Agreement and Plan of Merger - TMP Wordwide Inc. and HotJobs.com Ltd.


 ===============================================================================










                          Agreement and Plan of Merger

                            Dated as of June 29, 2001

                                      among

                               TMP Worldwide Inc.,

                                 TMP Tower Corp.

                                       and

                                HotJobs.com, Ltd.









================================================================================





                                Table of Contents


                                                                            Page
ARTICLE I   THE MERGER.......................................................1
      Section 1.1.  The Merger...............................................1
                    ----------
      Section 1.2.  Closing..................................................1
                    -------
      Section 1.3.  Effective Time...........................................2
                    --------------
      Section 1.4.  Certificate of Incorporation and Bylaws..................2
                    ---------------------------------------
      Section 1.5.  Directors and Officers...................................2
                    ----------------------
      Section 1.6.  Effects of the Merger....................................2
                    ---------------------
ARTICLE II  EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
      CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.....................2
      Section 2.1.  Effect on Capital Stock..................................3
                    -----------------------
            (a)  Capital Stock of Sub........................................3
                 --------------------
            (b)  Cancellation of Treasury Stock and Parent-Owned Stock.......3
                 -----------------------------------------------------
            (c)  Conversion of Company Common Stock..........................3
                 ----------------------------------
      Section 2.2.  Exchange of Certificates.................................3
                    ------------------------
            (a)  Exchange Agent..............................................3
                 --------------
            (b)  Exchange Procedures.........................................4
                 -------------------
            (c)  Distributions with Respect to Unexchanged Shares............5
                 ------------------------------------------------
            (d)  No Further Ownership Rights in Company Common Stock.........5
                 ---------------------------------------------------
            (e)  No Fractional Shares........................................5
                 --------------------
            (f)  Withholding Rights..........................................6
                 ------------------
            (g)  Termination of Exchange Fund................................6
                 ----------------------------
            (h)  No Liability................................................6
                 ------------
            (i)  Investment of Exchange Fund.................................6
                 ---------------------------
            (j)  Lost Certificates...........................................7
                 -----------------
            (k)  Stock Transfer Books........................................7
                 --------------------
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................7
      Section 3.1.   Representations and Warranties of the Company...........7
                     ---------------------------------------------
            (a)  Organization, Standing and Corporate Power..................7
                 ------------------------------------------
            (b)  Subsidiaries................................................8
                 ------------
            (c)  Capital Structure...........................................8
                 -----------------
            (d)  Authority; Noncontravention.................................9
                 ---------------------------
            (e)  Company SEC Documents......................................11
                 ---------------------
            (f)  Information Supplied.......................................12
                 --------------------
            (g)  Absence of Certain Changes or Events.......................12
                 ------------------------------------
            (h)  Litigation.................................................13
                 ----------
            (i)  Contracts..................................................13
                 ---------
            (j)  Compliance with Laws.......................................14
                 --------------------

                                       -i-





            (k)  Absence of Changes in Benefit Plans........................15
                 -----------------------------------
            (l)  ERISA Compliance...........................................15
                 ----------------
            (m)  Labor Relations............................................18
                 ---------------
            (n)  Taxes......................................................19
                 -----
            (o)  No Excess Parachute Payments; No Section 162(m) 
                 ------------------------------------------------
                  Payments..................................................20
                  --------
            (p)  Title to Properties........................................20
                 -------------------
            (q)  Intellectual Property......................................20
                 ---------------------
            (r)  Voting Requirements........................................21
                 -------------------
            (s)  Brokers....................................................22
                 -------
            (t)  Opinion of Financial Advisor...............................22
                 ----------------------------
            (u)  Accounting Matters.........................................22
                 ------------------
            (v)  Certain Business Practices.................................22
                 --------------------------
      Section 3.2.  Representations and Warranties of Parent and Sub........22
                    ------------------------------------------------
            (a)  Organization, Standing and Corporate Power.................22
                 ------------------------------------------
            (b)  Subsidiaries...............................................23
                 ------------
            (c)  Capital Structure..........................................23
                 -----------------
            (d)  Authority; Noncontravention................................24
                 ---------------------------
            (e)  Parent SEC Documents.......................................26
                 --------------------
            (f)  Information Supplied.......................................27
                 --------------------
            (g)  Absence of Certain Changes or Events.......................27
                 ------------------------------------
            (h)  Litigation.................................................27
                 ----------
            (i)  Compliance with Laws.......................................27
                 --------------------
            (j)  Accounting Matters.........................................28
                 ------------------
            (k)  Tax Matters................................................29
                 -----------
            (l)  Brokers....................................................29
                 -------
            (m)  Labor Relations............................................29
                 ---------------
            (n)  No Stockholder Vote........................................29
                 -------------------
            (o)  Ownership of Company Capital Stock.........................29
                 ----------------------------------
            (p)  Intellectual Property.......................................30
                 ---------------------
ARTICLE IV  COVENANTS RELATING TO CONDUCT OF BUSINESS.......................31
      Section 4.1.   Conduct of Business....................................31
                     -------------------
            (a)  Conduct of Business by the Company.........................31
                 ----------------------------------
            (b)  Conduct of Business by Parent..............................34
                 -----------------------------
      Section 4.2.  No Solicitation.........................................35
                    ---------------
ARTICLE V   ADDITIONAL AGREEMENTS...........................................36
      Section 5.1.  Preparation of the Form S-4 and the Proxy 
                    ------------------------------------------
              Statement; Stockholders Meetings..............................36
              --------------------------------
      Section 5.2.  Letters of the Company's Accountants....................38
                    ------------------------------------
      Section 5.3.  Letters of Parent's Accountants.........................38
                    -------------------------------
      Section 5.4.  Access to Information; Confidentiality..................39
                    --------------------------------------
      Section 5.5.  Reasonable Best Efforts.................................40
                    -----------------------
      Section 5.6.  Stock Options; Employee Benefits........................41
                    --------------------------------
      Section 5.7.  Indemnification, Exculpation and Insurance..............43
                    ------------------------------------------
   
                                      -ii-




      Section 5.8.   Fees and Expenses......................................45
                     -----------------
      Section 5.9.   Public Announcements...................................46
                     --------------------
      Section 5.10.  Affiliates.............................................46
                     ----------
      Section 5.11.  Nasdaq Listing.........................................47
                     --------------
      Section 5.12.  Pooling of Interests...................................47
                     --------------------
      Section 5.14   Publication of Combined Financial Results..............47
                     -----------------------------------------
      Section 5.13.  Tax Treatment..........................................47
                     -------------
      Section 5.15.  Notices of Certain Events..............................48
                     -------------------------
      Section 5.16.  Conveyance Taxes.......................................48
                     ----------------
      Section 5.17.  [RESERVED].............................................48
      Section 5.18.  Voting Agreements......................................48
                     -----------------
      Section 5.19.  Section 16 Matters.....................................49
                     ------------------
ARTICLE VI  CONDITIONS PRECEDENT............................................49
      Section 6.1.  Conditions to Each Party's Obligation to Effect the 
                    ----------------------------------------------------
            Merger..........................................................49
            ------
            (a)  Stockholder Approval.......................................49
                 --------------------
            (b)  Nasdaq Listing.............................................49
                 --------------
            (c)  HSR Act....................................................49
                 -------
            (d)  No Injunctions or Restraints...............................49
                 ----------------------------
            (e)  Form S-4...................................................49
                 --------
            (f)  Pooling Letters............................................49
                 ---------------
            (g)  No Governmental Litigation.................................49
                 --------------------------
            (h)  Governmental and Regulatory Approvals......................50
                 -------------------------------------
      Section 6.2.   Conditions to Obligations of Parent and Sub............50
                     -------------------------------------------
            (a)  Representations and Warranties.............................50
                 ------------------------------
            (b)  Performance of Obligations of the Company..................50
                 -----------------------------------------
            (c)  Letters from Company Affiliates............................51
                 -------------------------------
            (d)  Consents...................................................51
                 --------
            (e)  Tax Opinion................................................51
                 -----------
      Section 6.3.   Conditions to Obligation of the Company................51
                     ---------------------------------------
            (a)  Representations and Warranties.............................51
                 ------------------------------
            (b)  Performance of Obligations of Parent and Sub...............51
                 --------------------------------------------
            (c)  Tax Opinion................................................52
                 -----------
      Section 6.4.   Frustration of Closing Conditions......................52
                     ---------------------------------
ARTICLE VII       TERMINATION, AMENDMENT AND WAIVER.........................52
      Section 7.1.  Termination.............................................52
                    -----------
      Section 7.2.  Effect of Termination...................................54
                    ---------------------
      Section 7.3.  Amendment...............................................54
                    ---------
      Section 7.4.  Extension; Waiver.......................................54
                    -----------------
ARTICLE VIII      GENERAL PROVISIONS........................................55
      Section 8.1.  Nonsurvival of Representations and Warranties...........55
                    ---------------------------------------------
      Section 8.2.  Notices.................................................55
                    -------
      Section 8.3.  Definitions.............................................56
                    -----------
      Section 8.4.  Interpretation..........................................57
                    --------------

                                      -iii-





      Section 8.5.  Counterparts............................................58
                    ------------
      Section 8.6.  Entire Agreement; Third-Party Beneficiaries.............58
                    -------------------------------------------
      Section 8.7.  Governing Law...........................................58
                    -------------
      Section 8.8.  Assignment..............................................59
                    ----------
      Section 8.9.  Enforcement.............................................59
                    -----------
      Section 8.10. Severability............................................59
                    ------------




























                                      -iv-











                                       -v-





Exhibit 5.10(a)   Form of Company Affiliate Letter
Exhibit 5.10(b)   Form of Parent Affiliate Letter
Exhibit 5.18      Form of Company Voting Agreement























                                      -vi-





                             INDEX OF DEFINED TERMS
                             ---------------------

DEFINED TERM                                              SECTION
------------                                              -------
Adjusted Option                                           5.6(a)
Affiliate                                                 8.3(a)
Agreement                                                 Preamble
Benefit Plans                                             3.1(l)(i)
Business Day                                              8.3(b)
Certificate of Merger                                     1.3
Certificates                                              2.2(b)
Closing                                                   1.2
Closing Date                                              1.2
Code                                                      Preamble
Commonly Controlled Entity                                3.1(l)(i)
Company                                                   Preamble
Company Common Stock                                      Preamble
Company Disclosure Memorandum                             3.1
Company Preferred Stock                                   3.1(c)
Company Recommendation                                    5.1(b)
Company SEC Documents                                     3.1(e)
Company Stock Plans                                       5.6(a)
Company Stockholder Approval                              3.1(r)
Company Stockholders Meeting                              5.1(b)
Company Voting Agreement                                  5.18
Confidentiality Agreement                                 5.4
DGCL                                                      1.1
DOJ                                                       5.5(c)
Dow Jones News Release                                    3.1(e)
Effective Time                                            1.3
Employees                                                 5.6(f)
Environmental Laws                                        3.1(j)(ii)
ERISA                                                     3.1(l)(i)
Exchange Act                                              3.1(d)
Exchange Agent                                            2.2(a)
Exchange Fund                                             2.2(a)
Exchange Ratio                                            2.1(c)
Expenses                                                  5.8(b)
Filed Company SEC Document                                3.1(e)
Filed Parent SEC Document                                 3.2(e)
Form S-4                                                  3.1(f)
FTC                                                       5.5(c)

                                      -vii-





DEFINED TERM                                              SECTION
------------                                              -------
GAAP                                                      Preamble
Governmental Entity                                       3.1(d)
Hazardous Materials                                       3.1(j)(ii)
HSR Act                                                   3.1(d)
Indemnified Party                                         5.7(a)
Intellectual Property Rights                              3.1(q)
IRS                                                       3.1(l)(i)
Knowledge                                                 8.3(c)
Legal Provisions                                          3.1(j)(i)
Liens                                                     3.1(d)
Material Adverse Effect                                   8.3(d)
Material Contracts                                        3.1(i)
Merger                                                    Preamble
Merger Consideration                                      2.1(c)
Parent                                                    Preamble
Parent Common Stock                                       Preamble
Parent Disclosure Memorandum                              3.2
Parent Preferred Stock                                    3.2(c)
Parent SEC Documents                                      3.2(e)
Parent Stock Issuance                                     3.2(p)
Parent Stock Plans                                        3.2(c)
Pension Plans                                             3.1(l)(i)
Permits                                                   3.1(j)(i)
Person                                                    8.3(e)
Proxy Statement                                           3.1(d)
Regulatory Law                                            5.5(b)
Release                                                   3.1(j)(ii)
Restraints                                                6.1(d)
SEC                                                       3.1(d)
Significant Subsidiary                                    8.3(f)
Securities Act                                            3.1(e)
Stock Option                                              5.6(a)
Sub                                                       Preamble
Subsidiary                                                8.3(g)
Superior Proposal                                         8.3(h)
Surviving Corporation                                     1.1
Takeover Proposal                                         4.2(a)
Tax Returns                                               3.1(n)
Taxes                                                     3.1(n)
Termination Fee                                           5.8(b)


                                     -viii-





DEFINED TERM                                              SECTION
------------                                              -------
Welfare Plans                                             3.1(l)(i)













                                      -ix-





      AGREEMENT  AND PLAN OF MERGER (this  "AGREEMENT"),  dated as of June 29,
                                            ---------
2001, among TMP Worldwide Inc., a Delaware corporation ("PARENT"), TMP Tower  
                                                         ------
Corp.,  a  Delaware  corporation  and  a  newly  formed,  direct,  wholly-owned
subsidiary of Parent ("SUB"), and HotJobs.com, Ltd., a Delaware corporation (the
                       ---
"COMPANY").
 -------

      WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved and declared advisable this Agreement and the merger of Sub with
and into the Company (the "MERGER"), upon the terms and subject to the
                           ------                            
conditions set forth in this Agreement, whereby each issued and outstanding
share of common stock, par value $0.01 per share, of the Company ("COMPANY
                                                                   -------
COMMON STOCK"), other than Company Common Stock owned by Parent, Sub or the
------------
Company, will be converted into the right to receive common stock, par value
$0.001 per share, of Parent ("PARENT COMMON STOCK") as set forth herein;
                              -------------------

      WHEREAS, for U.S. Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "CODE"), and that this Agreement shall be, and is
                             ----
hereby, adopted as a plan of reorganization for purposes of Sections 354 and 361
of the Code; and

      WHEREAS, for financial accounting purposes, it is intended that the Merger
will be accounted for as a pooling of interests transaction under generally
accepted accounting principles ("GAAP").
                                 ----

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

                                    ARTICLE I
                                   THE MERGER

      Section 1.1. The Merger. Upon the terms and subject to the conditions set
                   ----------
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time. Following the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION") and shall succeed to and assume all the rights and
 ---------------------
obligations of Sub in accordance with the DGCL.

      Section 1.2. Closing. The closing of the Merger (the "CLOSING") will take
                   -------                                  -------
place at 10:00 a.m. on a date to be specified by the parties (the "CLOSING
                                                                   -------
DATE"), which shall be no later than the second Business Day after satisfaction
----
or waiver (subject to applicable law) of the conditions set forth in ARTICLE VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions), at the
offices of Fulbright & 1




Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103, unless another date
or place is agreed to by the parties hereto.

      Section 1.3. Effective Time. Subject to the provisions of this Agreement,
                   --------------
as soon as practicable on the Closing Date, the parties shall file a certificate
of merger (the "CERTIFICATE OF MERGER") executed in accordance with the relevant
                ---------------------
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware, or at such other time as Parent and the Company shall agree and
specify in the Certificate of Merger (the time the Merger becomes effective
being the "EFFECTIVE TIME").
           --------------

      Section 1.4.  Certificate of Incorporation and Bylaws.
                    ---------------------------------------

      (a) The Certificate of Incorporation of the Surviving Corporation shall be
amended in the Merger to read substantially as the Certificate of Incorporation
of Sub until thereafter amended as provided therein or by applicable law.

      (b) The Bylaws of Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until thereafter amended
as provided therein or by applicable law.

      Section 1.5.  Directors and Officers.
                    ----------------------

      (a) The directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.

      (b) The officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.

      Section 1.6. Effects of the Merger. At and after the Effective Time, the
                   ---------------------
Merger shall have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.



                                   ARTICLE II
                EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
              CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES


                                        2



      Section 2.1. Effect on Capital Stock. As of the Effective Time, by virtue
                   -----------------------
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Parent or Sub:

            (a) Capital Stock of Sub. Each issued and outstanding share of
                --------------------
      capital stock of Sub shall be converted into and become one validly
      issued, fully paid and nonassessable share of common stock, par value $.01
      per share, of the Surviving Corporation.

            (b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
                -----------------------------------------------------    
      share of Company Common Stock that is owned by the Company, Parent or Sub
      shall automatically be canceled and retired and shall cease to exist, and
      no Parent Common Stock or other consideration shall be delivered in
      exchange therefor.

            (c) Conversion of Company Common Stock. Each share of Company Common
                ----------------------------------
      Stock issued and outstanding immediately prior to the Effective Time
      (other than shares to be canceled in accordance with Section 2.1(b)) shall
      be converted into the right to receive a fraction of a validly issued,
      fully paid and nonassessable share of Parent Common Stock equal to 0.2195
      (the "EXCHANGE RATIO" and, together with any cash to be paid in lieu of
            --------------
      fractional shares of Parent Common Stock to be paid pursuant to Section
      2.2(e), the "MERGER CONSIDERATION").
                   --------------------

            As of the Effective Time, all such shares of Company Common Stock
      shall no longer be outstanding and shall automatically be canceled and
      retired and shall cease to exist, and each holder of a certificate which
      immediately prior to the Effective Time represented any such shares of
      Company Common Stock shall cease to have any rights with respect thereto,
      except the right to receive the Merger Consideration upon surrender of
      such certificate in accordance with Section 2.2, without interest.

            Notwithstanding the foregoing, if between the date of this Agreement
      and the Effective Time the outstanding shares of Parent Common Stock or
      Company Common Stock shall have been changed into a different number of
      shares or a different class, by reason of the occurrence or record date of
      any stock dividend, subdivision, reclassification, recapitalization,
      split, combination, exchange of shares or similar transaction, the
      Exchange Ratio shall be appropriately adjusted to reflect such stock
      dividend, subdivision, reclassification, recapitalization, split,
      combination, exchange or similar transaction.


      Section 2.2.  Exchange of Certificates.
                    ------------------------

            (a) Exchange Agent. As of the Effective Time, Parent shall deposit
                --------------
      with The Bank of New York or such other bank or trust company as may be
      designated by Parent (the "EXCHANGE AGENT") and which shall be reasonably
                                 --------------
      acceptable to the Company, for the benefit of the holders of shares of
      Company Common Stock, for exchange in accordance with this ARTICLE II, 
      through the Exchange Agent, certificates representing the shares of 


                                        3




     

      Parent Common Stock (such shares of Parent Common Stock, together with any
      dividends or distributions with respect thereto with a record date after
      the Effective Time and any cash payments in lieu of any fractional shares
      of Parent Common Stock, being hereinafter referred to as the "EXCHANGE
                                                                    --------
      FUND") issuable pursuant to Section 2.1 in exchange for outstanding shares
      ----
      of Company Common Stock. Parent agrees to make available to the Exchange
      Agent from time to time, as needed, cash sufficient to pay cash in lieu of
      fractional shares pursuant to Section 2.2(e) and any dividends and other
      distributions pursuant to Section 2.2(c).

            (b) Exchange Procedures. As soon as reasonably practicable after the
                -------------------
      Effective Time, Parent shall cause the Exchange Agent to mail to each
      holder of record of a certificate or certificates which immediately prior
      to the Effective Time represented outstanding shares of Company Common
      Stock (the "CERTIFICATES") whose shares were converted into the right to
                  ------------
      receive the Merger Consideration pursuant to Section 2.1(c), (i) a letter
      of transmittal (which shall specify that delivery shall be effected, and
      risk of loss and title to the Certificates shall pass, only upon delivery
      of the Certificates to the Exchange Agent and shall be in such form and
      have such other provisions as Parent may reasonably specify and shall be
      reasonably acceptable to the Company) and (ii) instructions for use in
      surrendering the Certificates in exchange for certificates representing
      the Merger Consideration. Upon surrender of a Certificate for cancellation
      to the Exchange Agent, together with such letter of transmittal, duly
      executed, and such other documents as may reasonably be required by the
      Exchange Agent, the holder of such Certificate shall be entitled to
      receive in exchange therefor (x) a certificate representing that number of
      whole shares of Parent Common Stock which such holder has the right to
      receive pursuant to the provisions of this ARTICLE II after taking into
      account all the shares of Company Common Stock then held by such holder
      under all such Certificates so surrendered, (y) cash in lieu of fractional
      shares of Parent Common Stock to which such holder is entitled pursuant to
      Section 2.2(e), and (z) any dividends or other distributions to which such
      holder is entitled pursuant to Section 2.2(c) (in each case after giving
      effect to any required withholding taxes), and the Certificate so
      surrendered shall forthwith be canceled. In the event of a transfer of
      ownership of Company Common Stock which is not registered in the transfer
      records of the Company, a certificate representing the proper number of
      shares of Parent Common Stock may be issued to a Person other than the
      Person in whose name the Certificate so surrendered is registered, if,
      upon presentation to the Exchange Agent, such Certificate shall be
      properly endorsed or otherwise be in proper form for transfer and the
      Person requesting such issuance shall pay any transfer or other taxes
      required by reason of the issuance of shares of Parent Common Stock to a
      Person other than the registered holder of such Certificate or establish
      to the reasonable satisfaction of Parent that such tax has been paid or is
      not applicable. Notwithstanding anything to the contrary contained herein,
      no certificate representing Parent Common Stock or cash in lieu of a
      fractional share interest shall be delivered to a Person who is a
      "affiliate" (as contemplated by Section 5.10(a) hereof) of the Company
      unless such affiliate has theretofore executed and delivered to Parent the
      agreement referred to in Section 5.10(a). Until surrendered as
      contemplated by this Section 2.2(b), each Certificate shall be deemed at
      any time after the Effective Time to represent only the right to 
      receive upon such surrender 


                                        4





      the Merger Consideration,  cash in lieu of any fractional shares of Parent
      Common Stock as contemplated by Section 2.2(e) and any dividends or other 
      distributions to which such holder is entitled pursuant to Section 2.2(c).
      No interest will be paid or will accrue on any cash payable to holders of
      Certificates pursuant to Section 2.2(c) or Section 2.2(e).

