Asset Purchase Agreement - Siemens-Elema AB and St. Jude Medical Inc.


                      [NON-U.S.] ASSET PURCHASE AGREEMENT


                 THIS ASSET  PURCHASE  AGREEMENT  is entered into as of June 26,
1994,  among  Siemens-Elema  AB, a  company  organized  under the laws of Sweden
("SiemensElema"),  St. Jude Medical,  Inc., a Minnesota corporation ("SJM"), and
St. Jude Medical International,  Inc., a Delaware corporation and a wholly owned
subsidiary of SJM ("SJM International").

                 WHEREAS,  Siemens-Elema  and  the  Shareholder  Affiliates  are
engaged in the Business (each as defined herein); and

                 WHEREAS,  each  of SJM,  SJM  International  and  Siemens-Elema
desire that the Sellers sell, assign, transfer, convey and deliver to SJM or its
Affiliates  all of the  Assets,  and that  SJM or its  Affiliates  purchase  and
acquire the same,  subject to the  assumption  by SJM or its  Affiliates  of the
Assumed Liabilities (each such term being used as defined herein),  all upon the
terms and subject to the conditions set forth in this Agreement;

                 The parties hereto agree as follows:


                                   ARTICLE 1

                               TRANSFER OF ASSETS

                 1.1  ASSETS TO BE SOLD.  (a) On the terms  and  subject  to the
conditions of this Agreement,  Siemens-Elema  shall,  and shall cause certain of
its Affiliates (the names and domiciles of  incorporation of which are listed on
Schedule 1.1(a);  collectively,  the "Shareholder Affiliates" and, together with
Siemens-Elema,  the "Sellers") to, on the Closing Date, sell, assign,  transfer,
convey and deliver to SJM, or to such Affiliate or Affiliates of SJM, as SJM may
designate in writing to Siemens-Elema (collectively,  "SJM Affiliates"), and SJM
shall purchase or shall cause one or more of the SJM Affiliates to purchase from
the Sellers on the Closing  Date,  all of the right,  title and  interest of the
Sellers  in the  assets,  properties,  rights  and  goodwill  of every  kind and
description and wherever located, whether tangible or intangible, real, personal
or mixed,  owned by the Sellers which are predominantly  used or held for use in
the  Business,  other  than  the  Excluded  Assets,  and to the  extent  legally
transferable  (the assets to be purchased by SJM or the SJM Affiliates  pursuant
to this  Section 1.1 being  referred  to as the  "Assets"),  including,  without
limitation, the following:

                 (i) all  furniture,  fixtures,  equipment,  machinery and other
         tangible  personal  property,  used or held  for  use by a  Seller  and
         predominantly  used in the  Business  or  otherwise  owned or held by a
         Seller  on the  Closing  Date  predominantly  for use in the  Business,
         including  the  furniture,  fixtures,  equipment,  machinery  and other
         tangible personal property described on Schedule 1.1(a)(i);

                 (ii) all  vehicles  predominantly  used in the  Business on the
         Closing Date, including the vehicles listed on Schedule 1.1(a)(ii);

                 (iii)  all  inventories  sold as part of the  Business  and all
         merchandise,  supplies or other personal property predominantly used in
         the  Business,   including  the   inventories   described  on  Schedule
         1.1(a)(iii);

                 (iv) all  third-party  accounts  and  notes  receivable  of the
         Sellers  arising  from the conduct of the  Business  before the Closing
         Date, including the accounts receivable listed on Schedule 1.1(a)(iv);

                 (v) all books of account, personnel records, invoices, shipping
         records, supplier lists, device history records, manufacturing records,
         traceability  records,  regulatory  documents,   records,  reports  and
         correspondence,  lab notebooks,  research records,  correspondence  and
         other documents,  data files and service manuals and any rights thereto
         (and copies of  financial  and tax records)  predominantly  used in, or
         relating predominantly to, the Business on the Closing Date;

                 (vi) all claims  (excluding any Tax claims),  causes of action,
         choses in action,  rights of recovery and rights of set-off of any kind
         (including  rights to insurance  proceeds and rights under and pursuant
         to all warranties,  representations and guarantees made by suppliers of
         products,  materials or equipment,  or components thereof),  pertaining
         to,  arising  out of,  and  enuring to the  benefit,  of any Seller and
         predominantly relating to the Business;

                 (vii) all sales and promotional literature,  customer lists and
         other sales-related  materials owned, used, associated with or employed
         by and  predominantly  used or  held  for  use in the  Business  on the
         Closing Date, and all customer lists owned,  used,  associated  with or
         employed by the Business on the Closing Date;

                 (viii) all rights of each Seller under all contracts, licenses,
         sublicenses,  agreements,  leases, commitments,  and sales and purchase
         orders,  and under all bids and offers  predominantly  relating  to the
         Business on the Closing  Date,  including  those  contracts,  licenses,
         sublicenses, agreements, leases, commitments, sales and purchase orders
         and bids and offers listed on Schedule 1.1(a)(viii);

                 (ix) all  patents,  trademarks,  service  marks,  trade  names,
         copyrights,  and  registrations  and applications for registration with
         respect to any of the foregoing,  pertaining to the Business, including
         all such items listed on Schedule  1.1(a)(ix);  and all trade  secrets,
         know-how and other  intellectual  property owned by any Seller and used
         predominantly in the Business on the Closing Date;

                 (x) all goodwill of the Sellers with respect to the Business on
         the Closing Date;

                 (xi)   all   permits,   licenses,   agreements,   waivers   and
         authorizations  held or used  by any  Seller  in  connection  with  the
         Business;

                 (xii)  all  product   approvals,   clearances,   registrations,
         permits,  consents,  waivers,  certificates,  listings,  and exemptions
         submitted to or granted by a regulatory authority, foreign or domestic,
         for the purpose of allowing the manufacture,  sale or distribution of a
         product of the Business, and all other permits,  orders,  certificates,
         authorizations or approvals of any  supranational,  national,  federal,
         state, provincial or local, domestic or foreign, governmental authority
         or regulatory agency held by a Seller in respect of the Business;

                 (xiii) all  advances,  deposits,  loans,  prepaid  interest and
         other  prepaid  expenses of all kinds of the  Business,  including  all
         advances,  deposits, loans, prepaid interest and other prepaid expenses
         listed on Schedule 1.1(a)(xiii);

                 (xiv) computer software and firmware used  predominantly in the
         Business,  including the software used in connection  with  production,
         inventory tracking, and work in process testing;

                 (xv) any and all interests in real property  leases  (including
         leases for  warehouse  space)  used or held for use in the  Business by
         each Seller and  described  in  Schedule  1.1(a)(xv)  attached  hereto,
         including without limitation, the benefit of any prepaid rent, security
         deposits  and  options to renew or purchase  in  connection  therewith,
         which schedule shall set forth basic  information  with respect to each
         lease including  landlord's name,  commencement date,  expiration date,
         square footage of the premises, monthly rent (including maintenance and
         tax obligations),  offsets,  free and prepaid rent,  security deposits,
         and information concerning any options to renew, expand or purchase the
         premises; and

                 (xvi) all Employee  Benefit Plans listed on Schedule 7.1.2, and
         all  insurance  contracts and other assets the Sellers are obligated to
         transfer to SJM or the SJM Affiliates pursuant to Section 7.1.2.

                 (b)  Notwithstanding  any  provision  of Section  1.1(a) to the
contrary,  the Assets shall exclude the following assets owned by one or more of
the Sellers (the "Excluded Assets"):

                 (i) all cash, cash  equivalents and bank accounts owned by each
         Seller at the Closing Date;

                 (ii) all assets  and  properties  of each  Seller  (other  than
         customer lists specified in Section  1.1(a)(vii)),  whether tangible or
         intangible,  that  are not  predominantly  used or held  for use in the
         conduct of the Business;

                 (iii)     all rights of each Seller under this Agreement; and

                 (iv)      financial records and tax records.

