   
or in Schedule 4.6, neither Roadmaster nor any of its subsidiaries had at March 
31, 1994, or has incurred since that date, any liabilities or obligations       
(whether absolute, accrued, contingent or otherwise) of any nature, (a) except  
liabilities, obligations or contingencies (i) which are accrued or reserved     
against in the Roadmaster Financial Statements or reflected in the notes        
thereto or (ii) which were incurred after March 31, 1994 in the ordinary course 
of business and consistent with past practices and (b) except for any           
liabilities, obligations or contingencies which (i) would not, in the           
aggregate, have a material adverse effect on the business, condition (financial 
or other) or results of operations of Roadmaster and its subsidiaries, taken as 
a whole, or (ii) have been discharged or paid in full prior to the date hereof. 

       Section 4.7      ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as set
forth in the Roadmaster 10-Q or the other Roadmaster SEC Reports, from March    
31, 1994 through the date hereof, (i) there has not been any material adverse   
change in the business, condition (financial or other) or results of operations 
of Roadmaster and its subsidiaries, taken as a whole, and (ii) Roadmaster has   
not made any declaration, setting aside or payment of any dividend or other     
distribution with respect to any of Roadmaster's capital stock.                 

     Section 4.8      LITIGATION.  Except as disclosed in the Roadmaster
10-K, the Roadmaster 10-Q or Schedule 4.8, there are no claims, suits, actions  
or proceedings pending or, to the knowledge of Roadmaster, threatened against,  
relating to or affecting Roadmaster or any of its subsidiaries, before any      
court, governmental department, commission, agency, instrumentality or          
authority, or any arbitrator, which could reasonably be expected, either alone  
or in the aggregate with all such claims, actions or proceedings, to materially 
and adversely affect the business, condition (financial or other) or results of 
operations of Roadmaster and its subsidiaries, taken as a whole.  Except as set 
forth in Schedule 4.8, neither Roadmaster nor any of its subsidiaries is        
subject to any judgment, decree, injunction, rule or order of any court,        
governmental department, commission, agency, instrumentality or authority or of 
any arbitrator which prohibits or restricts the consummation of the             
transactions contemplated hereby or would have a material adverse effect on the 
business, condition (financial or other) or results of operations of Roadmaster 
and its subsidiaries, taken as a whole.                                         

       Section 4.9      TRANSFER CLAIMS.  No prior offer, issue, redemption,
call, purchase, sale, transfer, negotiation or other transaction of any nature  
or kind with respect to any capital stock (including shares, offers, options,   
warrants, or debt convertible into shares, options or warrants) of Roadmaster   
or any of its subsidiaries, or any corporation which has been merged into       
Roadmaster or any of its subsidiaries, has given or may give rise to any claim  
or action by any person which is enforceable against Roadmaster or to the       
knowledge of Roadmaster any of its subsidiaries, and, to the knowledge of       
Roadmaster, no fact or circumstance exists which could give rise to any such    
claim or action on behalf of any person, except for claims or actions which     
would not have, in the aggregate, a material adverse effect on the business,    
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subsidiaries, taken as a whole.                                                 

   Section 4.10     NO VIOLATION OF LAW.  Except as disclosed in the
Roadmaster 10-K, the Roadmaster 10-Q or Schedule 4.10, neither Roadmaster nor   
any of its subsidiaries is in violation of, or has been given notice or been    
charged with any violation of any law, statute, order, rule, regulation,        
ordinance, or judgment (including, without limitation, any applicable           
environmental law, ordinance or regulation) of any governmental or regulatory   
body or authority, except for violations which, in the aggregate, do not have a 
material adverse effect on the business, condition (financial or other) or      
results of operations of Roadmaster and its subsidiaries, taken as a whole.     
Except as disclosed in the Roadmaster 10-K, the Roadmaster 10-Q or Schedule     
4.10, as of the date of this Agreement, to the knowledge of Roadmaster no       
investigation or review by any governmental or regulatory body or authority is  
pending or threatened, nor has any governmental or regulatory body or authority 
indicated an intention to conduct the same, other than, in each case, those the 
outcome of which, as far as reasonably can be foreseen, will not have a         
material adverse effect on the business, condition (financial or other) or      
results of operations of Roadmaster and its subsidiaries taken as a whole.      
Roadmaster and its subsidiaries have all permits, licenses, franchises,         
variances, exemptions, orders and other governmental authorizations, consents   
and approvals necessary to conduct their businesses as presently conducted,     
(the "Roadmaster Permits"), except for permits, licenses, franchises,           
variances, exemptions, orders, authorizations, consents and approvals the       
absence of which, alone or in the aggregate, would not have a material adverse  
effect on the business, condition (financial or other) or results of operations 
of the Roadmaster and its subsidiaries, taken as a whole.  Roadmaster and its   
subsidiaries (a) have duly and currently filed all reports and other            
information required to be filed with any governmental or regulatory authority  
in connection with the Roadmaster Permits, and (b) are not in violation of the  
terms of any Roadmaster Permit, except for delays in filing reports or          
violations which, alone or in the aggregate, would not have a material adverse  
effect on the business, condition (financial or other) or results of operations 
of the Roadmaster and its subsidiaries, taken as a whole.                       

      Section 4.11     COMPLIANCE WITH AGREEMENTS.  Except as disclosed in
the Roadmaster 10-K, the Roadmaster 10-Q or in Schedule 4.11, Roadmaster and    
each of its subsidiaries are not in breach or violation of or in default in the 
performance or observance of any term or provision of, and no event has         
occurred which, with lapse of time or action by a third party, could result in  
a default under, (a) the respective charters, by-laws or other similar          
organizational instruments of Roadmaster or any of its subsidiaries or (b) any  
contract, commitment, agreement, indenture, mortgage, loan agreement, note,     
lease, bond, license, approval or other instrument to which Roadmaster or any   
of its subsidiaries is a party or by which any of them is bound or to which any 
of their property is subject, which breaches, violations and defaults, in the   
case of clause (b) of this Section 4.11, would have, in the aggregate, a        
material adverse effect on the business, condition (financial or other) or      
results of operations of Roadmaster and its subsidiaries, taken as a whole.     

Section 4.12     TAXES.  Except as set forth on Schedule 4.12,
Roadmaster and its subsidiaries have, or prior to the Closing Date, will have   
(i) timely filed (or have, or prior to the Closing Date, will have obtained     
valid extensions of time to file) with the appropriate governmental authorities 
all Tax Returns required to be filed by them for all periods ending on or prior 
to the Closing Date, other than those Tax Returns the failure of which to file  
would not have a material adverse effect on the business, condition (financial  
or other) or results of operations of Roadmaster and its subsidiaries, taken as 
a whole, and such Tax Returns are true, correct and complete in all material    
respects, and (ii) duly paid in full or made adequate provision for the payment 
of all Taxes for all periods ending on or prior to the Closing Date, except     
where the failure to have paid or to have made adequate provision for the       
payment of Taxes would not, in the aggregate, have a material adverse effect on 
the business, condition (financial or other)                                    

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or results of operations of Roadmaster and its subsidiaries, taken as a whole.  
Except as set forth on Schedule 4.12, the liabilities and reserves for Taxes    
reflected in the Roadmaster balance sheets contained in the Roadmaster          
Financial Statements are adequate to cover all Taxes for all periods ending on  
or prior to March 31, 1994, except where the inadequacy of such balance sheet   
liabilities and reserves in covering all Taxes for all periods ending on or     
prior to March 31, 1994 would not, in the aggregate, have a material adverse    
effect on the business, conditions (financial or other) or results of           
operations of Roadmaster and its subsidiaries, taken as a whole, and there are  
no material liens for Taxes upon any property or assets of Roadmaster or any    
subsidiary thereof, except for liens for Taxes not yet due and payable.  There  
are no unresolved issues of law or fact arising out of a notice of deficiency,  
proposed deficiency or assessment from the IRS or any other governmental taxing 
authority with respect to Taxes of the Roadmaster or any of its subsidiaries    
which, if decided adversely, singly or in the aggregate, would have a material  
adverse effect on the business, condition (financial or other) or results of    
operations of Roadmaster and its subsidiaries, taken as a whole.  Except as set 
forth on Schedule 4.12, no waivers of statutes of limitation with respect to    
Tax Returns have been given by or requested from Roadmaster or its              
subsidiaries.  Except as set forth on Schedule 4.12, neither Roadmaster nor any 
of its subsidiaries, nor to the knowledge of Roadmaster any predecessor in      
interest to any of them, has filed a consent to the application of Section      
341(f) of the Code or filed, or shall be deemed to have filed, any election     
under Section 338 or Section 197 of the Code.                                   

       Section 4.13     EMPLOYEE BENEFIT PLANS; ERISA.  (a) Schedule 4.13(a)
hereof lists all Employee Arrangements with respect to which Roadmaster could   
incur any material liability (the "Material Roadmaster Arrangements").  For     
purposes of the preceding sentence, the term "Employee Arrangements" shall have 
the meaning set forth in Section 3.13(a) of this Agreement.  Schedule 4.13(a)   
hereto also separately lists all such Material Roadmaster Arrangements which    
are "Multiemployer Plans" within the meaning of Sections 3(37) and 4001(3) of   
ERISA or "Multiple Employer Plans" within the meaning of Section 413(c) of the  
Code.  For purposes of this Section 4.13, the term "ERISA Affiliate" shall,     
with respect to Roadmaster, mean any person or entity required to be aggregated 
with Roadmaster under Sections 414(b), (c), (m) or (o) of the Code.             

                (b)      Except as disclosed in Schedule 4.13(b), (1) there is
no liability (a) under Title IV of ERISA, (b) arising out of any communication  
or failure to communicate, or (c) by reason of the transactions contemplated by 
this Agreement, with respect to any Employee Arrangement which would have a     
material adverse effect on the business, condition (financial or other) or      
results of operations of Roadmaster and its subsidiaries, taken as a whole, (2) 
the current present value of all projected benefit obligations under each of    
the Material Roadmaster Arrangements which is subject to Title IV of ERISA did  
not, as of its latest valuation date, exceed the then current value of the      
assets of such Employee Arrangement allocable to such benefit liabilities       
(based upon actuarial assumptions used by the Pension Benefit Guaranty          
Corporation for valuing benefits in single-employer plans on termination), (3)  
each of the Material Roadmaster Arrangements has been written, operated and     
administered in all respects in accordance with applicable laws and regulations 
during the period of time covered by the applicable statute of limitations,     
except where noncompliance would not have a material adverse effect on the      
business, condition (financial or other) or results of operations of Roadmaster 
and its subsidiaries, taken as a whole, (4) each of the Material Roadmaster     
Arrangements which is intended to be "qualified" within the meaning of Section  
401(a) of the Code has been determined by the IRS to be so qualified (or if     
not, the remedial amendment period for filing an application for determination  
has not yet expired) and such determination has not been modified, revoked or   
limited by failure to satisfy any condition thereof, (5) there are no liens     
arising under ERISA or the Code and there are no claims, suits, actions, audits 
or proceedings pending or, to the knowledge of Roadmaster, threatened against,  
relating to or affecting any Employee Arrangement or any person affiliated      
therewith which could have a material adverse effect on                         

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the business, condition (financial or other) or results of operations of        
Roadmaster and its subsidiaries, taken as a whole, and (6) each Material        
Roadmaster Arrangement may be terminated at any time and for any reason by      
Roadmaster, an ERISA Affiliate of Roadmaster, or an officer or employee         
thereof.                                                                        

           (c) Schedule 4.13(c) separately sets forth a complete and
accurate list and description of all material insurance contracts or            
agreements, annuity contracts, fidelity bonds and fiduciary liability policies, 
investment manager or investment advisory contacts, and administrative services 
contracts or agreements with respect to all Material Roadmaster Arrangements.   

