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Published: 2008-03-26

Agreement and Plan of Merger - Wolters Kluwer U.S. Corp. and Waverly Inc.



                            AGREEMENT AND PLAN OF MERGER

                                    BY AND AMONG

                          WOLTERS KLUWER U.S. CORPORATION,

                               MP ACQUISITION CORP.,
                                          
                                        and

                                   WAVERLY, INC.
                                          
                                 February 10, 1998
                                          
                                          
                                          


 



                                  TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . . .  1

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

                                    ARTICLE I

THE OFFER AND MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
          1.1  The Offer . . . . . . . . . . . . . . . . . . . . . . . . . .  1
          1.2  Company Actions . . . . . . . . . . . . . . . . . . . . . . .  4
          1.3  Directors . . . . . . . . . . . . . . . . . . . . . . . . . .  6
          1.4  The Merger. . . . . . . . . . . . . . . . . . . . . . . . . .  7
          1.5  Effective Time. . . . . . . . . . . . . . . . . . . . . . . .  8
          1.6  Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
          1.7  Articles of Incorporation of
               the Surviving Corporation  . . . . . . . . . . . . . . . . . . 8
          1.8  By-Laws of the Surviving 
               Corporation  . . . . . . . . . . . . . . . . . . . . . . . . . 8
          1.9  Directors and Officers of the 
               Surviving Corporation  . . . . . . . . . . . . . . . . . . . . 9
          1.10 Shareholders' Meeting  . . . . . . . . . . . . . . . . . . . . 9
          1.11 Merger Without Meeting of
               Shareholders  . . . . . . . . . . . . . . . . . . . . . . . . 10


                                   ARTICLE II

CONVERSION OF SECURITIES   . . . . . . . . . . . . . . . . . . . . . . . . . 11
          2.1  Conversion of Capital Stock   . . . . . . . . . . . . . . . . 11
          2.2  Exchange of Certificates  . . . . . . . . . . . . . . . . . . 12

                                   ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY  . . . . . . . . . . . . . . . 14
          3.1  Corporate Organization and
               Qualification . . . . . . . . . . . . . . . . . . . . . . . . 14
          3.2  Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 14
          3.3  Authority Relative to This
               Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . .15
          3.4  Consents and Approvals; No 
               Violation  . . . . . . . . . . . . . . . . . . . . . . . . . .16
          3.5  SEC Reports; Financial

                                       ii


               Statements. . . . . . . . . . . . . . . . . . . . . . . . . . .17
          3.6  Absence of Certain Changes 
               Or Events . . . . . . . . . . . . . . . . . . . . . . . . . . .18
          3.7  Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . .18
          3.8  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
          3.9  Employee Benefit Plans; Labor 
               Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
          3.10 Environmental Laws and 
               Regulations . . . . . . . . . . . . . . . . . . . . . . . . . .21
          3.11 Intangible Property; Copyrights . . . . . . . . . . . . . . . .22
          3.12 Compliance with Applicable Laws . . . . . . . . . . . . . . . .22
          3.13 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . ..23
          3.14 Approvals; Antitakeover 
               Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . .23
          3.15 Voting Requirements . . . . . . . . . . . . . . . . . . . . . .24
          3.16 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . .24
          3.17 Opinion of Financial Advisors . . . . . . . . . . . . . . . . .24
          3.18 Information Supplied. . . . . . . . . . . . . . . . . . . . . .24
          3.19 Confidentiality Agreements. . . . . . . . . . . . . . . . . . .25

                                   ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
          4.1  Corporate Organization and
               Qualification . . . . . . . . . . . . . . . . . . . . . . . . .25
          4.2  Authority Relative to This 
               Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .26
          4.3  Consents and Approvals; No 
               Violation . . . . . . . . . . . . . . . . . . . . . . . . . . .26
          4.4  Interim Operations of Newco . . . . . . . . . . . . . . . . . .27
          4.5  Sufficient Funds. . . . . . . . . . . . . . . . . . . . . . . .27
          4.6  Share Ownership . . . . . . . . . . . . . . . . . . . . . . . .27
          4.7  Information in Proxy Statement
               and Schedule 14D-9. . . . . . . . . . . . . . . . . . . . . . .27
          4.8  Investigation by Parent . . . . . . . . . . . . . . . . . . . .28
          4.9  Brokers and Finders . . . . . . . . . . . . . . . . . . . . . .29

                                    ARTICLE V

ADDITIONAL COVENANTS AND AGREEMENTS. . . . . . . . . . . . . . . . . . . . . .29
          5.1  Interim Operations of the 
               Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
          5.2  Alternative Proposals . . . . . . . . . . . . . . . . . . . . .32
          5.3  Certain Filings . . . . . . . . . . . . . . . . . . . . . . . .33
          5.4  Satisfaction of Conditions;
               Receipt of Necessary Approvals. . . . . . . . . . . . . . . . .33

                                       iii


          5.5  Access to Information . . . . . . . . . . . . . . . . . . . . .34
          5.6  Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . .34
          5.7  Directors' and Officers' Insurance
               and Indemnification . . . . . . . . . . . . . . . . . . . . . .35
          5.8  Employees . . . . . . . . . . . . . . . . . . . . . . . . . . .37
          5.9  Corporate Presence. . . . . . . . . . . . . . . . . . . . . . .39
          5.10 Conduct of Business of Newco. . . . . . . . . . . . . . . . . .39
          5.11 Certain Filings . . . . . . . . . . . . . . . . . . . . . . . .39
          5.12 Further Assurances. . . . . . . . . . . . . . . . . . . . . . .39

                                   ARTICLE VI

CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . .40
          6.1  Conditions to Each Party's
               Obligations to Effect the Merger. . . . . . . . . . . . . . . .40
          6.2  Additional Conditions to the 
               Obligations of Parent and Newco . . . . . . . . . . . . . . . .41
          6.3  Additional Conditions to the 
               Obligations of the Company. . . . . . . . . . . . . . . . . . .41

                                   ARTICLE VII

TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
          7.1  Termination . . . . . . . . . . . . . . . . . . . . . . . . . .42
          7.2  Effect of Termination . . . . . . . . . . . . . . . . . . . . .46

                                  ARTICLE VIII

MISCELLANEOUS AND GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . .46
          8.1  Payment of Expenses and Other
               Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
          8.2  Survival of Representations and Warranties; Survival of
               Confidentiality Agreement . . . . . . . . . . . . . . . . . . .47
          8.3  Modification or Amendment . . . . . . . . . . . . . . . . . . .47
          8.4  Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . .47
          8.5  Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .47
          8.6  Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .47
          8.7  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
          8.8  Entire Agreement; Assignment. . . . . . . . . . . . . . . . . .49
          8.9  Parties in Interest . . . . . . . . . . . . . . . . . . . . . .49
          8.10 Certain Definitions . . . . . . . . . . . . . . . . . . . . . .49
          8.11 Obligation of Parent. . . . . . . . . . . . . . . . . . . . . .50
          8.12 Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
          8.13 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . .51
          8.14 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
          8.15 Specific Performance. . . . . . . . . . . . . . . . . . . . . .51

                                       iv


          8.16 Joint and Several Liability . . . . . . . . . . . . . . . . . .52
          8.17 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . .52

ANNEX A; CONDITIONS TO THE OFFER . . . . . . . . . . . . . . . . . . . . . . A-1

                                        v


 


                             AGREEMENT AND PLAN OF MERGER


          AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of 
February 10, 1998, by and among Wolters Kluwer U.S. Corporation, a Delaware 
corporation ("Parent"), MP Acquisition Corp., a Maryland corporation and a 
wholly owned subsidiary of Parent ("Newco"), and Waverly, Inc., a Maryland 
corporation (the "Company").

                                       RECITALS

          WHEREAS, the respective Boards of Directors of Parent, Newco and 
the Company have, subject to the conditions of this Agreement, determined 
that the Merger (as defined below) is in the best interests of their 
respective stockholders and approved this Agreement and the transactions 
contemplated hereby; and

          WHEREAS, Parent, Newco and the Company desire to make certain 
representations, warranties, covenants and agreements in connection with the 
Merger;

          NOW, THEREFORE, in consideration of the foregoing and the mutual 
representations, warranties, covenants and agreements set forth herein, and 
in consideration of the execution and delivery by Parent, Newco and the 
Stockholders named therein of a stock option and tender agreement (the "Stock 
Option and Tender Agreement") Parent, Newco and the Company hereby agree as 
follows:

                                      ARTICLE I

                                 THE OFFER AND MERGER

          1.1  The Offer.  (a) As promptly as practicable (but in no event 
later than five business days after the public announcement of the execution 
hereof), Newco shall commence (within the meaning of Rule 14d-2 under the 
Securities Exchange Act of 1934, as amended (the "Exchange Act")) an offer 
(the "Offer") to purchase for cash all shares of the issued and outstanding 
Common Stock, par value $2.00 per share (referred to herein as either the 
"Shares" or "Company Common Stock"), of the Company at a price of $ 39.00 per 
Share, net to the 



seller in cash (such price, or such higher price per Share as may be paid in 
the Offer, being referred to herein as the "Offer Price"), subject to there 
being validly tendered and not withdrawn prior to the expiration of the 
Offer, that number of Shares which, together with the Shares beneficially 
owned by Parent or Newco, represent at least two-thirds of the Shares 
outstanding on a fully diluted basis (the "Minimum Condition") and to the 
other conditions set forth in Annex A hereto.  Newco shall, on the terms and 
subject to the prior satisfaction or waiver (except that the Minimum 
Condition may not be waived) of the conditions of the Offer, accept for 
payment and pay for Shares tendered as soon as it is legally permitted to do 
so under applicable law.  The obligations of Newco to commence the Offer and 
to accept for payment and to pay for any Shares validly tendered on or prior 
to the expiration of the Offer and not withdrawn shall be subject only to the 
Minimum Condition and the other conditions set forth in Annex A hereto.  The 
Offer shall be made by means of an offer to purchase (the "Offer to 
Purchase") containing the terms set forth in this Agreement, the Minimum 
Condition and the other conditions set forth in Annex A hereto.  Newco 
expressly reserves the right to amend any of the terms and conditions of the 
Offer; provided that Newco shall not amend or waive the Minimum Condition, 
decrease the Offer Price or decrease the number of Shares sought, change the 
form of consideration to be paid pursuant to the Offer, impose conditions to 
the Offer in addition to those set forth in Annex A hereto, or amend any 
other term or condition of the Offer in any manner adverse to the holders of 
the Shares or extend the expiration date of the Offer without the prior 
written consent of the Company (such consent to be authorized by the Board of 
Directors of the Company or a duly authorized committee thereof). 
Notwithstanding the foregoing, Newco shall, and Parent agrees to cause Newco 
to, extend the Offer for a period of ten business days following the initial 
expiration date of the Offer, if any conditions to the Offer have not been 
satisfied or waived at such date.  In addition, following such first 
extension of the Offer as provided in the preceding sentence, Newco shall, 
and Parent agrees to cause Newco to, extend the Offer at any time up to six 
(6) months from the execution of this Agreement, for one or more periods of 
not more than ten business days, if at the expiration date of the Offer, as 
extended, all conditions to the Offer have not been satisfied or waived.  In 
addition, 

                                       2


the Offer Price may be increased and the Offer may be extended to the extent 
required by law in connection with such increase in each case without the 
consent of the Company.

               (b)    As soon as practicable on the date the Offer is 
commenced, Parent and Newco shall file with the United States Securities and 
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 
with respect to the Offer (together with all amendments and supplements 
thereto and including the exhibits thereto, the "Schedule 14D-1").  The 
Schedule 14D-1 will include, as exhibits, the Offer to Purchase and a form of 
letter of transmittal and summary advertisement (collectively, together with 
any amendments and supplements thereto, the "Offer Documents").  Parent and 
Newco represent that the Offer Documents will comply in all material respects 
with the provisions of applicable federal securities laws and, on the date 
filed with the SEC and on the date first published, sent or given to the 
Company's shareholders, shall not 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 were made, not misleading, except that no 
representation is made by Parent or Newco with respect to information 
supplied by the Company in writing for inclusion in the Offer Documents.  
Each of Parent and Newco further agrees to take all steps necessary to cause 
the Offer Documents to be filed with the SEC and to be disseminated to 
holders of Shares, in each case as and to the extent required by applicable 
federal securities laws.  Each of Parent and Newco, on the one hand, and the 
Company, on the other hand, agrees promptly to correct any information 
provided by it for use in the Offer Documents if and to the extent that it 
shall have become false and misleading in any material respect and each of 
Parent and Newco further agrees to take all steps necessary to cause the 
Offer Documents as so corrected to be filed with the SEC and to be 
disseminated to holders of Shares, in each case as and to the extent required 
by applicable federal securities laws.  The Company and its counsel shall be 
given a reasonable opportunity to review the Schedule 14D-1 and the Offer 
Documents before they are filed with the SEC.  In addition, Parent and Newco 
agree to provide the Company and its counsel in writing with any comments or 
other communications that Parent, Newco or their counsel 

                                       3


may receive from time to time from the SEC or its staff with respect to the 
Offer Documents promptly after the receipt of such comments or other 
communications.