                 (c)  Schedules  referenced  above  in  this  Section  1.1  more
specifically  describe the foregoing  generally described Assets as of September
30, 1993,  being sold to SJM or the SJM Affiliates and the Excluded Assets as of
September  30,  1993.  As soon as  practicable  (but in no event  later  than 90
calendar  days  following  the Closing  Date),  Siemens-Elema  shall prepare and
deliver  to SJM,  which  shall  have the right to review  (with  disputes  to be
resolved if necessary by the  Independent  Accounting  Firm specified in Section
2.2.4),  revised  Schedules  for this Section 1.1 which shall more  specifically
describe the Assets and the Excluded Assets as of the Closing Date.

                 1.2 ASSUMPTION AND EXCLUSION OF LIABILITIES. (a) Except for the
Assumed Liabilities  expressly provided for in Section 1.2(b) below, the Sellers
shall retain,  pay,  perform and  discharge  when due all  Liabilities  known or
unknown (the "Excluded Liabilities"):

                 (i) arising out of or relating to the conduct or  condition  of
         the Business or the Assets or the Excluded Assets existing or occurring
         on or prior to the Closing  Date whether  accrued or arising  before or
         after the Closing Date; and

                 (ii) except as specifically  provided in Section 7.2, for Taxes
         now or  hereafter  owed  by any  Seller  or  any of  their  Affiliates,
         relating to any Tax period, or any portion of any Tax period, including
         Taxes imposed on any Seller or any of their Affiliates for which SJM or
         any of its Affiliates  becomes  liable,  under the laws of the relevant
         jurisdiction, by virtue of being a successor to the Business.

                 (b)  On  the  terms  and  subject  to the  conditions  of  this
Agreement,  on the Closing Date, SJM shall,  or shall cause the  appropriate SJM
Affiliate to, assume and pay,  perform and discharge when due only the following
Liabilities (the "Assumed Liabilities");

                 (i) all Liabilities of the Business, to the extent reflected or
         reserved against on the Closing Balance Sheet;

                 (ii) all  Liabilities to the extent they arise out of or relate
         to the conduct or  condition  of the  Business or the Assets  after the
         Closing Date;

                 (iii) all Liabilities accruing after the Closing Date under all
         Commitments and other  contracts,  licenses,  sublicenses,  agreements,
         leases, commitments, sales and purchase orders transferred to SJM or an
         SJM Affiliate under this Agreement,  and, in respect of any Commitment,
         or other contract, license,  sublicense,  agreement, lease, commitment,
         sales or purchase order not  transferred  because a consent or approval
         required for the transfer  thereof has not been  obtained,  Liabilities
         thereunder  to the  extent  that  a  Seller  or  any of its  Affiliates
         provides SJM or an SJM Affiliate the rights and benefits thereof;

                 (iv)  all  Liabilities   relating  to  employees  and  employee
         benefits  and Taxes  assumed  by SJM or an SJM  Affiliate  pursuant  to
         Sections 7.1 and 7.2;

                 (v)       all Post Closing Products Liability Losses; and

                 (vi)      all Post Closing Litigation Losses.

                 1.3 TRANSFER  DOCUMENTATION AND POSSESSION.  The parties hereto
agree that, in order to effect the transfer of the Assets and the  assumption of
the Assumed  Liabilities,  the parties shall deliver the documents  described in
Sections 3.2 and 3.3, and such other  conveyance  documents as are  necessary to
convey and, as appropriate, record and perfect title to the Assets to SJM or SJM
Affiliates and for SJM or SJM Affiliates to assume the Assumed Liabilities, such
other  documents  to  be  in  form  and  substance   mutually   satisfactory  to
Siemens-Elema and SJM and as may be necessary under the laws of the jurisdiction
where such Assets and Assumed  Liabilities  are located to effect such  transfer
and  assumption.   Coincident  with  the  Closing,  the  Sellers  shall  deliver
possession of the Assets to SJM or the appropriate SJM Affiliate.

                 1.4       TRANSITIONAL SERVICES.

                 1.4.1 In order to allow for a transition  of those  portions of
the Business that are conducted at certain  facilities of Siemens-Elema  and the
Shareholder  Affiliates,  SiemensElema shall and shall cause certain Shareholder
Affiliates  and other of its  Affiliates to enter into one or more  transitional
services  agreements,  containing  the terms set forth in Exhibit  1.4.1 hereto,
including the terms relating to the lease of space at the Solna, Sweden facility
(the "Siemens Transitional Services Agreements").

                 1.4.2 In order to allow for a transition  of those  portions of
the Business that are predominantly used in the Business, but are partially used
by  Siemens-Elema  or another Seller in other  businesses,  SJM shall,  or shall
cause  an SJM  Affiliate  to,  enter  into  one or  more  transitional  services
agreements  in a form to be  agreed  upon by  Siemens-Elema  and SJM  (the  "SJM
Transitional Services Agreements").


                                   ARTICLE 2

                      CONSIDERATION AND MANNER OF PAYMENT

                 2.1  CONSIDERATION  AND  PAYMENT.  Subject to Section  2.2, the
aggregate cash  consideration  paid for the Assets shall be US$110,000,000  (the
"Cash  Consideration").  The  Cash  Consideration  shall  be  paid  in  full  in
immediately available dollar funds at the Closing.

                 2.2       CASH CONSIDERATION ADJUSTMENT.

                 2.2.1 The Cash Consideration shall be subject to adjustment, if
any,  after the  Closing  Date (as  defined in Article 3) as  specified  in this
Section 2.2.

                 2.2.2 As soon as  practicable  (but in no event  later  than 90
calendar  days  following  the Closing  Date),  Siemens-Elema  shall prepare and
deliver to SJM an audited  combined balance sheet for the Business (the "Closing
Balance Sheet") as of the Closing Date, together with a supplementary  statement
adjusting the combined  balance sheet to exclude  certain assets and liabilities
which are not to be sold and to include  certain  other  assets and  liabilities
which are to be sold, all as set forth on Schedule  2.2.2. In preparation of the
Closing Balance Sheet, Siemens-Elema shall in good faith consider all reasonable
audit procedures  suggested by SJM, and to the extent such suggested  procedures
are acceptable to  Siemens-Elema,  prepare the Closing Balance Sheet in a manner
consistent therewith. The Deal Balance Sheet and the Closing Balance Sheet shall
not include any  liability  or reserve  with  respect to any future  liabilities
relating  to or arising out of the  Settlement  Agreement.  The Closing  Balance
Sheet  shall be  accompanied  by the report  thereon  of Coopers & Lybrand,  the
independent  accountants  of  Siemens-Elema   ("Siemens-Elema's   Accountants"),
stating that the Closing  Balance Sheet fairly  presents the combined  financial
position of the Business at the Closing Date in conformity  with Schedule  2.2.2
and otherwise in accordance  with United States  generally  accepted  accounting
principles  (hereinafter  referred to as "U.S.  GAAP") which  Schedule 2.2.2 and
U.S. GAAP shall be applied on a basis  consistent  with the  preparation  of the
Deal Balance  Sheet as defined in Section  4.2.  During the  preparation  of the
Closing Balance Sheet by  Siemens-Elema  and the period of any dispute  provided
for in  Section  2.2.4,  SJM shall  provide  Siemens-Elema  and  Siemens-Elema's
Accountants reasonable access to the books, records, facilities and employees of
the Business,  and SJM, the SJM Affiliates and their respective  successors,  if
any, shall cooperate fully with SiemensElema's  Accountants, in each case to the
extent required by  Siemens-Elema  and  Siemens-Elema's  Accountants in order to
prepare  the Closing  Balance  Sheet and to  investigate  the basis for any such
dispute.  SJM and its  representatives  shall be given reasonable  access during
regular  business  hours  and upon  reasonable  notice  to the  books,  records,
facilities  and  employees  of  Siemens-Elema  and  the  Shareholder  Affiliates
pertaining to the Business including all supporting documents and auditor's work
papers used in the preparation of the Closing Balance Sheet, as necessary for it
to  review  the  Closing  Balance  Sheet;  provided,   however,  that  any  such
investigation  shall be conducted in such manner so as not to interfere with the
operations of the Sellers.  SJM shall be permitted to observe the physical count
of inventory to be undertaken in preparation of the Closing Balance Sheet.