      Section 4.14     INVESTMENT COMPANY ACT.  Roadmaster and each of its
subsidiaries either (a) is not an "investment company", or a company            
"controlled" by, or an "affiliated company" with respect to, an "investment     
company", within the meaning of the Investment Company Act or (b) satisfies all 
conditions for an exemption from the Investment Company Act, and, accordingly,  
neither Roadmaster nor any of its subsidiaries is required to be registered     
under the Investment Company Act.                                               

   Section 4.15     LABOR CONTROVERSIES.  Except as set forth in the
Roadmaster 10-K, the Roadmaster 10-Q or Schedule 4.15, (a) there are no         
significant controversies pending or, to the knowledge of Roadmaster,           
threatened between Roadmaster or its subsidiaries and any representatives of    
any of their employees, (b) to the knowledge of Roadmaster there are no         
organizational efforts presently being made involving any of the presently      
unorganized employees of Roadmaster and its subsidiaries, (c) Roadmaster and    
its subsidiaries have complied in all material respects with all laws relating  
to the employment of labor, including, without limitation, any provisions       
thereof relating to wages, hours, collective bargaining, immigration and the    
payment of social security and similar Taxes, and (d) no person has, to the     
knowledge of Roadmaster, asserted that Roadmaster or any of its subsidiaries is 
liable in any material amount for any arrears of wages or any Taxes or          
penalties for failure to comply with any of the foregoing, except for such      
controversies, organizational efforts, noncompliance and liabilities which,     
singly or in the aggregate, could not reasonably be expected to materially and  
adversely affect the business, condition (financial or other) or results of     
operations of Roadmaster and its subsidiaries, taken as a whole.                

Section 4.16     ENVIRONMENTAL MATTERS.  Roadmaster and its   
subsidiaries (i) have obtained all permits, licenses and other authorizations   
and filed all notices which are required to be obtained or filed by Roadmaster  
or any of its subsidiaries for the operation of its business under federal,     
state and local laws relating to pollution or protection of the environment;    
(ii) are in compliance with all terms and conditions of such required permits,  
licenses and authorizations; (iii) are in compliance with all other applicable  
limitations, restrictions, conditions, standards, prohibitions, requirements,   
obligations, schedules and timetables contained in those laws or contained in   
any law, regulation, code, plan, order, decree, judgment, notice or demand      
letter issued, entered, promulgated or approved thereunder, except, under (i),  
(ii) or (iii) above, where noncompliance would not have a material adverse      
effect on the business, condition (financial or other) or results of operations 
of Roadmaster and its subsidiaries taken as a whole.  Except as disclosed on    
Schedule 4.16 or where it would not have a material adverse effect on the       
business, condition (financial or other) or results of operations of Roadmaster 
and its subsidiaries taken as a whole, there are no past or present events,     
conditions, circumstances, activities, practices, incidents, actions or plans   
which may interfere with or prevent continued compliance, or which may give     
rise to any common law or statutory liability, or otherwise form the basis of   
any claim, action, suit, proceeding, hearing or investigation, based on or      
related to the manufacture, processing, distribution, use, treatment, storage,  
disposal, transport, or handling, or the emission, discharge, release or        
threatened release into the environment, of any pollutant, contaminant, or      
hazardous or toxic material or waste with respect to Roadmaster or any of its   
subsidiaries.                                                                   

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  Section 4.17     CERTAIN AGREEMENTS.  Except as set forth in the
Roadmaster 10-K, the Roadmaster 10-Q, or Schedule 4.17, and except for this     
Agreement, as of the date hereof, neither Roadmaster nor any of its             
subsidiaries is a party to any oral or written (a) consulting or similar        
agreement with any present or former director, officer or employee or any       
entity controlled by any such Person involving the payment or remuneration of   
more than $50,000 per annum or $200,000 in the aggregate, (b) agreement with    
any director, officer or employee of Roadmaster or any of its subsidiaries the  
benefits of which are contingent, or the terms of which are materially altered, 
upon the occurrence of a transaction involving Roadmaster of the nature         
contemplated by this Agreement, (c) agreement with respect to any officer or    
employee of Roadmaster or any of its subsidiaries providing any term of         
employment or compensation guarantee extending for a period longer than one     
year and for the payment or remuneration in excess of $50,000 per annum or      
$200,000 in the aggregate.                                                      

Section 4.18     PROPERTIES.                                  

 (a) Except as disclosed in Schedule 4.18(a), Roadmaster and its
subsidiaries have good title to each of their material properties set forth in  
the Roadmaster Financial Statements, free and clear of all security interests,  
liens, encumbrances, encroachments and condemnation notices, except liens for   
current Taxes not yet due and payable, security interests securing indebtedness 
reflected in the Roadmaster Financial Statements and imperfections of title and 
agreements of record which do not materially detract from the value or          
materially interfere with the current use of such properties.                   

    (b) Schedule 4.18(b) sets forth a list of all patents, trademarks,
service marks, trade names and copyrights owned or licensed by Roadmaster or    
its subsidiaries that are material to the business of Roadmaster and its        
subsidiaries, taken as a whole.                                                 

  Section 4.19     AFFILIATE TRANSACTIONS.  Except as set forth in
Schedule 4.19, there are no contracts, agreements, understandings or            
arrangements pursuant to which any goods or services are provided or obtained   
with any director, officer or shareholder of Roadmaster, or with any person     
related to or affiliated with any such person or with any company or other      
organization in which any director, officer or shareholder of Roadmaster, or    
any such person, has a direct or indirect financial interest.                   

        Section 4.20     PROXY STATEMENT.  None of the information relating to
Roadmaster and its subsidiaries included in the Roadmaster Proxy Statement (as  
defined in Section 6.2) will be false or misleading with respect to any         
material fact, or omit to state any material fact required to be stated therein 
or necessary in order to make the statements therein, in light of the           
circumstances under which they were made, not misleading.  Except for           
information supplied or to be supplied by Actava or the Sports Subsidiaries in  
writing for inclusion therein, as to which no representation is made, the       
Roadmaster Proxy Statement, and any supplements or amendments thereto, will     
comply in all material respects with the Exchange Act and the Securities Act,   
as the case may be, and in each case the rules and regulations thereunder.      

       Section 4.21     MATERIALITY.  The representations and warranties set
forth in this Article IV would in the aggregate be true and correct even        
without the materiality exceptions or qualifications contained therein except   
for such exceptions and qualifications which, in the aggregate for all such     
representations and warranties, are not materially adverse to the business,     
condition (financial or other), results of operations of Roadmaster and its     
subsidiaries, taken as a whole.                                                 

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ARTICLE V 

CONDUCT OF BUSINESS PENDING THE EXCHANGES 

 Section 5.1      CONDUCT OF BUSINESS BY THE SPORTS SUBSIDIARIES
PENDING THE EXCHANGES.  Except as set forth in Schedule 5.1 hereof or as        
otherwise contemplated by this Agreement, after the date hereof and prior to    
the Closing or earlier termination of this Agreement, unless Roadmaster shall   
otherwise agree in writing, the Sports Subsidiaries shall, and shall cause each 
of their subsidiaries, to:                                                      

              (a)      Conduct their respective businesses in the ordinary
and usual course of business and consistent with past practice.                 

             (b)      Not (i) amend or propose to amend their respective
charters or by-laws, or (ii) split, combine or reclassify their outstanding     
capital stock or declare, set aside or pay any dividend or distribution payable 
in cash, stock, property or otherwise; provided, however, the Sports            
Subsidiaries shall be permitted to declare and pay to Actava prior to the       
Closing a cash dividend in an aggregate amount not to exceed $300,000 less      
accounting fees of independent certified public accountants previously billed   
by Actava to the Sports Subsidiaries and collected by Actava with respect to    
accounting work performed in connection with this Agreement for the Sports      
Subsidiaries' fiscal years prior to 1992.                                       

             (c)      Not issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any additional shares of, or any options,    
warrants or rights of any kind to acquire any shares of their capital stock of  
any class or any debt or equity securities convertible into or exchangeable for 
such capital stock.                                                             

           (d)      Not (i) incur or become contingently liable with
respect to any indebtedness for borrowed money other than (A) borrowings or     
guarantees in the ordinary course of business or (B) borrowings to refinance    
existing indebtedness, (ii) redeem, purchase, acquire or offer to purchase or   
acquire any shares of its capital stock, other than as required by the          
governing terms of such capital stock, (iii) make any acquisition of any assets 
or businesses other than (A) the acquisitions described in Schedule 5.1 hereto, 
(B) expenditures for fixed or capital assets in the ordinary course of business 
as contemplated in each Sports Subsidiaries capital budget, (C) expenditures    
for inventory in the ordinary course of business or (D) other acquisitions      
having a value (including the principal amount of indebtedness assumed or       
acquired) of less than $1,000,000 individually and $2,000,000 in the aggregate, 
(iv) sell any assets or businesses other than (A) the sales described in        
Schedule 5.1 hereto, (B) sales in the ordinary course of business or (C) other  
sales of less than $1,000,000 individually and $2,000,000 in the aggregate or   
(v) enter into any contract, agreement, commitment or arrangement with respect  
to any of the foregoing.                                                        

              (e)      Use all reasonable efforts to preserve intact their
respective business organizations, keep available the services of their         
respective present officers and key employees, and preserve the business        
relationships with suppliers, distributors, customers, and others having        
business relationships with them and not engage in any action, directly or      
indirectly, with the intent to adversely impact the transactions contemplated   
by this Agreement.                                                              

             (f)      Not enter into or amend any employment, severance,
special pay arrangement with respect to termination of employment or other      
similar arrangements or agreements with any directors, officers or employees,   
except in the ordinary course and consistent with past practice.                

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      (g)      Not adopt, enter into or amend any Material
Subsidiary Arrangement.                                                         

              (h)      Maintain insurance on its assets and its businesses
in such amounts and against such risks and losses as are consistent with past   
practice.                                                                       

Section 5.2      CONDUCT OF BUSINESS BY ROADMASTER PENDING THE
EXCHANGES.  Except as set forth in Schedule 5.2 or as otherwise contemplated    
hereby, after the date hereof and prior to the Closing Date or earlier          
termination of this Agreement, unless Actava shall otherwise agree in writing,  
Roadmaster shall, and shall cause its subsidiaries to:                          

              (a)      Conduct their respective businesses in the ordinary
and usual course of business and consistent with past practice.                 

             (b)      Not (i) amend or propose to amend their respective
charters or by-laws, or (ii) split, combine or reclassify their outstanding     
capital stock or declare, set aside or pay any dividend or distribution payable 
in cash, stock, property or otherwise, except for the payment of dividends or   
distributions by a wholly owned subsidiary of Roadmaster.                       