          1.2  Company Actions.

               (a)  The Company hereby approves of and consents to the Offer 
and represents that the Board of Directors, at a meeting duly called and 
held, has (i) unanimously approved this Agreement and the transactions 
contemplated hereby, including the Offer and the Merger (collectively, the 
"Transactions"), (ii) adopted a resolution by the unanimous vote of the Board 
of Directors approving the acquisition of Shares by Parent and Newco pursuant 
to the Offer, which resolution constitutes approval of the acquisition of 
Shares pursuant to the Offer under Section 3-603 of the Maryland General 
Corporation Law (the "MGCL"); (iii) adopted a resolution by the unanimous 
vote of the Board of Directors which declares that the Transactions are 
advisable on substantially the terms and conditions set forth or referred to 
in the resolution in accordance with Section 3-105 of the MGCL; (iv) 
unanimously determined that as of the date hereof the Transactions are fair 
to and in the best interest of the Company's shareholders and (v) unanimously 
resolved to recommend that the shareholders of the Company accept the Offer, 
tender their Shares thereunder to Newco and approve and adopt this Agreement 
and the Merger; provided, that such recommendation may be withdrawn, modified 
or amended if, in the opinion of the Board of Directors, after consultation 
with its legal counsel, such recommendation would be inconsistent with its 
fiduciary duties to the Company's shareholders under applicable law.  The 
Company represents that it has previously  approved an amendment to the 
Company's By-laws that exempts the acquisition of Shares pursuant to the 
Transactions from the provisions of Section 3-702 of the MGCL.  The Company 
has been advised that all of its directors and executive officers intend 
either to tender their Shares pursuant to the Offer or to vote their Shares 
in favor of the Merger.

               (b)  As promptly as practicable following the commencement of 
the Offer, the Company shall file with the SEC a Solicitation/Recommendation 
Statement on 

                                       4


Schedule 14D-9 (together with all amendments and supplements thereto and 
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to 
the fiduciary duties of the Company's directors under applicable law and to 
the provisions of this Agreement, contain the recommendation referred to in 
clause (v) of Section 1.2(a) hereof.  The Company represents that the 
Schedule 14D-9 will comply in all material respects with the provisions of 
applicable federal securities laws and, on the date filed with the SEC and on 
the date first published, sent or given to the Company's shareholders, shall 
not 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 were made, 
not misleading, except that no representation is made by the Company with 
respect to information supplied by Parent or Newco for inclusion in the 
Schedule 14D-9.  The information supplied by Parent or Newco for inclusion in 
the Schedule 14D-9 shall not, on the date filed with the SEC and on the date 
first published, sent or given to the Company's stockholders, 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 were made, not 
misleading.  The Company further agrees to take all steps necessary to cause 
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders 
of Shares, in each case as and to the extent required by applicable federal 
securities laws.  Each of the Company, on the one hand, and Parent and Newco, 
on the other hand, agrees promptly to correct any information provided by it 
for use in the Schedule 14D-9 if and to the extent that it shall have become 
false and misleading in any material respect and the Company further agrees 
to take all steps necessary to cause the Schedule 14D-9 as so corrected to be 
filed with the SEC and to be disseminated to holders of the Shares, in each 
case as and to the extent required by applicable federal securities laws.  
Parent and its counsel shall be given a reasonable opportunity to review the 
initial Schedule 14D-9 before it is filed with the SEC.  In addition, the 
Company agrees to provide Parent, Newco and their counsel in writing with any 
comments or other communications that the Company or its counsel may receive 
from time to time from the SEC or its staff with 

                                       5


respect to the Schedule 14D-9 promptly after the receipt of such comments or 
other communications.  

               (c)  In connection with the Offer, if requested by Parent, the 
Company will promptly furnish or cause to be furnished to Parent mailing 
labels, security position listings and any available listing or computer file 
containing the names and addresses of the record holders of the Shares as of 
a recent date, and shall furnish Parent with such information and assistance 
as Parent or its agents may reasonably request in communicating the Offer to 
the shareholders of the Company.  Except for such steps as are necessary to 
disseminate the Offer Documents, Parent and Newco shall hold in confidence 
the information contained in any of such labels and lists and the additional 
information referred to in the preceding sentence, will use such information 
only in connection with the Offer, and, if this Agreement is terminated, will 
upon request of the Company deliver or cause to be delivered to the Company 
all copies of such information then in its possession or the possession of 
its agents or representatives.

          1.3  Directors.

               (a)  Promptly upon the purchase of and payment for Shares by 
Parent or any of its Subsidiaries (as defined in Section 8.10) which 
represent at least two-thirds of the outstanding shares of Company Common 
Stock (on a fully diluted basis), Parent shall be entitled to designate such 
number of directors, rounded up to the next whole number, on the Board of 
Directors of the Company as is equal to the product of the total number of 
directors on such Board (giving effect to the directors designated by Parent 
pursuant to this sentence) multiplied by the percentage that the aggregate 
number of Shares beneficially owned by Newco, Parent and any of their 
affiliates bears to the total number of shares of Company Common Stock then 
outstanding.  The Company shall take all action necessary to cause Parent's 
designees to be elected or appointed to the Company's Board of Directors and 
to secure the resignations of such number of its incumbent directors as is 
necessary to enable Parent's designees to be so elected to the Company's 
Board, and shall cause Parent's designees to be so elected.  At such times, 
the Company will take all action necessary to cause individuals designated by 
Parent to constitute the 

                                       6


same percentage as such individuals represent on the Company's Board of 
Directors of (A) each committee of the Board and (B) each board of directors 
(and committee thereof) of each Subsidiary in each case to the extent 
permitted by the National Association of Securities Dealers (the "NASD") 
Rules. Notwithstanding the foregoing, until the Effective Time (as defined in 
Section 1.5 hereof), the Company shall retain as members of its Board of 
Directors at least two (2) directors that are directors of the Company on the 
date hereof (the "Company Designees"); provided, that subsequent to the 
purchase of and payment for Shares pursuant to the Offer, Parent shall always 
have its designees represent at least a majority of the entire Board of 
Directors.  The Company's obligations under this Section 1.3(a) shall be 
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated 
thereunder.  The Company shall promptly take all actions required pursuant to 
such Section 14(f) and Rule 14f-1 in order to fulfill its obligations under 
this Section 1.3(a), including mailing to shareholders the information 
required by such Section 14(f) and Rule 14f-1 as is necessary to enable 
Parent's designees to be elected to the Company's Board of Directors.  Parent 
or Newco will supply the Company any information with respect to either of 
them and their nominees, officers, directors and affiliates required by such 
Section 14(f) and Rule 14f-1.

               (b)    From and after the time, if any, that Parent's 
designees constitute a majority of the Company's Board of Directors, any 
amendment of this Agreement, any termination of this Agreement by the 
Company, any extension of time for performance of any of the obligations of 
Parent or Newco hereunder, any waiver of any condition or any of the 
Company's rights hereunder or other action by the Company hereunder may be 
effected only by the action of a majority of the directors of the Company 
then in office who were directors of the Company on the date hereof, which 
action shall be deemed to constitute the action of the full Board of 
Directors; provided, that if there shall be no such directors, such actions 
may be effected by the unanimous vote of the entire Board of Directors of the 
Company.

          1.4  The Merger. Subject to the terms and conditions of this 
Agreement, at the Effective Time (as defined in Section 1.5 hereof), the 
Company and Newco 

                                       7


shall consummate a merger (the "Merger") pursuant to which (a) Newco shall be 
merged with and into the Company and the separate corporate existence of 
Newco shall thereupon cease, (b) the Company shall be the successor or 
surviving corporation in the Merger and shall continue to be governed by the 
laws of the State of Maryland and (c) the separate corporate existence of the 
Company with all its rights, privileges, immunities, powers and franchises 
shall continue unaffected by the Merger.  The corporation surviving the 
Merger is sometimes hereinafter referred to as the "Surviving Corporation."  
The Merger shall have the effects set forth in the MGCL.

          1.5  Effective Time.  Parent, Newco and the Company will cause 
appropriate Articles of Merger (the "Articles of Merger") to be executed and 
filed on the date of the Closing (as defined in Section 1.6) (or on such 
other date as Parent and the Company may agree) with the State Department of 
Assessments and Taxation of the State of Maryland as provided in the MGCL.  
The Merger shall become effective at the time at which the Articles of Merger 
have been duly filed with the State Department of Assessments and Taxation of 
the State of Maryland or at such time as is agreed upon by the parties and 
specified in the Articles of Merger, and such time is hereinafter referred to 
as the "Effective Time."

          1.6  Closing.  The closing of the Merger (the "Closing") shall take 
place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom, 1440 New 
York Avenue, Washington, D.C. as soon as practicable following the 
satisfaction or waiver of all of the conditions set forth in Article VI 
hereof or (b) at such other place, time and date as Parent and the Company 
may agree.

          1.7  Articles of Incorporation of the Surviving Corporation.  The 
Articles of Incorporation of the Company, as in effect immediately prior to 
the Effective Time, shall be the Articles of Incorporation of the Surviving 
Corporation until thereafter amended as provided by law and such Articles of 
Incorporation.

          1.8  By-Laws of the Surviving Corporation.  The By-Laws of Newco, 
as in effect immediately prior to the Effective Time, shall be the By-Laws of 
the Surviving Corporation until thereafter amended as provided by law, 

                                       8


the Articles of Incorporation of the Surviving Corporation and such By-Laws.

          1.9  Directors and Officers of the Surviving Corporation.  The 
directors and officers of Newco at the Effective Time shall, from and after 
the Effective Time, be the initial directors and officers, respectively, of 
the Surviving Corporation until their successors have been duly elected or 
appointed and qualified or until their earlier death, resignation or removal 
in accordance with the Surviving Corporation's Articles of Incorporation and 
By-Laws.

          1.10   Shareholders' Meeting.

               (a) If required by applicable law in order to consummate the 
Merger, the Company, acting through its Board of Directors, shall, in 
accordance with applicable law:

                    (i)  duly call, give notice of, convene and hold a special
     meeting of its shareholders (the "Special Meeting") as soon as practicable
     following the acceptance for payment and purchase of Shares by Newco
     pursuant to the Offer for the purpose of considering and taking action upon
     this Agreement;

                    (ii)  prepare and file with the SEC a preliminary proxy or
     information statement relating to the Merger and this Agreement and shall
     (x) obtain and furnish the information required to be included by the SEC
     in the Proxy Statement (as hereinafter defined) and, after consultation
     with Parent, to respond promptly to any comments made by the SEC with
     respect to the preliminary proxy or information statement and cause a
     definitive proxy or information statement (the "Proxy Statement") to be
     mailed to its shareholders and (y) obtain the necessary approvals of the
     Merger and this Agreement by its shareholders; and 

                    (iii)  subject to the fiduciary obligations of the Board
     under applicable law as advised by its legal counsel, include in the Proxy
     Statement the recommendation of the Board that shareholders of 

                                       9


     the Company vote in favor of the approval of the Merger and the adoption of
     this Agreement.

               (b)  Parent agrees that it will provide the Company with the 
information concerning Parent and Newco required to be included in the Proxy 
Statement and will vote, or cause to be voted, all of the Shares then owned 
by it, Newco or any of its other Subsidiaries and affiliates in favor of the 
approval of the Merger and the adoption of this Agreement.

               (c)  The Company represents that the Proxy Statement (or any 
amendment thereof or supplement thereto) at the date mailed to Company 
stockholders and at the time of the Special Meeting will not contain any 
untrue statement of 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 is made by the Company with respect to statements made 
therein based on information supplied by Parent or Newco in writing for 
inclusion in the Proxy Statement.  If at any time prior to the Effective Time 
any event with respect to the Company or any of its Subsidiaries should occur 
which is required to be described in a supplement to the Proxy Statement, 
such event shall be so described, and such supplement shall be promptly filed 
with the SEC and, as required by law, disseminated to the stockholders of the 
Company.  With respect to the information relating to the Company, the Proxy 
Statement will comply as to form and substance in all material respects with 
the requirements of the Exchange Act.

          1.11  Merger Without Meeting of Shareholders.  Notwithstanding 
Section 1.10 hereof, in the event that Parent, Newco or any other Subsidiary 
of Parent shall acquire at least 90% of the outstanding shares of each class 
of capital stock of the Company, pursuant to the Offer or otherwise, the 
parties hereto agree to take all necessary and appropriate action to cause 
the Merger to become effective as soon as practicable after such acquisition, 
without a meeting of shareholders of the Company, in accordance with Section 
3-106 of the MGCL.

                                       10




                                      ARTICLE II

                               CONVERSION OF SECURITIES

          2.1  Conversion of Capital Stock.  As of the Effective Time, by 
virtue of the Merger and without any action on the part of the holders of any 
shares of Company Common Stock or common stock, par value $ .01 per share, of 
Newco ("Newco Common Stock"):

               (a)    Newco Common Stock.  Each issued and outstanding share 
of Newco Common Stock shall be converted into and become one fully paid and 
nonassessable share of common stock of the Surviving Corporation with the 
same rights, powers and privileges as the shares so converted and shall 
constitute the only outstanding shares of capital stock of the Surviving 
Corporation.

               (b)    Cancellation of Treasury Stock and Parent-Owned Stock. 
All shares of Company Common Stock that are owned by the Company as treasury 
stock and any shares of Company Common Stock owned by Parent, Newco or any 
other wholly owned Subsidiary of Parent shall be cancelled and retired and 
shall cease to exist and no consideration shall be delivered in exchange 
therefor.