                 2.2.3 Subject to the  limitations  set forth in Section  2.2.4,
within 30 Business Days after the date of receipt by SJM of the Closing  Balance
Sheet:

                 (i) If the  amount  of Net  Book  Value  shown  on the  Closing
         Balance Sheet is less than  US$58,158,000  by at least  US$200,000 (the
         "Designated Amount"), Siemens-Elema shall immediately pay to SJM, as an
         adjustment to the Cash Consideration,  in immediately  available dollar
         funds, an amount equal to such excess over the Designated Amount; and

                 (ii) If the  amount  of Net Book  Value  shown  on the  Closing
         Balance Sheet is greater than  US$58,158,000 by at least the Designated
         Amount,  SJM  shall  immediately  pay,  as an  adjustment  to the  Cash
         Consideration,  in immediately available dollar funds, to Siemens-Elema
         an amount equal to such excess over the Designated Amount.

                 2.2.4 If not  disputed by SJM in  accordance  with this Section
2.2.4,  the Closing  Balance Sheet  delivered by  Siemens-Elema  to SJM shall be
final, binding and conclusive on the parties hereto. SJM may dispute any amounts
reflected on the Closing Balance Sheet to the extent that the net effect of such
disputed  amounts  in the  aggregate  would  be to  change  the Net  Book  Value
reflected on the Closing Balance Sheet by more than the Designated  Amount,  but
only on the basis that the amounts  reflected on the Closing  Balance Sheet were
not arrived at in  accordance  with  Schedule  2.2.2 and otherwise in accordance
with U.S. GAAP, or that the adjustments set forth in Schedule 2.2.2 or U.S. GAAP
were not applied on a basis  consistent with the preparation of the Deal Balance
Sheet;   provided,   however,   that  SJM   shall   notify   Siemens-Elema   and
Siemens-Elema's  Accountants  in writing of each disputed  item,  specifying the
amount  thereof in dispute  and  setting  forth,  in detail,  the basis for such
dispute,  within 30 Business Days of SJM's receipt of the Closing Balance Sheet.
In the event of such a dispute, each of Siemens-Elema and SJM shall negotiate in
good faith to reconcile their differences. If such dispute has not been resolved
within 10 Business Days after the notice  referred to in the preceding  sentence
has  been  given,  Ernst  & Young  ("SJM's  Accountants")  and  Siemens-Elema's
Accountants shall attempt to reconcile their differences,  and any resolution by
them as to any disputed  amounts shall be final,  binding and  conclusive on the
parties hereto. If any such resolution by SJM's Accountants and  Siemens-Elema's
Accountants  leaves in dispute  amounts the net effect of which in the aggregate
(together with any amounts  originally  disputed by SJM but no longer in dispute
("Non-Disputed Amounts")) would not be to change the Net Book Value reflected on
the Closing  Balance Sheet by at least the  Designated  Amount,  all the amounts
remaining in dispute  shall then be deemed to have been resolved in favor of the
Closing  Balance  Sheet,  and  such  resolution  shall  be  final,  binding  and
conclusive  on the parties  hereto.  If SJM's  Accountants  and  Siemens-Elema's
Accountants are unable to reach a resolution, leaving in dispute amounts the net
effect of which in the aggregate  (together  with  Non-Disputed  Amounts)  would
change the Net Book Value reflected on the Closing Balance Sheet by at least the
Designated  Amount,  SJM's  Accountants and  Siemens-Elema's  Accountants  shall
submit the items  remaining  in dispute that SJM shall be entitled to dispute by
the terms of this  Section  2.2.4 for  resolution  to  Deloitte & Touche or such
other independent accounting firm of international reputation as may be mutually
acceptable to Siemens-Elema and SJM (the "Independent  Accounting Firm"),  which
shall,  within 30  Business  Days of such  submission,  determine  and report to
Siemens-Elema and SJM upon such remaining  disputed items, and such report shall
have the legal  effect of an  arbitral  award  and shall be final,  binding  and
conclusive  on  Siemens-Elema  and  SJM.  The  fees  and  disbursements  of  the
Independent  Accounting Firm shall be allocated between SJM and Siemens-Elema in
the same proportion that the aggregate  amount of such remaining  disputed items
so submitted to the Independent Accounting Firm which is unsuccessfully disputed
by each such party (as finally  determined by the Independent  Accounting  Firm)
bears to the total amount of such  remaining  disputed  items so  submitted.  No
adjustment  to any amount  payable by SJM or  Siemens-Elema  pursuant to Section
2.2.3 shall be made with  respect to amounts  disputed  by SJM  pursuant to this
Section 2.2.4, unless the net effect of the amounts successfully disputed by SJM
in the aggregate  (together with the Non-Disputed  Amounts) is to change the Net
Book Value  reflected on the Closing  Balance  Sheet by at least the  Designated
Amount,  in which case such adjustment  shall only be made in an amount equal to
any excess over the Designated  Amount. Any amount that is payable under Section
2.2.3,  including,  without  limitation,  any portion thereof that is subject to
dispute under this Section 2.2.4 shall be paid by  Siemens-Elema  or SJM, as the
case may be, in immediately  available  dollar funds,  within five Business Days
following the  resolution  of such dispute and in an amount in  accordance  with
such resolution.

                 2.2.5  In  acting   under   this   Agreement,   Siemens-Elema's
Accountants,  SJM's  Accountants  and the  Independent  Accounting Firm shall be
entitled to the privileges and immunities of arbitrators.

                 2.2.6 Any payment  required to be made by SJM or  Siemens-Elema
pursuant to Section  2.2.3 shall bear interest from the Closing Date through the
date of  payment  on the  basis of the  average  of the daily  rate of  interest
publicly announced by Citibank,  N.A. in New York, New York from time to time as
its base rate for dollars from the Closing Date to the date of such payment.

                 2.3   ALLOCATION  OF  PURCHASE   PRICE.   (a)  As  promptly  as
practicable (but in no event later than ten (10) days prior to the Closing Date,
SJM shall deliver to SiemensElema a preliminary  proposed allocation of the Cash
Consideration and Assumed  Liabilities among the countries in which the Business
is conducted and the respective Sellers are located.

                  (b) As promptly as practicable (but in no event later than the
later of (i) 90 calendar  days  following  the Closing Date and (ii) thirty days
after the  Closing  Balance  Sheet is finally  resolved),  SJM shall  deliver to
Siemens-Elema a proposed  allocation of the Cash  Consideration  and the Assumed
Liabilities  reflected in the Closing Balance Sheet among the countries in which
the Business is conducted  and the Sellers are located and,  where  appropriate,
among the Assets located in such countries.

                 (c) SJM and  Siemens-Elema  agree to  negotiate  in good  faith
regarding  the  allocation  referred  to in  subsections  (a) and (b)  above  as
promptly as practicable. If SJM and Siemens-Elema are unable (despite good faith
negotiations)  to agree upon an  allocation  within  150 days after the  Closing
Date,  SJM  and  Siemens-Elema  shall  each  be  individually   responsible  for
performing its own allocation.