             (c)      Not issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any additional shares of, or any options,    
warrants or rights of any kind to acquire any shares of their capital stock of  
any class or any debt or equity securities convertible into or exchangeable for 
such capital stock, except that Roadmaster may issue shares upon exercise of    
outstanding options in the ordinary course of its business and consistent with  
its past practices.                                                             

           (d)      Not (i) incur or become contingently liable with
respect to any indebtedness for borrowed money other than (A) borrowings or     
guarantees in the ordinary course of business or (B) borrowings to refinance    
existing indebtedness, (ii) redeem, purchase, acquire or offer to purchase or   
acquire any shares of its capital stock, other than as required by the          
governing terms of such capital stock, (iii) take or fail to take any action    
which action or failure to take action would cause Actava to recognize gain or  
loss for federal income tax purposes as a result of the consummation of the     
Exchanges, (iv) make any acquisition of any assets or businesses other than (A) 
the acquisitions described in Schedule 5.2 hereto, (B) expenditures for fixed   
or capital assets in the ordinary course of business as contemplated in         
Roadmaster's capital budget, (C) expenditures for inventory in the ordinary     
course of business or (D) other acquisitions having a value (including the      
principal amount of indebtedness assumed or acquired) of less than $1,000,000   
individually and $2,000,000 in the aggregate, (v) sell any assets or businesses 
other than (A) the sales described in Schedule 5.2 hereto, (B) sales in the     
ordinary course of business or (C) other sales of less than $1,000,000          
individually and $2,000,000 in the aggregate or (vi) enter into any contract,   
agreement, commitment or arrangement with respect to any of the foregoing.      

              (e)      Use all reasonable efforts to preserve intact their
respective business organizations, keep available the services of their         
respective present officers and key employees, and preserve the business        
relationships with suppliers, distributors, customers, and others having        
business relationships with them and not engage in any action, directly or      
indirectly, with the intent to adversely impact the transactions contemplated   
by this Agreement.                                                              

             (f)      Not enter into or amend any employment, severance,
special pay arrangement with respect to termination of employment or other      
similar arrangements or agreements with any directors, officers or employees,   
except in the ordinary course and consistent with past practice.                

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      (g)      Not adopt, enter into or amend any Material
Roadmaster Arrangement.                                                         

          (h)      Maintain with financially responsible insurance
companies insurance on its assets and its businesses in such amounts and        
against such risks and losses as are consistent with past practice.             

       Section 5.3      ACQUISITION TRANSACTIONS.  After the date hereof and
prior to the Closing or earlier termination of this Agreement, unless the other 
party shall otherwise agree in writing, neither Roadmaster nor Actava shall,    
nor shall they permit any of their subsidiaries to, initiate, solicit,          
negotiate, encourage, or provide confidential information to facilitate any     
proposal or offer to acquire all or any substantial part of the business and    
properties of Roadmaster or the Sports Subsidiaries and their respective        
subsidiaries, taken as a whole, or all or any part of the capital stock of      
Roadmaster or the Sports Subsidiaries, whether by merger, purchase of assets,   
tender offer or otherwise, whether for cash, securities or any other            
consideration or combination thereof (such transactions, exclusive of an        
acquisition of assets that do not constitute substantially all of the assets of 
Roadmaster or the Sports Subsidiaries and their respective subsidiaries taken   
as a whole, being referred to herein as "Acquisition Transactions").            

      Section 5.4      ACCESS TO INFORMATION.  The Sports Subsidiaries and
their subsidiaries shall, and Actava shall cause the Sports Subsidiaries to,    
afford to Roadmaster and its respective accountants, counsel, financial         
advisors and other representatives (the "Roadmaster Representatives") and       
Roadmaster and its subsidiaries shall afford to Actava and its accountants,     
counsel, financial advisors and other representatives (the "Actava              
Representatives") full access during normal business hours throughout the       
period prior to the Closing to all of their respective properties, books,       
contracts, commitments and records (including, but not limited to, the Tax      
Returns of the Sports Subsidiaries and their subsidiaries) and employee         
compensation information, but not including any records pertaining to           
confidential employee health, disciplinary or other matters which are not       
legally relevant to the transactions contemplated by this Agreement and, during 
such period, shall furnish promptly to one another (i) a copy of each report,   
schedule and other document filed or received by any of them pursuant to the    
requirements of federal or state securities laws or filed by any of them with   
the SEC, and (ii) such other information concerning their respective            
businesses, properties and personnel as Roadmaster or Actava, as the case may   
be, shall reasonably request; provided that no investigation pursuant to this   
Section 5.4 shall affect any representations or warranties made herein or the   
conditions to the obligations of the respective parties to consummate the       
Exchanges.  The parties acknowledge that the information to be provided by one  
party to the other under this Section 5.4, and which has been provided prior to 
the execution and delivery of this Agreement, includes information which is     
nonpublic, confidential or proprietary in nature.  All of such information, in  
whole or in part, together with any analyses, compilations, studies or other    
documents prepared by any party, the Roadmaster Representatives, or the Actava  
Representatives, which contain or otherwise reflect any such information is     
hereinafter referred to as the "Information".                                   

Each party hereby agrees as follows:                          

              (a)      The Information will be kept confidential and shall
not, without the prior mutual written consent of Roadmaster and Actava be       
disclosed by any party, the Roadmaster Representatives, or the Actava           
Representatives, in any manner whatsoever, in whole or in part, and shall not   
be used by any party, the Roadmaster Representatives, or the Actava             
Representatives, following any termination of this Agreement.  Each party       
agrees to transmit the Information only to its respective employees and         
representatives who need to know the Information and who shall agree to be      
bound by the terms and conditions of this Agreement.  In any event, each party  
shall be responsible for any breach of this Agreement by its respective         
employees or representatives.                                                   

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                (b)      Each party agrees to keep a record of the location of
the Information.  If the Exchanges are not consummated, the Information, except 
for that portion of the Information which consists of analyses, compilations,   
studies or other documents prepared by each party's respective employees and    
representatives, will be returned to the other promptly upon request and no     
party shall retain any copies.  That portion of the Information, and all copies 
thereof, which consists of analyses, compilations, studies or other documents   
prepared by each party's respective employees and representatives will be       
destroyed.                                                                      

              (c)      In the event any party becomes legally compelled to
disclose any of the Information, such party will provide to the other prompt    
notice so that each other party may seek a protective order or other            
appropriate remedy and/or waive compliance with the provisions of this          
Agreement.  In the event that such protective order or other remedy is not      
obtained, or compliance with the provisions of this Agreement is waived, a      
party will furnish only that portion of the Information which is legally        
required, and to the extent requested by the other party, will exercise its     
best efforts to obtain a protective order or other reliable assurance that      
confidential treatment will be accorded the Information.                        

    The term "Information" does not include information which (i)  was
known to any party about the other prior to its disclosure, provided that       
Roadmaster, Actava, or their Representatives lawfully obtained or developed     
such information, (ii) becomes generally available to the public other than as  
a result of a disclosure by Roadmaster, Actava, or their Representatives in     
violation of this Agreement, or (iii) becomes available from a source other     
than Roadmaster, Actava, or their Representatives, if the source is not bound   
by a confidentiality agreement and such source lawfully obtained such           
information.                                                                    

ARTICLE VI  

ADDITIONAL AGREEMENTS 

      Section 6.1      PUBLIC ANNOUNCEMENTS.  So long as this Agreement is
in effect, Actava and Roadmaster shall not, and shall cause their affiliates    
not to, issue or cause the publication of any press release or any other        
announcement with respect to the Exchanges or the transactions contemplated by  
this Agreement without the consent of the other party, except where such        
release or announcement is required by applicable law or pursuant to any        
listing agreement with, or the rules or regulations of, any national securities 
exchange on which securities of Actava or Roadmaster, are listed or traded.     

Section 6.2      SHAREHOLDERS' APPROVAL; PROXY STATEMENT.  (a)
Roadmaster shall promptly submit this Agreement and the transactions            
contemplated hereby for the approval of its shareholders and, subject to the    
fiduciary duties of the Board of Directors of Roadmaster under applicable law,  
shall use its best efforts to obtain stockholder approval and adoption of this  
Agreement and the transactions contemplated hereby (the "Roadmaster             
Shareholders' Approval").  Subject to the fiduciary duties of the Board of      
Directors of Roadmaster under applicable law, Roadmaster shall, through its     
Board of Directors, recommend to its shareholders approval of the transactions  
contemplated by this Agreement.  As soon as practicable, Roadmaster shall file  
with the SEC under the Exchange Act, and shall use its best efforts to have     
cleared by the SEC, a proxy statement (the "Roadmaster Proxy Statement"), with  
respect to the approval of the Roadmaster's stockholders referred to above.     
Roadmaster shall comply with all applicable requirements of "Blue Sky" and      
state securities laws in connection with the Exchanges and the issuance of the  
Exchange Shares prior to the Closing.                                           

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              (b)      If required, Actava shall submit this Agreement and
the transactions contemplated hereby for the approval of its shareholders and,  
subject to the fiduciary duties of the Board of Directors of Actava under       
applicable law, shall use its best efforts to obtain shareholder approval and   
adoption of this Agreement and the transactions contemplated hereby (the        
"Actava Shareholders' Approval").  Subject to the fiduciary duties of the Board 
of Directors of Actava under applicable law, Actava shall, through its Board of 
Directors, recommend to its shareholders approval of the transactions           
contemplated by this Agreement.  If Actava Shareholders' Approval is required,  
Actava shall file with the SEC under the Exchange Act, and shall use its best   
efforts to have cleared by the SEC, a proxy statement (the "Actava Proxy        
Statement"), with respect to the approval of the Actava's shareholders referred 
to above.                                                                       

  Section 6.3      EXPENSES.  Except as provided in Section 5.1(b)
hereof as to Actava, Actava shall be responsible for all costs and expenses     
incurred by Actava and the Sports Subsidiaries in connection with this          
Agreement and Roadmaster shall be responsible for all costs and expenses        
incurred by Roadmaster in connection with this Agreement.                       

    Section 6.4      AGREEMENT TO COOPERATE.  Subject to the terms and
conditions herein provided, each of the parties hereto shall use all reasonable 
efforts to take, or cause to be taken, all action and to do, or cause to be     
done, all things necessary, proper or advisable to consummate and make          
effective the transactions contemplated by this Agreement, including using its  
reasonable efforts to obtain all necessary or appropriate governmental or third 
party waivers, consents and approvals and SEC "no-action" letters, to effect    
all necessary registrations, filings and submissions (including, but not        
limited to, filings under the HSR Act and any other submissions requested by    
the Federal Trade Commission (the "FTC") or Department of Justice the ("DOJ"))  
and to lift any injunction or other legal bar to the Exchanges (and, in such    
case, to proceed with the Exchanges as expeditiously as possible).              

    Section 6.5      STOCK EXCHANGE LISTING.  Roadmaster shall use its
reasonable best efforts to cause the listing of all shares of Roadmaster Common 
Stock and the Exchange Shares on the New York Stock Exchange (the "NYSE") prior 
to or simultaneous with the Closing.                                            

   Section 6.6      INSURANCE COVERAGE.  Roadmaster acknowledges and
agrees that all of the insurance policies in force naming the Sport             
Subsidiaries, any of their subsidiaries or employees thereof as an insured or   
beneficiary or as a loss payee or for which the Sports Subsidiaries or any of   
their subsidiaries has paid or is obligated to pay all or part of the premiums  
shall be terminated as of the Closing.  Roadmaster agrees that it will arrange  
to provide, effective as of the Closing, insurance coverage for the Sports      
Subsidiaries from responsible companies in such amounts and against such risks  
as Roadmaster and its subsidiaries maintain in the ordinary course of business. 