            (c) Distributions with Respect to Unexchanged Shares. No dividends
                ------------------------------------------------
      or other distributions with respect to Parent Common Stock with a record
      date after the Effective Time shall be paid to the holder of any
      unsurrendered Certificate with respect to the shares of Parent Common
      Stock represented thereby, and no cash payment in lieu of fractional
      shares shall be paid to any such holder pursuant to Section 2.2(e) until
      the holder of record of such Certificate shall surrender such Certificate
      in accordance with this ARTICLE II. Subject to the effect of applicable
      escheat or similar laws, following surrender of any such Certificate,
      there shall be paid to the record holder of the certificate representing
      whole shares of Parent Common Stock issued in exchange therefor, without
      interest, (i) at the time of such surrender, the amount of any cash
      payable in lieu of a fractional share of Parent Common Stock to which such
      holder is entitled pursuant to Section 2.2(e) and the amount of dividends
      or other distributions with a record date after the Effective Time
      theretofore paid with respect to such whole shares of Parent Common Stock,
      less the amount of any withholding taxes which may be required thereon,
      and (ii) at the appropriate payment date, the amount of dividends or other
      distributions with a record date after the Effective Time but prior to
      such surrender and a payment date subsequent to such surrender payable
      with respect to such whole shares of Parent Common Stock, less the amount
      of any withholding taxes which may be required thereon.

            (d) No Further Ownership Rights in Company Common Stock. All shares
                ---------------------------------------------------
      of Parent Common Stock issued upon the surrender for exchange of
      Certificates in accordance with the terms of this ARTICLE II (including
      any cash paid pursuant to Section 2.2(c) or Section 2.2(e)) shall be
      deemed to have been issued (and paid) in full satisfaction of all rights
      pertaining to the shares of Company Common Stock previously represented by
      such Certificates, subject, however, to the Surviving Corporation's
      obligation to pay any dividends or make any other distributions with a
      record date prior to the Effective Time which may have been declared or
      made by the Company on such shares of Company Common Stock in accordance
      with the terms of this Agreement or prior to the date of this Agreement
      and which remain unpaid at the Effective Time.

            (e)  No Fractional Shares.
                 --------------------

            (i) No certificates or scrip representing fractional shares of
      Parent Common Stock shall be issued upon the surrender for exchange of
      Certificates, no dividend or distribution of Parent shall relate to such
      fractional share interests and such fractional share interests will not
      entitle the owner thereof to vote or to any rights of a stockholder of
      Parent.

                                        5





            (ii) Notwithstanding any other provision of this Agreement, each
      holder of shares of Company Common Stock exchanged pursuant to the Merger
      who would otherwise have been entitled to receive a fraction of a share of
      Parent Common Stock (after taking into account all Certificates delivered
      by such holder) shall receive, in lieu thereof, cash (without interest) in
      an amount, less the amount of any withholding taxes, as contemplated by
      Section 2.2(f) below, which may be required thereon, equal to such
      fractional part of a share of Parent Common Stock multiplied by the per
      share closing price of Parent Common Stock on the Nasdaq National Market
      on the Closing Date, as such price is reported by THE WALL STREET JOURNAL
      (or, if not reported thereby, any other authoritative source).

            (f) Withholding Rights. Each of the Surviving Corporation and Parent
                ------------------
      shall be entitled to deduct and withhold from the consideration otherwise
      payable pursuant to this Agreement to any holder of shares of Company
      Common Stock such amounts as it is required to deduct and withhold with
      respect to the making of such payment under the Code and the rules and
      regulations promulgated thereunder, or any provision of state, local or
      foreign tax law. To the extent that amounts are so withheld by the
      Surviving Corporation or Parent, as the case may be, such withheld amounts
      shall be treated for all purposes of this Agreement as having been paid to
      the holder of the shares of Company Common Stock in respect of which such
      deduction and withholding was made by the Surviving Corporation or Parent,
      as the case may be.

            (g) Termination of Exchange Fund. Any portion of the Exchange Fund
                ----------------------------
      which remains undistributed to the holders of the Certificates for six
      months after the Effective Time shall be delivered to Parent, upon demand,
      and any holders of the Certificates who have not theretofore complied with
      this ARTICLE II shall thereafter look only to Parent for, and Parent shall
      remain liable for, payment of their claim for Merger Consideration, any
      cash in lieu of fractional shares of Parent Common Stock and any dividends
      or distributions with respect to Parent Common Stock. Any such portion of
      the Exchange Fund remaining unclaimed by holders of shares of Company
      Common Stock immediately prior to such time as such amounts would
      otherwise escheat to or become property of any Governmental Entity shall,
      to the extent permitted by law, become the property of the Surviving
      Corporation free and clear of any claims or interest of any Person
      previously entitled thereto.

            (h) No Liability. None of Parent, Sub, the Company or the Exchange
                ------------
      Agent shall be liable to any Person in respect of any shares of Parent
      Common Stock (or dividends or distributions with respect thereto) or cash
      in lieu of fractional shares of Parent Common Stock or cash from the
      Exchange Fund, in each case delivered to a public official pursuant to any
      applicable abandoned property, escheat or similar law.

            (i) Investment of Exchange Fund. The Exchange Agent shall invest any
                ---------------------------
      cash included in the Exchange Fund, as directed by Parent, on a daily
      basis, provided that no such investment or loss thereon shall affect the
      amounts payable or the timing of the amounts 

                                        6





      payable  pursuant to the  provisions  of this Article II. Any interest and
      other income resulting from such investments shall be paid to Parent.

            (j) Lost Certificates. If any Certificate shall have been lost,
                -----------------
      stolen or destroyed, upon the making of an affidavit of that fact by the
      Person claiming such Certificate to be lost, stolen or destroyed and, if
      required by the Surviving Corporation, the posting by such Person of a
      bond in such reasonable amount as the Surviving Corporation may direct as
      indemnity against any claim that may be made against it with respect to
      such Certificate, the Exchange Agent will issue in exchange for such lost,
      stolen or destroyed Certificate the Merger Consideration and any cash in
      lieu of fractional shares, and unpaid dividends and distributions on
      shares of Parent Common Stock deliverable in respect thereof, in each case
      pursuant to this Agreement.

            (k) Stock Transfer Books. The stock transfer books of the Company
                --------------------
      shall be closed immediately upon the Effective Time and there shall be no
      further registration of transfers of shares of Company Common Stock
      thereafter on the records of the Company. On or after the Effective Time,
      any Certificates presented to the Exchange Agent or the Surviving
      Corporation for any reason shall be converted into the Merger
      Consideration with respect to the shares of Company Common Stock formerly
      represented thereby (including any cash in lieu of fractional shares of
      Parent Common Stock to which the holders thereof are entitled pursuant to
      Section 2.2(e)) and any dividends or other distributions to which the
      holders thereof are entitled pursuant to Section 2.2(c).


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

      Section 3.1. Representations and Warranties of the Company. Except as
                   ---------------------------------------------
expressly set forth in the Filed Company SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by the Company to Parent
immediately prior to the execution of this Agreement and initialed on behalf of
Parent and the Company, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "COMPANY 
                                                                  -------
DISCLOSURE MEMORANDUM"), the Company represents and warrants to Parent and Sub
---------------------
as follows:

            (a) Organization, Standing and Corporate Power. Each of the Company
                ------------------------------------------
      and each of its Significant Subsidiaries is a corporation duly organized,
      validly existing and, to the extent applicable, in good standing under the
      laws of the jurisdiction in which it is organized and has all requisite
      corporate power and authority to own, lease and operate its properties and
      to carry on its business as now being conducted. Each of the Company and
      each of its Significant Subsidiaries is duly qualified or licensed to do
      business and, to the extent applicable, is in good standing in each
      jurisdiction in which the nature of its business or the ownership, leasing
      or operation of its properties makes such qualification or licensing
      necessary, other than in such jurisdictions where the failure to be so
      qualified or licensed 


                                        7




      individually  or in the aggregate would not reasonably be expected to have
      a Material  Adverse Effect on the Company.  The Company has made available
      to Parent prior to the  execution of this  Agreement  complete and correct
      copies of its Certificate of Incorporation and Bylaws,  and the comparable
      organizational documents of each of its Significant Subsidiaries,  in each
      case as amended to the date hereof.

            (b) Subsidiaries. All the outstanding shares of capital stock of, or
                ------------
      other equity interests in, each Subsidiary have been validly issued and
      are fully paid and nonassessable and are owned directly or indirectly by
      the Company free and clear of all Liens, and free of any restriction on
      the right to vote, sell or otherwise dispose of such capital stock or
      other ownership interests. Other than such Subsidiaries of the Company,
      neither the Company nor any Subsidiary owns a greater than 20% equity
      interest or similar interest in, or any interest convertible into or
      exchangeable or exercisable for a greater than 20% equity or similar
      interest in, any Person. Neither the Company nor any of its Subsidiaries
      is subject to any obligation or requirement to make any material loan,
      capital contribution investment or similar expenditure to or in any Person
      in excess of $500,000 individually or $1,000,000 to all Persons, except
      for loans, capital contributions, investments or similar expenditures by
      the Company or any Company Subsidiary to any Company Subsidiary. Except as
      provided by applicable law, there are no restrictions of any kind which
      prevent the payment of dividends by any Subsidiary.

            (c) Capital Structure. The authorized capital stock of the Company
                -----------------
      consists of 100,000,000 shares of Company Common Stock and 10,000,000
      shares of preferred stock, par value $.01 per share ("COMPANY PREFERRED
                                                            -----------------
      STOCK"). At the close of business on June 25, 2001, (i) 37,653,461 shares
      -----
      of Company Common Stock were issued and outstanding, none of which shares
      are subject to restrictions (other than with respect to Rule 144 of the
      Securities Act) or forfeiture risks, (ii) no shares of Company Common
      Stock were held by the Company in its treasury, (iii) 7,080,696 shares of
      Company Common Stock were issuable pursuant to outstanding Company Stock
      Options, and (iv) no shares of Company Preferred Stock were issued or
      outstanding. Since June 25, 2001, except as permitted by Section
      4.1(a)(ii) of this Agreement, (i) there have been no issuances of capital
      stock of the Company (or securities convertible into or exchangeable or
      exercisable for such capital stock) other than issuances of Company Common
      Stock pursuant to the exercise of options outstanding on June 25, 2001
      under Company Stock Plans, and (ii) no options, warrants, securities
      convertible into, or commitments with respect to the issuance of shares of
      Company Common Stock have been issued, granted or made. All outstanding
      shares of capital stock of the Company are, and all shares which may be
      issued pursuant to the Company Stock Plans will be, when issued in
      accordance with the terms thereof, duly authorized, validly issued, fully
      paid and nonassessable and not subject to preemptive rights. There are no
      bonds, debentures, notes or other indebtedness of the Company having the
      right to vote (or convertible into, or exchangeable for, securities having
      the right to vote) on any matters on which stockholders of the Company may
      vote. Except (i) as set forth above in this Section 3.1(c), and (ii) for
      shares of Company Common Stock reserved for issuance 

                                        8




      under  any plan or  arrangement  providing  for the  grant of  options  to
      purchase  shares of Company  Common  Stock to current or former  officers,
      directors,  employees or consultants of the Company or its Subsidiaries or
      resulting  from the issuance of shares of Company Common Stock pursuant to
      Stock  Options  outstanding  as of the close of business on June 25, 2001,
      (x) there are not issued,  issuable,  reserved for issuance or outstanding
      (A) any shares of capital stock or other voting securities of the Company,
      (B) any  securities of the Company  convertible  into or  exchangeable  or
      exercisable  for  shares  of  capital  stock or voting  securities  of the
      Company, (C) any warrants,  calls, options or other rights to acquire from
      the Company or any  Subsidiary  of the Company,  and no  obligation of the
      Company or any  Subsidiary  of the Company to issue,  any  capital  stock,
      voting  securities  or  securities  convertible  into or  exchangeable  or
      exercisable  for capital stock or voting  securities of the Company or (D)
      stock  appreciation  rights or rights to receive  shares of Company Common
      Stock on a  deferred  basis  granted  under  the  Company  Stock  Plans or
      otherwise;  and  (y)  there  are not any  outstanding  obligations  of the
      Company  or any  Subsidiary  of  the  Company  to  repurchase,  redeem  or
      otherwise  acquire any such  securities  or to issue,  deliver or sell, or
      cause to be issued,  delivered or sold, any such  securities.  Neither the
      Company nor any Subsidiary is a party to any voting agreement with respect
      to the voting of any such securities.  Except as set forth in this Section
      3.1(c),  there  are  no  issued,   issuable,   reserved  for  issuance  or
      outstanding (A) securities of the Company or any Subsidiary of the Company
      convertible  into or  exchangeable  or  exercisable  for shares of capital
      stock or other voting securities or ownership  interests in any Subsidiary
      of the Company,  (B) warrants,  calls,  options or other rights to acquire
      from the Company or any  Subsidiary  of the Company,  and no obligation of
      the Company or any Subsidiary of the Company to issue,  any capital stock,
      voting  securities  or other  ownership  interests  in, or any  securities
      convertible  into or  exchangeable  or exercisable  for any capital stock,
      voting securities or ownership interests in, any Subsidiary of the Company
      or (C)  obligations  of the  Company or any  Subsidiary  of the Company to
      repurchase, redeem or otherwise acquire any such outstanding securities of
      Subsidiaries  of the Company or to issue,  deliver or sell, or cause to be
      issued, delivered or sold, any such securities.  Except as set forth above
      in this Section 3.1(c),  neither the Company nor any Subsidiary is a party
      to or bound by any agreement  regarding  any  securities of the Company or
      any Subsidiary of the Company.

            (d) Authority; Noncontravention. The Company has the requisite
                ---------------------------
      corporate power and authority to enter into this Agreement and to
      consummate the transactions contemplated by this Agreement. The execution
      and delivery of this Agreement by the Company and the consummation by the
      Company of the transactions contemplated by this Agreement have been duly
      authorized by all necessary corporate action on the part of the Company
      and no other corporate proceedings on the part of the Company are
      necessary to authorize this Agreement or to consummate the transactions
      contemplated hereby, subject, in the case of the Merger, to receipt of the
      Company Stockholder Approval and the filing of the Certificate of Merger.
      The Board of Directors of the Company has unanimously approved this
      Agreement, determined that this Agreement and the transactions
      contemplated hereby are fair to and in the best interests of the Company
      and its stockholders and declared that the Merger is 


                                        9





      advisable,  provided  that after the date hereof,  the Board of Directors
      of the Company may withdraw  its  recommendation  as provided in
      Section 4.2 hereof.  Assuming that the  representation of Parent contained
      in Section  3.2(n) is correct,  the Board of  Directors of the Company has
      taken all action  necessary to render  inapplicable,  as it relates to the
      execution,  delivery and  performance  of this  Agreement  and the Company
      Voting  Agreements  and the  consummation  of the  Merger  and  the  other
      transactions  contemplated hereby and thereby, Section 203 of the DGCL. To
      the  Company's  Knowledge,  except  for  Section  203  of  the  DGCL  (the
      restrictions of which have been rendered inapplicable),  no state takeover
      statute  is  applicable  to  this  Agreement,  the  Merger,  or the  other
      transactions  contemplated hereby or thereby. This Agreement has been duly
      executed and delivered by the Company and, assuming the due authorization,
      execution and delivery by each of the other parties  thereto,  constitutes
      legal, valid and binding  obligations of the Company,  enforceable against
      the Company in accordance with its terms (except insofar as enforceability
      may be  limited  by  applicable  bankruptcy,  insolvency,  reorganization,
      moratorium or other similar laws affecting  creditors' rights generally or
      by principles governing availability of equitable remedies).

            The execution and delivery of this Agreement does not, and the
      consummation of the Merger and the other transactions contemplated by this
      Agreement and compliance with the provisions of this Agreement will not,
      conflict with, or result in any violation of, or default (with or without
      notice or lapse of time, or both) under, or give rise to a right of
      termination, cancellation or acceleration of any obligation or to loss of
      a benefit under, or result in the creation of any pledge, claim, lien,
      charge, encumbrance or security interest of any kind or nature whatsoever
      (collectively, "LIENS") in or upon any of the properties or assets of the
                      -----
      Company or any Subsidiary of the Company under, (i) the Company's
      Certificate of Incorporation or Bylaws or the comparable organizational
      documents of any of its Subsidiaries, (ii) any loan or credit agreement,
      bond, note, mortgage, indenture, lease or other contract, agreement,
      obligation, commitment, arrangement, understanding, instrument, permit or
      license applicable to the Company or any of its Subsidiaries or their
      respective properties or assets or (iii) subject to the governmental
      filings and other matters referred to in the following paragraph, any (A)
      statute, law, ordinance, rule or regulation or (B) judgment, order or
      decree, in each case applicable to the Company or any of its Subsidiaries
      or their respective properties or assets, other than, in the case of
      clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
      cancellations, accelerations, losses or Liens that individually or in the
      aggregate would not reasonably be expected to have a Material Adverse
      Effect on the Company or to prevent or materially delay the consummation
      of the transactions contemplated by this Agreement.

            No consent, approval, order or authorization of, action by or in
      respect of, or registration, declaration or filing with, any
      supranational, national, state, municipal, local or foreign government,
      any instrumentality, subdivision, court, administrative agency or
      commission or other authority thereof, or any quasi-governmental or
      private body exercising any regulatory, taxing, importing or other
      governmental or quasi-governmental authority (each, a "GOVERNMENTAL
                                                             ------------
      ENTITY") is required by or with respect to the Company or any of 

                                       10





      its  Subsidiaries  in  connection  with the execution and delivery of this
      Agreement by the Company or the  consummation by the Company of the Merger
      or the other transactions  contemplated by this Agreement,  except for (1)
      the filing of a  premerger  notification  and report  form by the  Company
      under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
      (the "HSR ACT") and any  applicable  filings and  approvals  under similar
            -------
      foreign antitrust laws and regulations, (2) the filing with the Securities
      and Exchange  Commission (the "SEC") of (A) a proxy statement  relating to
                                     ---
      the meeting of the Company's  stockholders  to be held in connection  with
      the  Merger  (as  amended or  supplemented  from time to time,  the "PROXY
                                                                           -----
      STATEMENT")  and (B) such reports under  Section  13(a),  13(d),  15(d) or
      ---------
      16(a) of the Securities Exchange Act of 1934 as amended, and the rules and
      regulations  promulgated  thereunder  (the  "EXCHANGE  ACT"),  as  may  be
                                                   -------------
      required  in  connection   with  this   Agreement  and  the   transactions
      contemplated  by this  Agreement,  (3) the  filing of the  Certificate  of
      Merger  with  the  Secretary  of  State  of  the  State  of  Delaware  and
      appropriate  documents  with the relevant  authorities  of other states in
      which the Company is  qualified  to do  business,  (4) such  filings  with
      Governmental  Entities to satisfy  the  applicable  requirements  of state
      securities  or  "blue  sky" law and (5) such  other  consents,  approvals,
      orders,  authorizations,   registrations,  declarations  and  filings  the
      failure of which to be obtained or made  individually  or in the aggregate
      would not reasonably be expected to have a Material  Adverse Effect on the
      Company  or to  prevent  or  materially  delay  the  consummation  of  the
      transactions contemplated by this Agreement.