                                   ARTICLE 3

                                    CLOSING

                 3.1 THE CLOSING.  The closing of the transactions  contemplated
hereby  (the  "Closing")  shall take place at the  offices of Baker & McKenzie,
Eriksbergsgatan  46, 100 41, Stockholm,  Sweden,  and at such other locations as
the  parties  may agree at 10:00  a.m.  (New York City time) on the later of (i)
August 31,  1994,  and (ii) the fifth  Business  Day after the  satisfaction  or
waiver of the  conditions in Articles 8 and 9, or at such other time or place as
the parties may agree (the "Closing Date").  All matters at the Closing shall be
considered to take place  simultaneously,  and no delivery of any document shall
be deemed  completed  until all  transactions  and  delivery  of  documents  are
completed.  At the Closing,  the purchase of the Assets shall be, as between SJM
and the SJM Affiliates,  on the one hand, and  SiemensElema  and the Shareholder
Affiliates,  on the other hand, deemed to have occurred at and as of 24:00 local
time in the respective jurisdictions on the Closing Date.

                 3.2 DELIVERIES OF SIEMENS-ELEMA.  At the Closing, Siemens-Elema
shall deliver or cause to be delivered to SJM or the  appropriate SJM Affiliates
the following:

                 3.2.1 copies of resolutions of Siemens-Elema's  and Shareholder
Affiliates' Boards of Directors (or equivalent  corporate body) showing that all
required corporate action, if any, on the part of each Seller, has been duly and
validly adopted and in full force and effect, authorizing execution and delivery
of  this  Agreement  and   performance   respectively  by  each  Seller  of  the
transactions contemplated hereby and by the Ancillary Documents;

                 3.2.2 an executed counterpart of the Medtronics  Assignment and
Assumption Agreement, in substantially the form of Exhibit 3.2.2 attached hereto
(the "Medtronics Assignment");

                 3.2.3 a license  agreement  among SJM,  SJM  International  and
Siemens AG, in a form to be agreed by Siemens-Elema  and SJM, whereby Siemens AG
grants to SJM, SJM International and their Affiliates a non-exclusive short-term
transition license to continue use of those certain  inventories of products and
packaging,  and for a certain period molds for production  bearing the trademark
"SIEMENS" existing at the Closing Date;

                 3.2.4  counterparts,  executed by each  Seller of the  Business
Transfer Agreements;

                 3.2.5 counterparts,  executed by Siemens-Elema,  Siemens AG and
such of their  Affiliates  as may be  appropriate,  of a General  Assignment  of
Intangibles  in a form  to be  agreed  upon by  Siemens-Elema  and  SJM,  and an
Intellectual  Property  Assignment  Agreement  in a form  to be  agreed  upon by
Siemens-Elema  and SJM, and such other conveyance  documents as are necessary to
convey  and record  title in any  intangibles,  including  any  patents,  patent
applications,   trademark   registrations   and   applications   for   trademark
registrations,  such other  documents to be in a form and  substance  reasonably
satisfactory to SJM and/or its counsel and as may be necessary under the laws of
the jurisdiction  where such intangibles are located to effect and record such a
transfer (collectively, the "Assignments"); and

                 3.2.6  counterparts,   executed  by  Siemens-Elema,  the  other
Sellers and their  Affiliates  (as  appropriate),  of the  Siemens  Transitional
Services Agreements and the SJM Transitional Services Agreements.


                 3.3  DELIVERIES  OF SJM. At the Closing,  SJM shall  deliver to
Siemens- Elema on its behalf and on behalf of the other Sellers, the following:

                 3.3.1 the Cash  Consideration,  in accordance  with Section 2.1
hereof, to a U.S. bank account  designated by Siemens-Elema to SJM in writing at
least two Business Days prior to the Closing Date;

                 3.3.2  Certificates of Good Standing dated not more than thirty
(30) days prior to the Closing Date,  with respect to SJM and SJM  International
issued by the Secretaries of State of Minnesota and Delaware, respectively;

                 3.3.3 copies of  resolutions  of SJM's and SJM  International's
Boards of Directors,  certified by the respective  Secretaries thereof as having
been  duly  and  validly  adopted  and in full  force  and  effect,  authorizing
execution and delivery of this  Agreement and  performance  of the  transactions
contemplated hereby;

                 3.3.4     an executed counterpart of the Medtronics Assignment;

                 3.3.5 counterparts,  executed by SJM International or other SJM
Affiliates (as appropriate), of the Business Transfer Agreements; and

                 3.3.6 counterparts,  executed by SJM International or other SJM
Affiliates (as appropriate), of the Siemens Transitional Services Agreements and
the SJM Transitional Services Agreements.

                 3.4       FURTHER DOCUMENTS.

                 3.4.1 SJM, SJM International, and the Sellers shall execute and
deliver,  or cause to be executed and  delivered,  such other notarial and other
deeds, assignments,  recordations, powers of attorney, instruments, documents or
certificates  as the other parties may reasonably  request to effect or evidence
the consummation of the transactions contemplated by this Agreement.


                                   ARTICLE 4

                REPRESENTATIONS AND WARRANTIES OF SIEMENS-ELEMA

                 Subject to Section 6.12,  Siemens-Elema represents and warrants
to SJM and agrees with SJM that, on and as of the date of this  Agreement and on
and as of the Closing Date:

                 4.1 AUTHORITY, ORGANIZATION,  CAPITALIZATION AND QUALIFICATION;
EFFECT OF AGREEMENT.

                 4.1.1  Authority.  Siemens-Elema  has full corporate  power and
authority  to execute  and  deliver  this  Agreement,  perform  its  obligations
hereunder and to consummate the transactions  contemplated hereby. The execution
and  delivery  of  this  Agreement,  the  performance  by  Siemens-Elema  of its
obligations  under this Agreement and the  consummation by  Siemens-Elema of the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
corporate  action  on  the  part  of  Siemens-Elema,   and  no  other  corporate
proceedings  on the  part  of  Siemens-Elema  are  necessary  to  authorize  the
execution and delivery of this Agreement and to consummate the  transactions  so
contemplated.   This   Agreement   has  been  duly  executed  and  delivered  by
Siemens-Elema and constitutes the valid and binding  obligation of Siemens-Elema
and is enforceable against Siemens-Elema in accordance with its terms, except to
the extent that such  enforceability  may be limited by bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws relating to creditors'  rights
generally.

                 4.1.2   Organization  and   Qualification   of   Siemens-Elema.
Siemens-Elema is a corporation  (aktiebolag) duly organized and validly existing
under the laws of Sweden and has full corporate  power and authority to carry on
its business as it is now being conducted. Each of the Shareholder Affiliates is
a  corporation  duly  organized  and  validly  existing  under  the  laws of the
jurisdiction of its  incorporation and has full corporate power and authority to
carry on its business as it is now being conducted.  Each of  Siemens-Elema  and
the Shareholder Affiliates is, in respect of the Business,  duly qualified to do
business in each  jurisdiction  where the  character  of the  property  owned or
leased by it or the nature of its activities makes such qualification necessary,
except for those  jurisdictions  where the failure to be so qualified would not,
individually or in the aggregate,  have a Material Adverse Effect (as defined in
Section  13.1).   Siemens-Elema  has  heretofore  delivered,  or  caused  to  be
delivered,  to SJM true and complete  copies of  Siemens-Elema's  certificate of
incorporation and bylaws (or equivalent organizational documents).

                 4.1.3 Subsidiaries.  Neither  Siemens-Elema nor any Shareholder
Affiliate,  in each case in respect of the Business,  has any Subsidiary,  owns,
directly or indirectly,  any stock, partnership interest, joint venture interest
or other equity  interest in any other  Person,  or has the power to vote, or to
exercise a controlling influence with respect to, any securities of any class of
any Person,  the holders of which class are entitled to vote for the election of
directors (or persons serving similar functions) of such Person.

                 4.1.4  Consents.  Except as disclosed  in Schedule  4.1.4 or as
would not, individually or in the aggregate,  have a Material Adverse Effect, no
consent,  approval,  waiver or other  action by any Person  under any  contract,
agreement, indenture, lease, instrument or other document to which Siemens-Elema
or any Shareholder  Affiliate is a party or by which any of them or their assets
is bound is required or necessary for the execution, delivery and performance of
this Agreement or any Ancillary  Agreement by  Siemens-Elema  or any Shareholder
Affiliate,  as the  case  may  be,  or  the  consummation  of  the  transactions
contemplated hereby or thereby.