     Section 6.7      RELEASES.  Roadmaster agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do or cause to be      
done, all things necessary, proper or advisable to release Actava from any      
guaranty or assurance of any obligation (payment or performance) of the Sports  
Subsidiaries and their subsidiaries, including, without limitation, Actava's    
obligations under that certain (a) Support Agreement, dated as of April 29,     
1993, between Actava and Sterling National Bank & Trust Company of New York     
(the "Support Agreement"), (b) Guaranty (Arbitration), dated December 15, 1993, 
as amended, in favor of ITT Commercial Finance Corp. and The Provident Bank     
(the "ITT Guaranty"), (c) Limited Guaranty, dated October 13, 1992, in favor of 
First Union National Bank of North Carolina (the "1992 First Union Guaranty");  
and (d) Guaranty, dated June 6, 1988, in favor of First Union National Bank of  
North Carolina (the "1988 First Union Guaranty"); provided, however, the        
parties agree that such actions on the part of Roadmaster to obtain the release 
of Actava from any such guaranty or assurance shall in no event include the     
contribution of cash to the Sports Subsidiaries by Roadmaster                   

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where such funds would be required to be used by the Sports Subsidiaries to     
satisfy their respective obligations to which any such Actava guaranty or       
assurance relates.  Roadmaster shall indemnify and reimburse Actava for any and 
all claims, losses, liabilities, damages, costs (including court costs), and    
expenses (including reasonable attorneys and accountants' fees) incurred by     
Actava, its successors or assigns, and their respective officers, employees,    
consultants and agents after the Closing as a result of any guaranty or         
assurance of any obligation (payment or performance) of the Sports Subsidiaries 
and their subsidiaries, including, without limitation, the ones specifically    
set forth herein; provided, however, Roadmaster's indemnity obligation set      
forth herein shall not apply to any liability or obligation required to be, but 
which was not disclosed on the schedules to this Agreement.                     

  Section 6.8      ADDITIONAL INCOME TAX MATTERS.  (a) Each of the
Sports Subsidiaries will continue to join, for all taxable periods of such      
Sports Subsidiaries ending on or before the Closing Date, as members of the     
Affiliated Group filing a consolidated federal income tax return for federal    
income tax purposes.  Actava shall be responsible for preparing and filing such 
consolidated federal income tax returns to be filed on behalf of the Affiliated 
Group for such periods and shall timely pay or cause to be paid all federal     
income taxes shown as due on such tax returns.  Roadmaster agrees that it shall 
provide (or shall cause its accountants and other representatives to provide)   
to Actava within three (3) months after the Closing Date, the information,      
including but not limited to internally prepared financial statements, tax work 
papers and records relating to the Sports Subsidiaries, that is reasonably      
necessary or related to Actava's preparation of the federal income tax returns  
of the Sports Subsidiaries for the taxable period ending on the Closing Date    
which will be included in the consolidated federal income tax return for the    
Affiliated Group for its taxable year beginning January 1, 1994 which will be   
filed by Actava (the "1994 Consolidated Return").                               

          (b)      Each of the Sports Subsidiaries will file their
respective state or local income or franchise tax returns based on the          
statutory filing requirements of the jurisdictions in which they have filing    
responsibilities including, but not limited to, filing on a combined, separate  
company or other statutory basis as required by the particular jurisdiction.    
The returns will be filed based on the statutorily defined tax period of the    
particular jurisdiction in which the filing occurs.  Such tax returns may, for  
example, include the period January 1, 1994 to the Closing Date or may include  
the period January 1, 1994 to December 31, 1994 depending on the particular     
jurisdiction's requirements.  The Sports Subsidiaries shall be responsible for  
preparing all their respective state or local income or franchise tax returns   
that have a tax period of January 1, 1994 to the Closing Date and shall timely  
pay or cause to be paid all state or local income or franchise taxes shown as   
due on such returns.  The Sports Subsidiaries shall also be responsible for     
preparing all their respective state or local income or franchise tax returns   
that have a tax period of either the Closing Date to December 31, 1994 or       
January 1, 1994 to December 31, 1994 and shall timely pay or cause to be paid   
all state or local income or franchise taxes shown as due on such returns.  If  
a jurisdiction has a short period filing requirement other than that described  
above, it is the intent of this Section 6.8(b) that the Sports Subsidiaries     
have all filing and payment responsibility for the tax returns for both the     
first and second such short periods.  Actava agrees that it shall provide (or   
shall cause its accountants and other representatives to provide) to the Sports 
Subsidiaries within three (3) months after the Closing Date, the information,   
including but not limited to internally prepared financial statements, tax work 
papers and records relating to the operations of the Sports Subsidiaries for    
the period January 1, 1994 through the Closing Date, that is reasonably         
necessary or related to the Sports Subsidiaries' preparation of all the state   
or local income or franchise tax returns for which they have filing and payment 
responsibility pursuant to this Section 6.8(b).  Notwithstanding anything to    
the contrary in this Section 6.8(b), for any taxable period ending on or before 
the Closing Date, Actava shall be responsible (and the Sports Subsidiaries      
shall not be responsible) for the payment of any state or local income or       
franchise taxes related to or arising out of business conducted by any          

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Actava entity other than the Sports Subsidiaries and their subsidiaries.        

              (c)      Roadmaster shall indemnify and hold harmless Actava
against, all Taxes with respect to the Sports Subsidiaries and their            
subsidiaries for any taxable period ending on or before the Closing Date;       
provided, however, Actava will indemnify and hold harmless Roadmaster and the   
Sports Subsidiaries against: (i) any and all liability for or with respect to   
federal income taxes for any taxable period ending on or before the Closing     
Date that is asserted against one or more of the Sports Subsidiaries by reason  
of it being severally liable for the entire federal income taxes of the         
Affiliated Group pursuant to Section 1.1502-6 of the Treasury Regulations; (ii) 
state or local income or franchise tax liability related to or arising out of   
business conducted by any Actava entity other than the Sports Subsidiaries and  
their subsidiaries for any taxable period ending on or before the Closing Date; 
and (iii) state or local income or franchise taxes of the Sports Subsidiaries   
for any taxable period ending on or before the Closing Date but only after      
there have been one or more Adjustments (as defined below) of such particular   
tax so that as adjusted, such particular state or local income or franchise tax 
plus any penalties and interest thereon (each such Adjustment plus the          
attributable penalties and interest being hereinafter referred to as an "Actava 
Adjustment Amount"), as reduced by the Tax Benefits (as defined and as          
calculated as set forth below) realized by the Sports Subsidiaries, Roadmaster  
and its other subsidiaries in connection with each such Adjustment in the       
manner described below, have exceeded on a cumulative basis, the amount of such 
particular state or local income or franchise tax to which each such Adjustment 
relates which has been accrued for and relates solely to the taxable periods    
ending on or before the Closing Date and which was reflected in the Sports      
Subsidiaries Financial Statements plus $250,000.00 (each such particular        
accrued tax reflected on such financial statements plus the single $250,000.00  
amount, which applies on an aggregate basis to all such Actava Adjustment       
Amounts and not to each Actava Adjustment Amount, being hereinafter referred to 
as the "Actava Threshold"), all subject to the provisions set forth below in    
this Section 6.8(c) governing the provisions of the potential indemnity         
obligation created pursuant to this clause (iii).                               

       Roadmaster shall also indemnify and hold harmless Actava against: (X)
all Taxes with respect to the Sports Subsidiaries and their subsidiaries for    
all taxable periods beginning after the Closing Date, and (Y) state or local    
income or franchise taxes of Roadmaster and its subsidiaries for any taxable    
period ending on or before the Closing Date but only after there have been one  
or more Adjustments of such particular tax so that adjusted, such particular    
state or local income or franchise tax plus any penalties and interest thereon  
(each such Adjustment plus the attributable penalties and interest being        
hereinafter referred to as a "Roadmaster Adjustment Amount"), as reduced by the 
Tax Benefits realized by Actava and its subsidiaries in connection with each    
such Adjustment in the manner described below, have exceeded on a cumulative    
basis, the amount of such particular state or local income or franchise tax     
which has been accrued for and relates solely to the taxable periods ending on  
or before the Closing Date and which was reflected in the Roadmaster Financial  
Statements plus $250,000.00 (each such particular accrued tax reflected on such 
financial statements plus the single $250,000.00 amount, which applies on an    
aggregate basis to such Roadmaster Adjustment Amounts and not to each such      
Roadmaster Adjustment Amount, being hereinafter referred to as the "Roadmaster  
Threshold"), all subject to the provisions set forth below in this Section      
6.8(c) governing the provisions of the potential indemnity obligation created   
pursuant to this clause (Y).  Except for the Roadmaster obligation described in 
clause (Y) above in the second sentence of this Section 6.8(c), any indemnity   
payable by Roadmaster to Actava pursuant to this Section 6.8(c) shall be paid   
within ten (10) days after Actava's written request therefor, or if later, ten  
(10) days prior to the date the liability for Taxes upon which the indemnity is 
based is required to be satisfied by Actava.  Except for the Actava indemnity   
obligation described in clauses (ii) and (iii) above in the first sentence of   
this Section 6.8(c), any indemnity payable by Actava to Roadmaster pursuant to  
this Section 6.8(c) shall be paid within ten (10) days after Roadmaster's       
written request therefor, or if later, ten (10) days prior to the date the      
liability for federal income taxes upon which the indemnity is                  

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based is required to be satisfied by the Sports Subsidiaries.                   

        To the extent that Roadmaster on the one hand, and Actava on the other
hand, shall be required to make any indemnity payment to the other party        
pursuant to any of the provisions of this Section 6.8, all such indemnity       
payments shall be treated by the parties as non-taxable adjustments to the      
Exchanges; provided, that if, pursuant to a written opinion of independent      
counsel of recognized standing selected by the party receiving the indemnity    
payment and reasonably approved by the party making the indemnity payment, to   
the effect that such indemnity payment is required to be included in the        
taxable income of the party receiving the indemnity payment or its affiliates,  
then the amount of any such indemnity payment shall include a "gross-up" for    
any federal, state or local income or franchise taxes actually payable by the   
recipient of such indemnity payment as a result of the receipt or accrual of    
such indemnity payment (including such "gross-up").  Notwithstanding anything   
to the contrary in this Section 6.8(c), the parties hereto agree that the party 
who is entitled to receive any indemnity payment from another party pursuant to 
this Section 6.8(c) shall have the right, exercisable in its sole discretion,   
to waive its right to receive such indemnity payment in cash and also, solely   
in the case of any indemnity payment Actava is entitled to receive from         
Roadmaster pursuant to Section 6.8(c), Actava shall have the right to instead   
require Roadmaster to satisfy such indemnity payment with Roadmaster Common     
Stock pursuant to the provisions of Section 6.13 hereof, by notice to the party 
required to make such payment.                                                  