            (e) Company SEC Documents. The Company has timely filed all reports,
                ---------------------
      schedules, forms, statements and other documents (including exhibits and
      other information incorporated therein) with the SEC required to be filed
      by the Company since January 1, 1999 (the "COMPANY SEC DOCUMENTS"). No
                                                 ---------------------
      Company Subsidiary is required to file any form, report, registration
      statement, prospectus or other document with the SEC. As of their
      respective dates (and, if amended or superseded by a filing prior to the
      date of this Agreement or the Closing Date, then on the date of such
      filing), (i) the Company SEC Documents complied in all material respects
      with the requirements of the Securities Act of 1933, as amended, and the
      rules and regulations promulgated thereunder (the "SECURITIES ACT") or the
                                                         --------------
      Exchange Act, as the case may be, applicable to such Company SEC
      Documents, and none of the Company SEC Documents contained any untrue
      statement of a material fact or omitted to state a 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.
      The Company SEC Documents filed since December 31, 2000, together with any
      public announcements in a news release issued by the Dow Jones news
      service, PR Newswire or any equivalent service (collectively, a "DOW JONES
                                                                       ---------
      NEWS RELEASE") made by the Company after the date hereof taken as a whole,
      ------------
      as of the Effective Time will 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 existing as of the Effective Time, not misleading. The
      financial statements (including the related notes) of the Company included
      in the Company SEC Documents, as of their respective dates, complied in
      all material respects with applicable accounting requirements 

                                       11





      and the published rules and  regulations of the SEC with respect  thereto,
      were  prepared in  accordance  with GAAP,  applied on a  consistent  basis
      during  the  periods  involved  (except as may be  indicated  in the notes
      thereto)  and (except as amended or  superseded  by a filing  prior to the
      date of this  Agreement)  fairly  presented the financial  position of the
      Company and its consolidated  Subsidiaries as of the dates thereof and the
      consolidated  results of their  operations  and cash flows for the periods
      then  ended  (subject,  in the case of  unaudited  statements,  to  normal
      year-end  audit  adjustments  not  material in amount).  Except (i) as set
      forth in the Filed Company SEC Documents  filed since December 31, 2000 or
      (ii) for the  transactions  contemplated  by this  Agreement,  neither the
      Company nor any of its  Subsidiaries has any liabilities or obligations of
      any nature (whether  accrued,  absolute,  contingent or otherwise)  which,
      individually or in the aggregate,  would  reasonably be expected to have a
      Material Adverse Effect on the Company. For purposes of this Agreement,  a
      "FILED  COMPANY SEC DOCUMENT"  shall mean a Company SEC Document  filed by
       ---------------------------
      the Company and publicly available prior to the date of this Agreement.

            (f) Information Supplied. None of the information to be supplied by
                --------------------
      the Company specifically for inclusion or incorporation by reference in
      the registration statement on Form S-4 to be filed with the SEC by Parent
      in connection with the issuance of Parent Common Stock in the Merger (the
      "Form S-4") will, at the time the Form S-4 is filed with the SEC, at any
       --------
      time it is supplemented or amended or at the time it becomes effective
      under the Securities Act, contain any untrue statement of a material fact
      or omit to state any material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances
      under which they are made, not misleading and the Proxy Statement will
      not, on the date it is first mailed to the Company's stockholders and at
      the time of the Company Stockholders Meeting, contain any untrue statement
      of a 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 are made, not misleading,
      except that no representation or warranty is made by the Company with
      respect to statements made or incorporated by reference therein based on
      information supplied by Parent or Sub specifically for inclusion or
      incorporation by reference in the Proxy Statement. The Proxy Statement
      will comply in all material respects with the requirements of the Exchange
      Act, as applicable to the Company, except that no representation or
      warranty is made by the Company with respect to statements made or
      incorporated by reference therein based on information supplied by Parent
      or Sub specifically for inclusion or incorporation by reference in the
      Proxy Statement.

            (g) Absence of Certain Changes or Events. Except as set forth in the
                ------------------------------------
      Filed Company SEC Documents filed after December 31, 2000 and for
      transactions expressly contemplated or permitted by this Agreement, since
      December 31, 2000 (i) the Company and its Subsidiaries have conducted
      their businesses in the ordinary course consistent with past practice and
      (ii) there has not been a Material Adverse Effect on the Company. Except
      as set forth in the Filed Company SEC Documents and for actions in the
      ordinary course of business, since December 31, 2000, neither the Company
      nor any Company Subsidiary has 

                                       12




      taken any action,  or failed to take any  action,  which if such action or
      failure  occurred during the period from the date of this Agreement to the
      Effective  Time would  constitute a breach or violation of Section  4.1(a)
      (i), (ii), (iv), (vi),  (viii),  (ix), (xi),  (xii),  (xiii) or (xiv), and
      neither  the  Company  nor  any  Company  Subsidiary  has  authorized,  or
      committed or agreed, to take any of such actions.

            (h) Litigation. There is no suit, action or proceeding pending or,
                ----------
      to the Knowledge of the Company, overtly threatened against or affecting
      the Company or any of its Subsidiaries or any of their respective
      properties that individually or in the aggregate would reasonably be
      expected to have a Material Adverse Effect on the Company, nor is there
      any judgment, decree, injunction, rule, order, action, demand or
      requirement of any Governmental Entity or arbitrator outstanding against,
      or, to the Knowledge of the Company, any investigation by any Governmental
      Entity involving, the Company or any of its Subsidiaries that individually
      or in the aggregate would reasonably be expected to have a Material
      Adverse Effect on the Company.

            (i) Contracts. Except as set forth in Section 3.1(i) of the Company
                ---------
      Disclosure Memorandum or listed as an exhibit to the Company's Annual
      Report on Form 10-K for the year ended December 31, 2000, neither the
      Company nor any Company Subsidiary is a party to, and none of their
      respective properties or assets are bound by, any "material contract" (as
      such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (the
      contracts listed in Section 3.1(i) of the Company Disclosure Memorandum
      being referred to as the "MATERIAL CONTRACTS"). Each such Material
                                ------------------
      Contract is a valid, binding and enforceable obligation of the Company or
      its Subsidiaries and, to the Company's Knowledge, of the other party or
      parties thereto, in accordance with its terms, and in full force and
      effect, except where the failure to be valid, binding, enforceable and in
      full force and effect would not reasonably be expected to have a Material
      Adverse Effect on the Company and to the extent as may be limited by
      applicable bankruptcy, insolvency, moratorium or other laws affecting the
      enforcement of creditors' rights generally or by general principles of
      equity. The Company has not received any notice from any other party to
      any such Material Contract, and otherwise has no Knowledge that such third
      party intends to terminate, or not renew, any such Material Contract. As
      of the date hereof, the Company has made available to Parent true and
      correct copies of all such contracts. Neither the Company nor any of its
      Subsidiaries, and, to the Knowledge of the Company, no other party
      thereto, is in violation of or in default under (nor does there exist any
      condition which upon the passage of time or the giving of notice or both
      would cause such a violation of or default under) any loan or credit
      agreement, bond, note, mortgage, indenture, lease or other contract,
      agreement, obligation, commitment, arrangement, understanding, instrument,
      permit or license to which it is a party or by which it or any of its
      properties or assets is bound, except for violations or defaults that
      individually or in the aggregate would not reasonably be expected to have
      a Material Adverse Effect on the Company. Neither the Company nor any of
      its Subsidiaries is a party to or otherwise bound by any agreement or
      covenant not to compete or by any agreement or covenant restricting the
      development, marketing or distribution of the 

                                       13





      Company's  or its  Subsidiaries'  products  or  services or the conduct of
      their  businesses  in a manner  that  would be  materially  adverse to the
      business of the Company and its Subsidiaries taken as a whole.

            (j)  Compliance with Laws.
                 --------------------

            (i) Each of the Company and its Subsidiaries is in compliance with
      all statutes, laws, ordinances, rules, regulations, judgments, orders and
      decrees of any Governmental Entity (other than Environmental Laws)
      (collectively, "LEGAL PROVISIONS") applicable to its business or
                      ----------------
      operations, except for instances of noncompliance that individually or in
      the aggregate would not reasonably be expected to have a Material Adverse
      Effect on the Company. Since January 1, 1998, neither the Company nor any
      of its Subsidiaries has received any written notice from any Governmental
      Entity regarding any actual or possible violation of, or failure to comply
      with, any Legal Provisions, except for such violations or failures to
      comply that individually or in the aggregate would not reasonably be
      expected to have a Material Adverse Effect on the Company. Each of the
      Company and its Subsidiaries has in effect all approvals, authorizations,
      certificates, filings, franchises, licenses, notices, permits and rights
      of or with all Governmental Entities, including all authorizations under
      Environmental Laws ("PERMITS"), necessary for it to own, lease or operate
                           -------
      its properties and assets and to carry on its business and operations as
      now conducted, except for the failure to have such Permits that
      individually or in the aggregate would not reasonably be expected to have
      a Material Adverse Effect on the Company. There has occurred no default
      under, or violation of, any such Permit, except for defaults under, or
      violations of, Permits that individually or in the aggregate would not
      reasonably be expected to have a Material Adverse Effect on the Company.
      The Merger, in and of itself, would not cause the revocation or
      cancellation of any such Permit that individually or in the aggregate is
      reasonably likely to have a Material Adverse Effect on the Company.

            (ii) Except for those matters that individually or in the aggregate
      would not reasonably be expected to have a Material Adverse Effect on the
      Company: (A) each of the Company and its Subsidiaries is, and has been, in
      compliance with all applicable Environmental Laws; (B) during the period
      of ownership or operation by the Company or its Subsidiaries of any of its
      currently or previously owned, leased or operated properties, no Hazardous
      Material has been treated or disposed of, and there have been no Releases
      or threatened Releases of Hazardous Material at, in, on, under or
      affecting such properties or any contiguous site; (C) prior to the period
      of ownership or operation by the Company or its Subsidiaries of any of its
      currently or previously owned, leased or operated properties, to the
      Knowledge of the Company, no Hazardous Material was treated, stored or
      disposed of, and there were no Releases of Hazardous Material at, in, on,
      under or affecting any such property or any contiguous site; and (D)
      neither the Company nor its Subsidiaries have received any written notice
      of, or entered into or assumed by contract, judicial or administrative
      settlement, or operation of law any indemnification obligation, order,
      settlement or decree relating to: (1) any violation of any Environmental
      Laws or the institution or pendency of 

                                       14





      any suit, action,  claim,  proceeding or investigation by any Governmental
      Entity or any third  party in  connection  with any alleged  violation  of
      Environmental Laws or any Release of Hazardous Materials, (2) the response
      to or  remediation  of  Hazardous  Material at or arising  from any of the
      Company's  or its  Subsidiaries'  activities  or  properties  or any other
      properties  or  (3)  payment  for  any  response  action  relating  to  or
      remediation of Hazardous  Material at or arising from any of the Company's
      or its Subsidiaries' properties,  activities, or any other properties. The
      term  "ENVIRONMENTAL  LAWS" means all applicable  U.S.,  state,  local and
             -------------------
      foreign laws, statutes,  treaties, rules, codes, ordinances,  regulations,
      certificates, orders, directives,  interpretations,  licenses, permits and
      other  authorizations of any Governmental  Entity and judgments,  decrees,
      injunctions,  writs,  orders or like  action of any court,  arbitrator  or
      other  administrative,  judicial or  quasi-judicial  tribunal or agency of
      competent jurisdiction, including any thereof of the European Community or
      the  European  Union having the force of law and being  applicable  to the
      Company or any of its Subsidiaries, dealing with the protection of health,
      welfare  or  the  environment,   including,  without  limitation,   flood,
      pollution or disaster laws and health and  environmental  protection  laws
      and  regulations,   and  all  other  rules  and  regulations   promulgated
      thereunder  and any  provincial,  municipal,  water  board or other  local
      statute, law, rule, regulation or ordinance relating to public or employee
      health, safety or the environment; including all laws relating to Releases
      to air, water,  land or groundwater,  relating to the withdrawal or use of
      groundwater,   and   relating  to  the  use,   handling,   transportation,
      manufacturing,  introduction  into the stream of  commerce  or disposal of
      Hazardous Materials.

            The term "Hazardous Materials" means any chemical, material, liquid,
                      -------------------
      gas, substance or waste, whether naturally occurring or man-made, that is
      prohibited, limited or regulated by or pursuant to an Environmental Law
      applicable to the Company, any Company Subsidiary or their respective
      properties.

            The term "Release" means the spilling, leaking, discharging,
                      -------
      injecting, emitting and/or disposing and placement of a Hazardous Material
      in any location that poses a threat thereof.

            (k) Absence of Changes in Benefit Plans. There has not been, since
                -----------------------------------
      December 31, 2000, any adoption or amendment in any material respect by
      the Company or any of its Subsidiaries of any collective bargaining
      agreement or any Benefit Plan, or any material change in any actuarial or
      other assumption used to calculate funding obligations with respect to any
      Pension Plans, or any change in the manner in which contributions to any
      Pension Plans are made or the basis on which such contributions are
      determined.

            (l)  ERISA Compliance.
                 ----------------

            (i) Section 3.1(l)(i) of the Company Disclosure Memorandum contains
      a list of each pension, retirement, savings, profit sharing, medical,
      dental, health, disability, life, death benefit, group insurance, deferred
      compensation, fringe, change in control, retiree, stock 

                                       15





      option,  stock purchase,  restricted stock, bonus or incentive,  vacation,
      sick leave,  severance pay, employment or termination,  and other material
      employee benefit or compensation plan,  arrangement,  contract,  agreement
      (including  pursuant  to any  collective  bargaining  agreement),  policy,
      practice or commitment,  whether  formal or informal,  written or oral, in
      each case that are binding commitments of the Company and its Subsidiaries
      (but,  for purposes  hereof,  excluding any  non-material  plan or program
      maintained by the Company or its  Subsidiaries for the benefit of non-U.S.
      employees),  under  which  (1)  current  or  former  employees,  officers,
      directors  or  independent  contractors  of  the  Company  or  any  of its
      Subsidiaries  (or their  beneficiaries)  participate  or are  entitled  to
      participate by reason of their relationship with the Company or any of its
      Subsidiaries,  (2) to which the  Company or any of its  Subsidiaries  is a
      party or a sponsor or a  fiduciary  thereof or by which the Company or any
      of its  Subsidiaries  (or any of their  rights,  properties  or assets) is
      currently  bound or (3) with  respect  to which the  Company or any of its
      Subsidiaries  has  any  obligation  to  make  payments  or  contributions,
      including,  without  limitation,  all "employee pension benefit plans" (as
      defined in Section 3(2) of the Employee  Retirement Income Security Act of
      1974,  as amended  ("ERISA"))  (sometimes  referred  to herein as "PENSION
                           -----                                         -------
      PLANS"),  "employee  welfare benefit plans" (as defined in Section 3(1) of
      ----- 
      ERISA)  (sometimes  referred  to herein as  "WELFARE  PLANS")  (all of the
                                                   --------------
      foregoing  referred to collectively  herein as "BENEFIT  PLANS"),  and all
                                                      --------------
      other Benefit Plans  maintained,  or contributed  to, by the Company,  its
      Subsidiaries or any Person or entity that,  together with the Company,  is
      treated as a single employer under Section 414(b),  (c), (m) or (o) of the
      Code (a  "COMMONLY  CONTROLLED  ENTITY") for the benefit of any current or
                ----------------------------
      former officers,  directors,  employees or independent  contractors of the
      Company and its Subsidiaries (or their beneficiaries)  (including any such
      plans maintained for current or former foreign employees). The Company has
      made  available  to Parent true,  complete and correct  copies of (1) each
      Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions
      thereof),  (2) the most recent  annual  report on Form 5500 required to be
      filed with the Internal  Revenue  Service (the "IRS") with respect to each
                                                      ---
      Benefit  Plan,  (3) the most  recent  summary  plan  description  for each
      Benefit Plan for which such summary plan  description  is required and (4)
      each trust  agreement and group annuity  contract  relating to any Benefit
      Plan. Each Benefit Plan has been  administered in all material respects in
      accordance  with its terms.  The  Company,  its  Subsidiaries  and all the
      Benefit  Plans are all in  compliance  in all material  respects  with the
      applicable  provisions of ERISA,  the Code and all other  applicable Legal
      Provisions.  Notwithstanding  anything  contained  herein to the contrary,
      with respect to any Benefit Plan  maintained,  sponsored or contributed to
      primarily for the benefit of persons  residing and  providing  services to
      the Company or its  Subsidiaries  outside of the United  States,  the term
      "Benefit  Plan" as used herein shall only include such  non-United  States
      Benefit  Plans  that are  material  Benefit  Plans of the  Company  or its
      Subsidiaries.

            (ii) All Pension Plans are the subject of a determination letter
      from the IRS to the effect that such Pension Plans are qualified (or has
      time remaining to apply under applicable regulations or IRS pronouncements
      to make any amendment necessary to obtain a favorable determination or
      opinion letter) and exempt from United States Federal income taxes under

                                       16





      Sections 401(a) and 501(a), respectively, of the Code, and no such
      determination letter has been revoked nor to the Company's Knowledge, has
      any event occurred since the date of its most recent determination letter
      or application therefor that would adversely affect its qualification.

            (iii) Neither the Company nor any Commonly Controlled Entity has (1)
      at any time in the six years prior to the Closing Date maintained or
      contributed to any Benefit Plan that is subject to Title IV of ERISA,
      Section 302 of ERISA or Section 412 of the Code or (2) has any unsatisfied
      liability under Title IV of ERISA, Section 302 of ERISA, Section 412 of
      the Code or Section 4980B of the Code. None of the Company, its
      Subsidiaries, or any Commonly Controlled Entity contributes to a
      "multiemployer plan" as defined in Section 3(37) of ERISA.

            (iv) With respect to any Benefit Plan (other than employment
      agreements or any other individual contract), there are no understandings,
      agreements or undertakings, written or oral, that would prevent any such
      Benefit Plan (including any such plan covering retirees or other former
      employees, other than agreements with individuals) from being amended or
      terminated without material liability to the Company on or at any time
      after the Effective Time.

            (v) No pending or, to the Knowledge of the Company, overtly
      threatened disputes, lawsuits, claims (other than routine claims for
      benefits), investigations, audits or complaints to, or by, any Person or
      Governmental Entity have been filed or are pending with respect to any
      Benefit Plans of the Company or any of its Subsidiaries in connection with
      any Benefit Plan or the fiduciaries or administrators thereof that could
      reasonably be expected to give rise to a material liability. With respect
      to each Benefit Plan, there has not occurred, and neither the Company, any
      Subsidiary of the Company, the plan sponsor nor, to the Company's
      Knowledge, a plan fiduciary that the Company has an obligation to
      indemnify or is contractually bound to enter into, any nonexempt
      "prohibited transaction" within the meaning of Section 4975 of the Code or
      Section 406 of ERISA, nor any transaction that would result in a material
      civil penalty being imposed under Section 409 or 502(i) of ERISA.

            (vi) There are no unfunded liabilities with respect to any Benefit
      Plan other than those that would not individually or in the aggregate
      reasonably be expected to have a Material Adverse Effect on the Company.

            (vii) Except as would not reasonably be expected to have a Material
      Adverse Effect on the Company, all contributions to and payments with
      respect to or under the Benefit Plans that are required to be made with
      respect to periods ending on or before the Effective Time have been made
      or accrued before the Effective Time by the Company in accordance with the
      appropriate plan documents, financial statements, actuarial report,
      collective bargaining agreements or insurance contracts or arrangements.

                                       17

 



           (viii) No Welfare Plan providing medical or death benefits (whether
      or not insured) with respect to current or former employees of the Company
      or any Subsidiary continues such coverage or provides such benefits beyond
      their date of retirement or other termination of service (except as
      required by Code Section 4908B or applicable state healthcare continuation
      law(s)).

            (ix) The execution of, and performance of the transactions
      contemplated in, this Agreement will not (either alone or upon the
      occurrence of any additional or subsequent events) constitute an event
      under any plan, policy, arrangement or agreement (including under any
      collective bargaining agreement) or any trust or loan that will or would
      reasonably be expected to result in any payment (whether of severance pay
      or otherwise), acceleration of, forgiveness of indebtedness owing from,
      vesting of, distribution of, or increase in or obligation to fund, any
      benefits with respect to any current or former employee, director or
      consultant of the Company.

            (m) Labor Relations. Neither the Company nor any of its Subsidiaries
                ---------------
      is a party to, or bound by, any collective bargaining agreement, contract
      or other agreement or understanding with a labor union or labor
      organization. There is no pending or, to the Knowledge of the Company,
      overtly threatened (i) union organizational campaign effort, collective
      bargaining negotiations, bargaining impasse, implementation of final
      offer, work-to-rule or intermittent strike or (ii) labor dispute,
      grievance or arbitration matter, economic or unfair labor practice strike,
      boycott, work stoppage or slowdown involving, in each case of this clause
      (ii), a material number of employees of the Company and its Subsidiaries,
      against the Company or any of its Subsidiaries, no lockout is in effect
      and no permanent or temporary strike replacements are currently employed
      at any Company facility. Neither the Company nor any of its Subsidiaries,
      nor their respective representatives or employees, has committed any
      unfair labor practices in connection with the operation of the respective
      businesses of the Company or any of its Subsidiaries, and there is no
      pending or, to the Knowledge of the Company, threatened charge, complaint,
      decision, order, notice-posting requirement, settlement agreement or
      injunctive action or order against the Company or any of its Subsidiaries
      by the National Labor Relations Board or any similar governmental or
      adjudicatory agency or court, except in each case as would not reasonably
      be expected to have a Material Adverse Effect on the Company. The Company
      and its Subsidiaries have in the past been and are in compliance in all
      respects with all applicable collective bargaining agreements and Legal
      Provisions respecting employment, employment practices, employee
      classification, labor relations, safety and health, wages, hours and terms
      and conditions of employment, except where the failure to be in compliance
      would not reasonably be expected to have a Material Adverse Effect on the
      Company. The Company has complied in all material respects with its
      payment obligations to all employees of the Company and its Subsidiaries
      in respect of all wages, salaries, commissions, bonuses, benefits and
      other compensation due and payable to such employees under any Company or
      Company Subsidiary policy, practice, agreement, plan, program or any
      statute or other law. Neither the Company nor any of its Subsidiaries has
      experienced within the past 12 months 

                                       18




      a "plant closing" or "mass layoff" within the meaning of the Worker
      Adjustment and Retraining Notification Act, 29 U.S.C. ss.ss. 2101 et seq.