               (c)    Exchange of Shares.  Each share of Company Common Stock 
issued and outstanding (other than Shares to be cancelled in accordance with 
Section 2.1(b) hereof), shall be converted into the right to receive the 
Offer Price, payable to the holder thereof, without interest (the "Merger 
Consideration"), upon surrender of the certificate formerly representing such 
share of Company Common Stock in the manner provided in Section 2.2.  All 
such shares of Company Common Stock, when so converted, shall no longer be 
outstanding and shall automatically be cancelled and retired and shall cease 
to exist, and each holder of a certificate representing any such shares shall 
cease to have any rights with respect thereto, except the right to receive 
the Merger Consideration therefor upon the surrender of such certificate in 
accordance with Section 2.2.

               (d)  Stock Options. Parent and the Company shall take all 
actions necessary to provide that, immediately prior to the Effective Time, 
(i) the Company shall pay to the holder of each then outstanding stock option 

                                       11


to purchase Shares (an "Option") granted under the Company's stock option plans
and agreements (the "Option Plans") with such Options listed on Section 2.1 of
the disclosure schedule delivered to Parent and Newco by the Company
concurrently with the execution hereof (the "Company Disclosure Schedule"),
whether or not then exercisable or vested, an amount in respect thereof equal to
the product of (A) the excess, if any, of the Offer Price over the per share
exercise price of each such Option and (B) the number of Shares subject thereto
(such payment to be net of applicable withholding taxes) and (ii) each such
Option shall be cancelled; provided, however, that the foregoing shall be
subject to the obtaining of any necessary consents of holders of Options, it
being agreed that the Company and Parent will (x) use all reasonable best
efforts to obtain any such consents and (y) make any amendments to the terms of
such stock option or compensation plans or arrangements that are necessary to
give effect to the transactions contemplated by this Section 2.1. 

          2.2  Exchange of Certificates.  

               (a)    Paying Agent.  Parent shall designate a bank or trust 
company reasonably acceptable to the Company to act as agent for the holders 
of shares of Company Common Stock in connection with the Merger (the "Paying 
Agent") to receive the funds to which holders of shares of Company Common 
Stock shall become entitled pursuant to Section 2.1(c) hereof.  Parent shall 
take all steps necessary to deposit or cause to be deposited with the Paying 
Agent such funds as needed for timely payment hereunder.  Such funds shall be 
invested by the Paying Agent as directed by Parent or the Surviving 
Corporation.

               (b)    Exchange Procedures.  As soon as reasonably practicable 
after the Effective Time but in no event more than three business days 
thereafter, the Paying Agent shall 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 pursuant to Section 2.1 hereof into the right to 
receive the Merger Consideration (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 

                                       12


Paying Agent and shall be in such form and have such other provisions as 
Parent and the Company may reasonably specify) and (ii) instructions for use 
in effecting the surrender of the Certificates in exchange for payment of the 
Merger Consideration.  Upon surrender of a Certificate for cancellation to 
the Paying Agent or to such other agent or agents as may be appointed by 
Parent, together with such letter of transmittal, duly executed, the holder 
of such Certificate shall be entitled to receive in exchange therefor the 
Merger Consideration for each share of Company Common Stock formerly 
represented by such Certificate and the Certificate so surrendered shall 
forthwith be cancelled.  If payment of the Merger Consideration is to be made 
to a person other than the person in whose name the surrendered Certificate 
is registered, it shall be a condition of payment that the Certificate so 
surrendered shall be properly endorsed or shall be otherwise in proper form 
for transfer and that the person requesting such payment shall have paid any 
transfer and other taxes required by reason of the payment of the Merger 
Consideration to a person other than the registered holder of the Certificate 
surrendered or shall have established to the satisfaction of the Surviving 
Corporation that such tax either has been paid or is not applicable.  Until 
surrendered as contemplated by this Section 2.2, each Certificate shall be 
deemed at any time after the Effective Time to represent only the right to 
receive the Merger Consideration in cash as contemplated by this Section 2.2.

               (c)    Transfer Books; No Further Ownership Rights in Company 
Common Stock.  At the Effective Time, the stock transfer books of the Company 
shall be closed and thereafter there shall be no further registration of 
transfers of shares of Company Common Stock on the records of the Company.  
From and after the Effective Time, the holders of Certificates evidencing 
ownership of shares of Company Common Stock outstanding immediately prior to 
the Effective Time shall cease to have any rights with respect to such 
Shares, except as otherwise provided for herein or by applicable law.  If, 
after the Effective Time, Certificates are presented to the Surviving 
Corporation for any reason, they shall be cancelled and exchanged as provided 
in this Article II.

               (d)    Termination of Fund; No Liability.  At any time 
following one (1) year after the Effective 

                                       13


Time, the Surviving Corporation shall be entitled to require the Paying Agent 
to deliver to it any funds (including any interest received with respect 
thereto) which had been made available to the Paying Agent and which have not 
been disbursed to holders of Certificates, and thereafter such holders shall 
be entitled to look to the Surviving Corporation (subject to abandoned 
property, escheat or other similar laws) only as general creditors thereof 
with respect to the Merger Consideration payable upon due surrender of their 
Certificates, without any interest thereon.  Notwithstanding the foregoing, 
neither the Surviving Corporation nor the Paying Agent shall be liable to any 
holder of a Certificate for Merger Consideration delivered to a public 
official pursuant to any applicable abandoned property, escheat or similar 
law. 

 
                                     ARTICLE III

                            REPRESENTATIONS AND WARRANTIES
                                    OF THE COMPANY

          The Company represents and warrants to Parent and Newco that:

          3.1  Corporate Organization and Qualification.  Each of the Company 
and its Subsidiaries is a corporation duly organized, validly existing and in 
good standing under the laws of its respective jurisdiction of incorporation 
and is qualified and in good standing as a foreign corporation in each 
jurisdiction where the properties owned, leased or operated, or the business 
conducted, by it require such qualification, except where the failure to so 
qualify or be in good standing would not have a Company Material Adverse 
Effect (as defined in Section 8.10).  Each of the Company and its 
Subsidiaries has all requisite corporate power and authority to own, lease 
and operate its properties and to carry on its business as it is now being 
conducted, except where the failure to have such power and authority would 
not have a Company Material Adverse Effect.  The Company has heretofore made 
available to Parent complete and correct copies of its Articles of 
Incorporation and By-Laws as in effect as of the date hereof.

          3.2  Capitalization.  The authorized capital stock of the Company 
consists of: (i) 12,000,000 Shares, 

                                       14


of which, as of the date hereof 9,039,576 Shares were issued and outstanding, 
and (ii) 500,000 shares of preferred stock, no par value per share, none of 
which, as of the date hereof, were issued and outstanding.  All of the 
outstanding Shares have been duly authorized and validly issued and are fully 
paid and nonassessable.  Except as set forth in Section 3.2 of the Company 
Disclosure Schedule, as of the date hereof all outstanding shares of capital 
stock of the Company's Subsidiaries are owned by the Company or a direct or 
indirect wholly owned subsidiary of the Company, free and clear of all liens, 
charges, encumbrances, claims and options of any nature.  Except as set forth 
on Section 3.2 of the Company Disclosure Schedule, there are not as of the 
date hereof any outstanding or authorized options, warrants, calls, rights 
(including preemptive rights), commitments or any other agreements of any 
character which the Company or any of its Subsidiaries is a party to, or may 
be bound by, requiring it to issue, transfer, sell, purchase, redeem or 
acquire any shares of capital stock or any securities or rights convertible 
into, exchangeable for, or evidencing the right to subscribe for, any shares 
of capital stock of the Company or any of its Subsidiaries.

          3.3  Authority Relative to This Agreement.  The Company has the 
requisite corporate power and authority to execute and deliver this Agreement 
and, subject to approval of this Agreement by the holders of two-thirds of 
the outstanding Shares in accordance with the MGCL, to consummate the 
transactions contemplated hereby.  This Agreement and the consummation by the 
Company of the transactions contemplated hereby have been duly and validly 
authorized by the Board of Directors 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 (other than, 
with respect to the Merger, the approval of this Agreement by the holders of 
two-thirds of the outstanding Shares in accordance with the MGCL).  This 
Agreement has been duly and validly executed and delivered by the Company 
and, assuming this Agreement constitutes the valid and binding agreement of 
Parent and Newco, constitutes the valid and binding agreement of the Company, 
enforceable against the Company in accordance with its terms, except that the 
enforcement hereof may be limited by (i) bankruptcy, insolvency, 
reorganization, moratorium or other similar laws now or hereafter in effect 
relating 

                                       15


to creditors' rights generally and (ii) general principles of equity 
(regardless of whether enforceability is considered in a proceeding in equity 
or at law). 

          3.4  Consents and Approvals; No Violation.  Neither the execution 
and delivery of this Agreement by the Company nor the consummation by the 
Company of the transactions contemplated hereby will (a) conflict with or 
result in any breach of any provision of the respective Articles of 
Incorporation or certificate of incorporation, as the case may be, or 
respective By-Laws of the Company or any of its Subsidiaries; (b) except as 
set forth on Section 3.4(b) of the Company Disclosure Schedule, require any 
consent, approval, authorization or permit of, or filing with or notification 
to, any governmental or regulatory authority, except (i) in connection with 
the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements 
Act of 1976, as amended (the "HSR Act"), (ii) pursuant to the applicable 
requirements of the Securities Exchange Act of 1934, as amended, and the 
rules and regulations promulgated thereunder (the "Exchange Act"), (iii) the 
filing of the Articles of Merger pursuant to the MGCL and appropriate 
documents with the relevant authorities of other states in which the Company 
or any of its Subsidiaries is authorized to do business all of which states 
are set forth on Section 3.4(b)(iii) of the Company Disclosure Schedule, (iv) 
as may be required by any applicable state corporation, securities or "blue 
sky" laws or state takeover laws, (v) such filings, consents, approvals, 
orders, registrations and declarations of the Company as may be required 
under the laws of Germany or any other relevant foreign country or (vi) where 
the failure to obtain such consents, approvals, authorizations or permits, or 
to make such filings or notifications, would not have a Company Material 
Adverse Effect; (c) except as set forth on Section 3.4(c) of the Company 
Disclosure Schedule, result in a violation or breach of, or constitute (with 
or without due notice or lapse of time or both) a default (or give rise to 
any right of termination, cancellation or acceleration 

                                       16


or lien or other charge or encumbrance) under any of the terms, conditions or 
provisions of any note, license, agreement or other instrument or obligation 
to which the Company or any of its Subsidiaries is a party or by which any of 
them or any of their respective assets may be bound, except for such 
violations, breaches and defaults (or rights of termination, cancellation or 
acceleration or liens or other charges or encumbrances) as to which requisite 
waivers or consents have been obtained or which would not have a Company 
Material Adverse Effect; or (d) assuming the consents, approvals, 
authorizations or permits and filings or notifications referred to in this 
Section 3.4 are duly and timely obtained or made and the approval of this 
Agreement by the Company's stockholders has been obtained, violate any order, 
writ, injunction, decree, statute, rule or regulation in effect as of the 
date of this Agreement and applicable to the Company or any of its 
Subsidiaries or any of their respective assets, except for violations which 
would not have a Company Material Adverse Effect.

          3.5  SEC Reports; Financial Statements.

               (a)  The Company has filed all reports required to be filed by 
it with the Securities and Exchange Commission (the "SEC") since January 1, 
1995 pursuant to the federal securities laws and the SEC rules and 
regulations thereunder, all of which as of their respective dates, complied 
in all material respects with applicable requirements of the Exchange Act 
(collectively, the "Company SEC Reports").  None of the Company SEC Reports, 
including, without limitation, any financial statements or schedules included 
therein, as of their respective dates 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.

               (b)  The consolidated statements of financial position and the 
related consolidated statements of operations, stockholders' equity and cash 
flows (including the related notes thereto) of the Company included in the 
Company SEC Reports complied in all material respects with applicable 
accounting requirements and the published rules and regulations of the SEC 
with respect thereto, have been prepared in conformity with generally 
accepted accounting principles ("GAAP") applied on a basis consistent with 
prior periods (except as otherwise noted therein), and present fairly the 
financial position of the Company as of their respective dates, and the 
consolidated results of its operations and its cash flows for the periods 
presented therein (subject, in the case of 

                                       17


the unaudited interim financial statements, to normal year-end adjustments).

               (c)  The income statement set forth on Section 3.5(c) of the 
Company Disclosure Schedule is an accurate summary of the results of 
operations for the period presented therein.

          3.6  Absence of Certain Changes or Events.  As of the date of this 
Agreement, except as set forth on Section 3.6 of the Company Disclosure 
Schedule or as a consequence of, or as contemplated by this Agreement, since 
December 31, 1996, the business of the Company has been carried on only in 
the ordinary and usual course, and other than in the ordinary course of 
business, there has not occurred any change (other than a change affecting 
the Company's industry generally) which has resulted or is reasonably likely 
to result in a Company Material Adverse Effect.

          3.7  Litigation.  As of the date hereof, except as set forth on 
Section 3.7 of the Company Disclosure Schedule there is no action, claim, 
suit, proceeding or governmental investigation pending or, to the knowledge 
of the Company, threatened against the Company or its Subsidiaries by or 
before any court, governmental or regulatory authority or by any third party.