  As discussed above in clause (iii) in the first sentence of this
Section 6.8(c) and in clause (Y) in the second sentence of this Section 6.8(c), 
respectively, the parties hereto agree that in calculating the amounts that are 
credited against and thereby reduce the Actava Threshold and the Roadmaster     
Threshold that must be exhausted before either Actava or Roadmaster, as the     
case may be, have the obligation to make indemnity payments to each other under 
the above referenced provisions, each Actava Adjustment Amount and each         
Roadmaster Adjustment Amount shall be reduced by the dollar amount of any Tax   
Benefits (as defined and as calculated as set forth below) obtained in          
connection with such Adjustment by the party seeking to reduce the applicable   
threshold of the other party (hereinafter the "Indemnitee").  Each Actava       
Adjustment Amount or Roadmaster Adjustment Amount, as the case may be, as       
reduced by the applicable Tax Benefits realized by the Indemnitee shall be      
referred to hereinafter as the "After-Tax Adjustment Amount."  If the Tax       
Benefits are realized by the Indemnitee in the same taxable period in which the 
Indemnitee seeks the reduction of the other party's threshold as a result of an 
Adjustment, then the Tax Benefits shall be taken into account by reducing each  
Actava Adjustment Amount or each Roadmaster Adjustment Amount, as the case may  
be, by the full dollar amount of the Tax Benefits in arriving at the After-Tax  
Adjustment Amount.  If the Tax Benefits are not realized by the Indemnitee in   
the same taxable period in which Indemnitee seeks the reduction of the other    
party's threshold but instead are realized by the Indemnitee in one or more     
future taxable periods, then the reduction of each Actava Adjustment Amount or  
each Roadmaster Adjustment Amount, as the case may be, shall be the amount      
which is the present value of such Tax Benefits over the periods such Tax       
Benefits will be realized by the Indemnitee using a discount rate equal to the  
"prime rate" established by The Chase Manhattan Bank (National Association)     
from time to time in its sole discretion as its prime rate of interest.         
Further, with respect to the actual indemnity payments that shall be payable by 
either Actava or Roadmaster to the other party if the Actava Threshold or the   
Roadmaster Threshold is exceeded by one or more After-Tax Adjustment Amounts,   
Actava or Roadmaster, as the case may be, shall only make indemnity payments to 
the other party to the extent that one or more After-Tax Adjustment Amounts     
exceed the Actava Threshold or the Roadmaster Threshold, as the case may be     
(before considering any required "gross up" of such indemnity payment as        
discussed above).                                                               

        For purposes of this Section 6.8(c), the term "Tax Benefits" means any
credits, deductions or other tax benefits for federal income tax purposes the   
Indemnitee is entitled to related to or arising out of an Actava Adjustment     
Amount or Roadmaster Adjustment Amount, as the case may be.  Further, it        

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shall be assumed that: (A) for purposes of calculating the dollar value of Tax  
Benefits to the Indemnitee, the federal income tax rate applicable to the       
Indemnitee is equal to 34%; (B) the Indemnitee would be able to utilize any Tax 
Benefits in the taxable period such Tax Benefits were originally anticipated to 
be available; and (C) the Indemnitee will realize the benefit of any credit,    
deduction, or other tax benefit in the taxable period in which such credit      
deduction, or tax benefit could first have been properly reflected on           
Indemnitee's federal income tax return.  For purposes of this Section 6.8(c),   
the term "Adjustment" means that an item of deduction, credit, income or other  
item on a consolidated, combined, unitary or separate tax return of the Sports  
Subsidiaries and their subsidiaries on one hand, and Roadmaster and its         
subsidiaries on the other hand, with respect to a particular state or local     
income or franchise tax, is adjusted as a result of or in settlement of any     
audit, other administrative proceeding or judicial proceeding or as a result of 
the filing of an amended tax return to reflect the consequences of any          
determination made in connection with any such audit or proceeding with respect 
to the applicable taxable periods.  Any indemnity payments by Actava pursuant   
to clause (iii) in the first sentence above and by Roadmaster pursuant to       
clause (Y) in the second sentence above shall only be made after the procedures 
for the verification of the documentation and calculations described herein in  
this Section 6.8(c) have been completed.  Each party shall promptly notify the  
other party of any notice or audit or other proceeding with respect to a        
potential Adjustment and shall include in such notice the pertinent facts       
surrounding such potential Adjustment and shall promptly provide the other      
party with copies of all correspondence with the taxing authority as well as    
all decision documents executed by the party and the taxing authority with      
respect to the final determination of any proposed Adjustment.                  

      Pursuant to the provisions of Sections 6.8(d) and (e), the party who
would bear indemnity responsibility for each such Adjustment shall have the     
absolute right to control the proceedings relating to such Adjustment but shall 
share information relevant to the potential indemnity obligation with the other 
party.  Whenever the Indemnitee proposes to reduce the Actava Threshold or the  
Roadmaster Threshold, as the case may be, as the result of an Adjustment, the   
Indemnitee shall provide the other party with all the necessary documentation   
and calculations of the Actava Adjustment Amount or Roadmaster Adjustment       
Amount, the applicable Tax Benefits and the present value of such Tax Benefits, 
if applicable, all of which must be determined in arriving at the After-Tax     
Adjustment Amount which the Indemnitee seeks to apply to reduce or to exceed    
the Actava Threshold or the Roadmaster Threshold, as the case may be.  The      
parties shall endeavor to mutually agree on the calculations of the After-Tax   
Adjustment Amounts and the amounts comprising it which determine whether and to 
what extent either Actava or Roadmaster has an obligation to make indemnity     
payments to the other party hereunder with respect to Adjustments.  All notices 
and other written communications pursuant to this Section 6.8(c) shall be made  
in the manner provided for in Section 9.3 hereof.  Prior to the Closing Date    
the parties agree that Actava shall have the right to adjust the liabilities    
balances with respect to state and local income or franchise taxes to properly  
reflect such liabilities on the Sports Subsidiaries Interim Financial           
Statements and Roadmaster shall also have the right to adjust the liabilities   
balances with respect to state and local income or franchise taxes to properly  
reflect such liabilities on the Roadmaster Financial Statements.                

              (d)      The Sports Subsidiaries (and Roadmaster) shall have
the right, in their sole discretion, to direct and control the handling of all  
tax matters relating to Taxes of the Sports Subsidiaries for the taxable        
periods ending before and after the Closing Date to the extent the Sports       
Subsidiaries are liable for such Taxes under this Agreement (and to the extent  
of Roadmaster's indemnity obligation in favor of Actava under Section 6.8(c)),  
including but not limited to the right to prosecute all administrative and      
judicial remedies, to settle all issues, to enter into closing agreements, and  
to execute consents or waivers extending the statute of limitations; Actava     
(and any successor or assign) shall grant such powers of attorney to the Sports 
Subsidiaries (and Roadmaster) and enter into such further documents as the      
Sports Subsidiaries (and Roadmaster) may in their reasonable judgment consider  
necessary or appropriate to enable the Sports Subsidiaries (and Roadmaster) to  
take all actions desired by the Sports Subsidiaries                             

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(and Roadmaster) in connection with any of the foregoing matters.  Actava       
agrees that it shall not, nor shall it permit any other person, to waive the    
provisions of any statute of limitations as such provisions may apply to the    
assessment of income or franchise taxes for any taxable period ending on or     
before the Closing Date.  If any governmental body or authority shall commence  
an examination, investigation, audit or other proceeding with respect to any    
Tax Return covering the operations of Actava (or any predecessor thereof) for   
taxable periods ending on or before the Closing Date, or shall give the Sports  
Subsidiaries (and Roadmaster) or Actava a notice of deficiency, or advise       
either of a proposed adjustment to income or franchise taxes, or assert any     
other claim or demand concerning a taxable period covered by such Tax Return,   
then the Sports Subsidiaries (and Roadmaster) or Actava shall promptly notify   
the other parties of such claim or demand.                                      

               (e)      Actava shall have the right, in its sole discretion,
to direct and control the handling of all tax matters relating to: (A) the      
federal income taxes of the Affiliated Group for all taxable periods whether    
before or after the Closing Date such Affiliated Group has filed a consolidated 
federal income tax return, including without limitation the taxable periods one 
or more of the Sports Subsidiaries were members of such Affiliated Group filing 
a consolidated return; and (B) for state or local income or franchise taxes of  
the Sports Subsidiaries, for which Roadmaster and the Sports Subsidiaries may   
seek indemnity from Actava under Section 6.8(c) hereof (by virtue of clauses    
(i), (ii) and (iii) of the first sentence of Section 6.8(c) hereof) including   
but not limited to the right to prosecute all administrative and judicial       
remedies, to settle all issues, to enter into closing agreements, and to        
execute consents or waivers extending the statute of limitations.               

            (f)      All refunds of Taxes related to or arising out of
business conducted by the Sports Subsidiaries and their subsidiaries (together  
with any interest thereon) received for or relating to any taxable period       
ending on or before the Closing Date, shall belong to and be kept by or         
promptly paid to Actava if after the Closing Date, such refund comes into the   
possession of Roadmaster, the Sports Subsidiaries or any of their subsidiaries. 

            (g)      Under Temporary Regulation ("Temp. Reg.") Section
1.197-1T, Actava may make an election to apply the provisions of Section 197 of 
the Code to all eligible Section 197 intangibles acquired by it and all the     
members of its Affiliated Group after July 25, 1991, and on or before August    
10, 1993 (hereinafter the "Retroactive Election" as such election is defined    
under Temp. Reg. Section 1.197-1T(a)) with respect to Actava's "election year"  
which, under Temp. Reg. Section 1.197-1T(b)(5), is Actava's taxable year ended  
December 31, 1993 ("Actava's Election Year").  Roadmaster acknowledges and      
agrees that Actava shall only make the Retroactive Election for Actava's        
Election Year if Actava determines in its sole discretion  that making such     
Retroactive Election would not result, with respect to any of the taxable years 
impacted by such Retroactive Election, in any material adverse tax consequences 
to Actava, any of the Sports Subsidiaries (while members of Actava's Affiliated 
Group), or any of the other members of the Affiliated Group.                    

              (h)      Actava on the one hand, and the Sports Subsidiaries
on the other hand, shall provide each other with such assistance as may         
reasonably be requested by each of them in connection with the preparation of   
any Tax Return, any audit or other examination by any taxing authority, or any  
judicial or administrative proceedings relating to the Taxes of the Sports      
Subsidiaries; provided, further, that Actava shall provide the Sports           
Subsidiaries (and Roadmaster) access to records and information with respect to 
the federal income taxes of the Affiliated Group to the extent such information 
(i) is reasonably necessary to the Sports Subsidiaries' preparation of its Tax  
Returns, and (ii) relates to Taxes of the Sports Subsidiaries for which they    
are liable under this Agreement (and for which Roadmaster has an indemnity      
obligation pursuant to Section 6.8(c) hereof).  Actava, the Sports Subsidiaries 
(and their subsidiaries) and Roadmaster agree that they will each file their    
respective Tax Returns on the basis that each of the                            

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Exchanges qualifies as a "reorganization" under Section 368(a)(1)(B) of the     
Code.                                                                           

          (i)      Upon consummation of the Exchanges, each of the
Sports Subsidiaries will cease to be members of the Actava Affiliated Group.    
Roadmaster and Actava agree that to the extent that Actava or the Sports        
Subsidiaries (and their subsidiaries) are eligible to make Tax elections that   
(A) impact the federal income tax liability of Actava on the Affiliated Group's 
consolidated federal income tax returns including without limitation, the 1994  
Consolidated Return or (B) otherwise affect the Taxes of the Sports             
Subsidiaries and their subsidiaries for taxable periods ending on or before the 
Closing Date, Actava shall, except as otherwise provided in this Agreement,     
have the right in its sole discretion to make or not make all such elections.   

       Section 6.9      INTERCOMPANY ACCOUNTS.  (a)  Notwithstanding Section
5.1 hereof, the parties hereto agree that prior to the Closing Date, each of    
the Sports Subsidiaries shall authorize, declare and pay an in-kind dividend to 
Actava in an amount equal to and the form of the then outstanding intercompany  
loans made by such Sports Subsidiary to Actava.                                 

               (b)      The parties hereto agree that Actava shall calculate
and charge to each Sports Subsidiary an administrative service fee for the      
period from January 1, 1994 through the Closing Date.  Such administrative      
service fee shall be calculated in a manner consistent with prior years and     
shall be accrued by each Sports Subsidiary.                                     

          (c)      The parties hereto agree that in no event shall
Actava pay any cash to the Sports Subsidiaries (or Roadmaster) at any time to   
compensate the Sports Subsidiaries (or Roadmaster) for Actava's realization of  
any tax benefit with respect to the Taxes of the Sports Subsidiaries.           