                 4.1.5 No Default.  Except as  disclosed  in Schedule  4.1.5 the
execution,  delivery and performance by  Siemens-Elema  of this Agreement and by
each Shareholder  Affiliate of the Ancillary  Agreements and the consummation by
them of the transactions contemplated hereby and thereby do not and will not (a)
except as would not have,  individually or in the aggregate,  a Material Adverse
Effect,  contravene  or  constitute  a default  under or give rise to a right of
termination,  cancellation  or  acceleration  of  any  right  or  obligation  of
Siemens-Elema or any Shareholder  Affiliate or to a loss of any benefit to which
Siemens-Elema  or the Business is entitled under (i) any provision of applicable
law or regulation (assuming the governmental consents referred to in Section 4.9
have been obtained); (ii) the certificate of incorporation or bylaws (or similar
organizational  documents) of Siemens-Elema or any Shareholder Affiliate;  (iii)
any  Commitment  (as defined in Section 4.6); or (iv) any judgment,  injunction,
order, decree, administrative interpretation,  award or other instrument binding
upon Siemens-Elema,  any Shareholder  Affiliate or the Business or (b) except as
would not have,  individually  or in the aggregate,  a Material  Adverse Effect,
result in the creation or imposition of any Lien on any of the Assets.

                 4.2 FINANCIAL  STATEMENTS.  Siemens-Elema  has delivered to SJM
copies of the audited  combined  balance  sheets of the Business as of September
30, 1993  (together  with a  supplementary  statement  adjusting  such financial
statements  to  exclude  certain  assets  and  liabilities,   including  certain
reserves, which are not to be sold and assumed and to include certain assets and
liabilities which are to be sold and assumed, all as set forth on Schedule 2.2.2
(the "Deal Balance Sheet")) as well as an audited income statement and cash flow
statement  for the  Business  for the fiscal  year  ended  September  30,  1993,
together  with the  related  notes  and  schedules  thereto  (collectively,  the
"Financial Statements").  The financial statements are attached as Schedule 4.2.
The  Financial  Statements  have been prepared from the books and records of the
Business in accordance with U.S. GAAP applied on a consistent basis,  subject to
normal year-end  adjustments,  and fairly present the financial condition of the
Business  as at the date  thereof  and the  results  of its  operations  for the
periods   covered  thereby   (subject  to  the  adjustments   contained  on  the
supplementary statement).  The supplementary statement has been subjected to the
auditing  procedures  applied in the audit of the  Financial  Statements  and is
fairly stated in all material respects in relation to the Financial  Statements.
Schedule  2.2.2.1 sets forth for each of the Non-U.S.  Financial  Statements the
intercompany eliminations between the Non-U.S.  Financial Statements and each of
the  corresponding  U.S.  Financial  Statements  as  defined  in the U.S.  Asset
Purchase  Agreement  (which the  Sellers  are  assuming  have been  prepared  in
accordance  with U.S.  GAAP),  that are necessary to prepare in accordance  with
U.S. GAAP combined  financial  statements  for the Financial  Statements and the
Non-U.S. Financial Statements. Siemens-Elema has also delivered to SJM unaudited
profit and loss information for the Business for the period from October 1, 1993
through  May 31,  1994,  based on  financial  information  normally  prepared by
Siemens-Elema for delivery to Siemens AG.

                 4.3  ABSENCE  OF CERTAIN  DEVELOPMENTS.  Except as set forth in
Schedule  4.3,  since  September  30, 1993,  the Business has been operated in a
manner  consistent  with  past  practice,  and  neither  Siemens-Elema  nor  any
Shareholder Affiliate,  in each case with respect to the Business, has, alone or
in the aggregate:

                 4.3.1  mortgaged,  pledged or subjected to any Lien, any of its
property or assets, tangible or intangible, other than in the ordinary course of
business,  Permitted  Liens  and  Liens  that  will be  released  at or prior to
Closing;

                 4.3.2 except as contemplated by this Agreement,  sold,  leased,
assigned,  transferred  or otherwise  disposed of any of its assets,  except for
inventory sold in the ordinary  course of business,  having a value of more than
US$50,000 or an aggregate value in excess of US$250,000;

                 4.3.3 except as contemplated by this Agreement, made or granted
any bonus or any wage,  salary increase,  severance or severance  arrangement to
any director, manager, officer,  salesperson,  employee or group of employees or
made or granted any  increase in any  employee  compensation  or benefit plan or
arrangement (except in accordance with past practice),  or amended or terminated
any existing  employee  benefit plan or  arrangement or adopted any new employee
benefit plan or arrangement;

                 4.3.4 sold, assigned, transferred or licensed to any Person any
rights under any patents,  trademarks,  service marks, trade names,  copyrights,
registrations  or  applications  for  registration  with  respect  to any of the
foregoing,  trade secrets or other  intellectual  property owned by, or licensed
to, Siemens-Elema or any Shareholder Affiliate;

                 4.3.5  entered  into any  settlement  agreement  regarding  the
breach or infringement  (or alleged breach or  infringement)  of any domestic or
foreign intellectual property license, patent, copyright or trademark;

                 4.3.6 made any capital  expenditures  in Scotland and Sweden in
excess of an aggregate of US$2,000,000;

                 4.3.7 suffered any extraordinary losses or waived any rights of
material value, whether or not consistent with past practice;

                 4.3.8  suffered any damage,  destruction  or loss of any assets
owned by Siemens-Elema or the Shareholder  Affiliate in Scotland or used by them
in the operation of the Business or any  inventory  owned or held for use by any
Shareholder  Affiliate  which in the aggregate  have a replacement  cost of more
than US$500,000 whether or not covered by insurance;

                 4.3.9  modified,  amended  or  terminated  any  Commitment  (as
defined in Section 4.6) in a manner materially adverse to the Business;

                 4.3.10     [Reserved];

                 4.3.11  been the  subject  of any  action  taken by the  United
States Food and Drug Administration (the "FDA") or any other domestic or foreign
regulatory  authority  having  jurisdiction  over  similar  matters,   excluding
observations  of  inspectors  which have not  resulted in any  action,  claim or
investigation by the FDA or other such regulatory authority;

                 4.3.12  made any  change in any of the  accounting  methods  or
accounting   practices  or  guidelines  of   Siemens-Elema  or  any  Shareholder
Affiliate,   except  for  any  such  change  required  by   Siemens-Elema's   or
Shareholders  Affiliates  accounting  policies  and except for changes to obtain
uniformity of accounting policies and classifications;

                 4.3.13 entered into any foreign exchange  hedging  contracts or
any other financial derivative contracts;

                 4.3.14  undertaken any  incurrence,  assumption or guarantee by
SiemensElema or any Shareholder Affiliate of any indebtedness for borrowed money
other than consistent with past practices;

                 4.3.15   failed  to  maintain  its  inventory  or  collect  its
receivables  in a normal and customary  manner  materially  consistent  with its
prior practice,  or made any material change in its pricing  practices or credit
terms, limits or durations inconsistent with its prior practice;

                 4.3.16  discharged  or satisfied  accounts  payable  other than
consistent with past practice; or

                 4.3.17  entered into any  agreement or made any  commitment  to
take any of the types of action described in subparagraphs  4.3.1 through 4.3.16
above.