          3.8  Taxes. 

               (a)  The Company and its Subsidiaries have filed (or have 
obtained extensions to file) all Tax Returns (as defined below) required to 
be filed by the Company and its Subsidiaries for taxable periods ending on or 
prior to the Closing other than those Tax Returns the failure of which to 
file would not have a Company Material Adverse Effect.  Such Tax Returns are 
true, correct and complete in all material respects. 
 
               (b)  All Taxes (as defined below) shown on such Tax Returns 
have been paid in full or adequate provisions have been made to reflect such 
items on the Company's or its Subsidiaries' balance sheet (in accordance with 
GAAP).  

               (c)  There are no material liens for Taxes upon the assets of 
either the Company or its Subsidiaries 

                                       18


except for statutory liens for current taxes not yet due.  

               (d)  Neither the Company nor any Subsidiary has waived in 
writing any statute of limitation with respect to Taxes of the Company or any 
Subsidiary.

               (e)  For the purpose of this Agreement, "Taxes" shall mean all 
taxes, charges, fees, levies, penalties or other assessments imposed by any 
United States federal, state, local, or foreign taxing authority, including, 
but not limited to income, excise, property, sales, transfer, franchise, 
payroll, withholding, social security or other taxes, including any interest, 
penalties or additions attributable thereto, and "Tax Return" shall mean any 
return, report, information return or other document (including any related 
or supporting information) with respect to Taxes.

          3.9  Employee Benefit Plans; Labor Matters.  (a)  Section 3.9 of 
the Company Disclosure Schedule sets forth a true and complete list of all 
collective bargaining agreements, employment, consulting, severance, deferred 
compensation and non-competition agreements, executive compensation plans, 
stock purchase, stock award and stock option plans and agreements, restricted 
stock awards, bonus and incentive plans, directors fee arrangements, both tax 
qualified and non-qualified and statutory and non-statutory employee pension 
plans, employee profit sharing plans, 401(k) savings plans, multiemployer 
plans, employee welfare plans, group life insurance, hospitalization 
insurance other similar plans or arrangements (either written or oral but 
only to the extent an oral plan provides material benefits) providing for 
benefits to any employees, consultants or director of the Company or any 
Subsidiaries or affiliates of the Company.  With respect to the employee 
benefit plans, stock option plans, restricted stock award programs and other 
programs and arrangements maintained or contributed to by the Company or any 
of its Subsidiaries (the "Company Plans"), except as specifically set forth 
on Section 3.9 of the Company Disclosure Schedule:  (i) each Company Plan 
intended to be qualified under Section 401(a) of the Code has received a 
favorable determination letter from the Internal Revenue Service (the "IRS") 
that it is so qualified and nothing has occurred since the date of such 
letter that could reasonably be expected to affect the 

                                       19


qualified status of such Company Plan; (ii) each Company Plan has been 
operated in all material respects in accordance with its terms and the 
requirements of applicable law; (iii) neither the Company nor any of its 
Subsidiaries has incurred any direct or indirect liability under, arising out 
of or by operation of Title IV of the Employee Retirement Income Security Act 
of 1974, as amended ("ERISA"), in connection with the termination of, or 
withdrawal from, any Company Plan or other retirement plan or arrangement, 
and no fact or event exists that could reasonably be expected to give rise to 
any liability.  Except as set forth on Section 3.9 of the Company Disclosure 
Schedule, the aggregate accumulated benefit obligations of each Company Plan 
subject to Title IV of ERISA (as of the date of the most recent actuarial 
valuation prepared for such Company Plan) do not exceed the fair market value 
of the assets of such Company Plan (as of the date of such valuation).

               (b)  The Company is not subject to any collective bargaining 
or other labor union contracts applicable to persons employed by the Company 
or its Subsidiaries as of the date of this Agreement.  As of the date of this 
Agreement, there is no pending or threatened in writing labor dispute, strike 
or work stoppage against the Company or any of its Subsidiaries which may 
interfere with the respective business activities of the Company or its 
Subsidiaries.

               (c)  As of the date of this Agreement, there are no more than 
973,750 options issued and outstanding under the Company's stock option 
plans. No options have been issued to employees or directors of the Company 
or its Subsidiaries since January 1, 1998.  There are no restricted stock 
awards which have been issued by the Company that are currently outstanding.

               (d)  The consummation of the transactions contemplated by this 
Agreement will not give rise to an obligation on behalf of the Company to 
make severance payments to any individuals, except such as may arise from 
actions of the Company taken at the direction of Parent following the 
Effective Time.

               (e)  No payments made to any individual by the Company or any 
Subsidiary as a result of the consummation of the transactions contemplated 
by this Agreement 

                                       20


would be non-deductible under either Section 162(m) of the Code or Section 
280G of the Code.

               (f)  Neither the Company nor any Subsidiary has taken any 
action or failed to take any action which would result in the imposition of a 
material excise tax on the Company pursuant to Sections 4975, 4980B and 4999 
of the Code.

          3.10  Environmental Laws and Regulations.  As of the date of this 
Agreement, except as set forth on Section 3.10 of the Company Disclosure 
Schedule, (i) the Company and each of its Subsidiaries is in compliance with 
all applicable federal, state and local laws and regulations relating to 
pollution or protection of human health or the environment (including, 
without limitation, ambient air, surface water, ground water, land surface or 
subsurface strata) (collectively, "Environmental Laws"), except for 
non-compliance that would not have a Company Material Adverse Effect; (ii) 
neither the Company nor any of its Subsidiaries (a) has received written 
notice of any action, cause of action, claim, investigation, demand or notice 
by any person or entity alleging liability under or non-compliance with any 
Environmental Law (an "Environmental Claim") or (b) to the knowledge of the 
Company is subject to any Environmental Claim which is reasonably likely to 
have a Company Material Adverse Effect; (iii) there has not been a Release of 
Hazardous Materials at any property currently or formerly owned or operated 
by the Company, any of its Subsidiaries or predecessor in interest except 
where such Release would not have a Company Material Adverse Effect; (iv) to 
the knowledge of the Company there has not been a Release of Hazardous 
Materials at any disposal or treatment facility that received Hazardous 
Materials generated by the Company, its Subsidiaries or a predecessor in 
interest.  For the purpose of this Section, "Hazardous Materials" means (a) 
any element, compound, or chemical that is defined, listed or otherwise 
classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous 
substance, extremely hazardous substance or chemical, hazardous waste, 
special waste, or solid waste under Environmental Laws; (b) petroleum, 
petroleum-based or petroleum-derived products; (c) polychlorinated byphenyls; 
(d) any substance exhibiting a hazardous waste characteristic including but 
not limited to corrosivity, ignitability, toxicity or reactivity as well as 
any radioactive or 

                                       21


explosive materials; and (e) any asbestos-containing materials.  The term 
"Release" means any spilling, leaking, pumping, emitting, emptying, 
discharging, injecting, escaping, leaching, migrating, dumping or disposing 
of Hazardous Materials (including the abandonment or discarding of barrels, 
containers or other closed receptacles containing Hazardous Materials) into 
the environment. 

          3.11  Intangible Property; Copyrights. The Company and its 
Subsidiaries own or have all rights to use all patents, trademarks, trade 
names, service marks, brands, logos, copyrights, licenses, trade secrets, 
customer lists and other proprietary intellectual property rights 
(collectively "Intellectual Property") required for, used in or incident to 
the businesses of the Company and its Subsidiaries as now conducted or 
proposed to be conducted. All Intellectual Property owned by the Company is 
valid and enforceable except as such invalidity or unenforceability would not 
have or would reasonably be expected to have a Company Material Adverse 
Effect.  The Company has not received notice of any infringement, and has no 
reason to know of any claim or threatened infringement of the rights of 
others with respect to any Intellectual Property used or owned by the 
Company, the loss of which could have a Company Material Adverse Effect.  
Except as set forth in Section 3.11 of the Company Disclosure Schedule, the 
Company and its Subsidiaries have not been sued within the past two years (or 
with respect to a Subsidiary, since such Subsidiary was acquired by the 
Company if acquired less than two years prior to the date hereof) for 
infringing on the Intellectual Property of another entity or person. To the 
knowledge of the Company, the Company is not now using, and has not in the 
past used without appropriate authorization, any confidential information or 
trade secrets of any third party.  The Company has never received any notice 
alleging such conduct.  The Company has timely and accurately made all 
requisite filings and payments with the Register of Copyrights and is 
otherwise in compliance with all applicable rules and regulations of the 
Copyright Office except where such noncompliance would not have a Company 
Material Adverse Effect.  

          3.12  Compliance with Applicable Laws.  Except as set forth in 
Section 3.12 of the Company Disclosure Schedule, to the knowledge of the 
Company, since January 

                                       22


1, 1996 neither the Company nor any of its Subsidiaries has violated or 
failed to comply with any statute, law, regulation, rule, judgment, decree or 
order of any governmental entity applicable to its business or operations, 
except for violations and failures to comply that would not, individually or 
in the aggregate, reasonably be expected to result in a Company Material 
Adverse Effect.  The conduct of the business of the Company and its 
Subsidiaries is in conformity with all federal, state and local governmental 
and regulatory requirements applicable to its business and operations, except 
where such nonconformities would not, in the aggregate, reasonably be 
expected to result in a Company Material Adverse Effect.  The Company and its 
Subsidiaries have all permits, licenses and franchises from governmental 
agencies required to conduct their businesses as now being conducted, except 
for such permits, licenses and franchises the absence of which would not, in 
the aggregate, reasonably be expected to result in a Company Material Adverse 
Effect.

          3.13  Insurance.  To the knowledge of the Company, the Company and 
its Subsidiaries have obtained and maintained in full force and effect 
insurance with responsible and reputable insurance companies or associations 
in such amounts, on such terms and covering such risks, including fire and 
other risks insured against by extended coverage, as is reasonably prudent, 
and each has maintained in full force and effect public liability insurance, 
insurance against claims for personal injury or death or property damage 
occurring in connection with the activities of the Company or its 
Subsidiaries or any properties owned, occupied or controlled by the Company 
or its Subsidiaries, in such amount as reasonably deemed necessary by the 
Company or its Subsidiaries.

          3.14  Approvals; Antitakeover Provisions.  The Company has taken 
all action necessary to approve the Transactions under the MGCL (except for 
shareholder approval and the filing of a certificate or articles of merger), 
including, but not limited to, all actions required to render the provisions 
of Sections 3-601 through 3-604 of the MGCL restricting business combinations 
with "interested shareholders" inapplicable to the Transactions.  The Company 
has taken all actions required to render the provisions of Section 3-702 of 
the MGCL restricting voting rights of "control shares" inapplicable 

                                       23


to Shares acquired by Parent, Newco or their affiliates pursuant to the Offer 
or the Merger.

          3.15  Voting Requirements.  The affirmative vote of the holders of 
two-thirds of the outstanding shares of Company Common Stock is the only vote 
of the holders of any class of the Company's capital stock necessary to 
approve this Agreement and the transactions contemplated by this Agreement.

          3.16  Brokers and Finders.  Other than as set forth on Section 3.16 
of the Company Disclosure Schedule, the Company has not employed any 
investment banker, broker, finder, advisor, consultant or intermediary in 
connection with the transactions contemplated by this Agreement which would 
be entitled to any investment banking, brokerage, finder's, advisory or 
similar fee or commission in connection with this Agreement or the 
transactions contemplated hereby.

          3.17  Opinion of Financial Advisors.  The Board of Directors has 
received the opinion of Morgan Stanley & Co. Incorporated dated February 10, 
1998, to the effect that, as of such date, the applicable Merger 
Consideration is fair to the stockholders of the Company from a financial 
point of view.

          3.18  Information Supplied.  None of the information supplied or to 
be supplied by the Company for inclusion or incorporation by reference in (i) 
the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be 
filed by the Company in connection with the Offer pursuant to Rule 14f-1 
promulgated under the Exchange Act (the "Information Statement") or (iv) the 
proxy statement (together with any amendments or supplements thereto, the 
"Proxy Statement") relating to the Special Meeting, if any, will, in the case 
of the Offer Documents, the Schedule 14D-9 and the Information Statement, at 
the respective times the Offer Documents, the Schedule 14D-9 and the 
Information Statement are filed with the SEC or first published, sent or 
given to the Company's stockholders, or, in the case of the Proxy Statement, 
at the time the Proxy Statement is first mailed to the Company's stockholders 
or at the time of the Special Meeting, if any, 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 

                                       24


light of the circumstances under which they are made, not misleading.  If at 
any time prior to the Effective Time any event with respect to the Company or 
its Subsidiaries should occur which is required to be described in a 
supplement to (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the 
Information Statement, or (iv) the Proxy Statement, such event shall be so 
described, and such supplement shall be promptly filed with the SEC and, as 
required by law, disseminated to the stockholders of the Company and to 
Parent.  The Schedule 14D-9, the Information Statement and the Proxy 
Statement will comply in all material respects with the requirements of the 
Exchange Act and the rules and regulations thereunder.

          3.19  Confidentiality Agreements.   Except as set forth in Section 
3.19 of the Company Disclosure Schedule, the confidentiality agreements 
entered into with any other potential purchasers are in substantially the 
same form as the Confidentiality Agreement (as defined in Section 5.5) and 
all benefits under such agreements shall inure to the Company as of the 
Effective Time.