            (d)      The parties further agree that other than amounts
previously billed the Sports Subsidiaries by Actava prior to the execution of   
this Agreement, Actava shall not further bill the Sports Subsidiaries for their 
estimated respective shares of the consolidated federal tax liability of the    
Affiliated Group for the taxable year beginning January 1, 1994.                

              (e)      Actava agrees it shall contribute to the capital of
the respective Sports Subsidiaries on or prior to the Closing Date the          
outstanding intercompany payable amounts previously billed by Actava to the     
Sports Subsidiaries with respect to consolidated federal income taxes and with  
respect to administrative service fees.  The parties agree that all other       
outstanding intercompany payable amounts previously billed by Actava to the     
Sports Subsidiaries (whether billed before or after the date hereof) shall be   
paid to Actava on the Closing Date or if later, in the normal course of         
business.  Actava and the Sports Subsidiaries agree that such intercompany      
amounts shall be the result of arms-length transactions.  By way of description 
only, such amounts as of July 1, 1994 are as set forth on Schedule 6.9(e).      

Section 6.10  EMPLOYEE BENEFITS MATTERS.                      

(a)      Certain Post-Retirement Benefits.    

                     (i)     Provision of Benefits.  As of the date of
  execution of this Agreement, the parties hereto have not reached
       agreement as to the provision of Post-Retirement Benefits (if any) to
     employees and former employees (and their dependents) of the Sports
    Subsidiaries on and after the Closing Date, but the parties intend
        that such an agreement shall be reached after the date of execution of
        this Agreement and prior to the Closing Date, and shall continue their
       negotiations in good faith following the execution of this Agreement.
Notwithstanding whether                                       

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    such an agreement is reached by the parties, the parties intend to
  consummate the Exchanges and agree that Actava and/or the Sports
      Subsidiaries may amend or terminate the provision of Post-Retirement
        Benefits provided under their respectively sponsored plans at any time
     and for any reason, whether prior to, on or after the Closing Date.

                         (ii)    Indemnification.  Notwithstanding whether the
   parties agree as provided in paragraph (i) above, Roadmaster and,
     after the Closing Date, the Sports Subsidiaries, shall, jointly and
        severally, indemnify and hold harmless Actava, the assigns, employees,
   agents, representatives, and successors of Actava, each and every
Actava Plan, and the agents, employees, servants, independent 
  contractors, attorneys, representatives, actuaries, accountants,
   fiduciaries, administrators, administrative committee(s) or other
   committee(s), and trustees of, or associated with, each and every
    Actava Plan from any and all claims, losses, liabilities, damages,
  costs (including court costs) and expenses (including reasonable
     attorneys', actuaries' and accountants' fees) which arise by reason
       of, or are in any way connected with, or which are or may be based in
   whole or in part on, (x) the cost and expense of providing former
 employees of the Sports Subsidiaries (or their dependents) with
      Post-Retirement Benefits, and (y) the liability to provide employees
   (or their dependents) of a Sports Subsidiary with Post-Retirement
     Benefits; provided, however, no such right to indemnification shall
      exist with respect to Post-Retirement Benefits which are required to
        be provided to such individuals under Code Section 4980B and/or Part 6
        of Title I of ERISA.  If Post-Retirement Benefits cease to be provided
      to employees or former employees (or their dependents) of the Sports
       Subsidiaries prior to the Closing Date due to actions taken by Actava
     or the Sports Subsidiaries, or if Roadmaster requests Actava or the
    Sports Subsidiaries to cease providing Post-Retirement Benefits to
   employees or former employees (or their dependents) of the Sports
    Subsidiaries prior to the Closing Date, the indemnification of the
       preceding sentence shall not, in the aggregate, exceed the sum of the
        Post-Retirement Benefit Liability of each Sports Subsidiary determined
immediately prior to the effective date of such cessation of  
        Post-Retirement Benefits or, in the case of a request for cessation by
        Roadmaster where cessation is not effectuated, as of the Closing Date.

                         (iii)   Definitions.  For purposes of this subsection
(a), the following terms shall have the following meanings:   

                                 a)       "Actava Plan" shall mean an employee
         welfare benefit plan (as defined in ERISA Section 3(1))
               sponsored and maintained by Actava providing medical, dental,
               vision or death benefits to employees and/or former employees
(and/or their dependents).                    

                             b)       "DP Plan" shall mean an employee
         welfare benefit plan (as defined in ERISA Section 3(1))
               sponsored and maintained by Actava providing medical, dental,
               vision or death benefits to employees and/or former employees
(and/or their dependents).                    

                                c)       "Post-Retirement Benefit Liability"
                shall mean, with respect to a Sports Subsidiary, the liability
             as shown on the accounting books and records of such Sports
                Subsidiary for Post-Retirement Benefits in accordance with the
               requirements of Financial Accounting Standard 106 promulgated
        by the Financial Accounting Standards Board, with such
                liability determined for such Sports Subsidiary as of the date
     which is immediately prior to the date on which the
               appropriate plan which would have the liability for providing
          Post-Retirement Benefits for such Sports Subsidiary (the
          Actava Plan or the DP Plan, as applicable) is amended as
       described in subparagraph (a) of paragraph (i) above.

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                             d)       "Post-Retirement Benefits" shall
         mean medical, dental, vision or life insurance benefits
          provided to an employee (or his or her dependents) after
termination of the employee's employment.     

(b)      Division of COBRA Responsibilities.  

                      (i)     COBRA Responsibilities Under Actava Health
    Plan.  With respect to any qualified beneficiary covered under the
  Fuqua Industries, Inc. and Affiliated Companies Health Plan (the
        "Actava Health Plan"), the Actava Health Plan shall be responsible for
        the provision of any continuation coverage required under Code Section
    4980B and/or Part 6 of Title I of ERISA due to the occurrence of a
        qualifying event with respect to such qualified beneficiary while such
 qualified beneficiary was covered under the Actava Health Plan.

                       (ii)    COBRA Responsibilities Under DP Plan.  With
    respect to any qualified beneficiary covered under the Diversified
  Products Corporation Medical Plan (the "DP Health Plan"), the DP
        Health Plan shall be responsible for the provision of any continuation
        coverage required under Code Section 4980B and/or Part 6 of Title I of
        ERISA due to the occurrence of a qualifying event with respect to such
    qualified beneficiary while such qualified beneficiary was covered
under the DP Health Plan.                                     

                       (iii) Definitions.  For purposes of this subsection
 (b), the terms "qualified beneficiary," "qualifying event," and
   "continuation coverage" shall have the meanings specified in Code
Section 4980B and/or Part 6 of Title I of ERISA.              

(c)      Participation in Certain Plans.      

                   (i) Actava Sponsored Plans.  On or prior to the
Closing Date, each of the Sports Subsidiaries shall cease     
     participation in, and shall (after the payment of any contributions
    due) cease making contributions to, all employee benefit plans (as
    defined in ERISA Section 3(3)) which are sponsored by Actava or an
      ERISA Affiliate of Actava other than the Sports Subsidiaries, except
   for the participation of NWR and Willow in The Actava Group, Inc.
     Sports Group Profit Sharing Plan Profit Sharing Plan.  Employees of
      the Sports Subsidiaries participating in such employee benefit plans
    shall cease active participation in, or coverage under, such plans
       simultaneously with the cessation of participation by their employing
     Sports Subsidiary; to the extent that such plans do not provide for
      such cessation of participation or coverage at that time without the
      necessity of an amendment to such plans, such plans shall be amended
       to so provide.  Any vested accrued or other benefits under such plans
  shall be paid to such employees in accordance with the terms and
        provisions of such plans.  Roadmaster shall take whatever measures are
   necessary to ensure that all employees of the Sports Subsidiaries
       presently participating in any health care plan sponsored, maintained
or contributed to by the Sports Subsidiaries shall be able to 
   participate (without preexisting condition limitations) as of the
        Closing date in a group health care plan sponsored by Roadmaster or an
  affiliate of Roadmaster which is subject to Part 6 of Title I of
ERISA.                                                        

                        (ii)    Sports Subsidiary Plans.  On or prior to the
        Closing Date, Actava and all ERISA Affiliates of Actava other than the
        Sports Subsidiaries shall cease participation in, and shall (after the
      payment of any contributions due) cease making contributions to, all
     employee benefit plans (as defined in ERISA Section 3(3)) which are
     sponsored by a Sports Subsidiary.  Employees of Actava or any ERISA
        Affiliate of Actava participating in such employee benefit plans shall
cease active participation in, or coverage under, such plans  
simultaneously with the                                       

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       cessation of participation by their employer; to the extent that such
      plans do not provide for such cessation of participation or coverage
        at that time without the necessity of an amendment to such plans, such
    plans shall be amended to so provide.  Any vested accrued or other
benefits under such plans shall be paid to such employees in  
        accordance with the terms and provisions of such plans.  All employees
  of Actava or any ERISA Affiliate of Actava other than the Sports
        Subsidiaries shall become fully vested in their accrued benefits under
       the Diversified Products Corporation Profit Sharing/401(k) Plan as of
the Closing Date.                                             

                     (iii) Transfer of Sponsorship.  As of the Closing
   Date, Roadmaster (or an ERISA Affiliate thereof) shall assume the
   sponsorship of The Actava Group, Inc. Sports Group Profit Sharing
        Plan, whether or not Roadmaster (or such ERISA Affiliate) participates
        in such plan, and NWR and Willow shall continue their participation in
        such plan as of the Closing Date.  The parties to this Agreement agree
to take all actions necessary to effectuate such transfer of  
sponsorship.                                                  

                         (iv)    Definitions.  For purposes of this subsection
      (c), the term ERISA Affiliate shall, with respect to an entity, mean
        each other employer which would be required to be aggregated with such
      entity under the provisions of Code Section 414(b), (c), (m) or (o).

      Section 6.11     FINANCIAL STATEMENTS.  Prior to the Closing, Actava
shall deliver to Roadmaster (a) an audited income statement for the fiscal year 
ended December 31, 1991 for each Sport Subsidiary (other than DP) and (b) an    
audited balance sheet of DP as of June 7, 1993 and the related audited          
statements of income, retained earnings and cash flows for the year then ended. 
The financial statements delivered pursuant to this Section 6.11 shall have     
been prepared in accordance with generally accepted accounting principles       
applied on a consistent basis (except as may be indicated therein or in the     
notes thereto).                                                                 

Section 6.12     PRODUCTS LIABILITY.                          

(a) Actava shall indemnify Roadmaster for:    

               (i) any losses, liabilities, damages, costs
(including court costs), and expenses (including reasonable attorneys and       
accountants' fees) incurred by Hutch, NWR or Willow as a result of any products 
liability claim against Hutch, NWR or Willow by consumers with respect to       
injuries caused by alleged defects in products of Hutch, NWR or Willow and      
which occurred on or prior to the Closing Date; and                             

                 (ii)  any losses, liabilities, damages, costs
(including court costs), and expenses (including reasonable attorneys and       
accountants' fees) in excess of $3,250,000 incurred by DP as a result of any    
products liability claim against DP by consumers with respect to injuries       
caused by alleged defects in products manufactured by DP on or prior to the     
Closing Date.                                                                   

                (b)  Roadmaster shall notify Actava, in writing and as soon as
practicable, of any product liability claim for which it is entitled to         
indemnity pursuant to Section 6.12(a), specifying in reasonable detail the      
nature of such claim and, if known, the amount, or an estimate of the amount,   
of the liability arising therefrom.  Roadmaster shall provide to Actava as      
promptly as practicable thereafter such information and documentation as may be 
reasonably requested by Actava to support and verify such claim.                