                 4.4 TITLE TO PERSONAL PROPERTY AND ASSETS. Either Siemens-Elema
or a  Shareholder  Affiliate  owns  or has a  valid  leasehold  interest  in all
tangible personal property  necessary for the conduct of the Business,  free and
clear of all  Liens,  except  as set forth in  paragraph  (a) of  Schedule  4.4,
Permitted Liens or as reflected on the Financial Statements. Except as set forth
in paragraph (b) of Schedule 4.4, the equipment and fixed assets of the Business
are in good  condition  and  repair  and are  usable in the  ordinary  course of
business,  ordinary wear and tear  excepted.  The Assets  constitute  all of the
assets and  properties  necessary  for the conduct of the  Business as currently
conducted in all material respects.

                 4.5 PATENTS,  TRADEMARKS  AND  COPYRIGHTS.  To the knowledge of
Siemens-Elema, (a) Schedule 4.5(a) lists all patents, trademarks, service marks,
trade names,  copyrights,  registrations  and applications for registration with
respect  to any of the  foregoing,  owned by  Siemens-Elema  or any  Shareholder
Affiliate or other Affiliate of Siemens-Elema with respect to the Business;  (b)
Schedule  4.5(b)  lists all  license  agreements  under  which third party owned
patents, trademarks, copyrights, registrations and applications for registration
of any of the foregoing,  know how,  technology or other  intellectual  property
rights are licensed to Siemens-Elema  or any Shareholder  Affiliate with respect
to the Business;  and (c) Schedule 4.5(c) lists all claims and disputes  pending
or threatened (in writing) with third parties alleging that Siemens-Elema or any
Shareholder  Affiliate  with respect to the  Business,  on the one hand, or such
third party, on the other hand,  infringes on the other's  patents,  trademarks,
service  marks,  trade names,  copyrights,  trade secrets or other  intellectual
property rights. Siemens-Elema has previously furnished or made available to SJM
all licenses  listed on Schedules  4.5(a) and 4.5(b).  On or before the Closing,
Siemens-Elema  shall make available to SJM all pending patent applications filed
by  SiemensElema  or any  Shareholder  Affiliate with respect to the Business in
Sweden,  the United States or elsewhere.  Schedule  4.5(d) lists all outstanding
orders,  judgments  and  decrees  restricting  the use by  Siemens-Elema  or any
Shareholder  Affiliate with respect to the Business of the patents,  trademarks,
copyrights,  trade  secrets  or  other  intellectual  property  rights  owned or
licensed by any of them. All of the license agreements listed on Schedule 4.5(b)
will be in full force and effect on the Closing Date, and none of  Siemens-Elema
or any  Shareholder  Affiliate  is in  default  under  any of them  nor,  to the
knowledge of Siemens-Elema or any Shareholder Affiliate,  (i) is any other party
to any such license agreement in default thereunder, nor (ii) does any condition
exist that,  with notice or lapse of time or both,  would  constitute  a default
thereunder,  except  in each  case for such  failures  to be in full  force  and
effect,  defaults  or  conditions  that would not have,  individually  or in the
aggregate,  a  Material  Adverse  Effect.  The  right,  title  and  interest  of
Siemens-Elema  and the Shareholder  Affiliates in and to the Proprietary  Rights
and Proprietary Information are duly recorded (as applicable) and free and clear
of all Liens and  rights of third  parties  other  than  Permitted  Liens and as
otherwise   described  in  Schedule   4.5(e).   As  used  herein,   "Proprietary
Information"  means all know-how and technology owned by Siemens-Elema or any of
the  Shareholder   Affiliates  and  used  predominantly  in  the  Business;  and
"Proprietary Rights" means all patents, trademarks,  service marks, trade names,
copyrights,  registrations and applications for registration with respect to any
of the  foregoing,  arising  out of,  and owned by  Siemens-Elema  or any of the
Shareholder Affiliates as part of, the Business.

                 4.6  COMMITMENTS.  Paragraph  (a) of Schedule  4.6 sets forth a
list of all of the following  written  contracts  and other  agreements to which
Siemens-Elema or any Shareholder Affiliate in respect of the Business is a party
or by  which  Siemens-Elema  or any  Shareholder  Affiliate  in  respect  of the
Business or any of the Assets is bound or subject (collectively, "Commitments"):
(i)  customer  contracts  and  agreements  for the sale of materials or products
which by their terms exceed one year or which are in dollar  amounts which equal
or  exceed   US$500,000   per  annum;   (ii)   distributorship   agreements  and
manufacturer's  representative agreements,  which provide for payments in excess
of  US$500,000  per annum;  (iii)  supply and vendor  contracts  for sole source
components or which provide for payments in excess of US$350,000 per annum; (iv)
material  research  and  development  agreements;  (v)  employment,  consulting,
independent   contractor,   severance,   change  in   control,   retention   and
indemnification  agreements,  arrangements  or  understandings,  and  any  other
agreements, arrangements or understandings, between Siemens-Elema or Shareholder
Affiliate, and any current or former stockholder,  officer, director,  employee,
consultant, agent or other representative,  which provide for payments in excess
of  US$100,000  per annum or with respect to any such  contract  under which the
total liability of Siemens-Elema or any Shareholder  Affiliate equals or exceeds
US$500,000;  (vi)  contracts  and  other  agreements  with  any  labor  union or
association  representing  any  employee  of  Siemens-Elema  or any  Shareholder
Affiliate; (vii) joint venture agreements;  (viii) contracts or other agreements
under which  Siemens-Elema or any Shareholder  Affiliate agrees to indemnify for
or share Tax  liability  of any  party;  (ix)  contracts  and  other  agreements
relating to the borrowing of money; (x) any equipment  leases requiring  payment
of at least  US$100,000  within a given  year which are not  cancelable  without
penalty upon 90 days' notice;  (xi)  agreements  settling  pending or threatened
Litigation which require continuing obligations after the date hereof; (xii) any
agreements between Siemens-Elema or any Shareholder Affiliate,  on the one hand,
and any Affiliate of Siemens-Elema, on the other hand, material, individually or
in the aggregate,  to the continued  operation of the Business  consistent  with
past  practice;  (xiii)  agreements  granting  rights or options to purchase the
securities or assets (other than  inventory in the ordinary  course of business)
of other companies or entities;  (xiv)  agreements which limit the Business from
competing  in any  line  of  business  or in any  geographic  area,  other  than
distributorship   or  representation   agreements  which  are  exclusive  as  to
geographic territory;  or (xv) any other contract or other agreement (other than
contracts  and  agreements  of the type  specified in clauses (i) through  (xiv)
above) that is  material  to the  Business.  There have been  delivered  or made
available  to SJM true and  complete  copies  of all such  contracts  and  other
agreements  set forth in paragraph (a) of Schedule 4.6. All of such  Commitments
are in full  force  and  effect,  and none of  SiemensElema  or any  Shareholder
Affiliate is in material default under any of them. None of Siemens-Elema or any
Shareholder  Affiliate  has  received  any  notification  of any  change  in its
arrangements  with  customers and suppliers that would  individually,  or in the
aggregate,  have a  Material  Adverse  Effect.  Paragraph  (b) of  Schedule  4.6
indicates which of the  Commitments  requires the consent of a third party to be
transferred or to remain in full force and effect  following the consummation of
the transactions contemplated by this Agreement.

                 4.7  LITIGATION.  Except as set forth in Schedule 4.7, there is
no Litigation  pending or, to  Siemens-Elema's  or any  Shareholder  Affiliate's
knowledge,  threatened which seeks to enjoin or obtain damages in respect of the
consummation of the  transactions  contemplated  hereby.  Schedule 4.7 lists any
Litigation and, to Siemens-Elema's or any Shareholder Affiliate's knowledge, any
investigation by a governmental  entity, in each case that (i) involves a claim,
or to Siemens-Elema's or any Shareholder Affiliate's knowledge, potential claim,
of liability,  in excess of US$2,000,000,  against or affecting Siemens-Elema or
any Shareholder  Affiliate in respect of the Business or (ii) enjoins,  or seeks
to enjoin,  the  operation  of a portion of the  Business  or seeks  declaratory
judgment if such injunction or judgment would, or if entered would, constitute a
Material Adverse Effect.