                                      ARTICLE IV

                       REPRESENTATIONS AND WARRANTIES OF PARENT
                                      AND NEWCO

          Each of Parent and Newco represents and warrants jointly and severally
to the Company that:

          4.1  Corporate Organization and Qualification.  Each of Parent, 
Newco and each of Parent's Subsidiaries which is both owned directly or 
indirectly by Parent and directly or indirectly owns Newco is a corporation 
duly organized, validly existing and in good standing under the laws of its 
respective jurisdiction of incorporation.  Each of Parent, Newco and Parent's 
Subsidiaries is qualified and in good standing as a foreign corporation in 
each jurisdiction where the properties owned, leased or operated, or the 
business conducted, by it require such qualification, except where the 
failure to so qualify or be in good standing would not have a Parent Material 
Adverse Effect (as defined in Section 8.10).

                                       25


          4.2  Authority Relative to This Agreement.  Each of Parent and 
Newco has the requisite corporate power and authority to execute and deliver 
this Agreement and to consummate the transactions contemplated hereby.  This 
Agreement and the consummation by Parent and Newco of the transactions 
contemplated hereby have been duly and validly authorized by the respective 
Boards of Directors of Parent and Newco and by Parent as the sole stockholder 
of Newco, and no other corporate proceedings on the part of Parent and Newco 
are necessary to authorize this Agreement or to consummate the transactions 
contemplated hereby.  This Agreement has been duly and validly executed and 
delivered by each of Parent and Newco and, assuming this Agreement 
constitutes the valid and binding agreement of the Company, constitutes the 
valid and binding agreement of each of Parent and Newco, enforceable against 
each of them in accordance with its terms, except that the enforcement hereof 
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or 
other similar laws now or hereafter in effect relating to creditors' rights 
generally and (b) general principles of equity (regardless of whether 
enforceability is considered in a proceeding at law or in equity).

          4.3  Consents and Approvals; No Violation.  Neither the execution 
and delivery of this Agreement by Parent or Newco nor the consummation by 
Parent and Newco of the transactions contemplated hereby will (a) conflict 
with or result in any breach of any provision of the Articles of 
Incorporation or the By-Laws, respectively, of Parent or Newco; (b) except as 
set forth in Section 4.3 of the Disclosure Schedule delivered to the Company 
by Parent concurrently with the execution hereof (the "Parent Disclosure 
Schedule"), require any consent, approval, authorization or permit of, or 
filing with or notification to, any governmental or regulatory authority, 
except (i) in connection with the applicable requirements of the HSR Act, 
(ii) pursuant to the applicable requirements of the Exchange Act, (iii) the 
filing of the Articles of Merger pursuant to the MGCL and appropriate 
documents with the relevant authorities of other states in which Parent or 
Newco is authorized to do business or (iv) as may be required by any 
applicable state corporation, securities or "blue sky" laws or state takeover 
laws, (v) where the failure to obtain such consents, approvals, 
authorizations or permits, or to make such filings or notifications would not 
have a Parent Material 

                                       26


Adverse Effect; (c) result in a violation or breach of, or constitute (with 
or without due notice or lapse of time or both) a default (or give rise to 
any right of termination, cancellation or acceleration or liens or other 
charges or encumbrances) under any of the terms, conditions or provisions of 
any note, license, agreement or other instrument or obligation to which 
Parent or any of its Subsidiaries is a party or by which any of them or any 
of their respective assets may be bound, except for such violations, breaches 
and defaults (or rights of termination, cancellation or acceleration or lien 
or other charge or encumbrance) as to which requisite waivers or consents 
have been obtained or which would not have a Parent Material Adverse Effect; 
or (d) assuming the consents, approvals, authorizations or permits and 
filings or notifications referred to in this Section 4.3 are duly and timely 
obtained or made, violate any order, writ, injunction, decree, statute, rule 
or regulation applicable to Parent or any of its Subsidiaries or to any of 
their respective assets, except for violations which would not have a Parent 
Material Adverse Effect.

          4.4  Interim Operations of Newco.  Newco was formed solely for the 
purpose of engaging in the transactions contemplated hereby and has not 
engaged in any business activities or conducted any operations other than in 
connection with the transactions contemplated hereby.

          4.5   Sufficient Funds.  Either Parent or Newco has sufficient 
funds available (through existing credit arrangements or otherwise) to 
purchase all of the Shares outstanding on a fully diluted basis and to pay 
all fees, expenses and payments related to the Transactions.

          4.6  Share Ownership.  None of Parent and Newco, or any of their 
respective "affiliates" or Associates (as such terms are defined in Rule 
12b-2 under the Exchange Act), beneficially own any Shares.

          4.7  Information in Proxy Statement and Schedule 14D-9.  None of 
the information supplied by Parent or Newco for inclusion or incorporation by 
reference in the Proxy Statement or the Schedule 14D-9 will, at the date 
mailed to stockholders and at the time of the Special Meeting, contain any 
untrue statement of a material fact or omit to state any material fact 
required to be stated 

                                       27


therein or necessary in order to make the statements therein, in light of the 
circumstances under which they are made, not misleading.  If at any time 
prior to the Effective Time any event with respect to Parent or any of its 
Subsidiaries should occur which is required to be described in a supplement 
to the Proxy Statement or the Schedule 14D-9, such event shall be so 
described, and such supplement shall be promptly filed with the SEC and, as 
required by law, disseminated to the stockholders of the Company and Parent.  
With respect to information relating to Parent or Newco, the Proxy Statement 
will comply in all material respects with the provisions of the Exchange Act 
and the rules and regulations thereunder.

          4.8  Investigation by Parent.  Parent and Newco have conducted 
their own independent review and analysis of the businesses, assets, 
condition, operations and prospects of the Company and its Subsidiaries and 
acknowledge that Parent and Newco have been provided access to the 
properties, premises and records of the Company and its Subsidiaries for this 
purpose.  In entering into this Agreement, Parent and Newco:

          (a) acknowledge that none of the Company, its Subsidiaries or any 
of their respective directors, officers, employees, affiliates, agents or 
representatives makes any representation or warranty, either express or 
implied, as to the accuracy or completeness of any of the information 
provided or made available to Parent and Newco or their agents or 
representatives prior to the execution of this Agreement, and

          (b) agree, to the fullest extent permitted by law, that none of the 
Company, its Subsidiaries or any of their respective directors, officers, 
employees, affiliates, agents or representatives shall have any liability or 
responsibility whatsoever to Parent and Newco on any basis based upon any 
information provided or made available, or statements made, to Parent and 
Newco prior to the execution of this Agreement, except that the foregoing 
limitations shall not apply with respect to representations or warranties of 
the Company in any Company SEC Report or in Article III of this Agreement and 
in the Company Disclosure Schedule, but always subject to the limitations and 
restrictions contained in such representations and warranties.

                                       28


          4.9  Brokers and Finders.  Other than Credit Suisse First Boston 
Corporation, which has been retained by Parent's Board of Directors, Parent 
and Newco have not employed any investment banker, broker, finder, advisor, 
consultant or intermediary in connection with the transactions contemplated 
by this Agreement which would be entitled to any investment banking, 
brokerage, finder's, advisory or similar fee or commission in connection with 
this Agreement or the transactions contemplated hereby.

                                      ARTICLE V

                         ADDITIONAL COVENANTS AND AGREEMENTS

          5.1  Interim Operations of the Company.  Except as set forth on 
Section 5.1 of the Company Disclosure Schedule, during the period from the 
date of this Agreement to the time the directors of Newco have been elected 
to, and shall constitute a majority of, the Board of Directors of the Company 
pursuant to Section 1.3 (unless Parent shall otherwise agree in writing and 
except as otherwise contemplated by this Agreement), the Company will conduct 
its operations according to its ordinary and usual course of business 
consistent with past practice and seek to preserve intact its current 
business organizations, keep available the service of its current officers 
and employees and preserve its relationships with customers, suppliers and 
others having business dealings with it.  Without limiting the generality of 
the foregoing, and except as otherwise contemplated by this Agreement or as 
set forth on Section 5.1 of the Company Disclosure Schedule, the Company will 
not, without the prior written consent of Parent:

                    (i)  issue, sell, grant, dispose of, pledge or
     otherwise encumber, or authorize or propose the issuance, sale,
     disposition or pledge or other encumbrance of (A) any additional
     shares of capital stock of any class (including the Shares), or any
     securities or rights convertible into, exchangeable for, or evidencing
     the right to subscribe for any shares of capital stock, or any rights,
     warrants, options, calls, commitments or any other agreements of any
     character to purchase or acquire any shares of capital stock or any 

                                          29


     securities or rights convertible into, exchangeable for, or evidencing the
     right to subscribe for, any shares of capital stock or (B) any other
     securities in respect of, in lieu of, or in substitution for, Shares
     outstanding on the date hereof;

                    (ii)  redeem, purchase or otherwise acquire, or propose
     to redeem, purchase or otherwise acquire, any of its outstanding
     Shares;

                    (iii)  split, combine, subdivide or reclassify any
     Shares or declare, set aside for payment or pay any dividend, or make
     any other actual, constructive or deemed distribution in respect of
     any Shares or otherwise make any payments to stockholders in their
     capacity as such, other than the declaration and payment of regular
     quarterly cash dividends in accordance with past dividend policy and
     except for dividends by a direct or indirect wholly owned Subsidiary
     of the Company;

                    (iv)  adopt a plan of complete or partial liquidation,
     dissolution, merger, consolidation, restructuring, recapitalization or
     other reorganization of the Company or any of its direct or indirect
     Subsidiaries (other than the Merger);

                    (v)  adopt any amendments to its Articles of
     Incorporation or By-Laws or alter through merger, liquidation,
     reorganization, restructuring or in any other fashion the corporate
     structure or ownership of any direct or indirect Subsidiary of the
     Company;

                    (vi)  make any material acquisition, by means of
     merger, consolidation or otherwise, or material disposition, of assets
     or securities (other than the Merger);

                    (vii)  other than in the ordinary course of business
     consistent with past practice, incur any indebtedness for borrowed
     money or guarantee any such indebtedness or issue any 

                                          30


     debt securities or make any loans, advances or capital contributions to, or
     investments in, any other person other than the Company or any direct or
     indirect wholly owned Subsidiary of the Company;

                    (viii)  grant any material increases in the
     compensation of any of its directors, officers or key employees,
     except in the ordinary course of business and in accordance with past
     practice, provided, however, that the Company shall be entitled to
     pay, prior to the Effective Time, bonuses with respect to 1997
     pursuant to the Company's Incentive Plan, and shall further be
     entitled to disregard for purposes of the calculation of the amount of
     such bonuses any effect that results from, or action that is taken in
     contemplation of, this Agreement or the transaction contemplated
     hereby;

                    (ix)  enter into any new or amend any existing
     employment or severance or termination agreement with any director or
     officer of the Company;

                    (x)  except as may be required to comply with
     applicable law, become obligated under any new pension plan, welfare
     plan, multiemployer plan, employee benefit plan, severance plan,
     benefit arrangement, or similar plan or arrangement, which was not in
     existence on the date hereof, or amend, other than in the ordinary
     course of business consistent with past practice, any such plan or
     arrangement in existence on the date hereof if such amendment would
     have the effect of materially enhancing any benefits thereunder;  

                    (xi)   (A) take, or agree or commit to take, any action
     that would make any representation or warranty of the Company
     hereunder inaccurate at the Effective Time (except for representations
     and warranties which speak as of a particular date, which need be
     accurate only as of such date), (B) omit, or agree or commit to omit,
     to take any action necessary to 

                                          31


     prevent any such representation or warranty from being inaccurate in any
     material respect at the Effective Time (except for representations and
     warranties which speak as of a particular date, which need be accurate only
     as of such date), provided however that the Company shall be permitted to
     take or omit to take such action which can be cured, and in fact is cured,
     at or prior to the Effective Time or (C) take, or agree or commit to take,
     any action that would result in, or is reasonably likely to result in, any
     of the conditions of the Merger set forth in Article VI not being
     satisfied; or

                    (xii)  authorize, recommend, propose or announce an
     intention to do any of the foregoing, or enter into any contract,
     agreement, commitment or arrangement to do any of the foregoing.

          5.2  Alternative Proposals.  Subject to the last sentence of this 
Section 5.2, from and after the date hereof and prior to the Effective Time, 
the Company (a) will not, and will cause its officers, directors, employees, 
representatives and agents not to, initiate, solicit or encourage, directly 
or indirectly, any Alternative Proposal (as defined in Section 8.10) or 
engage in any negotiations or enter into any agreement or provide any 
confidential information or data to any person in connection with or relating 
to any Alternative Proposal; (b) will immediately cease any existing 
discussions or negotiations, if any, with any parties conducted heretofore 
with respect to any Alternative Proposal; and (c) will notify Parent as soon 
as practicable if any such inquiries or proposals are received by, any such 
information is requested from, or any such negotiations and/or discussions 
are sought to be initiated or continued with, the Company. Notwithstanding 
the foregoing, nothing in this Section 5.2 shall require the Board of 
Directors of the Company on behalf of the Company to act, or refrain from 
acting, in any manner which, in the opinion of the Board of Directors of the 
Company after consultation with its counsel, could reasonably be deemed 
inconsistent with its fiduciary duties to the Company's stockholders under 
applicable law.