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         (c)  Actava shall have the absolute right to manage and
control the defense, and all communications or proceedings related to such      
defense, of any products liability claim for which Actava would be liable       
pursuant to Section 6.12(a), including, without limitation, the right to manage 
and prosecute all administrative and judicial remedies, settle all issues,      
enter into settlement agreements, discontinue sales and distribution of, or     
recall, any such allegedly defective products, and to execute consents or       
waivers extending the statue of limitation with respect to any such claim.      
Roadmaster shall, and shall cause its subsidiaries to, fully cooperate with     
Actava in the defense of any such claim and shall, and shall cause its          
subsidiaries to, furnish such records, information and testimony, and attend    
such conferences, discovery proceedings, hearings, trials and appeals, as may   
be reasonably requested in connection therewith.  Actava shall be subrogated to 
all rights and remedies of Roadmaster or its subsidiaries with respect to any   
such claim.                                                                     

          (d)  Failure by Roadmaster or any of its subsidiaries to
comply with any of their obligations set forth in this Section 6.12 with        
respect to a products liability claim for which Roadmaster is entitled to be    
indemnified against pursuant to Section 6.12(a) shall release Actava from its   
obligation to indemnify hereunder to the extent that Actava is prejudiced by    
any such failure.                                                               

       Section 6.13  SATISFACTION OF INDEMNITY WITH ROADMASTER COMMON STOCK.
Notwithstanding anything to the contrary in this Agreement, the parties agree   
that if Actava shall be entitled to any indemnity payment from Roadmaster       
pursuant to the terms of this Agreement, including, without limitation, Section 
6.8(c) hereof, Actava shall have the right exercisable in its sole discretion   
to elect, by written notice to Roadmaster, to require Roadmaster to satisfy     
such indemnity payment with Roadmaster Common Stock in lieu of paying cash.  If 
such election is made by Actava, Roadmaster shall substitute for the cash       
indemnity payment an equal fair market value amount of consideration in the     
form of shares of Roadmaster Common Stock.  For purposes hereof, the value of   
the Roadmaster Common Stock to be issued in substitution for the cash indemnity 
payment shall be the average of the last sale price for the Roadmaster Common   
Stock as reported on the AMEX or the NYSE, as the case may be, for the five (5) 
consecutive trading days immediately prior to the date on which it is           
determined under this Agreement that Actava is entitled to receive a cash       
indemnity payment.                                                              

        Section 6.14     CERTAIN ENVIRONMENTAL MATTERS.  Prior to the Closing,
DP shall (i) form a wholly owned subsidiary ("Newco"), (ii) contribute to Newco 
title to that certain parcel of real property described on Schedule 6.14 (the   
"Orbitron Materials Storage Parcel"), along with any permits, licenses and      
other authorizations held by DP under federal, state and local laws relating to 
pollution or protection of the environment related to the Orbitron Materials    
Storage Parcel, and (iii) declare and pay to Actava an in-kind dividend of all  
the outstanding capital stock of Newco.                                         

ARTICLE VII 

CONDITIONS  

      Section 7.1      CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
EXCHANGES.  The respective obligations of each party to effect the Exchanges    
shall be subject to the fulfillment at or prior to the Closing (as provided     
herein) of the following conditions:                                            

           (a)      This Agreement and the transactions contemplated
hereby shall have been approved and adopted by the requisite vote of the        
shareholders of Roadmaster and, if required, by the shareholders of Actava.     

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           (b)      The Exchange Shares shall have been approved for
listing on the NYSE or AMEX subject to notice of issuance.                      

               (c)      The waiting period applicable to the consummation of
the Exchanges under the HSR Act shall have expired or been terminated.          

                (d)      No preliminary or permanent injunction or other order
or decree by any federal or state court which prevents the consummation of the  
Exchanges shall have been issued and remain in effect (each party agreeing to   
use its reasonable efforts to have any such injunction, order or decree         
lifted).                                                                        

                (e)      No action shall have been taken, and no statute, rule
or regulation shall have been enacted, by any state or federal government or    
governmental agency in the United States which would prevent the consummation   
of the Exchanges.                                                               

          (f)      All governmental consents, orders and approvals
legally required for the consummation of the Exchanges and the transactions     
contemplated hereby, including, without limitation, approval (if required) by   
the FTC, the DOJ and the SEC, shall have been obtained and be in effect at the  
Closing.                                                                        

                (g)      Actava, the Sports Subsidiaries or Roadmaster, as the
case may be, shall have received consents or waivers, or any necessary          
amendments, from any parties to the agreements listed on Schedules 2.2(b),      
3.4(b) and 4.4(b), in each case where the Exchanges, in the absence of or       
failure in obtaining such consent, waiver or amendment, would result in a       
material adverse effect on the business, condition (financial or other) or      
results of operations of Actava, the Sports Subsidiaries or Roadmaster, as the  
case may be, and their respective subsidiaries, taken as a whole.               

   Section 7.2      CONDITIONS TO OBLIGATION OF ACTAVA TO EFFECT THE
EXCHANGES.  Unless waived by Actava, the obligation of Actava to effect the     
Exchanges shall be subject to the fulfillment at or prior to the Closing of the 
following additional conditions:                                                

          (a)      Roadmaster shall have performed in all material
respects its agreements contained in this Agreement required to be performed on 
or prior to the Closing, and the representations and warranties of Roadmaster   
contained in this Agreement shall be true and correct in all material respects  
on and as of (i) the date made and (ii) (except in the case of representations  
and warranties expressly made solely with reference to a particular date) the   
Closing Date, and Actava shall have received a certificate of the President or  
a Vice President of Roadmaster to that effect.                                  

            (b)      Actava shall have received an opinion from Smith,
Gambrell & Russell, counsel to Roadmaster, dated the Closing Date,              
substantially in the form set forth as Exhibit A hereto.                        

              (c)      Since the date hereof, (i) there shall have been no
changes that constitute, and (ii) no event or events shall have occurred which  
have resulted in or constitute, a material adverse change in the business,      
condition (financial or other) or results of operations of Roadmaster and its   
subsidiaries, taken as a whole, including, without limitation, any change or    
development with respect to matters disclosed to Actava or the Sports           
Subsidiaries on the schedules to this Agreement or otherwise.                   

         (d)      Roadmaster shall have executed and delivered a
Registration Rights Agreement substantially in the form set forth as Exhibit B  
hereto.                                                                         

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                (e)      Roadmaster, Henry Fong and Edward E. Shake shall have
executed and delivered a Shareholders Agreement substantially in the form of    
Exhibit C hereto (the "Shareholders Agreement").                                

          (f)      Roadmaster shall have executed and delivered to
Actava an unconditional guaranty, in form reasonably satisfactory to Actava, of 
that certain Promissory Note executed by DP as of July 1, 1994, in favor of     
JCJ, Inc. (the "DP Note").                                                      

              (g)      Four designees of Actava shall have been elected to
the Roadmaster Board of Directors.                                              

           (h)      Henry Fong shall have entered into an Employment
Agreement with Roadmaster substantially in the form set forth as Exhibit D and  
Edward E. Shake shall have entered into an Employment Agreement with Roadmaster 
containing the terms set forth on Exhibit E.                                    

               (i)      Actava shall have been released from any guaranty or
assurance of any obligation (payment or performance) of the Sports Subsidiaries 
and their subsidiaries, including, without limitation, the Support Agreement,   
the ITT Guaranty, the 1988 First Union Guaranty, and the 1992 First Union       
Guaranty.                                                                       

               (j)      Actava shall have received certificates of insurance
or other evidence reasonably satisfactory to Actava that Roadmaster has         
satisfied its obligation to supply the insurance coverage as required in        
Section 6.6.                                                                    

              (k)  The Restated Certificate of Incorporation of Roadmaster
set forth as Exhibit F and the Amended and Restated By-laws of Roadmaster set   
forth as Exhibit G shall have been authorized, approved and be in full force    
and effect.                                                                     

          (l)      Roadmaster shall have executed and delivered an
Environmental Indemnity Agreement substantially in the form set forth as        
Exhibit H (the "Environmental Indemnity Agreement").                            

        Section 7.3      CONDITIONS TO OBLIGATIONS OF ROADMASTER TO EFFECT THE
EXCHANGES.  Unless waived by Roadmaster, the obligations of Roadmaster to       
effect the Exchanges shall be subject to the fulfillment at or prior to the     
Closing of the additional following conditions:                                 

        (a)      Actava and the Sports Subsidiaries shall have
performed in all material respects their agreements contained in this Agreement 
required to be performed on or prior to the Closing and the representations and 
warranties of Actava and the Sports Subsidiaries contained in this Agreement    
shall be true and correct in all material respects on and as of (i) the date    
made and (ii) (except in the case of representations and warranties expressly   
made solely with reference to a particular date) the Closing Date, and          
Roadmaster shall have received a Certificate of the President or of a Vice      
President of Actava and each of the Sports Subsidiaries to that effect.         

               (b)      Roadmaster shall have received an opinion from Long,
Aldridge & Norman, counsel to Actava, dated the Closing Date, substantially in  
the form set forth as Exhibit I hereto.                                         

        (c)      Roadmaster shall have received the opinion of
Jeffries & Company, Inc. to the effect that the Exchanges are fair from a       
financial point of view to Roadmaster and its shareholders.                     

              (d)      Since the date hereof, (i) there shall have been no
changes that constitute, and (ii)                                               

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no event or events shall have occurred which have resulted in or constitute, a  
material adverse change in the business, condition (financial or other) or      
results of operations of the Sports Subsidiaries and their subsidiaries, taken  
as a whole, including, without limitation, any change or development with       
respect to matters disclosed to Roadmaster on the schedules to this Agreement   
or otherwise.                                                                   

       (e)      Actava shall have executed and delivered the
Shareholders Agreement.                                                         

               (f)      The liens, claims, encumbrances, security interests,
equities, charges and options on the Sports Subsidiaries Stock which are set    
forth on Schedule 2.3 shall have been terminated or released.                   

             (g)  Roadmaster shall have received a certificate from JCJ,
Inc. stating that as of the Closing Date, to JCJ, Inc.'s knowledge, no Event of 
Default (as defined in the DP Note) exists under the DP Note.                   

              (h)      Actava and DP shall have executed and delivered the
Environmental Indemnity Agreement.                                              

ARTICLE VIII  

TERMINATION, AMENDMENT AND WAIVER 

        Section 8.1      TERMINATION.  This Agreement may be terminated at any
time prior to the Closing, whether before or after approval by the shareholders 
of Roadmaster and, if required, Actava:                                         

      (a)      by mutual consent of Roadmaster and Actava.

                (b)      by either Roadmaster or Actava, so long as such party
has not breached its obligations hereunder (except for such breaches as are     
clearly immaterial), after December 31, 1994, if the Exchanges shall not have   
been consummated on or before December 31, 1994 (the "Termination Date").       

                (c)      unilaterally by Roadmaster or Actava (i) if the other
fails to perform any covenant in any material respect in this Agreement, and    
does not cure the failure in all material respects within 30 business days      
after the terminating party delivers written notice of the alleged failure or   
(ii) if any condition to the obligations of that party is not satisfied (other  
than by reason of a breach by that party of its obligations hereunder), and it  
reasonably appears that the condition cannot be satisfied prior to the          
Termination Date.                                                               

Section 8.2      EFFECT OF TERMINATION.                       