            (n) Taxes. Each of the Company and its Subsidiaries has timely filed
                -----
      all Tax Returns required to be filed by it, or requests for extensions to
      file such Tax Returns have been timely filed and granted and have not
      expired, and all such filed Tax Returns are complete and accurate in all
      respects, except for such failures to (i) file, (ii) have extensions
      granted that remain in effect or (iii) be complete and accurate in all
      respects, as applicable, as would not individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on the Company.
      The Company and each of its Subsidiaries has paid (or the Company has paid
      on its behalf) all Taxes required to be paid by it, except for such
      failures to pay as would not, individually or in the aggregate, reasonably
      be expected to have a Material Adverse Effect on the Company. The most
      recent financial statements contained in the Filed Company SEC Documents
      reflect an adequate reserve for all Taxes payable by the Company and its
      Subsidiaries for all taxable periods and portions thereof accrued through
      the date of such financial statements, except for such failures to reflect
      such reserves as would not, individually or in the aggregate, reasonably
      be expected to have a Material Adverse Effect on the Company. No
      deficiencies for any Taxes have been proposed, asserted or assessed
      against the Company or any of its Subsidiaries that are not adequately
      reserved for on the Company's financial statements in accordance with GAAP
      except for such failures to so reserve as would not, individually or in
      the aggregate, reasonably be expected to have a Material Adverse Effect on
      the Company. Except as set forth in Section 3.1(n) of the Company
      Disclosure Memorandum, no Company income or franchise Tax Return has ever
      been examined or audited by any Governmental Entity. No requests for
      waivers of the time to assess any Taxes against the Company or any of its
      Subsidiaries have been granted that remain in effect. No claim has ever
      been made in writing by a Governmental Entity in a jurisdiction where the
      Company or any of its Subsidiaries does not file Tax Returns that it is or
      may be subject to taxation by that jurisdiction. There are no Liens for
      Taxes upon any of the assets of the Company or its Subsidiaries except
      Liens for current Taxes not yet due and payable or for Taxes that are
      being disputed in good faith by appropriate proceedings and for which
      appropriate reserves under GAAP exist on the books of the Company. Neither
      the Company nor any of its Affiliates has taken or agreed to take any
      action or has Knowledge of any fact or circumstance that is reasonably
      likely to prevent the Merger from qualifying as a reorganization within
      the meaning of Section 368(a) of the Code. As used in this Agreement,
      "TAXES" shall include all U.S. Federal, state and local, domestic and
       -----
      foreign, income, franchise, property, sales, use, excise and other taxes,
      of any nature whatsoever, tariffs or similar governmental charges,
      including any obligations for withholding taxes from payments due or made
      to any other person, together with all interest, penalties or additions to
      tax imposed with respect to such amounts and "TAX RETURNS" shall include
                                                    -----------
      any return, report or similar statement (including attached schedules)
      required to be filed with respect to any Tax, including, without
      limitation, any information return, claim for refund, amended return or
      declaration of estimated Tax.

                                       19




            (o) No Excess Parachute Payments; No Section 162(m) Payments. There
                --------------------------------------------------------
      will be no payments or benefits to any "disqualified individual" (within
      the meaning of Section 280G of the Code) that would constitute or result
      in an "excess parachute payment" under Section 280G of the Code as a
      direct or indirect consequence of the transactions contemplated by this
      Agreement, including, without limitation, as a result of the acceleration
      of vesting or exercisability of any options to purchase Company Common
      Stock held by "disqualified individuals" as a direct or indirect
      consequence of the transactions contemplated by this Agreement. No such
      Person is entitled to receive any additional payment from the Company, the
      Surviving Corporation or any other Person in the event that the excise tax
      of Section 4999(a) of the Code is imposed on such Person. The Benefit
      Plans and other Company employee compensation arrangements in effect as of
      the date of this Agreement have been designed so that the disallowance of
      a deduction under Section 162(m) of the Code for employee remuneration
      will not apply to any amounts paid or payable by the Company or any of its
      Subsidiaries under any such plan or arrangement.

            (p) Title to Properties. (i) Each of the Company and its
                -------------------
      Subsidiaries has good and marketable title to, or valid leasehold
      interests in, all its properties and assets except for such as are no
      longer used or useful in the conduct of its businesses or as have been
      disposed of in the ordinary course of business and except for failures to
      have, or defects in title or interests, easements, restrictive covenants
      and similar encumbrances that individually or in the aggregate would not
      reasonably be expected to have a Material Adverse Effect on the Company.
      All such material assets and properties, other than assets and properties
      in which the Company or any of its Subsidiaries has a leasehold interest,
      are free and clear of all Liens, except for Liens that individually or in
      the aggregate would not reasonably be expected to have a Material Adverse
      Effect on the Company.

            (ii) Each of the Company and its Subsidiaries has complied in all
      respects with the terms of all leases to which it is a party and under
      which it is in occupancy, and all such leases are in full force and
      effect, except for such noncompliance or failure to be in full force and
      effect that individually or in the aggregate would not reasonably be
      expected to have a Material Adverse Effect on the Company. Each of the
      Company and its Subsidiaries enjoys peaceful and undisturbed possession
      under all such leases, except for failures to do so that individually or
      in the aggregate are not reasonably likely to have a Material Adverse
      Effect on the Company.

            (q)  Intellectual Property.
                 ---------------------

            (i) Each of the Company and its Subsidiaries owns, or is validly
      licensed or otherwise has the right to use (in each case free and clear of
      all Liens) all patents, patent applications, trademarks, trademark rights,
      trade names, trade name rights, service marks, service mark rights,
      copyrights and other proprietary intellectual property rights and computer
      programs (collectively, "INTELLECTUAL PROPERTY RIGHTS") which if the
                               ----------------------------
      Company or its Subsidiaries did not own or validly license or otherwise
      have the right to use would 

                                       20





      reasonably be expected to have a Material  Adverse  Effect on the Company.
      Section 3.1(q) of the Company Disclosure  Memorandum sets forth, as of the
      date hereof, a list of all granted patents,  pending patent  applications,
      trademarks  and  applications  therefor owned by the Company or any of its
      Subsidiaries.  Except  as,  in the  aggregate,  would  not  reasonably  be
      expected to have a Material Adverse Effect on the Company,  (i) the use of
      any Intellectual  Property Rights by the Company and its Subsidiaries does
      not  infringe on or  otherwise  violate the rights of any Person and is in
      accordance  with any applicable  license  pursuant to which the Company or
      any Subsidiary of the Company  acquired the right to use any  Intellectual
      Property Rights; (ii) no Person is challenging or, to the Knowledge of the
      Company,  infringing on or otherwise violating any right of the Company or
      any of its Subsidiaries  with respect to any  Intellectual  Property Right
      owned by and/or  licensed  to the Company or its  Subsidiaries;  and (iii)
      neither the Company nor any of its  Subsidiaries  has received any written
      notice  or  otherwise  has  Knowledge  of  any  pending  claim,  order  or
      proceeding  with respect to any  Intellectual  Property  Right used by the
      Company and its Subsidiaries and to its Knowledge no Intellectual Property
      Right owned and/or  licensed by the Company or its  Subsidiaries  is being
      used or enforced in a manner that would  reasonably  be expected to result
      in the abandonment,  cancellation or unenforceability of such Intellectual
      Property Right.  The Company has no Knowledge that the use of its material
      Intellectual  Property  Rights  in the  business  of the  Company  and its
      Subsidiaries as presently  conducted or as presently  contemplated does or
      will  infringe  (i) any granted  patent or existing  trademark or (ii) any
      patent granted from a pending patent application.

            (ii) The execution, delivery and performance of this Agreement by
      the Company and the consummation by the Company of the transactions
      contemplated hereby will not (A) constitute a breach by the Company or its
      Subsidiaries of any instrument or agreement governing any Company
      Intellectual Property Rights, (B) pursuant to the terms of any license or
      agreement relating to any Company Intellectual Property Rights, cause the
      modification of any terms of any such license or agreement, including but
      not limited to the modification of the effective rate of any royalties or
      other payments provided for in any such license or agreement, (C) cause
      the forfeiture or termination of any Company Intellectual Property Rights
      under the terms thereof, (D) give rise to a right of forfeiture or
      termination of any Company Intellectual Property Rights under the terms
      thereof or (E) impair the right of the Company, its Subsidiaries, the
      Surviving Corporation or Parent to make, have made, offer for sale, use,
      sell, export or license any Company Intellectual Property Rights or
      portion thereof pursuant to the terms thereof, except in each case for
      those matters that individually or in the aggregate would not reasonably
      be expected to have a Material Adverse Effect on the Company.

            (r) Voting Requirements. The affirmative vote of a majority of the
                -------------------
      outstanding shares of Company Common Stock to adopt this Agreement (the
      "COMPANY STOCKHOLDER APPROVAL") is the only vote of the holders of any
       ----------------------------
      class or series of the Company's capital stock necessary to adopt this
      Agreement and approve the transactions contemplated hereby.

                                       21





            (s) Brokers. No broker, investment banker, financial advisor or
                -------
      other Person, other than Lazard Freres & Co., LLC, the fees and expenses
      of which will be paid by the Company, is entitled to any broker's,
      finder's, financial advisor's or other similar fee or commission in
      connection with the transactions contemplated by this Agreement based upon
      arrangements made by or on behalf of the Company.

            (t) Opinion of Financial Advisor. The Company has received the
                ----------------------------
      opinion of Lazard Freres & Co., LLC, dated the date hereof, to the effect
      that, as of such date, the Exchange Ratio is fair from a financial point
      of view to the holders of shares of Company Common Stock.

            (u) Accounting Matters. Neither the Company nor any of its
                ------------------
      Affiliates has taken or agreed to take any action or has Knowledge of any
      fact or circumstance that is reasonably likely to prevent Parent from
      accounting for the business combination to be effected by the Merger as a
      pooling of interests. The Company's management has consulted with and has
      made representations to its advisors regarding the Company's management's
      conclusion that the Merger will qualify as a pooling of interests business
      combination. Based upon the Company's management's consultations with its
      advisors, nothing has come to the Company's management's attention that
      would preclude the Merger from qualifying as a pooling of interests
      business combination, subject to the occurrence of any events between (i)
      the initiation and the consummation of the Merger and (ii) for a period of
      two years subsequent to the consummation of the Merger that would preclude
      Parent from accounting for the Merger as a pooling of interests business
      combination.

            (v) Certain Business Practices. Neither the Company nor any of its
                --------------------------
      Subsidiaries nor (to the Knowledge of the Company) any director, officer,
      agent or employee of the Company or any of its Subsidiaries has, in
      connection with the conduct of the business of the Company and its
      Subsidiaries, (i) used any funds for unlawful contributions, gifts,
      entertainment or other unlawful expenses relating to political activity,
      (ii) made any unlawful payment to foreign or domestic government officials
      or employees or to foreign or domestic political parties or campaigns or
      violated any provision of the Foreign Corrupt Practices Act of 1977, as
      amended, or (iii) made any other unlawful payment.

      Section 3.2. Representations and Warranties of Parent and Sub. Except as
                   ------------------------------------------------
expressly set forth in the Filed Parent SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by Parent to the Company
immediately prior to the execution of this Agreement and initialed on behalf of
the Company and Parent, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "PARENT
                                                                  ------
DISCLOSURE MEMORANDUM"), Parent and Sub represent and warrant to the Company as
---------------------
follows:

            (a) Organization, Standing and Corporate Power. Each of Parent and
                ------------------------------------------
      each of its Subsidiaries is a corporation duly organized, validly existing
      and, to the extent applicable, in good standing under the laws of the
      jurisdiction in which it is organized and has all 

                                       22





      requisite  corporate  power and  authority  to own,  lease and operate its
      properties  and to carry on its business as now being  conducted.  Each of
      Parent  and each of its  Significant  Subsidiaries  is duly  qualified  or
      licensed to do business and, to the extent applicable, is in good standing
      in each jurisdiction in which the nature of its business or the ownership,
      leasing  or  operation  of its  properties  makes  such  qualification  or
      licensing necessary, other than in such jurisdictions where the failure to
      be so qualified or licensed  individually  or in the  aggregate  would not
      reasonably be expected to have a Material Adverse Effect on Parent. Parent
      has made available to the Company prior to the execution of this Agreement
      complete  and  correct  copies of its  Certificate  of  Incorporation  and
      Bylaws,  and  the  comparable  organizational  documents  of  each  of its
      Significant Subsidiaries, in each case as amended to the date hereof.

            (b) Subsidiaries. All the outstanding shares of capital stock of, or
                ------------
      other equity interests in, each Subsidiary have been validly issued and
      are fully paid and nonassessable and are owned directly or indirectly by
      Parent free and clear of all Liens, and free of any restriction on the
      right to vote, sell or otherwise dispose of such capital stock or other
      ownership interests. Other than such Subsidiaries of Parent, neither
      Parent nor any Subsidiary owns a greater than 20% equity interest or
      similar interest in, or any interest convertible into or exchangeable or
      exercisable for a greater than 20% equity or similar interest in, any
      Person. Neither the Parent nor any of its Subsidiaries is subject to any
      obligation or requirement to make any material loan, capital contribution
      investment or similar expenditure to or in any Person, except for loans,
      capital contributions, investments or similar expenditures by Parent or
      any Parent Subsidiary to any Parent Subsidiary. Except as provided by
      applicable law, there are no restrictions of any kind which prevent the
      payment of dividends by any Subsidiary.

            Parent owns all the outstanding capital stock of Sub. Sub was formed
      solely for the purpose of effecting the Merger and, since the date of its
      incorporation, Sub has not engaged in any activities and has not incurred
      any liabilities or obligations other than in connection with its formation
      and in connection with or as contemplated by this Agreement.

            (c) Capital Structure. The authorized capital stock of Parent
                -----------------
      consists of 1,500,000,000 shares of Parent Common Stock 39,000,000 shares
      of Parent Class B Common Stock and 1,000,000 shares of Preferred Stock,
      par value $.001 per share ("PARENT PREFERRED STOCK"). At the close of
                                  ----------------------
      business on June 25, 2001, (i) 103,820,962 shares of Parent Common Stock
      were issued and outstanding, (ii) 4,762,000 shares of Parent Class B
      Common Stock were issued and outstanding, (iii) no shares of Parent Common
      Stock were held by Parent in its treasury, (iv) 16,536,718 shares of
      Parent Common Stock were issuable pursuant to outstanding Parent Stock
      Options, (v) no shares of Preferred Stock were issued or outstanding, and
      (vi) no shares of 10.5% cumulative preferred stock, par value $10.00 per
      share, were issued and outstanding. All outstanding shares of capital
      stock of Parent Common Stock are, and all shares of Parent Common Stock
      which may be issued pursuant 

                                       23





      to this  Agreement  will be,  when  issued  in  accordance  with the terms
      hereof, duly authorized,  validly issued, fully paid and nonassessable and
      not  subject to  preemptive  rights.  As of the date  hereof  there are no
      bonds, debentures,  notes or other indebtedness of Parent having the right
      to vote (or convertible into, or exchangeable  for,  securities having the
      right to vote) on any  matters on which  stockholders  of Parent may vote.
      Except (i) as set forth above in this Section 3.2(c),  and (ii) for shares
      of Parent Common Stock reserved for issuance under any plan or arrangement
      providing  for the grant of options to  purchase  shares of Parent  Common
      Stock to current or former officers,  directors,  employees or consultants
      of Parent or its Subsidiaries (the "PARENT STOCK PLANS") or resulting from
                                          ------------------
      the issuance of shares of Parent Common Stock pursuant to options or other
      benefits issued or granted pursuant to the Parent Stock Plans  outstanding
      as of the close of  business on June 25,  2001,  as of the date hereof (x)
      there are not issued,  issuable,  reserved for issuance or outstanding (A)
      any shares of capital stock or other voting securities of Parent,  (B) any
      securities of Parent  convertible  into or exchangeable or exercisable for
      shares of capital stock or voting securities of Parent,  (C) any warrants,
      calls,  options  or other  rights to  acquire  from  Parent or any  Parent
      Subsidiary, and no obligation of Parent or any Parent Subsidiary to issue,
      any capital stock,  voting  securities or securities  convertible  into or
      exchangeable  or  exercisable  for capital  stock or voting  securities of
      Parent, or (D) any stock  appreciation  rights or rights to receive shares
      of Parent Common Stock on a deferred  basis granted under the Parent Stock
      Purchase  Plans  or  otherwise;  and (y)  there  are  not any  outstanding
      obligations of Parent or any Parent  Subsidiary to  repurchase,  redeem or
      otherwise  acquire any such  securities  or to issue,  deliver or sell, or
      cause to be issued, delivered or sold, any such securities. Neither Parent
      nor any  Significant  Subsidiary is a party to any voting  agreement  with
      respect to the voting of any such securities.  Except as set forth in this
      Section  3.2(c)  and in the Joint  Venture  Agreement  among  Parent,  TMP
      Worldwide Pty Limited,  Monster.com A&NZ Pty Limited, ninemsn Pty Limited,
      Turustar  Pty  Limited  and  Clycal  Pty  Limited,  there  are no  issued,
      issuable, reserved for issuance or outstanding (A) securities of Parent or
      any Parent  Significant  Subsidiary  convertible  into or  exchangeable or
      exercisable  for shares of capital  stock or other  voting  securities  or
      ownership  interests in any Parent Significant  Subsidiary,  (B) warrants,
      calls,  options or other rights to acquire from Parent or any  Significant
      Subsidiary  of  Parent,  and no  obligation  of Parent or any  Significant
      Subsidiary of Parent to issue,  any capital  stock,  voting  securities or
      other  ownership  interests  in,  or any  securities  convertible  into or
      exchangeable  or exercisable for any capital stock,  voting  securities or
      ownership  interests  in,  any  Significant  Subsidiary  of  Parent or (C)
      obligations  of  Parent  or  any  Significant   Subsidiary  of  Parent  to
      repurchase, redeem or otherwise acquire any such outstanding securities of
      the Significant  Subsidiaries  of Parent or to issue,  deliver or sell, or
      cause to be issued, delivered or sold, any such securities.

            (d) Authority; Noncontravention. Each of Parent and Sub has all
                ---------------------------
      requisite corporate power and authority to enter into this Agreement and
      to consummate the transactions contemplated by this Agreement. The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated by this Agreement have been duly authorized by
      all necessary corporate action on the part of Parent and Sub and no other

                                       24





      corporate proceedings on the part of Parent or Sub are necessary to
      authorize this Agreement or to consummate the transactions contemplated
      hereby, subject, in the case of the Merger, to the filing of the
      Certificate of Merger. The Board of Directors of each of Parent and Sub
      have unanimously approved this Agreement, determined that this Agreement
      and the transactions contemplated hereby are fair to and in the best
      interests of Parent and Sub and their respective stockholders and declared
      that the Merger is advisable. This Agreement has been duly executed and
      delivered by Parent and Sub, as applicable, and, assuming the due
      authorization, execution and delivery by each of the other parties
      thereto, constitute legal, valid and binding obligations of Parent and
      Sub, as applicable, enforceable against Parent and Sub, as applicable, in
      accordance with its terms (except insofar as enforceability may be limited
      by applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar laws affecting creditors' rights generally or by principles
      governing availability of equitable remedies).

            The execution and delivery of this Agreement does not, and the
      consummation of the Merger and the other transactions contemplated by this
      Agreement and compliance with the provisions of this Agreement will not,
      conflict with, or result in any violation of, or default (with or without
      notice or lapse of time, or both) under, or give rise to a right of
      termination, cancellation or acceleration of any obligation or to loss of
      a benefit under, or result in the creation of any Lien in or upon any of
      the properties or assets of Parent or any of its Subsidiaries under (i)
      the Certificate of Incorporation or Bylaws of Parent or the comparable
      organizational documents of any of its Subsidiaries, (ii) any loan or
      credit agreement, bond, note, mortgage, indenture, lease or other
      contract, agreement, obligation, commitment, arrangement, understanding,
      instrument, permit or license applicable to Parent or any of its
      Subsidiaries or their respective properties or assets or (iii) subject to
      the governmental filings and other matters referred to in the following
      paragraph, any (A) statute, law, ordinance, rule or regulation or (B)
      judgment, order or decree, in each case applicable to Parent or any of its
      Subsidiaries or their respective properties or assets, other than, in the
      case of clauses (ii) and (iii), any such conflicts, violations, defaults,
      rights, cancellations, accelerations, losses or Liens that individually or
      in the aggregate would not reasonably be expected to have a Material
      Adverse Effect on Parent or to prevent or materially delay the
      consummation of the transactions contemplated by this Agreement.