                                          32


          5.3  Certain Filings.  The Company and Newco shall reasonably 
cooperate with one another (a) in connection with the preparation of the 
Proxy Statement and the Schedule 14D-9, and (b) in determining whether any 
action by or in respect of, or filing with, any governmental body, agency or 
official, or authority is required, or any actions, consents, approvals or 
waivers are required to be obtained from parties to any material contracts, 
in connection with the consummation of the transactions contemplated by this 
Agreement and (c) in seeking any such actions, consents, approvals, or 
waivers or making any such filings, furnishing information required in 
connection therewith or with the Proxy Statement and the Schedule 14D-9 and 
seeking timely to obtain any such actions, consents, approvals or waivers.

          5.4  Satisfaction of Conditions; Receipt of Necessary Approvals.

               (a)  Subject to the terms and conditions herein provided, each 
of the parties hereto agrees to (i) promptly effect all necessary 
registrations, submissions and filings, including, but not limited to, 
filings under the HSR Act, German Law Against Restraints of Competition and 
submissions of information requested by governmental authorities, which may 
be necessary or required in connection with the consummation of the 
transactions contemplated by this Agreement, (ii) use its reasonable best 
efforts to secure federal antitrust clearance (including taking steps to 
avoid or set aside any preliminary or permanent injunction or other order of 
any federal or state court of competent jurisdiction or other governmental 
authority), (iii) use its reasonable best efforts to take all other action 
and to do all other things necessary, proper or advisable to consummate and 
make effective as promptly as practicable the transactions contemplated by 
this Agreement and (iv) use its reasonable best efforts to obtain all other 
necessary or appropriate waivers, consents and approvals (including but not 
limited to such filings, consents, approvals, orders, registrations and 
declarations as may be required under the laws of any foreign country in 
which the Company or any of its Subsidiaries or Parent or any of its 
Subsidiaries conducts any business or owns any assets) and to lift any 
injunction or other legal bar to the Merger (and, in such case, to proceed 
with the Merger as expeditiously as possible), subject, however, to the 
requisite 

                                          33


vote of the stockholders of the Company.  Parent represents and warrants to 
the Company that Parent's affiliates have full power and authority to effect 
the transactions contemplated by this Section 5.4.  

               (b)  Notwithstanding the foregoing, the Company shall not be 
obligated to use its reasonable efforts or take any action pursuant to this 
Section 5.4 if in the opinion of the Board of Directors after consultation 
with its counsel such actions could reasonably be deemed inconsistent with 
its fiduciary duties to the Company's stockholders under applicable law.

          5.5  Access to Information.  To the extent permitted by applicable 
law, upon reasonable notice, the Company shall (and shall cause each of its 
Subsidiaries to) afford to the officers, employees, accountants, counsel, 
financing sources and other representatives of Parent, access, during normal 
business hours during the period prior to the Effective Time, to all its 
properties, books, contracts, commitments and records and, during such 
period, the Company shall (and shall cause each of its Subsidiaries to) 
furnish promptly to the Parent (a) a copy of each report, schedule, 
registration statement and other document filed or received by it during such 
period pursuant to the requirements of federal securities laws and (b) all 
other information concerning its business, properties and personnel as Parent 
may reasonably request.  Parent will hold any such information which is 
nonpublic in confidence in accordance with the provisions of the 
Confidentiality Agreement between the Company and Parent, dated as of 
December 5, 1997 (the "Confidentiality Agreement").

          5.6  Publicity. The initial press release with respect to the 
execution of this Agreement shall be a joint press release acceptable to 
Parent and the Company.  Thereafter, so long as this Agreement is in effect, 
neither the Company, Parent nor any of their respective affiliates shall 
issue or cause the publication of any press release or other announcement 
with respect to the Merger, this Agreement or the other transactions 
contemplated hereby without prior consultation with the other party, except 
as may be required by law, the rules and regulations of any national 
securities exchange or over-the-counter market or by any listing agreement 
with a national securities exchange.

                                          34


          5.7  Directors' and Officers' Insurance and Indemnification.

               (a)  From and after the consummation of the Offer, Parent 
shall, and shall cause the Company (or, if after the Effective Time, the 
Surviving Corporation) to, indemnify, defend and hold harmless any person who 
is now, or has been at any time prior to the date hereof, or who becomes 
prior to the Effective Time, an officer or director (the "Company Indemnified 
Party") of the Company and its Subsidiaries against all losses, claims, 
damages, liabilities, costs and expenses (including attorney's fees and 
expenses), judgments, fines, losses, and amounts paid in settlement in 
connection with any actual or threatened action, suit, claim, proceeding or 
investigation (each a "Claim") to the extent that any such Claim is based on, 
or arises out of, the fact that such person is or was a director or officer 
of the Company or any of its Subsidiaries, and to the extent that any such 
Claim pertains to any matter or fact arising out of any act or omission prior 
to or at the Effective Time, regardless of whether such Claim is asserted or 
claimed prior to, at or after the Effective Time, to the full extent 
permitted under applicable law or the Company's Articles of Incorporation, 
By-laws or indemnification agreements in effect at the date hereof identified 
on Section 5.7 of the Company Disclosure Schedule, or otherwise as permitted 
by contracts identified on Section 5.7 of the Company Disclosure Schedule, 
including provisions relating to advancement of expenses incurred in the 
defense of any action or suit.  Without limiting the foregoing, in the event 
any Company Indemnified Party becomes involved in any capacity in any Claim, 
then from and after consummation of the Offer Parent shall, or shall cause 
the Company (or the Surviving Corporation if after the Effective Time) to, 
periodically advance to such Company Indemnified Party its legal and other 
expenses (including the cost of any investigation and preparation incurred in 
connection therewith), subject to the provision by such Company Indemnified 
Party of an undertaking to reimburse the amounts so advanced in the event of 
a final non-appealable determination by a court of competent jurisdiction 
that such Company Indemnified Party is not entitled thereto.

               (b)   Parent and the Company agree that all rights to 
indemnification and all limitations on liability existing in favor of a 
Company Indemnified Party as provided 

                                          35


in the Company's Articles of Incorporation and By-laws as in effect as of the 
date hereof shall survive the Merger and shall continue in full force and 
effect, without any amendment thereto, for a period of six years from the 
Effective Time to the extent such rights are consistent with the MGCL; 
provided, that in the event any claim or claims are asserted or made within 
such six year period, all rights to indemnification in respect of any such 
claim or claims shall continue until disposition of any and all such claims; 
provided further, that nothing in this Section 5.7 shall impair any rights or 
obligations of any present or former directors or officers of the Company

               (c)  Parent shall cause to be maintained in effect for the 
Indemnified Parties (as defined below) for not less than six years after the 
Effective Time policies of directors' and officers' liability insurance and 
fiduciary liability insurance with respect to matters occurring at or prior 
to the Effective Time (including, without limitation, the transactions 
contemplated by this Agreement) providing  substantially the same coverage 
and containing terms and conditions which are no less advantageous, in any 
material respect, to those currently maintained by the Company for the 
benefit of the Company's present or former directors, officers, employees or 
agents covered by such insurance policies prior to the Effective Time (the 
"Indemnified Parties").

               (d)  In the event Parent or Newco or any of their 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 Newco assume the obligations set forth in this Section 5.7 and none of 
the actions described in clauses (i) or (ii) shall be taken until such 
provision is made.

                                          36


          5.8  Employees.

               (a)  Parent agrees that individuals who are employed by the 
Company and its Subsidiaries immediately prior to the Effective Time shall be 
employees of the Company and its Subsidiaries as of the Effective Time (each 
such employee, an "Affected Employee" and together with all former employees 
of the Company and its Subsidiaries "Company Employees").

               (b)  Parent will, or will cause the Surviving Corporation to, 
give Affected Employees full credit for purposes of eligibility and vesting 
and determination of the level of benefits under any employee benefit plans 
or arrangements maintained by Parent, the Surviving Corporation or any 
Subsidiary of Parent for such Affected Employees' service with the Company or 
any Subsidiary of the Company to the same extent recognized by the Company 
immediately prior to the Effective Time.  

               (c)  Parent will, or will cause the Surviving Corporation to, 
(i) waive all limitations as to preexisting conditions exclusions and waiting 
periods with respect to participation and coverage requirements applicable to 
the Company Employees under any welfare benefit plans that such employees may 
be eligible to participate in after the Effective Time, other than 
limitations or waiting periods that are already in effect with respect to 
such employees and that have not been satisfied as of the Effective Time 
under any welfare plan maintained for the Company Employees immediately prior 
to the Effective Time, and (ii) provide each Company Employee with credit for 
any co-payments and deductibles paid prior to the Effective Time in 
satisfying any applicable deductible or out-of-pocket requirements under any 
welfare plans that such employees are eligible to participate in after the 
Effective Time.

               (d)  Parent agrees that until December 31, 2000, the coverage 
and benefits provided to Affected Employees pursuant to employee benefit 
plans or arrangements maintained by Parent, the Surviving Corporation, or any 
Subsidiaries of the Parent shall be, in the aggregate, not less favorable 
than those provided to such employees immediately prior to the Effective Time 
determined in accordance with the benefits set forth on Section 5.8(d)(i) of 
the Company Disclosure Schedule, and after 

                                          37


December 31, 2000, Parent agrees to provide or cause the Surviving 
Corporation to provide coverage and benefits in the aggregate, at least as 
favorable to the Affected Employees as the coverage and benefits provided to 
Parent's employees. Without limiting the generality of the foregoing, Parent 
agrees to honor, or to cause the Surviving Corporation to honor, until 
December 31, 2000, the severance policy of the Company as in effect as of the 
Effective Time, as set forth on Section 5.8(d)(ii) of the Company Disclosure 
Schedule.  
  

               (e)  Through December 31, 2000, Parent agrees to provide, or 
to cause the Surviving Corporation to provide, to each currently retired 
Company Employee and to each Company Employee who retires prior to December 
31, 2000 (the "Retired Employees"), the benefits (other than stock options) 
set forth on Section 5.8(e)(i) of the Company Disclosure Schedule.  From 
December 31, 2000 until December 31, 2002, Parent agrees to continue to 
provide or to cause the Surviving Corporation to provide the Retired 
Employees with the post-retirement medical insurance premium percentage 
subsidy (as described on Section 5.8(e)(i) of the Company Disclosure 
Schedule) which each such Retired Employee is receiving as of December 31, 
2000 and that in all other respects, the post-retirement medical benefits 
available to Retired Employees will be no less favorable than those available 
to Parent's employees who are eligible for post-retirement medical benefits 
under its retiree medical benefit plan. From and after December 31, 2002, 
Parent will provide the Retired Employees the post-retirement medical 
coverage provided to employees or former employees of Parent who are eligible 
for post-retirement medical benefits, treating for all purposes of such 
coverage the Retired Employee's service with the Company as service with 
Parent.   

               (f)  Parent and the Surviving Corporation hereby agree to 
honor without modification and assume the employment agreements, executive 
termination agreements and individual benefit arrangements set forth on 
Section 5.8(f) of the Company Disclosure Schedule, all as in effect at the 
Effective Time.

               (g)  Parent shall advise the employees of the Company, in a 
written communication issued to the Company Employees as soon as practicable 
following the 

                                          38


date of this Agreement, of Parent's undertakings set forth in this Section 
5.8.

               (h)   Until December 31, 2000, Parent agrees that there shall 
be no termination or merger or consolidation of the Waverly, Inc. Pension 
Plan (the "Pension Plan") and the Pension Plan shall not be amended except as 
required by applicable law.

          5.9  Corporate Presence.  Parent and Newco agree that the Surviving 
Corporation shall maintain a substantial operating presence in the City of 
Baltimore, Maryland, including maintaining a substantial work force and 
operations in Baltimore, for a period of five (5) years following the 
Effective Time. 

          5.10  Conduct of Business of Newco.  During the period of time from 
the date of this Agreement to the Effective Time, Newco shall not engage in 
any activities of any nature except as provided in or contemplated by this 
Agreement.

          5.11  Certain Filings.  The Company and Newco shall reasonably 
cooperate with one another (a) in connection with the preparation of the 
Proxy Statement and the Schedule 14D-9, and (b) in determining whether any 
action by or in respect of, or filing with, any governmental body, agency or 
official, or authority is required, or any actions, consents, approvals or 
waivers are required to be obtained from parties to any material contracts, 
in connection with the consummation of the transactions contemplated by this 
Agreement and (c) in seeking any such actions, consents, approvals, or 
waivers or making any such filings, furnishing information required in 
connection therewith or with the Proxy Statement and the Schedule 14D-9 and 
seeking timely to obtain any such actions, consents, approvals or waivers.

          5.12  Further Assurances.  Upon the terms and subject to the 
conditions herein provided, each of the parties hereto agrees to use its 
reasonable best efforts to take, or cause to be taken, all action and to do, 
or cause to be done, all things necessary under applicable laws and 
regulations to consummate and make effective the transactions contemplated by 
this Agreement. The provisions of Sections 5.7 are intended to benefit the 
Company Indemnified Parties, and with respect to paragraph 5.7(c) 

                                          39


hereof the Indemnified Parties, as the case may be, and shall be binding on 
all successors and assigns of Parent, Newco, the Company and the Surviving 
Corporation and shall be enforceable by the Company Indemnified Parties and 
the Indemnified Parties, as the case may be, after the Effective Time.  
Parent hereby guarantees the performance by the Surviving Corporation of the 
obligations pursuant to Sections 5.7, 5.8. and 5.9.