               (a)   In the event of termination of this Agreement by either
Roadmaster or Actava, as provided in Section 8.1, this Agreement shall          
forthwith become void and there shall be no further obligation on the part of   
Actava, the Sports Subsidiaries, Roadmaster or their subsidiaries (except as    
set forth in this Section 8.2(a) and in Sections 5.4 and 6.3 which shall        
survive the termination).  Nothing in this Section 8.2(a) shall relieve any     
party from liability for any breach of this Agreement.                          

            (b)  In the event that (i) either Actava or Roadmaster, in
breach of this Agreement,                                                       

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refuses to consummate the Exchanges as provided herein or (ii) either Actava or 
Roadmaster is unable to consummate the Exchanges as a result of the failure of  
such party to obtain the approval its shareholders, and in the event such       
breach or failure to obtain shareholder approval is the result of Actava or     
Roadmaster's decision to pursue, or recommendation to its shareholders of, an   
alternative transaction with a third party (an "Alternative Transaction"), then 
such party that has refused or is unable to consummate the Exchanges as a       
result of an Alternative Transaction shall pay to the other party a fee of      
$1,500,000 (the "Break-up Fee").  The payment of the Break-up Fee by either     
party shall constitute liquidated damages (it being acknowledged and agreed by  
both parties that the other's damages in such event will be difficult to        
ascertain and that the Break-up Fee is a reasonable and appropriate estimate of 
such damages) and upon the payment of the Break-up Fee this Agreement shall     
terminate and forthwith become void and there shall be no further right,        
liability or obligation on the part of Actava, the Sport Subsidiaries,          
Roadmaster or their subsidiaries (except as set forth in this Section 8.2(b)    
and in Sections 5.4 and 6.3 which shall survive the termination).               

   Section 8.3      AMENDMENT.  This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of     
Directors, at any time before or after approval of the matters presented in     
connection with the Exchanges by the shareholders of Roadmaster or, if          
required, Actava, but, after any such approval, no amendment shall be made      
which by law requires further approval by such shareholders without such        
further approval.  This Agreement may not be amended except by an instrument in 
writing signed on behalf of each of the parties hereto.                         

 Section 8.4      WAIVER.  At any time prior to the Closing, the
parties hereto may (a) extend the time for the performance of any of the        
obligations or other acts of the other parties hereto, (b) waive any            
inaccuracies in the representations and warranties contained herein or in any   
document delivered pursuant thereto and (c) waive compliance with any of the    
agreements or conditions contained herein.  Any agreement on the part of a      
party hereto to any such extension or waiver shall be valid if set forth in an  
instrument in writing signed on behalf of such party.                           

ARTICLE IX  

GENERAL PROVISIONS  

        Section 9.1      SURVIVAL.  All representations and warranties in this
Agreement shall not survive the Closing.  The covenants and agreements in this  
Agreement shall survive the Closing until such covenants and agreements have    
been performed.                                                                 

   Section 9.2      BROKERS.  Actava represents and warrants that no
broker, finder or investment banker is entitled to any brokerage, finder's or   
other fee or commission in connection with the transactions contemplated by     
this Agreement based upon arrangements made by or on behalf of Actava.          
Roadmaster represents and warrants that, except for the fees described on       
Schedule 9.2, no broker, finder or investment banker is entitled to any         
brokerage, finder's or other fee or commission in connection with the           
transactions contemplated by this Agreement based upon arrangements made by or  
on behalf of Roadmaster.                                                        

 Section 9.3      NOTICES.  All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered            
personally, mailed by registered or certified mail (return receipt requested)   
or sent via overnight courier to the parties at the following addresses (or at  
such other address for a party as shall be specified by like notice):           

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(a)      If to Roadmaster:                    

               Roadmaster Industries, Inc.
             7315 East Peakview Avenue
             Englewood, Colorado 80111
             Attention: Mr. Henry Fong

with copies to:             

             Smith, Gambrell & Russell
               1230 Peachtree Street, N.E.
           Atlanta, Georgia  30309
                     Attention:  David J. Harris, Esq.

       (b)      If to Actava or the Sports Subsidiaries, to:

         The Actava Group Inc.
               4900 Georgia-Pacific Center
        133 Peachtree Street
          Atlanta, Georgia 30303
                    Attention: Walter M. Grant, Esq.

with a copy to:             

           Long, Aldridge & Norman
        One Peachtree Center
Suite 5300  
        303 Peachtree Street
           Atlanta, Georgia  30308
                 Attention: Clay C. Long, Esq.

  Section 9.4      INTERPRETATION.  The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the   
meaning or interpretation of this Agreement.                                    

Section 9.5      MISCELLANEOUS.  This Agreement (including the
documents and instruments referred to herein):  (a) constitutes the entire      
agreement and supersedes all other prior agreements and understandings, both    
written and oral, among the parties, or any of them, with respect to the        
subject matter hereof including, without limitation, that certain letter of     
intent, dated May 31, 1994, between Actava and Roadmaster and the               
confidentiality agreements, dated May 5, 1994, between Actava and Roadmaster;   
(b) shall not be assigned by operation of law or otherwise; and (c) shall be    
governed in all respects, including validity, interpretation and effect, by the 
laws of the State of Georgia (without giving effect to the provisions thereof   
relating to conflicts of law).                                                  

       Section 9.6      COUNTERPARTS.  This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all  
of which shall constitute one and the same agreement.                           

        Section 9.7      PARTIES IN INTEREST.  This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and nothing in this   
Agreement, express or implied, is intended to confer                            

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upon any other person any rights or remedies of any nature whatsoever under or  
by reason of this Agreement.                                                    

     Section 9.8      SCHEDULES.  The parties acknowledge and agree that
the disclosure on certain schedules may be overinclusive, taking into           
consideration the materiality standard that may be contained in the             
representation and warranty with respect to such schedule, and the fact that    
any item or matter is disclosed on a schedule shall not be deemed to set or     
establish a different standard of materiality than the one set forth in such    
representation and warranty.                                                    

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 IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be signed by their respective officers thereunto duly authorized   
as of the date first written above.                                             

         ROADMASTER INDUSTRIES, INC.

 By:  /s/ Henry Fong
                            ----------------------------------------

                         Its:  President and Chief Executive Officer
                             ---------------------------------------

   THE ACTAVA GROUP INC.

     By:/s/ John D. Phillips
                            ----------------------------------------

                         Its:  President and Chief Executive Officer
                             ---------------------------------------

              DIVERSIFIED PRODUCTS CORPORATION

      By:  /s/ James L. Marden
                            ----------------------------------------

                         Its:  President and Chief Executive Officer
                             ---------------------------------------

    HUTCH SPORTS USA, INC.

         By:  /s/ Garrett A. Kamstra
                            ----------------------------------------

                         Its:  President and Chief Executive Officer
                             ---------------------------------------

       NELSON/WEATHER-RITE, INC.

  By:  /s/ Melvin Marx
                            ----------------------------------------

                         Its:  President and Chief Executive Officer
                             ---------------------------------------

          WILLOW HOSIERY COMPANY, INC.

          By:  /s/ Herbert W. Libowitz
                            ----------------------------------------

Its:  President   
                             ---------------------------------------

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THE ACTAVA GROUP, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE ACTAVA GROUP,
INC.
(THE "COMPANY") IN CONNECTION WITH A SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1994. 

    The undersigned hereby appoints Frederick B. Beilstein, III, Walter M. Grant
and Victor E. Goetz and each of them, with full power of substitution as proxies
and attorneys-in-fact on behalf and in the name of the undersigned to represent 
the undersigned, at the Special Meeting of Stockholders of the Company to be    
held on October 24, 1994 at 10:00 a.m., local time at                           
and at any adjournments thereof with respect to such business as may properly   
come before the meeting or any and all adjournments thereof and to vote all     
shares of stock which the undersigned would be entitled to vote if then and     
there personally present.                                                       

  The proxies appointed hereby are instructed to vote as indicated herein on
the following proposals as more fully described in the Company's Notice of      
Meeting of Stockholders and Proxy Statement, each dated September   , 1994,     
receipt of which is hereby acknowledged, and in their discretion on any other   
business which may properly come before the meeting or any adjournment thereof. 

The Company's Board of Directors recommends voting FOR approval of the  
Agreement as specified in the Proxy Statement and the Proxy will be so voted    
unless otherwise specified.                                                     

1. To approve the Agreement and Plan of Reorganization dated as of July 20, 1994
   by and among the Company, the Sports Subsidiaries, and Roadmaster Industries,
Inc., and the transactions contemplated thereby.                          

/ /  FOR         / /  AGAINST         / /  ABSTAIN

all as set forth in the Proxy Statement.                                        

(Continued on other side) 

(Continued from other side)                                                     

Please mark, then date and sign this proxy, exactly as your name appears
hereon, and return this entire proxy card in the enclosed postage paid envelope.
When shares are held by joint tenants, both should sign. When signing as        
attorney, executor, administrator, trustee, guardian or in any other fiduciary  
capacity, please give full title as such. If a corporation, please sign in full 
corporate name by the president or other authorized officer. If a partnership,  
please sign in full partnership name by authorized person.                      

                                                  ______________________________
                                                 Signature

                                                  ______________________________
                                                 Signature if Held Jointly

                                                  Dated: ________________ , 1994
                                                 If you also expect to
                                            attend the stockholders'
                                         meeting, the Board of
                                                Directors requests you check
                                  the box below.

                                               / / I/we plan to attend the
                            meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE  
SPECIFICATIONS INDICATED HEREON OR IT WILL BE VOTED IN ACCORDANCE WITH THE      
RECOMMENDATIONS OF THE BOARD OF DIRECTORS FOR THE PROPOSAL SPECIFIED IN THE     
PROXY STATEMENT.                                                                

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRES14A’ Filing		Date		First		Last			Other Filings
		12/15/96		60
		7/1/96		82					S-3/A
		12/29/95		60
		8/11/95		8		44
		5/8/95		82
		4/29/95		60
		2/13/95		8		44
		1/1/95		82
		12/31/94		15		127			10-K,  10-K/A
		12/15/94		82
For Period End:		10/24/94		2		132
		9/23/94		4		7
		9/20/94		4		10
		8/31/94		44		60			8-K
Filed on:		8/25/94		22		47			8-K
		8/24/94		1		47
		8/19/94		2		46			SC 13D
		8/12/94		2		44			8-K,  8-K/A
		7/20/94		2		132
		7/19/94		11
		7/2/94		29		47
		7/1/94		120		126
		6/30/94		12		64			10-Q,  10-Q/A
		6/10/94		11					DEF 14A
		5/31/94		11		129
		5/27/94		18
		5/5/94		129
		5/4/94		47					8-K
		4/19/94		2		46			8-K
		4/14/94		47
		4/2/94		47
		4/1/94		82
		3/31/94		47		107			10-K,  10-Q,  10-Q/A
		3/3/94		50		67			8-K
		1/1/94		31		120
		12/31/93		22		119			10-K,  10-K/A
		12/15/93		114
		10/22/93		76
		9/14/93		34		84
		8/31/93		46
		8/10/93		119
		8/6/93		84
		7/31/93		81
		7/3/93		29
		7/1/93		76
		6/30/93		49		64			10-Q/A
		6/10/93		84
		6/8/93		34		74			8-K/A
		6/7/93		34		123
		4/29/93		114
		4/5/93		83
		3/31/93		72
		3/15/93		81
		1/1/93		22		62
		12/31/92		39		84
		12/15/92		72
		10/13/92		114
		9/30/92		75		80
		8/14/92		68
		6/28/92		34		74
		6/27/92		66		96
		6/2/92		82
		1/1/92		58
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