            No consent, approval, order or authorization of, action by or in
      respect of, or registration, declaration or filings with, any Governmental
      Entity is required by or with respect to Parent or any of its Subsidiaries
      in connection with the execution and delivery of this Agreement by Parent
      and Sub or the consummation by Parent and Sub of the Merger or the other
      transactions contemplated by this Agreement, except for (1) the filing of
      a premerger notification and report form under the HSR Act and any
      applicable filings and approvals under similar foreign antitrust laws and
      regulations, (2) the filing with the SEC of (A) the Form S-4 and (B) such
      reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as
      may be required in connection with this Agreement or the Company Voting
      Agreements and the transactions contemplated by this Agreement or the
      Company Voting 

                                       25





      Agreements, (3) the filing of the Certificate of Merger with the Secretary
      of State of the  State of  Delaware  and  appropriate  documents  with the
      relevant  authorities  of other states in which the Parent is qualified to
      do business,  (4) such filings with  Governmental  Entities to satisfy the
      applicable  requirements of state  securities or "blue sky" laws, (5) such
      filings with and approvals of Nasdaq to permit the shares of Parent Common
      Stock  that are to be issued  pursuant  to the  Merger to be traded on the
      Nasdaq  National Market and (6) such other  consents,  approvals,  orders,
      authorizations,  registrations,  declarations  and  filings the failure of
      which to be obtained or made  individually or in the aggregate,  would not
      reasonably be expected to have a Material  Adverse  Effect on Parent or to
      prevent  or  materially   delay  the   consummation  of  the  transactions
      contemplated by this Agreement.

            (e) Parent SEC Documents. Except as listed in Section 3.2(c) of the
                --------------------
      Parent Disclosure Memorandum, Parent has timely filed all reports,
      schedules, forms, statements and other documents (including exhibits and
      other information incorporated therein) with the SEC required to be filed
      by the Parent since January 1, 1999 (the "PARENT SEC DOCUMENTS"). No
                                                --------------------
      Parent Subsidiary is required to file any form, report, registration
      statement, prospectus or other document with the SEC. As of their
      respective dates (and, if amended or superseded by a filing prior to the
      date of this Agreement or the Closing Date, then on the date of such
      filing), the Parent SEC Documents complied in all material respects with
      the requirements of the Securities Act or the Exchange Act, as the case
      may be and none of the Parent SEC Documents contained any untrue statement
      of a material fact or omitted to state a 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. The
      Parent SEC Documents filed since December 31, 2000, together with any
      public announcements in a Dow Jones News Release made by Parent after the
      date hereof taken as a whole, as of the Effective Time will 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 existing as of the Effective Time, not
      misleading. The financial statements (including the related notes) of
      Parent included in the Parent SEC Documents, as of their respective dates,
      complied in all material respects with applicable accounting requirements
      and the published rules and regulations of the SEC with respect thereto,
      were prepared in accordance with GAAP applied on a consistent basis during
      the periods involved (except as may be indicated in the notes thereto) and
      (except as amended or superseded by a filing prior to the date of this
      Agreement) fairly presented the financial position of Parent and its
      consolidated Subsidiaries as of the dates thereof and the consolidated
      results of their operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments not material in amount). Except (i) as set forth in the Parent
      SEC Documents filed since December 31, 2000 and (ii) for liabilities set
      forth in this Agreement, neither Parent nor any of its Subsidiaries has
      any liabilities or obligations of any nature (whether accrued, absolute,
      contingent or otherwise) which, individually or in the aggregate, would
      reasonably be expected to have a Material Adverse Effect on Parent. For
      purposes of this Agreement, a "FILED PARENT SEC 
                                     ----------------


                                       26




      DOCUMENT" shall mean a Parent SEC Document filed by Parent and publicly
      -------- 
      available prior to the date of this Agreement.

            (f) Information Supplied. None of the information supplied or to be
                --------------------
      supplied by Parent or Sub specifically for inclusion or incorporation by
      reference in the Form S-4 will, at the time the Form S-4 is filed with the
      SEC, at any time it is supplemented or amended or at the time it becomes
      effective under the Securities Act, contain any untrue statement of a
      material fact or omit to state any material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they are made, not misleading. The Form S-4 will
      comply in all material respects with the requirements of the Securities
      Act and the Exchange Act, respectively, in each case as applicable to
      Parent and Sub, except that no representation or warranty is made by
      Parent or Sub with respect to statements made or incorporated by reference
      therein based on information supplied by the Company specifically for
      inclusion or incorporation by reference in the Form S-4.

            (g) Absence of Certain Changes or Events. Except as set forth in the
                ------------------------------------         
      Filed Parent SEC Documents filed after December 31, 2000 and for
      transactions contemplated or permitted by this Agreement, since December
      31, 2000 (i) Parent and its Subsidiaries have conducted their businesses
      in the ordinary course consistent with past practice and (ii) there has
      not been a Material Adverse Effect on Parent. Except as set forth in the
      Filed Parent SEC Documents and for actions in the ordinary course of
      business, since December 31, 2000, neither Parent nor any Parent
      Subsidiary has taken any action, or failed to take any action, which if
      such action or failure occurred during the period from the date of this
      Agreement to the Effective Time would constitute a breach or violation of
      Section 4.1(b), and neither Parent nor any Parent Subsidiary has
      authorized, or committed or agreed, to take any of such actions.

            (h) Litigation. There is no suit, action or proceeding pending or,
                ----------
      to the Knowledge of Parent, overtly threatened against or affecting Parent
      or any of its Subsidiaries or any of their respective properties that
      individually or in the aggregate would reasonably be expected to have a
      Material Adverse Effect on Parent, nor is there any judgment, decree,
      injunction, rule, order, action, demand or requirement of any Governmental
      Entity or arbitrator outstanding against, or, to the Knowledge of Parent,
      any investigation by any Governmental Entity involving, Parent or any of
      its Subsidiaries that individually or in the aggregate would reasonably be
      expected to have a Material Adverse Effect on Parent.

            (i) Compliance with Laws. (i) Each of Parent and its Subsidiaries is
                --------------------
      in compliance with all Legal Provisions applicable to its business or
      operations, except for instances of noncompliance that individually or in
      the aggregate would not reasonably be expected to have a Material Adverse
      Effect on Parent. Since January 1, 1998, neither Parent nor any of its
      Subsidiaries has received any written notice from any Governmental Entity
      regarding any actual or possible violation of, or failure to comply with,
      any Legal Provisions, except for such violations or failures to comply
      that individually or in the aggregate would not 

                                       27




      reasonably be expected to have a Material  Adverse Effect on Parent.  Each
      of Parent and its Subsidiaries has in effect all Permits  necessary for it
      to own,  lease or operate  its  properties  and assets and to carry on its
      business and operations as now  conducted,  except for the failure to have
      such Permits that individually or in the aggregate would not reasonably be
      expected to have a Material  Adverse Effect on Parent.  There has occurred
      no default  under,  or violation of, any such Permit,  except for defaults
      under,  or violations  of, Permits that  individually  or in the aggregate
      would not  reasonably  be  expected to have a Material  Adverse  Effect on
      Parent.  The Merger,  in and of itself,  would not cause the revocation or
      cancellation  of any such Permit that  individually or in the aggregate is
      reasonably likely to have a Material Adverse Effect on Parent.

            (ii) Except for those matters that individually or in the aggregate
      would not reasonably be expected to have a Material Adverse Effect on
      Parent: (A) each of Parent and its Subsidiaries is, and has been, in
      compliance with all applicable Environmental Laws; (B) during the period
      of ownership or operation by Parent or its Subsidiaries of any of its
      currently or previously owned, leased or operated properties, no Hazardous
      Material has been treated or disposed of, and there have been no Releases
      or threatened Releases of Hazardous Material at, in, on, under or
      affecting such properties or any contiguous site; (C) prior to the period
      of ownership or operation by Parent or its Subsidiaries of any of its
      currently or previously owned, leased or operated properties, to the
      Knowledge of Parent, no Hazardous Material was treated, stored or disposed
      of, and there were no Releases of Hazardous Material at, in, on, under or
      affecting any such property or any contiguous site; and (D) neither Parent
      nor its Subsidiaries have received any written notice of, or entered into
      or assumed by contract, judicial or administrative settlement, or
      operation of law any indemnification obligation, order, settlement or
      decree relating to: (1) any violation of any Environmental Laws or the
      institution or pendency of any suit, action, claim, proceeding or
      investigation by any Governmental Entity or any third party in connection
      with any alleged violation of Environmental Laws or any Release of
      Hazardous Materials, (2) the response to or remediation of Hazardous
      Material at or arising from any of Parent's or its Subsidiaries'
      activities or properties or any other properties or (3) payment for any
      response action relating to or remediation of Hazardous Material at or
      arising from any of Parent's or its Subsidiaries' properties, activities,
      or any other properties.

            (j) Accounting Matters. Neither Parent nor any of its Affiliates has
                ------------------
      taken or agreed to take any action that would prevent Parent from
      accounting for the business combination to be effected by the Merger as a
      pooling of interests. Parent's management has consulted with and has made
      representations to its advisors regarding Parent's management's conclusion
      that the Merger will qualify as a pooling of interests business
      combination. Based upon Parent's management's consultations with its
      advisors, nothing has come to Parent's management's attention that would
      preclude the Merger from qualifying as a pooling of interests business
      combination, subject to the occurrence of any events between (i) the
      initiation and the consummation of the Merger and (ii) for a period of two
      years subsequent 

                                       28




      to  the  consummation  of the  Merger  that  would  preclude  Parent  from
      accounting for the Merger as a pooling of interests business combination.

            (k) Tax Matters. Each of Parent and its Subsidiaries has timely
                -----------
      filed all Tax Returns required to be filed by it, or requests for
      extensions to file such Tax Returns have been timely filed and granted and
      have not expired, and all such filed Tax Returns are complete and accurate
      in all respects, except for such failures to (i) file, (ii) have
      extensions granted that remain in effect or (iii) be complete and accurate
      in all respects, as applicable, as would not, individually or in the
      aggregate, reasonably be expected to have a Material Adverse Effect on
      Parent. Parent and each of its Subsidiaries has paid (or Parent has paid
      on its behalf) all Taxes required to be paid by it, except for such
      failures to pay as would not, individually or in the aggregate, reasonably
      be expected to have a Material Adverse Effect on Parent. The most recent
      financial statements contained in the Filed Parent SEC Documents reflect
      an adequate reserve for all Taxes payable by Parent and its Subsidiaries
      for all taxable periods and portions thereof accrued through the date of
      such financial statements, except for such failures to reflect such
      reserves as would not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect on Parent. Neither Parent nor
      any of its Affiliates have taken or agreed to take any action or has
      Knowledge of any fact or circumstance that is reasonably likely to prevent
      the Merger from qualifying as a reorganization within the meaning of
      Section 368(a) of the Code.

            (l) Brokers. No broker, investment banker, financial advisor or
                -------
      other Person, other than Deutsche Banc Alex. Brown, the fees and expenses
      of which will be paid by Parent, is entitled to any broker's, finder's,
      financial advisors or other similar fee or commission in connection with
      the transactions contemplated by this Agreement based upon arrangements
      made by or on behalf of Parent.

            (m) Labor Relations. There is no pending or, to the knowledge of
                ---------------
      Parent, overtly threatened union organizational campaign effort,
      collective bargaining negotiations, bargaining impasse, implementation of
      final offer, boycott, work stoppage, slowdown, work-to-rule or
      intermittent strike against Parent or any of its Subsidiaries, no lockout
      is in effect and no permanent or temporary strike replacements are
      currently employed at any Parent facility, in each case except as would
      not be reasonably expected to have a Material Adverse Effect on Parent.

            (n) No  Stockholder  Vote. No vote of the  stockholders  of Parent
                ---------------------
      is  necessary  to  approve  the  issuance  of  Parent  Common  Stock  in
      connection with the Merger.

            (o) Ownership of Company Capital Stock. Neither Parent nor Sub is,
                ----------------------------------
      nor at any time during the last three years has it been, an "interested
      stockholder" of the Company as defined in Section 203 of the DGCL (other
      than as contemplated by this Agreement). Neither Parent nor Sub owns
      (directly or indirectly, beneficially or of record) or is a party to any
      agreement, arrangement or understanding for the purpose of acquiring,
      holding, voting or 

                                       29





      disposing of, in each case, any shares of capital stock of the Company
      (other than as contemplated by this Agreement).

            (p)  Intellectual Property.
                 ---------------------

            (i) Each of the Parent and its Subsidiaries owns, or is validly
      licensed or otherwise has the right to use (in each case free and clear of
      all Liens) all Intellectual Property Rights which if the Parent or its
      Subsidiaries did not own or validly license or otherwise have the right to
      use would reasonably be expected to have a Material Adverse Effect on the
      Parent. Except as, in the aggregate, would not reasonably be expected to
      have a Material Adverse Effect on the Parent, (i) the use of any
      Intellectual Property Rights by the Parent and its Subsidiaries does not
      infringe on or otherwise violate the rights of any Person and is in
      accordance with any applicable license pursuant to which the Parent or any
      Subsidiary of the Parent acquired the right to use any Intellectual
      Property Rights; (ii) no Person is challenging or, to the Knowledge of the
      Parent, infringing on or otherwise violating any right of the Parent or
      any of its Subsidiaries with respect to any Intellectual Property Right
      owned by and/or licensed to the Parent or its Subsidiaries; and (iii)
      neither the Parent nor any of its Subsidiaries has received any written
      notice or otherwise has Knowledge of any pending claim, order or
      proceeding with respect to any Intellectual Property Right used by the
      Parent and its Subsidiaries and to its Knowledge no Intellectual Property
      Right owned and/or licensed by the Parent or its Subsidiaries is being
      used or enforced in a manner that would reasonably be expected to result
      in the abandonment, cancellation or unenforceability of such Intellectual
      Property Right. The Parent has no Knowledge that the use of its material
      Intellectual Property Rights in the business of the Parent and its
      Subsidiaries as presently conducted or as presently contemplated does or
      will infringe (i) any granted patent or existing trademark or (ii) any
      patent granted from a pending patent application.

            (ii) The execution, delivery and performance of this Agreement by
      the Parent and the consummation by the Parent of the transactions
      contemplated hereby will not (A) constitute a breach by the Parent or its
      Subsidiaries of any instrument or agreement governing any Parent
      Intellectual Property Rights, (B) pursuant to the terms of any license or
      agreement relating to any Parent Intellectual Property Rights, cause the
      modification of any terms of any such license or agreement, including but
      not limited to the modification of the effective rate of any royalties or
      other payments provided for in any such license or agreement, (C) cause
      the forfeiture or termination of any Parent Intellectual Property Rights
      under the terms thereof, (D) give rise to a right of forfeiture or
      termination of any Parent Intellectual Property Rights under the terms
      thereof or (E) impair the right of the Parent or its Subsidiaries to make,
      have made, offer for sale, use, sell, export or license any Parent
      Intellectual Property Rights or portion thereof pursuant to the terms
      thereof, except in each case for those matters that individually or in the
      aggregate would not reasonably be expected to have a Material Adverse
      Effect on the Parent.


                                       30




                                   ARTICLE IV
                    COVENANTS RELATING TO CONDUCT OF BUSINESS

      Section 4.1.   Conduct of Business.
                     -------------------

      (a) Conduct of Business by the Company. During the period from the date of
          ----------------------------------
this Agreement to the Effective Time, or the date, if any, on which this
Agreement is earlier terminated pursuant to Section 7.1, and except as may be
agreed in writing by Parent, as may be expressly permitted pursuant to this
Agreement or as set forth in Section 4.1 of the Company Disclosure Memorandum,
the Company shall, and shall cause its Subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice and
in compliance in all material respects with all applicable Legal Provisions and,
to the extent consistent therewith, use all commercially reasonable efforts to
preserve intact its current business organizations, keep available the services
of its current officers and key employees and preserve its relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with them with the intention that its goodwill and ongoing
business shall be preserved. Without limiting the generality of the foregoing,
during the period from the date of this Agreement to the Effective Time, or the
date, if any, on which this Agreement is earlier terminated pursuant to Section
7.1, and except as may be agreed in writing by Parent, as may be expressly
permitted pursuant to this Agreement or as set forth in Section 4.1 of the
Company Disclosure Memorandum, the Company shall not, and shall not permit any
of its Subsidiaries to:

            (i) (A) declare, set aside or pay any dividends on, or make any
      other distributions (whether in cash, stock or property), in respect of,
      any of its capital stock, other than dividends or distributions by a
      direct or indirect wholly owned Subsidiary of the Company to its parent,
      (B) split, combine or reclassify any of its capital stock or amend the
      terms of any outstanding securities (including Stock Options) or (C)
      purchase, redeem or otherwise acquire any shares of its capital stock or
      any other securities;

            (ii) issue, deliver, sell, grant, pledge or otherwise encumber or
      subject to any Lien any shares of its capital stock, any other securities
      convertible into or exercisable or exchangeable for, or any rights,
      warrants or options to acquire, any such shares or securities (other than
      the issuance of shares of Company Common Stock upon the exercise of Stock
      Options outstanding on the date hereof or permitted to be granted after
      the date hereof as set forth in Section 4.1 of the Company's Disclosure
      Memorandum and in accordance with their terms on the date hereof) or any
      "phantom" stock, "phantom" stock rights, stock appreciation rights or
      stock based performance units;
            (iii) amend its  Certificate of  Incorporation  or Bylaws or other
      comparable charter or organizational documents;

            (iv) acquire or agree to acquire by merging or consolidating with,
      or by purchasing assets of, or by any other manner, any Person or
      division, business or equity interest of any 


                                       31





      Person except for purchases of assets in the ordinary course of business
      which do not constitute the purchase of a Person's business;

            (v) except in the ordinary course of business, sell, lease, license,
      mortgage or otherwise encumber or subject to any Lien or otherwise dispose
      of any of its properties or assets (including securitizations);

            (vi) (A) except for borrowings under the Company's existing credit
      facilities, incur any indebtedness for borrowed money or guarantee any
      such indebtedness of another Person, issue or sell any debt securities or
      warrants or other rights to acquire any debt securities of the Company or
      any of its Subsidiaries, guarantee any debt securities of another Person,
      enter into any "keep well" or other agreement to maintain any financial
      statement condition of another Person or enter into any arrangement having
      the economic effect of any of the foregoing or (B) make any loans,
      advances or capital contributions to, or investments in, any other Person,
      other than in the ordinary course of business or to or in any direct or
      indirect wholly-owned Subsidiary of the Company (or any foreign
      Subsidiary of the Company with nominal non-Company ownership);

            (vii) make or agree to make any new capital expenditure (including
      leases) or enter into any agreement or agreements providing for payments
      which are in excess of $100,000 individually or $500,000 in the aggregate,
      excluding capital expenditures or agreements provided for or contemplated
      by the capital budgets approved by the Company's Board of the Directors
      prior to the date hereof (copies of which have been provided to Parent);

            (viii) (A) pay, discharge, settle or satisfy any claims,
      liabilities, obligations or litigation (absolute, accrued, asserted or
      unasserted, contingent or otherwise) in excess of $100,000 individually
      and $250,000 in the aggregate, other than the payment, discharge,
      settlement or satisfaction in the ordinary course of business or in
      accordance with their terms, of liabilities disclosed, reflected or
      reserved against in the most recent consolidated financial statements (or
      the notes thereto) of the Company included in the Filed Company SEC
      Documents or incurred since the date of such financial statements in the
      ordinary course of business, or (B) cancel any indebtedness in excess of
      $10,000 individually and $50,000 in the aggregate, other than in the
      ordinary course of business;

            (ix) modify, amend or terminate any Material Contract to which the
      Company or any of its Subsidiaries is a party in a manner that would
      reasonably be expected to have a Material Adverse Effect on the Company;

            (x) enter into any contract, agreement, binding arrangement or
      understanding that would be a Material Contract, other than pursuant to
      any such contracts, agreements, arrangements or understandings currently
      in place (that have been disclosed in writing to Parent prior to the date
      hereof) in accordance with their terms as of the date hereof;


                                       32





            (xi) except as otherwise set forth in this Agreement or as required
      to comply with applicable Legal Provisions or contractual commitments
      existing as of the date hereof, (A) adopt, enter into, terminate or amend
      in any material respect (I) any collective bargaining agreement or Benefit
      Plan or (II) any other agreement, plan or policy involving the Company or
      its Subsidiaries, and one or more of its current or former directors,
      officers, or other executive employees, (B) increase in any manner the
      compensation, bonus or fringe or other benefits of, or pay any bonus to,
      any current or former officer, director or employee, other than in the
      case of employees who are neither current nor former officers or
      directors, increases made in connection with normal periodic reviews and
      related compensation and benefit increases which are consistent with past
      practice, (C) pay any benefit or amount not required under any Benefit
      Plan, (D) increase in any manner the severance or termination pay of any
      current or former director, officer or other executive employee, (E) enter
      into or amend any employment, deferred compensation, consulting,
      severance, termination or indemnification agreement, arrangement or
      understanding with any current or former officer, director or other
      executive employee, (F) grant any awards under any bonus, incentive,
      performance or other compensation plan or arrangement or Benefit Plan
      (including the grant of stock options, stock appreciation rights,
      performance units, restricted stock, "phantom" stock or other stock
      related awards), or remove any existing restrictions in any Benefit Plans
      or agreements or awards made thereunder, (G) amend or modify any Stock
      Option, (H) take any action to fund or in any other way secure the payment
      of compensation or benefits under any employee plan, agreement, contract
      or arrangement or Benefit Plan, or (I) take any action to accelerate the
      vesting of payment of any compensation or benefit under any Benefit Plan;

            (xii)  except as required by GAAP,  make any change in  accounting
      methods, principles or practices;

            (xiii) transfer or license to any Person or otherwise extend, amend
      or modify any rights to the Intellectual Property Rights of the Company
      and its Subsidiaries, other than in the ordinary course of business or
      pursuant to any contracts, agreements, arrangements or understandings
      currently in place (that have been disclosed in writing to Parent prior to
      the date of this Agreement);

            (xiv) take any action (including any action otherwise permitted by
      this Section 4.1(a)) that would reasonably be expected to prevent the
      Merger from qualifying as a "pooling of interests" for accounting purposes
      or as a "reorganization" under Section 368(a) of the Code;

            (xv) enter into any hedging, option, derivative or other similar
      transaction of any foreign exchange position or contract for the exchange
      of currency other than in the ordinary course of business and consistent
      with past practice;

            (xvi) [RESERVED];


                                       33



        

            (xvii) take any action that would reasonably be expected to prevent,
      impair or materially delay the ability of the Company, Parent or Sub to
      consummate the transactions contemplated by this Agreement;

            (xviii) (A) change any material tax election; (B) change any annual
      tax accounting period or method of tax accounting in any material respect;
      (C) file any amended Tax Return; (D) enter into any closing agreement
      relating to any material Tax; (E) settle any material Tax claim or
      assessment or (F) surrender any right to claim a material Tax refund or to
      any extension or waiver of the limitations period applicable to any
      material Tax claim or assessment; or

            (xix)  authorize,   or  commit  or  agree  to  take,  any  of  the
      foregoing actions.