                 4.8 PERMITS. Except as set forth in Schedule 4.8, Siemens-Elema
or a Shareholder  Affiliate currently holds all permits,  licenses,  clearances,
registrations,  consents, waivers, listings,  exemptions,  orders, certificates,
authorizations or approvals of any international,  federal, provincial, state or
local,  domestic or foreign,  governmental  authorities or regulatory  agencies,
including, without limitation, those regulating safety, effectiveness and market
clearance of medical devices (the "Permits"), necessary to carry on the Business
as it is currently being conducted, except for such Permits the absence of which
would not, individually or in the aggregate, have a Material Adverse Effect.

                 4.9  GOVERNMENTAL  CONSENTS.  Except  for the  filing  with the
Austrian  Cartel Court,  with the Treasury  Department of the French Ministry of
Economy,  Finance and Budget and  otherwise  as set forth in Schedule  4.9,  the
execution,  delivery and performance by  Siemens-Elema of this Agreement and the
consummation by Siemens-Elema of the transactions contemplated by this Agreement
and  the  consummation  by  the  Shareholder   Affiliates  of  the  transactions
contemplated by the Ancillary Agreements require no action by, or in respect of,
or filing with, any governmental body, agency, official or authority.

                 4.10       EMPLOYEE BENEFIT PLANS.

                 4.10.1  Schedule  4.10.1 sets forth a true and complete list of
each material  Employee  Benefit Plan covering any Employee  (each as defined in
Section  4.10.5).  With  respect  to each  Employee  Benefit  Plan set  forth on
Schedule 4.10.1:

                 (a)  Each  Employee  Benefit  Plan  (and  each  related  trust,
         insurance  contract,  or fund) complies in form and in operation in all
         material  respects  with  its  terms,  and with  all  applicable  laws,
         regulations, ordinances, codes or other legally binding rules and other
         requirements  of all tax,  labor  and  other  governmental  authorities
         having  jurisdiction over  Siemens-Elema or any Shareholder  Affiliate,
         and all applicable  collective  bargaining agreements and works council
         rules.

                 (b) All employer and Employee  contributions  which are due and
         owing as of the Closing  Date with  respect to Employee  Benefit  Plans
         have  been  or  will be made in  accordance  with  local  law and  past
         practice. Any Benefit Obligations under any Employee Benefit Plan as of
         the Closing  Date have been  appropriately  reflected  on the books and
         records of such Employee  Benefit Plan sponsor in accordance with local
         law, past practice and generally accepted accounting  principles in the
         local jurisdiction. Except as disclosed in Schedule 4.10.1, all Benefit
         Obligations under any Employee Benefit Plan as of the Closing Date will
         be, on the Closing Date, fully covered by insurance contracts,  special
         assets or other provisions established for this purpose.

                 (c)  Siemens-Elema  has  delivered  to SJM correct and complete
         copies  of all  plan  documents  and  summary  plan  descriptions,  all
         material  communications  to Employees,  all related trust  agreements,
         insurance contracts,  and other funding agreements which implement each
         Employee  Benefit  Plan,  and,  where a plan  document  for an Employee
         Benefit Plan does not exist,  a detailed  description  of such Employee
         Benefit Plan.

                 (d) Except as disclosed on Schedule 4.10.1, no Employee Benefit
         Plan provides medical,  health,  life insurance,  or other welfare-type
         benefits for current or future retired or terminated  Employees,  their
         spouses or their dependents.

                 (e)  Except  as  disclosed  on  Schedule  4.10.1,  to the  best
         knowledge of  Siemens-Elema,  there has been no amendment  to,  written
         interpretation  of, or announcement  (whether or not written)  relating
         to, or any change in  employee  participation  or coverage  under,  any
         Employee  Benefit  Plan  that  is not  reflected  in the  text  of such
         Employee  Benefit  Plan which  would  materially  increase  the expense
         (whether or not such expense is  recognized  under  generally  accepted
         accounting  principles) to the employer whose  Employees are covered by
         such Employee  Benefit Plan,  other than as a function of the number of
         plan participants.

                 (f) Except as  disclosed  on Schedule  4.10.1,  or as otherwise
         expressly  provided  with  respect to an  Employee  Benefit  Plan or as
         otherwise  required  by  applicable  law,  to  the  best  knowledge  of
         Siemens-Elema,  no condition exists that would prevent the amendment or
         termination of any Employee Benefit Plan with respect to any Employee.

                 4.10.2 No action,  suit,  proceeding,  hearing or investigation
with  respect  to the  administration  or the  investment  of the  assets of any
Employee  Benefit  Plan  (other than  routine  claims for  benefits)  that could
reasonably be expected to result in a material liability to Siemens-Elema or any
Shareholder Affiliate is pending or threatened, and neither SiemensElema nor any
Shareholder  Affiliate has any knowledge of any basis for any such action, suit,
proceeding, hearing, or investigation.

                 4.10.3  Except as set forth on Schedule 4.10.3:

                 (a) the consummation of the  transactions  contemplated by this
         Agreement will not (i) entitle any Transferred Employee of the Business
         to severance pay, termination indemnities,  supplementary  unemployment
         compensation  or any  similar  payment,  (ii)  accelerate  the  time of
         payment or vesting,  or increase the amount of any  compensation due to
         any  such  Employee,  or  (iii)  constitute  or  involve  a  prohibited
         transaction   that  is  not   otherwise   covered  by  a  statutory  or
         administrative exemption; and

                 (b) no collective bargaining agreement, employment agreement or
         other agreement  contains any "change in control" or similar provisions
         which may be triggered by any of the transactions  contemplated in this
         Agreement.

                 4.10.4 Except as disclosed in Schedule 4.10.4,  there have been
no statements by authorized  representatives of Siemens-Elema or any Shareholder
Affiliate,  whether oral or in writing,  regarding any Employee Benefit Plans to
be maintained  (or not to be  maintained)  by SJM or an SJM Affiliate  after the
Closing  Date,  which  will  result  in  material  liability  to SJM or such SJM
Affiliate, whether direct or indirect.

                 4.10.5  For purposes of this Agreement:

                 (a) "Employee" means a current employee,  including both active
         employees  (including  light duty  employees),  and inactive  employees
         (including  employees  on a leave of absence,  sick  leave,  short term
         disability, long term disability or worker's compensation disability on
         the Closing Date), of the Business employed outside of North America.

                 (b) "Employee Benefit Plan" means any agreement, plan, program,
         fund,  policy,  contract or arrangement  (either  written or unwritten)
         providing compensation, benefits, pension, retirement,  superannuation,
         profit sharing,  stock bonus, stock option, stock purchase,  phantom or
         stock  equivalent,   bonus,  thirteenth  month,   incentive,   deferred
         compensation,   hospitalization,  medical,  dental,  vision,  vacation,
         insurance,  sick pay,  disability,  severance,  termination  indemnity,
         redundancy   pay,   educational   assistance,   holiday  pay,   housing
         assistance,  moving  expense  reimbursement,  fringe benefit or similar
         employee  benefits  covering any Employee,  and the  beneficiaries  and
         dependents of the Employee,  regardless of whether it is mandated under
         local law,  private,  funded,  unfunded,  financed  by the  purchase of
         insurance, contributory or non-contributory.

                 (c)  For  purposes  of  this   Agreement,   the  term  "Benefit
         Obligations"  means the actual  liability  to provide  all  current and
         projected  benefits to Employees,  regardless of whether an amount less
         than such actual  liability  is reported  on the  employer's  financial
         statements under applicable tax or accounting  rules. For example,  the
         "Benefit  Obligations"  of an unfunded  book  reserve  pension  plan in
         Austria  or  Germany  is  greater  than  the  amount  credited  to  the
         employer's bookkeeping reserve.