                                      ARTICLE VI

                       CONDITIONS TO CONSUMMATION OF THE MERGER

          6.1  Conditions to Each Party's Obligations to Effect the Merger.  
The respective obligations of each party to effect the Merger are subject to 
the satisfaction at or prior to the Effective Time of the following 
conditions:

               (a)  Stockholder Approval.  This Agreement shall have been 
duly approved by the stockholders of the Company entitled to vote with 
respect thereto in accordance with applicable law and the Articles of 
Incorporation and By-Laws of the Company.

               (b)  Injunction.  There shall not be in effect any statute, 
rule, regulation, executive order, decree, ruling or injunction or other 
order of a court or governmental or regulatory agency of competent 
jurisdiction directing that the transactions contemplated herein not be 
consummated or otherwise materially limiting or restricting ownership or the 
operation of the business of the Surviving Corporation; provided, however, 
that, subject to the terms and provisions herein provided (including but not 
limited to Section 5.4 of this Agreement), prior to invoking this condition 
each party shall use its reasonable efforts to have any such decree, ruling, 
injunction or order vacated.

               (c)  Governmental Filings and Consents.  Subject to the terms 
and provisions herein provided (including but not limited to Section 5.4 
hereof), all governmental consents, orders and approvals legally required for 
the consummation of the Merger and the transactions contemplated hereby shall 
have been obtained and be in effect at the Effective Time, other than 
non-material consents, orders or approvals and the waiting periods 

                                          40


under the HSR Act and under antitrust laws of applicable jurisdictions 
outside the United States shall have expired or been terminated. 

          6.2  Additional Conditions to the Obligations of Parent and Newco. 
The respective obligations of Parent and Newco to effect the Merger are 
subject to the satisfaction at or prior to the Effective Time of the 
following conditions, any or all of which may be waived in whole or in part 
by Parent or Newco, as the case may be, to the extent permitted by applicable 
law.

               (a)  Representations and Warranties.  The representations and 
warranties of the Company set forth in this Agreement shall be true and 
correct as of the Effective Time as though made on and as of the Effective 
Time (except for changes permitted by this Agreement and that those 
representations and warranties which address matters only as of a particular 
date shall remain true and correct as of such date), except in any case where 
such failures to be true and correct in the aggregate would not have a 
Company Material Adverse Effect.

               (b)  Performance.  The Company shall have performed in all 
material respects all of its respective covenants and agreements under this 
Agreement theretofore to be performed.

               (c)  Officer's Certificate.  Parent shall have received at the 
Effective Time a certificate dated the Effective Time and executed by the 
President or a Vice President of the Company certifying to the fulfillment of 
the conditions specified in Sections 6.2(a) and (b) hereof.

          6.3  Additional Conditions to the Obligations of the Company.  The 
obligation of the Company to effect the Merger is subject to the satisfaction 
at or prior to the Effective Time of the following conditions, any and all of 
which may be waived in whole or in part by the Company to the extent 
permitted by applicable law:

               (a)  Representations and Warranties.  The representations and 
warranties of Parent and Newco set forth in this Agreement shall be true and 
correct as of the Effective Time as though made on and as of the Effective 
Time (except for changes permitted by this Agreement 

                                          41


and that those representations and warranties which address matters only as 
of a particular date shall remain true and correct as of such date), except 
in any case where such failures to be true and correct in the aggregate would 
not have a Parent Material Adverse Effect.

               (b)  Performance.  Parent and Newco shall have performed in 
all material respects all of their respective covenants and agreements under 
this Agreement theretofore to be performed.

               (c)  Officer's Certificate.  The Company shall have received 
at the Effective Time a certificate dated the Effective Time and executed by 
the President or a Vice President of Parent certifying to the fulfillment of 
the conditions specified in Sections 6.3(a) and (b) hereof.

                                     ARTICLE VII

                                     TERMINATION

          7.1  Termination.  This Agreement may be terminated and the Merger 
contemplated herein may be abandoned at any time prior to the Effective Time, 
whether before or after shareholder approval thereof:

               (a)    By the mutual consent of Parent, Newco and the Company.

               (b)    By either the Company or Parent:

                    (i)  if shares of Company Common Stock shall not have
     been purchased pursuant to the Offer on or prior to six (6) months
     from the execution of this Agreement; provided, however, that the
     right to terminate this Agreement under this Section 7.1(b)(i) shall
     not be available to any party whose failure to fulfill any obligation
     under this Agreement has been the cause of, or resulted in, the
     failure of Parent or Newco, as the case may be, to purchase shares of
     Company Common Stock pursuant to the Offer on or prior to such date;
     or

                    (ii)  if any governmental entity of competent
     jurisdiction in the United States 

                                          42


     or other country in which the Company or Parent directly or indirectly 
     has material assets or operations shall have issued an order, decree or 
     ruling or taken any other action (which order, decree, ruling or other 
     action the parties hereto shall use their respective reasonable best 
     efforts to lift), in each case permanently restraining, enjoining or 
     otherwise prohibiting the transactions contemplated by this Agreement 
     and such order, decree, ruling or other action shall have become final 
     and non-appealable. 

               (c)    By the Board of Directors of the Company:

                    (i)  if, prior to the purchase of shares of Company
     Common Stock pursuant to the Offer, (a) the Board of Directors of the
     Company shall have entered into or shall have publicly announced its
     intention to enter into an agreement or an agreement in principle with
     respect to any Alternative Proposal that the Board of Directors
     determines, in good faith after consultation with its financial
     advisors, is a Superior Proposal (as defined in Section 8.10);  (b)
     the Board of Directors of the Company shall have withdrawn, or
     modified or changed in a manner adverse to Parent or Newco its
     approval or recommendation of the Offer, this Agreement or the Merger
     or shall have recommended a Superior Proposal or shall have executed,
     or shall have announced its intention to enter into, an agreement in
     principle or definitive agreement relating to an Superior Proposal
     with a person or entity other than Parent, Newco or their affiliates
     (or the Board of Directors of the Company resolves to do any of the
     foregoing); (c) any person or group (as defined in Section 13(d)(3) of
     the Exchange Act) (other than Parent, Newco or any affiliate thereof)
     shall have become, after the date of this Agreement, the beneficial
     owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of
     a majority of the outstanding Shares, or (d) any representation or
     warranty made by Parent or Newco in this Agreement shall not have been
     true and correct in all material respects when made, or 

                                          43


     Parent or Newco shall have failed to observe or perform in any material
     respect any of its material obligations under this Agreement; provided 
     that prior to exercising such right of termination, the Company shall 
     give prompt written notice to Parent of such misrepresentation or breach 
     of warranty or failure to observe or perform; provided, further, that 
     the Company shall not have such right of termination if the condition 
     resulting in such misrepresentation or breach of warranty or failure to 
     observe or perform is cured (i) in the event such notice is delivered on 
     or prior to the fourth business day prior to the then-scheduled 
     expiration date of the Offer, not later than the earlier of (A) such 
     expiration date and (B) ten business days following delivery of such 
     notice and (ii) in the event such notice is delivered on or after the 
     third business day prior to such expiration date, not later than three 
     business days following such delivery (it being agreed that in such 
     event the Offer shall be extended as necessary at least until the end of 
     such cure period); or 

                    (ii)  if Parent or Newco shall have terminated the
     Offer, or the Offer shall have expired, without Parent or Newco, as
     the case may be, purchasing any shares of Company Common Stock
     pursuant thereto; provided that the Company may not terminate this
     Agreement pursuant to this Section 7.1(c)(ii) if the Company is in
     material breach of this Agreement; or

                    (iii)  if Parent, Newco or any of their affiliates
     shall have failed to commence the Offer on or prior to five business
     days following the date of the initial public announcement of the
     Offer; provided, that the Company may not terminate this Agreement
     pursuant to this Section 7.1(c)(iii) if the Company is in material
     breach of this Agreement.

               (d)    By Parent or Newco:

                    (i)  if, due to an occurrence that if occurring after
     the commencement of the Offer would result in a failure to satisfy any 

                                          44


     of the conditions set forth in Annex A hereto, Parent, Newco, or any of
     their affiliates shall have failed to commence the Offer on or prior to
     five business days following the date of the initial public announcement 
     of the Offer; provided that Parent may not terminate this Agreement 
     pursuant to this Section 7.1(d)(i) if Parent or Newco is in material 
     breach of this Agreement; or

                    (ii)  prior to the purchase of shares of Company Common
     Stock pursuant to the Offer, if (a) the Company shall have received
     any Alternative Proposal which the Board of Directors of the Company
     has determined is a Superior Proposal; (b) the Board of Directors of
     the Company shall have withdrawn, or modified or changed in a manner
     adverse to Parent or Newco its approval or recommendation of the
     Offer, this Agreement or the Merger or shall have recommended an
     Alternative Proposal or shall have executed, or shall have announced
     its intention to enter into, an agreement in principle or definitive
     agreement relating to an Alternative Proposal with a person or entity
     other than Parent, Newco or their affiliates (or the Board of
     Directors of the Company resolves to do any of the foregoing); (c) any
     person or group (as defined in Section 13(d)(3) of the Exchange Act)
     (other than Parent, Newco or any affiliate thereof) shall have become,
     after the date of this Agreement, the beneficial owner (as defined in
     Rule 13d-3 promulgated under the Exchange Act) of more than one-third
     of the outstanding Shares, or (d) any representation or warranty made
     by the Company in this Agreement shall not have been true and correct
     in all material respects when made, or the Company shall have failed
     to observe or perform in any material respect any of its material
     obligations under this Agreement; provided that prior to exercising
     such right of termination, Parent and Newco shall give prompt written
     notice to the Company of such misrepresentation or breach of warranty
     or failure to observe or perform; provided, further, that Parent and
     Newco shall not have such right of termination if the condition 

                                          45


     resulting in such misrepresentation or breach of warranty or failure to
     observe or perform is cured (i) in the event such notice is delivered on 
     or prior to the fourth business day prior to the then-scheduled 
     expiration date of the Offer, not later than the earlier of (A) such 
     expiration date and (B) ten business days following delivery of such 
     notice and (ii) in the event such notice is delivered on or after the 
     third business day prior to such expiration date, not later than three 
     business days following such delivery (it being agreed that in such 
     event the Offer shall be extended as necessary at least until the end of 
     such cure period). 

          7.2  Effect of Termination.  In the event of the termination of 
this Agreement as provided in Section 7.1, written notice thereof shall 
forthwith be given to the other party or parties specifying the provision 
hereof pursuant to which such termination is made, and this Agreement shall 
forthwith become null and void, and there shall be no liability on the part 
of Parent, Newco or the Company or their respective directors, officers, 
employees, representatives, agents, advisors or shareholders other than the 
obligations pursuant to this Section 7.2, except that the agreements 
contained in Sections 8.1, 8.2, 8.3, 8.4, 8.6, 8.7, 8.8, 8.12, 8.14, 8.15, 
8.16 and the last sentence of Section 5.5 shall survive the termination 
hereof, provided, however, that if Parent or Newco terminates this Agreement 
pursuant to Section 7.1(d)(ii)(a), (b) and (c) hereof, then immediately 
following such termination the Company shall pay to Parent $10,000,000 in 
full satisfaction of the obligations of the Company under this Agreement.  
Nothing contained in this Section 7.2 shall relieve any party from liability 
for fraud or for willful breach of this Agreement.

                                     ARTICLE VIII

                              MISCELLANEOUS AND GENERAL

          8.1  Payment of Expenses and Other Payments.  Whether or not the 
Merger shall be consummated, each party hereto shall pay its own expenses 
incident to preparing for, entering into and carrying out this Agreement and 
the consummation of the transactions contemplated hereby.

                                          46


          8.2  Survival of Representations and Warranties; Survival of 
Confidentiality Agreement.  The representations and warranties made herein 
shall not survive beyond the earlier of termination of this Agreement or the 
Effective Time.  This Section 8.2 shall not limit any covenant or agreement 
of the parties hereto which by its terms contemplates performance after the 
Effective Time. The Confidentiality Agreement shall survive any termination 
of this Agreement, and the provisions of such Confidentiality Agreement shall 
apply to all information and material delivered by any party hereunder.

          8.3  Modification or Amendment.  Subject to the applicable 
provisions of the MGCL, at any time prior to the Effective Time, the parties 
hereto may modify or amend this Agreement, by written agreement executed and 
delivered by duly authorized officers of the respective parties; provided, 
however, that after approval of this Agreement by the stockholders of the 
Company, no amendment shall be made which reduces or changes the 
consideration payable in the Merger or adversely affects the rights of the 
Company's stockholders hereunder without the approval of such stockholders.

          8.4  Waiver of Conditions. Except as otherwise provided in this 
Agreement, any failure of any of the parties to comply with any obligation, 
covenant, agreement or condition herein may be waived by the party or parties 
entitled to the benefits thereof only by a written instrument signed by the 
party granting such waiver, but such waiver or failure to insist upon strict 
compliance with such obligation, covenant, agreement or condition shall not 
operate as a waiver of, or estoppel with respect to, any subsequent or other 
failure.  

          8.5  Counterparts.  This Agreement may be executed in two 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, it being understood that 
all parties need not sign the same counterpart.

          8.6  Governing Law.  This Agreement shall be governed by, and 
construed in accordance with, the laws of 

                                          47


the State of Maryland without giving effect to the principles of conflicts of 
law thereof.