      (b) Conduct of Business by Parent. During the period from the date of this
          -----------------------------
Agreement to the Effective Time or the date, if any, on which this Agreement is
earlier terminated pursuant to Section 7.1, and except as may be agreed in
writing by the Company, or as may be contemplated by this Agreement or Section
4.1(b) of the Parent Disclosure Memorandum, (i) Parent shall and shall cause its
Subsidiaries to carry on their respective businesses in the ordinary course
consistent with past practice and in compliance in all material respects with
all applicable Legal Provisions and, to the extent consistent therewith, use all
commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers and key
employees and preserve its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them with the
intention that its goodwill and ongoing business shall be preserved. Parent
shall not, and shall not permit any of its Subsidiaries to:

            (i) (A) declare, set aside or pay any dividends on, or make any
      other distributions (whether in cash, stock or property), in respect of,
      any of its capital stock, other than dividends or distributions by a
      direct or indirect wholly owned Subsidiary of Parent to its parent, or (B)
      split, combine or reclassify any of its capital stock;

            (ii) amend its Certificate of  Incorporation  or other  comparable
      charter or organizational documents;

            (iii) except as required by GAAP,  make any changes in  accounting
      methods, principles or practices;

            (iv) take any action that would reasonably be expected to prevent,
      impair or materially delay the ability of the Company, Parent or Sub to
      consummate the transactions contemplated by this Agreement;

            (v) take any action (including any action otherwise permitted by
      this Section 4.1(b)) that would reasonably be expected to prevent the
      Merger from qualifying as a "pooling of interests" for accounting purposes
      or as a "reorganization" under Section 368(a) of the Code;


                                       34





            (vi) cause Sub to engage in any activities or incur any liabilities
      or obligations other than in connection with or as contemplated by this
      Agreement; or

            (vii)  authorize,   or  commit  or  agree  to  take,  any  of  the
      foregoing actions.

      Section 4.2.  No Solicitation.
                    ---------------

      (a) The Company agrees that neither it nor any of its Subsidiaries nor any
of the officers and directors of the Company or its Subsidiaries shall, and that
it shall use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker, attorney
or accountant retained by the Company or any of its Subsidiaries) not to,
directly or indirectly, (i) initiate, solicit, encourage or knowingly facilitate
any inquiries or the making of any proposal or offer with respect to, or a
transaction to effect, a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving it or any of its Significant Subsidiaries (or any group of
Subsidiaries which taken together could constitute a Significant Subsidiary), or
any purchase or sale of 15% or more of the consolidated assets (including stock
of its Subsidiaries) of the Company and its Subsidiaries, taken as a whole, or
any purchase or sale of, or tender or exchange offer for, its equity securities
that, if consummated, would result in any Person (or the stockholders of such
Person) beneficially owning securities representing 15% or more of its total
voting power (or of the surviving parent entity in such transaction) or the
voting power of any of its Significant Subsidiaries (any such proposal, offer or
transaction (other than a proposal or offer made by Parent or an Affiliate
thereof) a "TAKEOVER PROPOSAL"), (ii) have any discussion with or provide any
            -----------------
confidential information or data to any Person relating to a Takeover Proposal,
or engage in any negotiations concerning a Takeover Proposal, or knowingly
facilitate any effort or attempt to make or implement a Takeover Proposal, (iii)
approve or recommend, or propose publicly to approve or recommend, any Takeover
Proposal or (iv) approve or recommend, or propose to approve or recommend, or
execute or enter into, any letter of intent, agreement in principle, merger
agreement, acquisition agreement, option agreement or other similar agreement or
propose publicly or agree to do any of the foregoing related to any Takeover
Proposal.

      (b) Notwithstanding anything in this Agreement to the contrary, the
Company (and its Board of Directors) shall be permitted to (i) comply with
applicable law (including Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act) with regard to a Takeover Proposal or make any other disclosure to
the Company's stockholders if, in the good faith judgment of the Company, after
taking into account the advice of outside counsel, failure to so disclose would
be inconsistent with applicable law (and any such disclosure shall not be deemed
a change, amendment or modification in the Company's (or its Board of
Directors') recommendation to the stockholders of the Company), (ii) change its
recommendation to its stockholders or (iii) engage in discussions or
negotiations with, or provide any information to any Person in response to, an
unsolicited bona fide written Takeover Proposal by such Person that did not
result from a breach of Section 4.1(a) if and only to the extent 


                                       35





that, in any such case referred to in clause (ii) or (iii), (A) the Company
Stockholders Meeting shall not have occurred, (B) (I) in the case of clause (ii)
above, it has received an unsolicited bona fide written Takeover Proposal from a
third party that did not result from a breach of Section 4.1(a) and its Board of
Directors  concludes in good faith that such  Takeover  Proposal  constitutes  a
Superior  Proposal and such  withdrawal is in connection with the termination of
this  Agreement in accordance  with the provisions of Section 7.1(f) and (II) in
the case of clause (iii) above,  its Board of Directors  concludes in good faith
that  there  is a  reasonable  likelihood  that  such  Takeover  Proposal  could
constitute a Superior  Proposal and (C) prior to providing  any  information  or
data to any Person or entering into discussions or negotiations with any Person,
it notifies Parent promptly of such inquiries,  proposals or offers received by,
any such  information  requested  from, or any such  discussions or negotiations
sought to be initiated or continued with, any of its representatives indicating,
in connection  with such notice,  the name of such Person and the material terms
and conditions of any inquiries, proposals or offers and enters into a customary
and reasonable  confidentiality  agreement no less favorable to the Company than
the  Confidentiality  Agreement.  The Company  agrees that it will promptly keep
Parent reasonably  informed of the status and terms of any inquiries,  proposals
or offers and the status and terms of any discussions or negotiations, including
the  identity  of the Person  making  such  inquiry,  proposal or offer and will
deliver to Parent the  information  delivered  to such  Person to the extent not
previously  provided to Parent.  The Company agrees that it will, and will cause
its officers,  directors and  representatives to, immediately cease and cause to
be terminated any  activities,  discussions or  negotiations  existing as of the
date of this Agreement with any Person (other than the parties hereto) conducted
heretofore with respect to any Takeover Proposal, and Parent agrees that no such
prior  activity  shall  be  considered   solicitation  of  a  Takeover  Proposal
hereunder.  The  Company  agrees  that it will use  reasonable  best  efforts to
promptly   inform  its   directors,   officers,   key   employees,   agents  and
representatives  of the  obligations  undertaken  in this Section  4.2.  Without
limiting the foregoing,  it is understood that any violation of the restrictions
set forth in this  Section  4.2 by any officer or director of the Company or any
of its  Subsidiaries  or any  investment  banker,  attorney or other  advisor or
representative  of the Company or any of its  Subsidiaries,  whether or not such
Person is purporting to act on behalf of the Company or any of its  Subsidiaries
or otherwise, shall be deemed to be a breach of this Section 4.2 by the Company.
Nothing in this Section 4.2 shall (i) permit  Parent or the Company to terminate
this Agreement  (except as specifically  provided in Article VII) or (ii) affect
or limit any other  obligation  of Parent or the  Company  under this  Agreement
except as explicitly provided herein.  Notwithstanding  anything to the contrary
in this  Agreement,  if requested  by a third  party,  the Company may waive any
"standstill" or similar provisions in favor of the Company in any agreement with
such third party if the Board of Directors  reasonably  believes that there is a
reasonable likelihood that third party will submit a bona fide Takeover Proposal
that could  constitute  a Superior  Proposal,  and any such waiver  shall not be
construed as a breach of this Section 4.2.


                                    ARTICLE V
                              ADDITIONAL AGREEMENTS

      Section  5.1.  Preparation  of the Form S-4 and the  Proxy  Statement;  
                     -------------------------------------------------------
Stockholders Meetings
---------------------


                                       36





      (a) As soon as practicable following the date of this Agreement, the
Company and Parent shall prepare and file with the SEC the Proxy Statement and
Parent shall prepare and file with the SEC the Form S-4, in which the Proxy
Statement will be included as a prospectus. Subject to Section 4.2, each of the
Company and Parent shall use its reasonable best efforts to (i) have the Form
S-4 declared effective under the Securities Act as promptly as practicable after
such filing and (ii) cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after the Form S-4 is declared effective
under the Securities Act. Parent shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the issuance
of Parent Common Stock in the Merger and upon the exercise of Adjusted Options,
and the Company shall furnish all information concerning the Company and the
holders of Company Common Stock as may be reasonably requested in connection
with any such action. The Form S-4 and the Proxy Statement shall comply as to
form in all material respects with the applicable provisions of the Securities
Act and the Exchange Act. The Company and Parent shall, as promptly as
practicable after receipt thereof, provide the other party copies of any written
comments and advise the other party of any oral comments, with respect to the
Proxy Statement received from the SEC. Parent shall provide the Company with a
reasonable opportunity to review and comment on any amendment or supplement to
the Form S-4 prior to filing such with the SEC, and shall provide the Company
with a copy of all such filings made with the SEC. Notwithstanding any other
provision herein to the contrary, no amendment or supplement (including by
incorporation by reference) to the Proxy Statement or the Form S-4 shall be made
without the approval of both parties, which approval shall not be unreasonably
withheld or delayed; PROVIDED, that with respect to documents filed by a party
which are incorporated by reference in the Form S-4 or Proxy Statement, this
right of approval shall apply only with respect to information relating to the
other party or its business, financial condition or results of operations or the
transactions contemplated by this Agreement. No filing of, or amendment or
supplement to, the Form S-4 shall be made by Parent, or to the Proxy Statement
shall be made by the Company, without providing the other party the opportunity
to review and comment thereon. Parent shall advise the Company, promptly after
it receives notice thereof, of the time when the Form S-4 has become effective,
the issuance of any stop order, the suspension of the qualification of Parent
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Form S-4 or
comments thereon and responses thereto or requests by the SEC for additional
information. Each party shall advise the other party, promptly after it receives
notice thereof, of any request by the SEC for amendment of the Proxy Statement
or the Form S-4 or comments thereon and responses thereto or requests by the SEC
for additional information. If at any time prior to the Effective Time any
information relating to the Company or Parent, or any of their respective
Affiliates, officers or directors, should be discovered by the Company or Parent
which should be set forth in an amendment or supplement to any of the Form S-4
or the Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be 


                                       37





promptly filed with the SEC and, to the extent required by law, disseminated to 
the stockholders of the Company and Parent.

      (b) The Company shall, as soon as reasonably practicable, consistent with
the process of clearing the Proxy Statement with the SEC and having the SEC
declare the Form S-4 effective, all as provided in Section 5.1(a), establish a
record date for, duly call, give notice of, convene and hold a meeting of its
stockholders (the "COMPANY STOCKHOLDERS MEETING") for the purpose of obtaining
                   ----------------------------
the Company Stockholder Approval and shall take all lawful action to solicit
adoption of this Agreement by the required Company Stockholder Approval. Unless
the Company has terminated this Agreement pursuant to Section 7.1(f) hereof, the
Company shall, through its Board of Directors, recommend to its stockholders
adoption of this Agreement (the "COMPANY RECOMMENDATION"), and except as
                                 ----------------------
expressly permitted by this Agreement, shall not withdraw, amend or modify in a
manner adverse to Parent its recommendation. The Company shall ensure that the
Company Stockholders Meeting is called, noticed, convened, held and conducted,
and that all proxies solicited in connection with the Company Stockholders
Meeting are solicited, in compliance with all applicable Legal Provisions.
Without limiting the generality of the foregoing, (i) the Company agrees that
its obligation to duly call, give notice of, convene and hold a meeting of the
holders of Company Common Stock, as required by this Section 5.1(b), shall not
be affected by the withdrawal, amendment or modification of the Company
Recommendation and (ii) the Company agrees that its obligations pursuant to this
Section 5.1(b) shall not be affected by the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal.

      Section 5.2.  Letters of the Company's Accountants.
                    ------------------------------------

      (a) The Company shall use its reasonable best efforts to cause to be
delivered to Parent two letters from KPMG LLP, the Company's independent public
accountants, one dated a date within two Business Days before the date on which
the Form S-4 shall become effective and one dated a date within two Business
Days before the Closing Date, each addressed to Parent and the Company, in form
and substance reasonably satisfactory to Parent and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.


      (b) The Company shall use its reasonable best efforts to cause to be
delivered to Parent a letter from KPMG LLP, addressed to Parent and the Company,
dated as of the Closing Date, stating that (i) KPMG LLP concurs with the Company
management's conclusion that, subject to customary qualifications, the Company
meets the requirements to be a party to a pooling of interests transaction for
financial reporting purposes under Opinion 16 of the Accounting Principles Board
and applicable SEC rules and regulations and (ii) the basis for such a
concurrence is KPMG LLP's belief that the criteria for such accounting treatment
have been met.

      Section 5.3.  Letters of Parent's Accountants.
                    -------------------------------


                                       38





      (a) Parent shall use its reasonable best efforts to cause to be delivered
to the Company two letters from BDO Seidman LLP, Parent's independent public
accountants, one dated a date within two Business Days before the date on which
the Form S-4 shall become effective and one dated a date within two Business
Days before the Closing Date, each addressed to the Company and Parent, in form
and substance reasonably satisfactory to the Company and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.

      (b) Parent shall use its reasonable best efforts to cause to be delivered
to the Company a letter from BDO Seidman LLP, addressed to the Company and
Parent, dated as of the Closing Date, stating that (i) BDO Seidman LLP concurs
with Parent's management's conclusion that, subject to customary qualifications,
the Merger qualifies for pooling of interests treatment for financial reporting
purposes under Opinion 16 of the Accounting Principles Board and applicable SEC
rules and regulations and (ii) the basis for such a concurrence is BDO Seidman
LLP's belief that the criteria for such accounting treatment have been met.


      Section 5.4. Access to Information; Confidentiality. Upon reasonable
                   --------------------------------------
notice, each party shall (and shall cause its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financial advisors and other
representatives of the other party reasonable access during normal business
hours, during the period prior to the Effective Time, to such of its properties,
books, contracts, commitments, records, officers and employees as the other
party may reasonably request and, during such period, such party shall (and
shall cause its Subsidiaries to) furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of Federal or state securities laws, as applicable (other than
documents which such party is not permitted to disclose under applicable law),
and (b) consistent with its legal obligations, all other information concerning
it and its business, properties and personnel as such other party may reasonably
request; PROVIDED, HOWEVER, that either party may restrict the foregoing access
to the extent that it reasonably concludes, after consultation with outside
counsel, that (i) any Legal Provision of any Governmental Entity applicable to
such party requires such party or its Subsidiaries to restrict access to any
properties or information, (ii) providing such access would result in the loss
of the attorney-client privilege, (iii) such document discusses the pricing or
dollar value of the transactions contemplated by this Agreement or (iv) the
documents contain competitively sensitive information, the sharing of which
could constitute a violation of any applicable antitrust laws. The parties shall
hold any such information in confidence to the extent required by, and in
accordance with, the provisions of the Confidentiality Agreement dated as of
June 18, 2001, between Parent and the Company (as it may be amended from time to
time, the "CONFIDENTIALITY AGREEMENT"). Each party shall make all reasonable
           -------------------------
best efforts to minimize disruption to the business of the other party and its
Subsidiaries which may result from the requests for data and information
hereunder. All requests for access and information shall be coordinated through
senior executives of the parties to be designated. Any investigation by Parent
or the Company shall not affect the representations and warranties of Parent or
the Company, as the case may be.


                                       39





      Section 5.5.  Reasonable Best Efforts.
                    -----------------------

      (a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable best efforts to accomplish the following:
(i) the taking of all reasonable acts necessary to cause the conditions to
Closing to be satisfied, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by any Governmental Entity, (iii) the obtaining of all necessary
consents, approvals or waivers from third parties other than Governmental
Entities (provided that if obtaining any such consent, approval or waiver would
require any action other than the payment of a nominal amount, such action shall
be subject to the consent of Parent, not to be unreasonably withheld), (iv) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby or thereby, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (v) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. In connection with and without
limiting the foregoing Parent, Sub and the Company and their respective Boards
of Directors shall, if any state takeover statute or similar statute becomes
applicable to this Agreement, the Merger or any other transactions contemplated
by this Agreement, take all action necessary, with the reasonable cooperation of
the other parties hereto if reasonably requested, to ensure that the Merger and
the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on this
Agreement, the Merger and the other transactions contemplated by this Agreement.
The Company shall give Parent the opportunity to participate, on an advisory
basis, in the defense of any stockholder litigation against the Company and/or
its directors relating to the transactions contemplated by this Agreement.


      (b) In furtherance and not in limitation of the foregoing, each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and any other Regulatory Law with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any other
Regulatory Law and to take all other actions necessary to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable. "REGULATORY LAW" means the Sherman Act, as amended, the Clayton
              --------------
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and
all other applicable federal, state and foreign, if any, statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to prohibit, restrict 

                                      
                                       40





or regulate (i) foreign investment or (ii) actions having the purpose or effect 
of monopolization or restraint of trade or lessening of competition.

      (c) Each of Parent and the Company shall, in connection with the efforts
referenced in Section 5.5(b) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Regulatory Law, use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to, the Antitrust Division of the Department of Justice (the "DOJ"), the Federal
                                                              ---
Trade Commission (the "FTC") or any other Governmental Entity and of any
                       ---
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) subject to Section 5.4 and unless prohibited from doing so by
applicable law, permit the other party to review any communication given by it
to, and consult with each other in advance of any meeting or conference with,
the DOJ, the FTC or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person, and to the extent
appropriate or permitted by the DOJ, the FTC or such other applicable
Governmental Entity or other Person, give the other party the opportunity to
attend and participate in such meetings and conferences.

      (d) Nothing in this Agreement shall require any of Parent and its
Subsidiaries or the Company and its Subsidiaries to sell, hold separate or
otherwise dispose of or conduct any portion of their business in a specified
manner, or agree to sell, hold separate or otherwise dispose of or conduct any
portion of their business in a specified manner, or permit the sale, holding
separate or other disposition of, any assets of Parent, the Company or their
respective Subsidiaries or the conduct of their business in a specified manner,
whether as a condition to obtaining any approval from a Governmental Entity by
March 31, 2002 or any other Person or for any other reason, if such sale,
holding separate or other disposition or the conduct of their business in a
specified manner would reasonably be expected to have a Material Adverse Effect
on Parent and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.

      Section 5.6.  Stock Options; Employee Benefits.
                    --------------------------------

      (a) As of the Effective Time, (i) each outstanding option to purchase
shares of Company Common Stock (a "STOCK OPTION") granted under any plan or
                                   ------------
arrangement providing for the grant of options to purchase shares of Company
Common Stock to current or former officers, directors, employees or consultants
of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested
                                         -------------------
or unvested, shall be assumed by Parent and converted into an option to acquire,
on the same terms and conditions as were applicable under the Stock Option, the
number of shares of Parent Common Stock (rounded up to the nearest whole share)
determined by multiplying the number of shares of Company Common Stock subject
to such Stock Option by the Exchange Ratio, at a price per share of Parent
Common Stock equal to (A) the aggregate exercise price for the shares of 


                                       41





Company Common Stock  otherwise  purchasable  pursuant to such Stock Option
(assuming all conditions to the exercise of such Stock Option had then been met)
divided by (B) the  aggregate  number of shares of Parent  Common  Stock  deemed
purchasable  pursuant to such Stock Option (each,  as so adjusted,  an "ADJUSTED
                                                                        --------
OPTION");  PROVIDED that such exercise  price shall be rounded up to the nearest
------
whole cent and (ii) any and all  repurchase  rights under any Company Stock Plan
held by the Company on the shares of Company  Common Stock shall,  to the extent
permitted by law, be assigned to Parent and shall be converted  into  repurchase
rights held by Parent as the corresponding shares of Parent Common Stock.

      (b) The adjustments provided herein with respect to any Stock Options that
are "incentive stock options" as defined in Section 422 of the Code shall be and
are intended to be effected in a manner which is consistent with Section 424(a)
of the Code.

      (c) Parent shall, prior to the Effective Time, take all action necessary
so that, at the Effective Time, by virtue of the Merger and without the need of
any further corporate action, Parent shall assume the Company Stock Plans with
the result that all obligations of the Company under the Company Stock Plans
with respect to Stock Options outstanding at the Effective Time, shall be
obligations of Parent, and all Adjusted Options shall be exercisable, on the
same terms as were applicable under the Stock Options, for shares of Parent
Common Stock following the Effective Time.

      (d) At or prior to the Effective Time, Parent shall take all corporate
action necessary to reserve for issue a sufficient number of shares of Parent
Common Stock for delivery upon exercise of Adjusted Options. As soon as
practicable after the Effective Time, Parent shall file a Registration Statement
on Form S-1, Form S-3 or Form S-8 as the case may be (or any successor or other
appropriate forms), with respect to the shares of Parent Common Stock subject to
such Adjusted Options, and shall maintain the effectiveness of such registration
statement and the current status of the prospectus or prospectuses contained
therein, for so long as such Adjusted Options remain outstanding. Following the
Effective Time, Parent shall use its reasonable best efforts to provide that
holders of Adjusted Options do not experience delays in exercising and settling
their Adjusted Options.

      (e) [Reserved]

      (f) Parent shall take, and shall cause the Surviving Corporation and its
Subsidiaries to take, the following actions: (i) waive any limitations regarding
pre-existing conditions and eligibility waiting periods under any health benefit
plan maintained by any of them for the benefit of individuals who are employees
of the Company and its Subsidiaries immediately prior to the Effective Time (the
"EMPLOYEES") to the extent such pre-existing condition or waiting period did not
 ---------
apply to the Employee under a comparable plan of the Company or its Subsidiary
immediately prior to the Effective Time (or the date the Employees become
eligible to receive benefits under Parent's plans following the Continuation
Period), (ii) provide each Employee with credit for any co-payments and
deductibles paid prior to the Effective Time for the calendar year in which the


                                       42





Effective Time occurs (or the date the Employees become eligible to receive
benefits under Parent's plans following the Continuation Period), in satisfying
any applicable deductible or out-of-pocket requirements under such health plans,
and (iii) for eligibility, vesting and benefit accrual purposes (but not for
purposes of benefit accruals under any defined benefit pension plan) under all
compensation and benefit plans and policies applicable to the Employees, treat
all service by the Employees with the Company or any of its Subsidiaries and
their predecessor entities before the Effective Time as service with Parent and
its Subsidiaries. Parent shall cause the Surviving Corporation to honor all
employment, retention and severance arrangements (including, without limitation,
those set forth on Section 5.6(f) of the Company Disclosure Schedule) and all
obligations to current and former employees of the Company and its Subsidiaries
thereunder. Parent shall take all actions necessary to cause the Surviving
Corporation and its Subsidiaries to satisfy the obligations listed in Section
5.6(f) of the Company Disclosure Memorandum.

      (g) The Company shall terminate its Employee Stock Purchase Plan in
accordance with its terms as of or prior to the Effective Time. The Company
shall not commence a new offering under its Employee Stock Purchase Plan after
the date of this Agreement.

      (h) The provisions of this Section 5.6 shall not create in any employee or
former employee of the Company or any of its Subsidiaries any rights to
employment or continued employment with Parent, the Surviving Corporation, the
Company or any of their respective Subsidiaries.

      Section 5.7.  Indemnification, Exculpation and Insurance.
                    ------------------------------------------

      (a) Parent shall cause all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
now existing in favor of the current or former directors or employees or
officers of the Company (each such Person being an "INDEMNIFIED PARTY") as
                                                    -----------------
provided in the Company's Certificate of Incorporation, Bylaws or any
indemnification agreement between such directors or officers and the Company (in
each case, as in effect on the date hereof) to be assumed by the Surviving
Corporation in the Merger, without further action, as of the Effective Time and
such rights shall survive the Merger and shall continue in full force and effect
in accordance with their terms. Without limiting the foregoing, Parent shall
indemnify and hold harmless, and provide advancement of expenses to, all past
and present directors, officers and employees of the Company and its
Subsidiaries (in all of their capacities) to the fullest extent permitted by the
Company's Certificate of Incorporation, Bylaws or any indemnification agreement
between such directors, officers and employees for acts or omissions occurring
at or prior to the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the transactions contemplated
hereby).
      (b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 5.7 shall promptly notify the Surviving Corporation, upon
learning of any such claim, action, suit, proceeding or investigation, but the
failure to so notify shall not relieve the Surviving Corporation of any
liability it may have to such Indemnified Party to the extent such failure does
not materially prejudice the Surviving Corporation. The Surviving Corporation
may, at its own expense: (i) participate in the defense of any claim, suit,
action or proceeding; or (ii) at any time during the 


                                       43





course of any such claim,  suit,  action or proceeding,  assume the defense
thereof, unless the Indemnified Parties (or any of them) determine in good faith
(after  consultation  with  legal  counsel)  that  there  is,  under  applicable
standards of professional  conduct,  a conflict or any significant issue between
the positions of Parent and any of such Indemnified  Parties,  provided that the
Surviving   Corporation's  counsel  shall  be  reasonably  satisfactory  to  the
Indemnified  Parties.  If the Surviving  Corporation  assumes such defense,  the
Indemnified Parties shall have the right (but not the obligation) to participate
in the defense  thereof and to employ  counsel,  at their own expense,  separate
from the  counsel  employed  by the  Surviving  Corporation.  Whether or not the
Surviving  Corporation  chooses to assume the defense of any such  claim,  suit,
action or proceeding,  the Surviving  Corporation  and Parent shall cooperate in
the defense thereof. If the Surviving Corporation fails to so assume the defense
thereof,  the Indemnified Parties may retain counsel reasonably  satisfactory to
the Surviving Corporation and the Surviving Corporation shall pay the reasonable
fees and  expenses  of such  counsel  promptly  after  statements  therefor  are
received;  provided that the  Indemnified  Parties on whose behalf  expenses are
advanced  provide (x) a written  affirmation of their good faith belief that the
standard of conduct necessary for indemnification  under Section 145 of the DGCL
has been met, and (y) an  undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification  under
Section 145 of the DGCL.  Neither Parent nor the Surviving  Corporation shall be
liable for any settlement  effected  without its written  consent (which consent
shall not be unreasonably withheld or delayed); provided that, in the event that
any claim or claims for  indemnification  are  asserted  or made  within  such a
period of six years after the Effective Time, all rights to  indemnification  in
respect of any such claim or claims (and the matters  giving rise thereto) shall
continue  until the  disposition  of any and all such  claim or claims  (and the
matters giving rise thereto). The Indemnified Parties as a group may retain only
one law firm (in addition to local  counsel) to represent them with respect to a
single  action  unless any  Indemnified  Party  determines  in good faith (after
consultation  with legal counsel) that there is, under  applicable  standards of
professional  conduct, a conflict on any significant issue between the positions
of any two or more  Indemnified  Parties.  In the event Parent or the  Surviving
Corporation or any of their  respective  successors or assigns (i)  consolidates
with or  merges  into any  other  Person  and  shall  not be the  continuing  or
surviving  corporation  or  entity  of such  consolidation  or  merger,  or (ii)
transfers or conveys all or  substantially  all of its  properties and assets to
any Person,  then, and in each such case, to the extent  necessary to effectuate
the  purposes of this Section 5.7,  proper  provision  shall be made so that the
successors  and  assigns  of Parent  and the  Surviving  Corporation  assume the
obligations set forth in this Section 5.7, and none of the actions  described in
clause (i) or (ii) shall be taken until such provision is made.  Nothing in this
Section  5.7(b)  is  intended  to  modify   adversely  any  existing  rights  to
indemnification of an Indemnified Party from the Company.

      (c) For six years after the Effective Time, Parent shall cause the
Surviving Corporation to maintain in effect the Company's current officers',
directors' and employees' liability insurance in respect of acts or omissions
occurring at or prior to the Effective Time, covering each Person currently
covered by the Company's officers' and directors' liability insurance policy (a
copy of which has been heretofore delivered to Parent), on terms with respect to
such coverage and amount no less favorable than those of such policy in effect
on the date hereof; PROVIDED that Parent may substitute therefor policies of
Parent containing terms with respect to coverage and amount no less 


                                       44





favorable  to such  directors  and  officers;  provided,  however,  that in
satisfying  its  obligation  under  this  Section  5.7(b)  Parent  shall  not be
obligated to pay annual  premiums in excess of 200% of the amount per annum paid
by the Company in its last full fiscal year; and provided further that if Parent
is not  able to  obtain  such  coverage  for  such  200%  amount,  Parent  shall
nevertheless  be obligated to provide such coverage as may be obtained  annually
for such 200% amount and provided  further that  notwithstanding  the foregoing,
the Surviving  Corporation may satisfy its obligations under this Section 5.7(c)
by  purchasing  a "tail"  policy under the  Company's  existing  directors'  and
officers'  insurance policy that (i) has an effective term of six years from the
Effective Time, (ii) covers those Persons who are currently covered,  or will be
covered on or prior to the  Effective  Time,  by the  Company's  directors'  and
officers'  insurance  policy  in  effect  on the date  hereof  for  actions  and
omissions  occurring on or prior to the Effective  Time and (iii) contains terms
and conditions (including without limitation coverage amounts) that are at least
as  favorable  in the  aggregate as the terms and  conditions  of the  Company's
directors' and officers' insurance policy in effect on the date hereof.

      (d) The Certificate of Incorporation and Bylaws of the Surviving
Corporation shall contain, and Parent shall cause the Surviving Corporation to
fulfill and honor, provisions with respect to indemnification and exculpation
that are substantially identical to those set forth in the certificate of
incorporation and bylaws of the Company as of the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of any of the Indemnified Parties.

      (e) The obligations of Parent or the Surviving Corporation under this
Section 5.7 are subject to the conditions that each Indemnified Party shall
comply with the reasonable requests of the Surviving Corporation or Parent in
defending or settling any action hereunder and that any Indemnified Party shall
approve any proposed settlement of any such action if (i) such settlement
involves no finding or admission of any liability by any Indemnified Party, and
(ii) the sole relief provided in connection with such settlement is monetary
damages that are paid in full by the Surviving Corporation or Parent.

      (f) The provisions of this Section 5.7 are (i) intended to be for the
benefit of, and will be enforceable by, each Indemnified Party, his or her heirs
and his or her representatives and (ii) in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such Person
may have by contract or otherwise. Parent hereby guarantees the performance by
Surviving Corporation of its obligations under this Section 5.7.

      Section 5.8.  Fees and Expenses.
                    -----------------

      (a) Except as provided below, all fees and expenses incurred in connection
with this Agreement, the Merger and the other transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses, whether or
not the Merger is consummated.


                                       45





      (b) In the event that (1) a bona fide Takeover Proposal shall have been
publicly disclosed or has been made directly to the Company's stockholders or
any Person has announced an intention (whether or not conditional) to make a
bona fide Takeover Proposal and thereafter this Agreement is terminated (x) by
Parent or the Company pursuant to Section 7.1(b)(iii), (y) by Parent pursuant to
Section 7.1(d) (provided that the breach or failure to perform giving rise to
Parent's right to terminate under Section 7.1(d) shall be willful and material)
or (z) by Parent pursuant to Section 7.1(e)(vii) and, in any case, within 12
months of termination either the Company enters into definitive agreement with
respect to a Takeover Proposal or a Takeover Proposal is consummated (provided
that for this purpose the percentage in the definition of Takeover Proposal
shall be 50% in lieu of 15%) or (2) this Agreement is terminated (x) by the
Company pursuant to Section 7.1(f) or (y) by Parent pursuant to Section 7.1(e)
(other than Section 7.1(e)(vii)), then the Company shall pay Parent a fee equal
to $15 million (the "TERMINATION FEE"), payable by wire transfer of immediately
                     ---------------
available funds, such payment to be made (A) in the case of the termination
contemplated by clause (1), on the earlier of the date the Company enters into a
definitive agreement or a Takeover Proposal is consummated, (B) in the case of a
termination contemplated by clause (2)(x), no later than immediately prior to
such termination and (c) in the case of termination contemplated by clause 2(y),
no later than the date of such termination. Simultaneously with the payment of
the Termination Fee, the Company shall reimburse Parent for all of its
documented out-of-pocket expenses incurred in connection with this Agreement and
the transactions contemplated hereby (including documented fees and expenses of
accountants, attorneys and financial advisors) up to an aggregate of $2.0
million (the "EXPENSES"). The Company acknowledges that the agreements contained
              --------
in this Section 5.8(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter into
this Agreement. If Parent shall successfully bring an action to enforce its
rights under this Section 5.8(b), the Company shall reimburse Parent for its
reasonable fees and expenses in connection therewith and shall pay Parent
interest on the Termination Fee and Expenses from the date the Termination Fee
becomes payable to the date of payment at the publicly announced prime rate of
Citibank, N.A. in effect on the date the Termination Fee became payable.

      Section 5.9. Public Announcements. Parent and the Company shall consult
                   --------------------
with each other before issuing, and give each other the opportunity to review
and comment upon, any press release or other public statements with respect to
the transactions contemplated by this Agreement, including the Merger, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange or national securities quotation system. In addition to the foregoing,
neither Parent nor the Company shall issue any press release or otherwise make
any public statement or disclosure concerning non-public information relating to
the other party's business, financial condition or results of operations without
the consent of the other party, which consent shall not be unreasonably withheld
or delayed. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
prepared by Parent after consultation with the Company.

      Section 5.10.  Affiliates.
                     ----------


                                       46





      (a) As soon as practicable after the date hereof, and in no event more
than 45 days prior to the date of the Company Stockholders Meeting, the Company
shall deliver to Parent a letter identifying all Persons who are, at the time
this Agreement is submitted for adoption by the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act or
for purposes of qualifying the Merger for pooling of interests accounting
treatment under Opinion 16 of the Accounting Principles Board and its related
interpretations and applicable SEC rules and regulations. The Company shall use
its reasonable best efforts to cause each such Person to deliver to Parent at
least 30 days prior to the Closing Date a written agreement substantially in the
form attached as Exhibit 5.10(a) hereto.
                 --------------- 

      (b) As soon as practicable after the date hereof, and in no event more
than 45 days prior to the date of the Company Stockholders Meeting, Parent shall
deliver to the Company a letter identifying all Persons who are, at the time the
issuance of Parent Common Stock in the Merger is submitted for approval by the
stockholders of the Company, "affiliates" of the Parent for purposes of
qualifying the Merger for pooling of interests accounting treatment under
Opinion 16 of the Accounting Principles Board and its related interpretations
and applicable SEC rules and regulations. Parent shall use its reasonable best
efforts to cause each such Person to deliver to Parent at least 30 days prior to
the Closing Date a written agreement substantially in the form attached as
Exhibit 5.10(b) hereto.
---------------

      Section 5.11. Nasdaq Listing. Parent shall use its reasonable best efforts
                    --------------
to cause the shares of Parent Common Stock to be issued in the Merger and such
other shares of Parent Common Stock to be reserved for issuance in connection
with the Merger to be approved for listing on the Nasdaq National Market,
subject to official notice of issuance, prior to the Closing Date.

      Section 5.12. Pooling of Interests. Each of the Company and Parent shall
                    --------------------
use reasonable best efforts to cause the Merger to be accounted for as a pooling
of interests under Opinion 16 of the Accounting Principles Board and its related
interpretations and applicable SEC rules and regulations, and such accounting
treatment to be accepted by each of the Company's and Parent's independent
public accountants, and by the SEC, respectively, and each of the Company and
Parent agrees that it will voluntarily take no action that would cause such
accounting treatment not to be obtained.

      Section 5.13. Tax Treatment. Parent and the Company intend that the Merger
                    -------------
will qualify as a reorganization within the meaning of Section 368(a) of the
Code. Parent and the Company shall each use all reasonable efforts to cause the
Merger to so qualify.

      Section 5.14. Publication of Combined Financial Results. Parent shall use
                    -----------------------------------------
its reasonable best efforts to file with the SEC within 28 days, but in no event
later than 42 days, after the end of the first full calendar month after the
Effective Time, a Form 8-K containing financial results (including combined
sales and net income) covering at least 30 days of post-merger combined
operations of Parent and the Company. The provisions of this Section 5.14 are
intended to be for 


                                       47





the benefit of, and will be enforceable by, each affiliate of the Company 
immediately preceding the Effective Time, his or her heirs and his or her 
representatives.

      Section  5.15.  Notices  of Certain  Events.  Each  party  hereto  shall
                      ---------------------------
promptly notify the other parties orally and in writing of:

            (a) the receipt by such party or any of such party's Subsidiaries of
      any notice or other communication from any Person alleging that the
      consent of such Person is or may be required in connection with the
      transactions contemplated by this Agreement;

            (b) subject to any applicable legal restrictions, the receipt by
      such party or any of such party's Subsidiaries of any notice or other
      communication from any Governmental Entity in connection with the
      transactions contemplated by this Agreement;

            (c) such party's obtaining Knowledge of any actions, suits, claims,
      investigations or proceedings commenced or threatened against, relating to
      or involving or otherwise affecting any of Parent, Sub or the Company, as
      the case may be, or any of their respective Subsidiaries which relate to
      the consummation of the transactions contemplated by this Agreement; and

            (d) such party's obtaining Knowledge of the occurrence, or failure
      to occur, of any event which occurrence or failure to occur will be likely
      to cause the conditions set forth in Article VII not to be satisfied;

PROVIDED, HOWEVER, that no such notification shall affect the representations,
warranties or obligations of the parties or the conditions to the obligations of
the parties hereunder, or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.

      Section 5.16. Conveyance Taxes. The Company and the Parent shall cooperate
                    ----------------
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transaction contemplated by this Agreement that
are required or permitted to be filed on or before the Effective Time.

      Section 5.17.  [RESERVED]

      Section 5.18. Voting Agreements. Concurrently with the execution and
                    -----------------
delivery of this Agreement, each of Richard Johnson and John A. Hawkins
shall execute and deliver to Parent an agreement substantially in the form of 
Exhibit 5.18 hereto (the "COMPANY VOTING AGREEMENT"), pursuant to which, among 
------------              ------------------------
other things, such Person is agreeing to vote all of the shares of Company 
Common Stock owned, beneficially or of record, by him or her it to approve the 
Merger.


                                       48





      Section 5.19. Section 16 Matters. Prior to the Effective Time, Parent and
                    ------------------
the Company shall take all such steps as may be required to cause any
dispositions of Company Common Stock (including derivative securities with
respect to the Company Common Stock) resulting from the transactions
contemplated by this Agreement by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act, such
steps to be taken in accordance with the No-Action Letter, dated January 12,
1999, issued by the SEC to Skadden, Arps, Slate, Meagher & Flom LLP.


                                   ARTICLE VI
                              CONDITIONS PRECEDENT

      Section 6.1. Conditions to Each Party's Obligation to Effect the Merger.
                   ----------------------------------------------------------
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:

            (a)  Stockholder  Approval.  The Company  shall have  obtained the
                 ---------------------
      Company Stockholder Approval.

            (b) Nasdaq Listing. The shares of Parent Company Stock to be issued
                --------------
      in the Merger and such other shares of Parent Common Stock to be reserved
      for issuance in connection with the Merger shall have been approved for
      listing on the Nasdaq National Market, subject to official notice of
      issuance.

            (c) HSR Act. The waiting period (and any extension thereof)
                -------
      applicable to the Merger under the HSR Act shall have been terminated or
      shall have expired.

            (d) No Injunctions or Restraints. No temporary restraining order,
                ----------------------------
      preliminary or permanent injunction or other judgment or order issued by
      any court of competent jurisdiction or other statute, law, rule, legal
      restraint or prohibition (collectively, "RESTRAINTS") shall be in effect
                                               ----------
      preventing the consummation of the Merger.

            (e) Form S-4. The Form S-4 shall have become effective under the
                --------
      Securities Act and shall not be the subject of any stop order or
      proceedings seeking a stop order.

            (f) Pooling Letters. Parent and the Company shall have received
                ---------------
      letters from KPMG LLP and BDO Seidman LLP, dated as of the Closing Date,
      in each case addressed to Parent and the Company, stating in substance the
      matters to be stated by KPMG LLP and BDO Seidman LLP, pursuant to Section
      5.2(b) and Section 5.3(b), respectively.