          8.7  Notices.  Any notice, request, instruction or other document 
to be given hereunder by any party to the other parties shall be in writing 
and delivered personally or sent by registered or certified mail, postage 
prepaid, or by facsimile transmission (with a confirming copy sent by 
overnight courier), as follows:

               (a)  If to the Company, to

                    Waverly, Inc.
                    351 West Camden Street
                    Baltimore, Maryland  21117
                    (410) 528-4000 (telephone)
                    (410) 528-4414 (telecopier)

                    with copies to:

                    Michael P. Rogan 
                    Skadden, Arps, Slate, Meagher & Flom LLP
                    1440 New York Avenue, N.W.
                    Washington, D.C.  20005-2111
                    (202) 371-7000 (telephone)
                    (202) 393-5760 (telecopier)

                    Ariel Vannier
                    Venable, Baetjer, Howard & Civiletti,
                      LLP
                    1201 New York Avenue, N.W.
                    Suite 1000
                    Washington, D.C. 20005
                    (202) 962-4800 (telephone)
                    (202) 962 8300 (telecopier)


               (b)  If to Parent or Newco, to

                    Bruce C. Lenz, Executive Vice                       
                         President
                    Wolters Kluwer United States Inc.
                    161 North Clark Street
                    Chicago, IL 60601
                    (312) 425-7020 (telephone)
                    (312) 425-0233 (telecopier)

                                          48


                    with a copy to:

                    Arnold J. Schaab, Esq.
                    Pryor, Cashman, Sherman & Flynn
                    410 Park Avenue
                    New York, NY 10022
                    (212) 326-0168 (telephone)
                    (212) 326-0806 (telecopier)

or to such other persons or addresses as may be designated in writing by the 
party to receive such notice.

          8.8  Entire Agreement; Assignment.  This Agreement and the 
Confidentiality Agreement (a) constitute the entire agreement among the 
parties with respect to the subject matter hereof and supersede all other 
prior agreements and understandings, both written and oral, among the parties 
or any of them with respect to the subject matter hereof and (b) shall not be 
assigned by operation of law or otherwise without the prior written consent 
of the other parties. 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 permitted successors and assigns.

          8.9  Parties in Interest.  This Agreement shall be binding upon and 
inure solely to the benefit of each party hereto and their respective 
successors and assigns.  Nothing in this Agreement, express or implied, other 
than the right to receive the consideration payable in the Merger pursuant to 
Article II hereof, is intended to or shall confer upon any other person any 
rights, benefits or remedies of any nature whatsoever under or by reason of 
this Agreement; provided, however, that the provisions of Sections 5.7 shall 
inure to the benefit of the Company Indemnified Parties and the Indemnified 
Parties and shall be binding on all successors and assigns of Parent, Newco, 
the Company and the Surviving Corporation and shall be enforceable by the 
Company Indemnified Parties and the Indemnified Parties, as the case may be, 
after the Effective Time.

          8.10  Certain Definitions.  As used herein:

               (a)  "Alternative Proposal" shall mean any proposal or offer 
for a merger, asset acquisition or other 

                                          49


business combination involving the Company or any proposal or offer to 
acquire a significant equity interest in, or a significant portion of the 
assets of, the Company other than the transactions contemplated by this 
Agreement.

               (b)  "Company Material Adverse Effect" shall mean any adverse 
change in the assets, liabilities, financial condition, or results of 
operations of the Company or any of its Subsidiaries which is material to the 
Company and its Subsidiaries taken as a whole other than any change or effect 
arising out of general economic conditions.

               (c)  "Parent Material Adverse Effect" shall mean any material 
adverse change in the assets, liabilities, financial condition, or results of 
operations of Parent or any of its Subsidiaries which is material to Parent 
and its Subsidiaries taken as a whole other than any change or effect arising 
out of general economic conditions.

               (d)  "Subsidiary" shall mean, when used with reference to any 
entity, any corporation a majority of the outstanding voting securities of 
which are owned directly or indirectly by such entity.

               (e)  "Superior Proposal" means any bona fide proposal to 
acquire, directly or indirectly, for consideration consisting of cash and/or 
securities, all of the Shares then outstanding or all or substantially all 
the assets of the Company, and otherwise on terms which the Board of 
Directors of the Company determines in good faith to be more favorable to the 
Company and its shareholders than the Offer and the Merger (after 
consultation with the Company's financial advisor). 

          8.11  Obligation of Parent.  Whenever this Agreement requires Newco 
to take any action, such requirement shall be deemed to include an 
undertaking on the part of Parent to cause Newco to take such action and a 
guarantee of the performance thereof.

          8.12  Validity. If any term, provision, covenant or restriction of 
this Agreement is held by a court of competent jurisdiction or other 
authority to be invalid, void, unenforceable or against its regulatory 
policy, the remainder of the terms, provisions, covenants and restrictions 

                                          50


of this Agreement shall remain in full force and effect and shall in no way 
be affected, impaired or invalidated so long as the economic or legal 
substance of the transactions contemplated hereby are not affected in any 
manner materially adverse to any party.

          8.13  Interpretation.  The words "hereof", "herein", and "herewith" 
and words of similar import shall, unless otherwise stated, be construed to 
refer to this Agreement as a whole and not to any particular provision of 
this Agreement, and article, section, paragraph, exhibit and schedule 
references are to the articles, sections, paragraphs, exhibits and schedules 
of this Agreement unless otherwise specified.  Whenever the words "include", 
"includes" or "including" are used in this Agreement they shall be deemed to 
be followed by the words "without limitation".  The words describing the 
singular number shall include the plural and vice versa, and words denoting 
any gender shall include all genders and words denoting natural persons shall 
include corporations and partnerships and vice versa.  The phrase "to the 
best knowledge of" or any similar phrase shall mean such facts and other 
information which as of the date of this Agreement are actually known (or 
after reasonable inquiry would have been known) to (i) in the case of the 
Company, any officer of the Company; and (ii) in the case of Parent or Newco, 
any of their respective officers.  The phrase "made available" in this 
Agreement shall mean that the information referred to has been made available 
if requested by the party to whom such information is to be made available.  
The phrases "the date of this Agreement", "the date hereof", and terms of 
similar import, unless the context otherwise requires, shall be deemed to 
refer to February 10, 1998.  As used in this Agreement, the term 
"affiliate(s)" shall have the meaning set forth in Rule l2b-2 of the Exchange 
Act.  No presumption or burden of proof shall arise favoring or disfavoring 
any party by virtue of the authorship of any provisions of this Agreement.

          8.14  Captions.  The Article, Section and paragraph captions herein 
are for convenience of reference only, do not constitute part of this 
Agreement and shall not be deemed to limit or otherwise affect any of the 
provisions hereof.

          8.15  Specific Performance.  Each of the parties hereto 
acknowledges and agrees that in the event of any 

                                          51


breach of this Agreement, each non-breaching party would be irreparably and 
immediately harmed and could not be made whole by monetary damages.  It is 
accordingly agreed that the parties hereto (a) will waive, in any action for 
specific performance, the defense of adequacy of a remedy at law and (b) 
shall be entitled, in addition to any other remedy to which they may be 
entitled at law or in equity, to compel specific performance of this 
Agreement in any action instituted in a court of competent jurisdiction.

          8.16  Joint and Several Liability.  Parent and Newco hereby agree 
that they will be jointly and severally liable for all covenants, agreements, 
obligations and representations and warranties made by either of them in this 
Agreement.

          8.17   Schedules.  The Company Disclosure Schedule and the Parent 
Disclosure Schedule shall be construed with and as an integral part of this 
Agreement to the same extent as if the same had been set forth verbatim 
herein.  No such disclosure shall be deemed to be an admission or 
representation as to the materiality of the item so disclosed.

 
                                          52


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

Attest:             WAVERLY, INC.
 
[seal]

                    By: /s/ William M. Passano, Jr.      
                        ---------------------------------
                         Name:  William M. Passano, Jr.
                         Title: Chairman




Attest:             WOLTERS KLUWER U.S. CORPORATION

[seal]

                    By: /s/ Peter W. van Wel             
                        ---------------------------------
                         Name:  Peter W. van Wel
                         Title: President




Attest:             MP ACQUISITION CORP.

[seal]

                    By: /s/ Bruce C. Lenz                  
                        ---------------------------------
                         Name:  Bruce C. Lenz
                         Title: Vice President


 
                                          53



                                                                      ANNEX A

                               CONDITIONS TO THE OFFER

          The capitalized terms used in this Annex A shall have the meanings 
ascribed to them in the Agreement and Plan of Merger to which it is attached, 
except that the term "Merger Agreement" shall be deemed to refer to such 
Agreement and Plan of Merger.

          Notwithstanding any other provisions of the Offer, and in addition 
to (and not in limitation of) Newco's rights to extend and amend the Offer at 
any time in its sole discretion (subject to the provisions of the Merger 
Agreement), Newco shall not be required to accept for payment or, subject to 
any applicable rules and regulations of the SEC, including Rule 14e-1(c) 
under the Exchange Act (relating to Newco's obligation to pay for or return 
tendered Shares promptly after termination or withdrawal of the Offer), pay 
for, and may delay the acceptance for payment of or, subject to the 
restriction referred to above, the payment for, any tendered Shares, and may 
terminate the Offer if (i) any applicable waiting period under the HSR Act or 
the antitrust laws of applicable jurisdictions outside the United States has 
not expired or terminated prior to the expiration of the Offer, (ii) the 
Minimum Condition has not been satisfied, (iii) at any time on or after the 
date hereof, and before the expiration of the Offer any of the following 
conditions exist:

               (a)    there shall be any statute, rule, regulation, judgment, 
order or injunction promulgated, entered, enforced, enacted, issued or 
applicable to the Offer or the Merger by any governmental entity of competent 
jurisdiction in the United States or other country in which the Company or 
Parent directly or indirectly has material assets or operations which (l) 
seeks to prohibit the consummation of the Offer or the Merger, (2) as a 
result of the Offer or the Merger, seeks to restrain or prohibit, or impose 
any material limitations on, Parent's or Newco's ownership or operation of 
all or a material portion of the businesses or assets of the Company and its 
Subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken as a 
whole, or compel Parent or any of its subsidiaries or affiliates to dispose 
of or hold 

                                         A-1


separate all or any material portion of the business or assets of the Company 
and its Subsidiaries, taken as a whole, or of Parent and its subsidiaries, 
taken as a whole or requires the Company, Parent or Newco to pay damages that 
are material in relation to the Company and its Subsidiaries, taken as a 
whole, (3) seeks to challenge, prohibit, or make illegal the acceptance for 
payment, payment for or purchase of Shares pursuant to, or consummation of, 
the Offer or the Merger, (4) seeks to impose material limitations on the 
ability of Newco or Parent effectively to exercise full rights of ownership 
of the Shares accepted for payment pursuant to the Offer, including, without 
limitation, the right to vote the Shares purchased by it on all matters 
properly presented to the Company's shareholders (5) seeks to require 
divestiture by Parent or any of its Subsidiaries or affiliates of any Shares, 
provided that Parent shall have used all reasonable efforts to cause any such 
judgment, order or injunction to be vacated or lifted; 

               (b)    there shall be threatened, instituted or pending any 
action, suit, or proceeding by any governmental entity of competent 
jurisdiction in the United States, or any other country in which the Company 
or Parent directly or indirectly has material assets or operations, that is 
reasonably likely, directly or indirectly, to result in any of the 
consequences referred to in clauses (1) through (5) of paragraph (a) above;

               (c)       there has been since the date hereof any event, 
occurrence or development or state of circumstances or facts which has had or 
would reasonably be expected to have a Company Material Adverse Effect (as 
defined in Section 8.10);

               (d)    the representations and warranties of the Company set 
forth in the Merger Agreement shall not be true and accurate as of the date 
of consummation of the Offer as though made on or as of such date or the 
Company shall have breached or failed in any material respect to perform or 
comply with any material obligation, agreement or covenant required by the 
Merger Agreement to be performed or complied with by it except, (i) those 
representations and warranties that address matters only as of a particular 
date or only with respect to a specified period of time which need only be 
true and accurate as of such date or with respect to such period or (ii) 

                                         A-2


where the failure of such representations and warranties to be true and 
accurate, or the breach, non-performance or non-compliance with such 
obligations, agreements or covenants, do not have, individually or in the 
aggregate, or would not reasonably be expected to have, individually or in 
the aggregate, a Company Material Adverse Effect;

               (e)    the Merger Agreement shall have been terminated in 
accordance with its terms;

               (f)    the Company shall have entered into a definitive 
agreement or agreement in principle with any person with respect to an 
Alternative Proposal;

               (g)    the Company's Board of Directors shall have withdrawn, 
or modified or changed in a manner adverse to Parent or Newco (including by 
amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger 
Agreement, or the Merger, or recommended an Alternative Proposal, or shall 
have resolved to do any of the foregoing;

which in the sole judgment of Parent or Newco, in any such case, and 
regardless of the circumstances giving rise to such condition, makes it 
inadvisable to proceed with the Offer and/or with such acceptance for payment 
or payments.

          The foregoing conditions are for the sole benefit of Newco and 
Parent and may be waived by Parent or Newco, in whole or in part at any time 
and from time to time in the sole discretion of Parent or Newco.

                                         A-3