            (g) No Governmental Litigation. There shall not be pending any suit,
                --------------------------
      action or proceeding by any Governmental Entity, (i) challenging the
      acquisition by Parent or Sub of

                                       49




      any shares of Company  Common  Stock,  seeking to restrain or prohibit the
      consummation  of the  Merger,  or  seeking  to  place  limitations  on the
      ownership of shares of Company  Common Stock (or shares of common stock of
      the Surviving  Corporation) by Parent or Sub or seeking to obtain from the
      Company,  Parent or Sub any damages  that are  material in relation to the
      Company,  (ii) seeking to prohibit or  materially  limit the  ownership or
      operation  by the Company or its  Subsidiaries,  Parent or any of Parent's
      Subsidiaries  of any material  portion of any business or of any assets of
      the  Company,  Parent or any of  Parent's  Subsidiaries,  or to compel the
      Company, Parent or any of Parent's Subsidiaries to divest or hold separate
      any  material  portion of any  business  or of any assets of the  Company,
      Parent or any of their respective Subsidiaries,  as a result of the Merger
      or (iii)  seeking  to  prohibit  Parent  or any of its  Subsidiaries  from
      effectively controlling in any material respect the business or operations
      of the Company or its Subsidiaries.

            (h) Governmental and Regulatory Approvals. Other than the filing
                -------------------------------------
      provided for under Section 1.3 and filings pursuant to the HSR Act (which
      are addressed in Section 5.5(c)), all consents, approvals and actions of,
      filings with and notices to any Governmental Entity required of Parent,
      the Company or any of their Subsidiaries to consummate the Merger, the
      issuance of Parent Common Stock in the Merger and the other transactions
      contemplated hereby, the failure of which to be obtained or taken,
      individually or in the aggregate, would reasonably be expected to have a
      Material Adverse Effect on Parent and its Subsidiaries (including the
      Surviving Corporation and its Subsidiaries), taken together after giving
      effect to the Merger, shall have been obtained. No consents, approvals,
      actions, filings or notices related to any antitrust requirements of any
      jurisdiction, except as set forth in Section 6.1(c) hereof, shall be a
      condition of closing under this Section 6.1(h).

      Section 6.2. Conditions to Obligations of Parent and Sub. The obligations
                   -------------------------------------------
of Parent and Sub to effect the Merger are further subject to the satisfaction
or waiver on or prior to the Closing Date of the following conditions:

            (a) Representations and Warranties. Each representation and warranty
                ------------------------------
      of the Company contained in this Agreement shall be true and correct in
      all respects without reference to any qualification as to materiality such
      that the aggregate effect of any inaccuracies in such representations and
      warranties will not have a Material Adverse Effect on the Company, in each
      case as of the date of this Agreement and as of the Closing Date as though
      made on the Closing Date, except to the extent such representations and
      warranties expressly relate to an earlier date, in which case as of such
      earlier date. Parent shall have received a certificate signed on behalf of
      the Company by the chief executive officer and the chief financial officer
      of the Company to such effect.

            (b) Performance of Obligations of the Company. The Company (i) shall
                -----------------------------------------
      have performed or complied with all agreements and covenants required to 
      be performed by it under this Agreement at or prior to the Closing Date
      that are  qualified  as to  Material  Adverse  Effect  and (ii) shall have
      performed or complied with all  agreements  and  covenants  required 
      

                                       50





      to be performed by it under this Agreement at or prior to the Closing Date
      that are not qualified as to Material Adverse Effect except  where  such
      non-performance  or non-compliance  individually or in the aggregate would
      not  reasonably  be  expected  to have a  Material  Adverse  Effect on the
      Company,  and Parent shall have received a certificate signed on behalf of
      the Company by the chief executive officer and the chief financial officer
      of the Company to such effect.

            (c) Letters from Company Affiliates. Parent shall have received
                -------------------------------
                                                 from each Person named in the 
                                                 letter referred to in Section 
                                                 5.10(a) an executed copy of
                                                 an agreement substantially in 
                                                 the form of Exhibit A hereto.

            (d) Consents. All consents, the absence of which, in the aggregate,
                --------
      would be reasonably likely to have a Material Adverse Effect on the
      Company, shall have been obtained.

            (e) Tax Opinion. Parent shall have received an opinion of Fulbright
                -----------
      & Jaworski L.L.P., counsel to Parent, dated as of the Effective Time, to
      the effect that the Merger will qualify as a reorganization within the
      meaning of Section 368(a) of the Code. The issuance of such opinion shall
      be conditioned upon the receipt by such counsel of customary
      representation letters from each of Parent, Sub and the Company, in each
      case, in form and substance reasonably satisfactory to such counsel. Each
      such representation letter shall be dated on or before the date of such
      opinion and shall not have been withdrawn or modified in any material
      respect.

      Section 6.3. Conditions to Obligation of the Company. The obligation of
                   ---------------------------------------
the Company to effect the Merger is further subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:

            (a) Representations and Warranties. Each representation and warranty
                ------------------------------
      of Parent and Sub contained in this Agreement shall be true and correct in
      all respects without reference to any qualification as to materiality such
      that the aggregate effect of any inaccuracies in such representations and
      warranties will not have a Material Adverse Effect on Parent, in each case
      as of the date of this Agreement and as of the Closing Date as though made
      on the Closing Date, except to the extent such representations and
      warranties expressly relate to an earlier date, in which case as of such
      earlier date. The Company shall have received a certificate signed on
      behalf of Parent by an executive officer of Parent to such effect.
            (b) Performance of Obligations of Parent and Sub. Each of Parent and
                --------------------------------------------
            Sub (i) shall have performed or complied with all agreements and
            covenants required to be performed by it under this Agreement at or
            prior to the Closing Date that are qualified  as to  Material  
            Adverse  Effect  and  (ii)  shall  have performed or complied in all
            material  respects with all agreements and covenants  required to be
            performed by

            
                                       51





            it under this Agreement at or prior to the Closing Date that are not
            qualified  as  to  Material   Adverse   Effect   except  where  such
            non-performance  or non-compliance  individually or in the aggregate
            would not  reasonably be expected to have a Material  Adverse Effect
            on Parent,  and the Company shall have received a certificate signed
            on  behalf  of  Parent  by an  executive  officer  of Parent to such
            effect.

            (c) Tax Opinion. The Company shall have received an opinion of
                -----------
      Wachtell, Lipton, Rosen & Katz, counsel to the Company, dated as of the
      Effective Time, to the effect that the Merger will qualify as a
      reorganization within the meaning of Section 368(a) of the Code. The
      issuance of such opinion shall be conditioned upon the receipt by such
      counsel of customary representation letters from each of Parent, Sub and
      the Company, in each case, in form and substance reasonably satisfactory
      to such counsel. Each such representation letter shall be dated on or
      before the date of such opinion and shall not have been withdrawn or
      modified in any material respect. The Company may not waive or amend this
      condition without the express written consent of Parent.

      Section 6.4. Frustration of Closing Conditions. None of the Company,
                   ---------------------------------
Parent or Sub may rely on the failure of any condition set forth in Section 6.1,
Section 6.2 or Section 6.3, as the case may be, to be satisfied if such failure
was caused by such party's failure to use reasonable best efforts to consummate
the Merger and the other transactions contemplated by this Agreement, as
required by and subject to Section 5.5.


                                   ARTICLE VII
                        TERMINATION, AMENDMENT AND WAIVER

      Section  7.1.  Termination.  This  Agreement  may be  terminated  at any
                     -----------
time prior to the  Effective  Time,  whether  before or after the  Stockholder
Approval:

            (a)  by mutual written consent of Parent, Sub and the Company;

            (b)  by either Parent or the Company:

                  (i) if the Merger shall not have been consummated by March 31,
            2002 for any reason; PROVIDED, HOWEVER, that the right to terminate
            this Agreement under this Section 7.1(b)(i) shall not be available
            to any party whose action or failure to act has been a principal
            cause of or resulted in the failure of the Merger to be consummated
            on or before such date;
                  
                  (ii) if any Restraint having any of the effects set forth in  
            Section  6.1(d)  shall be in effect and shall have become  final and
            nonappealable;  PROVIDED  that the party  seeking to terminate  this
            Agreement  pursuant  to this  Section  7.1(b)(ii)  shall  have  used
            reasonable  best  efforts to prevent the entry of and to remove such
            Restraint; or



                                       52





            
                  (iii) if the Company Stockholder Approval shall not have been
            obtained at the Company Stockholders Meeting duly convened therefor
            or at any adjournment or postponement thereof;

            (c) by the Company, if Parent shall have breached or failed to
      perform any of its representations, warranties, covenants or agreements
      set forth in this Agreement, which breach or failure to perform (A) would
      give rise to the failure of a condition set forth in Section 6.3(a) or
      Section 6.3(b), and (B) is not cured by Parent within 30 calendar days
      following receipt of written notice of such breach or failure to perform
      from the Company;

            (d) by Parent, if the Company shall have breached or failed to
      perform any of its representations, warranties, covenants or agreements
      set forth in this Agreement, which breach or failure to perform (A) would
      give rise to the failure of a condition set forth in Section 6.2(a) or
      Section 6.2(b), and (B) is not cured by the Company within 30 calendar
      days following receipt of written notice of such breach or failure to
      perform from Parent;

            (e) by Parent, if (i) the directors of the Company shall have failed
      to include in the Proxy Statement the Company Recommendation, (ii) the
      directors of the Company shall have withdrawn the Company Recommendation,
      (iii) the directors of the Company shall have modified or changed the
      Company Recommendation in a manner adverse to Parent or Sub (it being
      agreed that any disclosure of information required by applicable law
      regarding the Company's operations shall not be deemed a modification or
      change of the Company Recommendation in a manner adverse to Parent or
      Sub), provided that Parent shall not be entitled to terminate this
      Agreement pursuant to this clause (iii) unless it has notified the Company
      in writing that it intends to terminate the Agreement pursuant to this
      clause (iii) and the Company has not, within two Business Days after
      receipt of Parent's notice, revised the Company Recommendation in a manner
      not so adverse, (iv) a tender or exchange offer relating to securities of
      the Company shall have been commenced and the Company shall not have sent
      to its security holders, within 15 Business Days after the commencement of
      such tender or exchange offer (or such longer period as the Company
      advises Parent it requires to obtain the information necessary to evaluate
      such offer), a statement disclosing that the Company's Board of Directors
      recommends rejection of such tender or exchange offer, (v) the directors
      of the Company shall have approved or recommended to the stockholders of
      the Company a Takeover Proposal, (vi) the directors of the Company shall
      have approved or recommended that the stockholders of the Company tender
      their shares of Company Common Stock into any tender offer or exchange
      offer that is a Takeover Proposal or is related thereto, (vii) the Company
      willfully breaches any of its obligations under Section 4.2 of this
      Agreement that results in a Person making a Takeover Proposal, (viii) the
      Company shall have materially breached its obligations under this
      Agreement by reason of a failure to call the Company Stockholders Meeting
      in accordance with Section 5.1(b), or (ix) the directors of the Company 
      shall have adopted a resolution to do any of the foregoing specified in 
      clauses (i), (ii), (iii), (iv), (v), (vi) or (viii); or



                                       53





      
            (f) by the Company, if the Board of Directors of Company has
      provided written notice to Parent that the Company intends to enter into a
      binding written agreement for a Superior Proposal (with such termination
      becoming effective upon the Company entering into such binding written
      agreement); PROVIDED, HOWEVER, that (i) the Company shall have complied
      with Section 4.2 in all material respects; (ii) the Company shall have (A)
      notified Parent in writing of its receipt of such Superior Proposal, (B)
      further notified Parent in writing that the Company intends to enter into
      a binding agreement with respect to such Superior Proposal subject to
      clause (iii) below and (C) attached the most current written version of
      such Superior Proposal (or a summary containing all material terms and
      conditions of such Superior Proposal) to such notice referred to in clause
      (B), (iii) Parent does not make, within 72 hours after receipt of the
      Company's written notice pursuant to clause (ii)(B) above, an offer that
      the Board of Directors of the Company shall have reasonably concluded in
      good faith (following consultation with its financial advisor and outside
      counsel) is as favorable to the stockholders of the Company as such
      Superior Proposal and (iv) the Company pays the Termination Fee and
      Expenses in accordance with Section 5.8(b) concurrently with entering into
      such binding written agreement.

      Section 7.2. Effect of Termination. In the event of termination of this
                   ---------------------
Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the
provisions of the second sentence of Section 5.4 obligation to keep confidential
nonpublic information received from the other party and Section 5.8 fees and 
expenses this Section 7.2 and ARTICLE VIII, which provisions shall survive such 
termination, PROVIDED THAT, notwithstanding anything to the contrary contained 
in this Agreement, neither Parent nor the Company shall be relieved or released 
from any liabilities or damages arising out of its willful and material breach 
of this Agreement.

      Section 7.3. Amendment. This Agreement may be amended by the parties
                   ---------
hereto at any time before or after approval of the matters presented in
connection with the Merger to the stockholders of the Company; PROVIDED,
HOWEVER, that after any such approval, there shall be made no amendment that by
law requires further approval by the stockholders of the Company without such
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.

      Section 7.4. Extension; Waiver. At any time prior to the Effective Time,
                   -----------------
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto or (c) subject to the proviso of Section 7.3, waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any 
party to this Agreement to assert any of its rights under this Agreement or 
otherwise shall not constitute a waiver of such rights.


                                       54





                                  ARTICLE VIII
                               GENERAL PROVISIONS

      Section 8.1. Nonsurvival of Representations and Warranties. None of the
                   ---------------------------------------------
representations, warranties, covenants and other agreements in this Agreement or
in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and
other agreements, shall survive the Effective Time, except for those covenants
and agreements contained herein and therein (including Sections 5.6(d), 5.7 and
5.14) that by their terms apply or are to be performed in whole or in part after
the Effective Time and this Article VIII.

      Section 8.2. Notices. All notices, requests, claims, demands and other
                   -------
communications hereunder shall be in writing and shall be deemed given, and
shall be effective upon receipt, if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

            if to Parent or Sub, to:

                  TMP Worldwide inc.
                  622 Third Avenue
                  New York, New York 10017
                  Telephone:  (212) 351-7000
                  Telecopier: (917)256-8026
                  Attention: CEO
and

                  TMP Worldwide inc.
                  622 Third Avenue
                  New York, New York 10017
                  Telephone: (212) 351-7000
                  Telecopier:(917)256-8026
                  Attention: General Counsel

            with a copy to (which shall not constitute notice):

                  Fulbright & Jaworski LLP
                  666 Fifth Avenue
                  New York, New York 10103
                  Telephone: (212) 318-3000
                  Telecopier: (212) 318-3400
                  Attention: Gregg Berman, Esq.


                                       55





            if to the Company, to:

                  HotJobs.com, Ltd.
                  406 West 31st Street
                  New York, New York 10001
                  Telephone:  (212) 699-5300
                  Telecopier: 
                  Attention: Chief Executive Officer
and


                  HotJobs.com, Ltd.
                  406 West 31st Street
                  New York, New York 10001
                  Telephone:  (212) 699-5300
                  Telecopier: (917) 438-2632
                  Attention: General Counsel

            with a copy to (which shall not constitute notice):

                  Wachtell, Lipton, Rosen & Katz
                  51 West 52nd Street
                  New York, New York 10014
                  Telephone:  (212) 403-1000
                  Telecopier: (212) 403-2000
                  Attention: Mitchell S. Presser, Esq.


      Section 8.3.  Definitions.  For purposes of this Agreement:
                    -----------

            (a) an "AFFILIATE" of any Person means another Person that directly
                    ---------
      or indirectly, through one or more intermediaries, controls, is controlled
      by, or is under common control with, such first Person;

            (b) "BUSINESS DAY" means any day other than Saturday, Sunday or any
                 ------------
      other day on which banks are legally permitted to be closed in New York,
      New York;

            (c) "KNOWLEDGE" of any Person that is not an individual means, with
                 ---------
      respect to any matter in question, the actual knowledge of any of such
      person's executive officers having primary responsibility for such matter;

            (d) "MATERIAL ADVERSE EFFECT" with respect to the Company or Parent,
                 -----------------------
      means any change, effect, event, occurrence or state of facts (or any
      development that has had or is
                                      

                                       56





      reasonably likely to have any change or effect) that is materially adverse
      to the  business,  financial  condition or results of  operations  of such
      entity and its Subsidiaries,  taken as a whole, PROVIDED, HOWEVER, none of
      the  following  shall  be  deemed  in  themselves,   either  alone  or  in
      combination,  to constitute, and none of the following shall be taken into
      account in determining  whether there has been a Material  Adverse Effect:
      (i) any change in the  market  price or  trading  volume of such  entity's
      capital  stock after the date hereof,  (ii) any adverse  change,  event or
      effect arising from or relating to general business or economic conditions
      in the United States (including  prevailing interest rate and stock market
      levels),  (iii)  any  adverse  change,  event or  effect  arising  from or
      relating  to the general  state of the  industries  and market  sectors in
      which such  entity  operates  and (iv) the loss of existing  customers  or
      employees,   a  reduction  in  business  by,  or  revenue  from,  existing
      customers,  or any  reduction  in job  seekers,  in  each  case  resulting
      primarily from the announcement or consummation of the Merger;

            (e) "PERSON" means an individual, corporation, partnership, limited
                 ------
      liability company, joint venture, association, trust, unincorporated
      organization or other entity;

            (f)  "SIGNIFICANT  SUBSIDIARY"  shall have the meaning ascribed to
                  -----------------------
      such term in Rule 1-02 of Regulation S-X of the SEC;

            (g) a "SUBSIDIARY" of any Person means, with respect to such Person,
                   ----------
      any corporation, partnership, joint venture or other legal entity of which
      such person (either alone or through or together with any other
      subsidiary), owns, directly or indirectly, 50% or more of the stock or
      other equity interests the holders of which are generally entitled to vote
      for the election of the Board of Directors or other governing body of such
      corporation or other legal entity; and

            (h) "SUPERIOR PROPOSAL" means a bona fide written proposal made by a
                 -----------------
      Person other than a party hereto that is (a) for a Takeover Proposal
      (except that references in the definition of "Takeover Proposal" to "15%"
      shall be "50%") and (b) is on terms which the Board of Directors of the
      Company in good faith concludes (following receipt of the advice of its
      financial advisors and outside counsel), taking into account, among other
      things, all legal, financial, regulatory and other aspects of the proposal
      and the Person making the proposal, (i) would, if consummated, result in a
      transaction that is more favorable to the Company's stockholders (in their
      capacities as stockholders), from a financial point of view, than the 
      transactions contemplated by this Agreement and (ii) is reasonably capable
      of being completed by March 31, 2002.

      Section 8.4. Interpretation. When a reference is made in this Agreement to
                   --------------
an Article, a Section, Exhibit or Schedule, such reference shall be to an
Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or 


                                       57




"including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
References to this Agreement include references to the Company Disclosure
Memorandum and Parent Disclosure Memorandum. Each Section of this Agreement is
qualified by the matters set forth in the related Section of the Company
Disclosure Memorandum and of the Parent Disclosure Memorandum and by such
matters set forth any place else in this Agreement or in the Company Disclosure
Memorandum or the Parent Disclosure Memorandum where the applicability of such
qualification to the Section of this Agreement is reasonably apparent.

      Section 8.5. Counterparts. This Agreement may be executed in one or more
                   ------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties.

      Section 8.6. Entire Agreement; Third-Party Beneficiaries. This Agreement
                   -------------------------------------------
and the Confidentiality Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement and the
Confidentiality Agreement and (b) except for the provisions of Sections 5.6(f)
(including the corresponding section of the Company Disclosure Memorandum), 5.7
and 5.14, are not intended to confer upon any Person other than the parties any
rights or remedies.

      Section 8.7. Governing Law. This Agreement shall be governed by, and
                   -------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

      Section 8.8. Assignment. Neither this Agreement nor any of the rights,
                   ----------
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned newly-formed
United States Subsidiary of Parent, provided that no such assignment shall
adversely affect the tax-free nature of the transaction and provided further
that no such assignment shall relieve Sub of any of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.


                                       58





      
      Section 8.9. Enforcement. The parties agree that irreparable damage would
                   -----------
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the Chancery or other Courts of
the State of Delaware, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of the Chancery or other
Courts of the State of Delaware in the event any dispute arises out of this
Agreement or the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (c) agrees that it will not bring any
action relating to this Agreement or the transactions contemplated by this
Agreement in any court other than the Chancery or other Courts of the State of
Delaware, and each of the parties irrevocably waives the right to trial by jury,
and (d) each of the parties irrevocably consents to service of process by first
class certified mail, return receipt requested, postage prepaid, to the address
at which such party is to receive notice.

      Section 8.10. Severability. If any term or other provision of this
                    ------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

               [REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]




                                       59





      IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.

                                          TMP WORLDWIDE INC.


                                          By:  /s/ Myron F. Olesnyckyj
                                             ----------------------------
                                          Name:
                                          Title:

                                          TMP TOWER CORP.


                                          By:  /s/ Myron F. Olesnyckyj
                                             ----------------------------
                                          Name:
                                          Title:

                                          HOTJOBS.COM, LTD.


                                          By:  /S/ Dimitri Boylan
                                             ----------------------------
                                          Name:  Dimitri Boylan
                                          Title: Pres & CEO