                 4.11  EMPLOYEES.  Paragraph  (a) of Schedule  4.11 sets forth a
true  and  complete  list  of  all  Employees  (other  than  former  employees),
indicating  their position and base salary.  Paragraph (b) of Schedule 4.11 sets
forth a true and  complete  list of each  works  council,  union or other  labor
organization,  which has to be notified or consulted or with which  negotiations
need to be conducted in connection  with the  transactions  contemplated by this
Agreement and each collective  bargaining  agreement which has any impact on the
terms and conditions of employment with respect to the Employees. Where required
under local law,  Siemens-Elema or the relevant Shareholder Affiliate will have,
prior to the Closing Date, properly notified,  or where appropriate consulted or
negotiated  with,  the local  works  council,  union,  labor  board or  relevant
government agency concerning the transactions contemplated by this Agreement and
the Ancillary  Agreements.  Other than as described on Schedule 4.11(c), each of
Siemens-Elema and the Shareholder  Affiliates is in material compliance with all
domestic  and foreign  laws,  regulations,  ordinances,  codes or other  legally
binding  rules  applicable  to the  Business  and  its own  policies  respecting
employment and employment practices,  terms and conditions of employment,  wages
and hours, equal opportunity, civil rights, labor relations, occupational health
and safety and payroll taxes, and any federal,  state, provincial or local human
rights  act.  Other  than  as  described  on  Schedule  4.11(d),   (i)  none  of
Siemens-Elema or any Shareholder Affiliate is in receipt of a complaint,  demand
letter or charge  issued by a federal,  state,  provincial or local agency which
alleges a violation by Siemens-Elema or any Shareholder  Affiliate in respect of
the Business of any  applicable  law or  regulation  respecting  employment  and
employment practices, terms and conditions of employment, wages and hours, equal
opportunity,  civil rights,  labor relations,  occupational health and safety or
payroll taxes;  and (ii) since September 30, 1993, none of  Siemens-Elema or any
Shareholder  Affiliate has engaged in any plant closing, work force reduction or
other action which has resulted or would result in material  liability under any
applicable  domestic  or foreign law or  regulation,  have not issued any notice
that any such action is to occur in the future,  and are in material  compliance
with  all  applicable  requirements  of  all  applicable  immigration  laws  and
regulations.

                 4.12       [RESERVED]

                 4.13       COMPANY PRODUCTS; REGULATION.

                 4.13.1 Except as disclosed in paragraph (a) of Schedule  4.13.1
and except as would not have a Material  Adverse  Effect,  to the  knowledge  of
Siemens-Elema,  since  January  1,  1992  there  have been no  written  notices,
citations or decisions by any  governmental  or regulatory body that any product
produced, manufactured, marketed or distributed at any time by the Business (the
"Products") is defective or fails to meet any applicable  standards  promulgated
by any such  governmental or regulatory body. To the knowledge of Siemens-Elema,
Siemens-Elema  is in  compliance  with  the  Consent  Decree  applicable  to the
Products of the  Business.  Except as  disclosed  in  paragraph  (b) of Schedule
4.13.1, since January 1, 1992 there have been no recalls, field notifications or
seizures ordered or, to the knowledge of  Siemens-Elema,  threatened by any such
governmental or regulatory  body with respect to any of the Products.  Except as
has been disclosed to SJM, since January 1, 1992, Siemens-Elema has not received
and does not have knowledge of any reasonable basis for, any warning letter,  or
Section  305 or other  similar  notices  from the FDA or any other  domestic  or
foreign regulatory authority having jurisdiction over similar matters.

                 4.13.2  Except as would  not have a  Material  Adverse  Effect,
Siemens-Elema  is in possession of and will, upon SJM's request,  make available
to  SJM,  all  supportive  materials  and  data  with  respect  to the  Business
substantiating  representations  made to the FDA or other  domestic  or  foreign
governmental  regulatory  authority in its filings therewith,  including any and
all testing  data in the  possession,  or under the control,  of  Siemens-Elema,
whether or not  submitted to the FDA or other  domestic or foreign  governmental
regulatory  authority.  In addition,  Siemens-Elema has identified or will, upon
SJM's  request,  identify  to  SJM,  to  the  knowledge  of  Siemens-Elema,  all
international  locations  where  regulatory  information and documents are kept,
except  where  the  failure  to  identify  any such  locations  would not have a
Material  Adverse  Effect.  The  Products  perform in all  material  respects in
compliance with the representations and performance  specifications as contained
in said filings.

                 4.14       TAX MATTERS.

                 4.14.1  U.S.  Real  Property.  Except as set forth in  Schedule
4.14.1, none of Siemens-Elema or the Shareholder Affiliates own, with respect to
the Business,  any interest in real property located in the United States or any
property  which would  constitute an  investment  in United States  property (as
defined  in  Section  956(b)  of the  Code)  if  held  by a  controlled  foreign
corporation (as defined in Section 957 of the Code).

                 4.14.2 Permanent Establishment. Except as set forth in Schedule
4.14.2, none of Siemens-Elema or the Shareholder  Affiliates has, or has had, in
respect of the Business, a permanent  establishment or other presence subjecting
it to taxation, in any foreign country, as defined under any applicable law, tax
treaty or convention.

                 4.15       [RESERVED]

                 4.16  BROKERAGE.  Other than the fee payable by Siemens Medical
Systems,  Inc. to Gleacher & Co., its investment banker, there are no claims for
brokerage commissions,  finder's fees or similar compensation in connection with
the  transactions  contemplated  by this Agreement  based on any  arrangement or
agreement made by SiemensElema or any of its Affiliates.

                 4.17 AFFILIATED TRANSACTIONS. Except as listed and described in
paragraph  (a) of Schedule  4.6 or in Schedule  4.17  hereto,  as relates to the
Business,  neither SiemensElema nor any Shareholder  Affiliate is a party to any
transaction or Commitment  with, and has no obligation or liability  owing to or
from,  any  Affiliate  of  Siemens-Elema  in excess of US$50,000 or which is not
cancelable by Siemens-Elema  or such Shareholder  Affiliate on at least 60 days'
notice without penalty.

                 4.18 INSURANCE.  Schedule 4.18  constitutes a true and complete
description  of all of the  policies  in force and effect and a  description  of
their respective  coverage and limits  presently  applicable to or including the
operations  and  property  of  the  Business.  None  of  Siemens-Elema  nor  any
Shareholder  Affiliate  has  received any notice of  cancellation  in respect of
insurance  coverage  for  operations,  assets  and  properties  relating  to the
Business.  All premiums due and payable in respect of such  insurance  have been
paid.  There  are  no  pending  or,  to  Siemens-Elema's  knowledge,  threatened
terminations  or  premium  increases  with  respect  to any  such  policies  and
Siemens-Elema and the Shareholder Affiliates are in compliance with all material
conditions contained therein.

                 4.19       [RESERVED]

                 4.20 INVENTORY.  Siemens-Elema has previously  disclosed to SJM
by letter dated June 22, 1994, the accounting  guidelines used by  Siemens-Elema
in respect of the Business (and used by  Siemens-Elema in the preparation of the
Deal Balance Sheet) for valuing Inventory (as defined below),  including without
limitation the  guidelines  used to determine  whether  Inventory is obsolete or
damaged, or will be slow-moving or defective.

                 4.21   ACCOUNTS  AND  NOTES   RECEIVABLE.   Siemens-Elema   has
previously  disclosed  to SJM by letter  dated  June 22,  1994,  the  accounting
guidelines  used  by  SiemensElema  in  respect  of the  Business  (and  used by
Siemens-Elema in the preparation of the Deal Balance Sheet) for valuing accounts
receivable.  All  accounts  and notes  receivable  reflected on the Deal Balance
Sheet for sales to customers  (other than  Affiliates of  Siemens-Elema  and the
Shareholder  Affiliates)  outside the United  States and all such  accounts  and
notes receivable  arising subsequent to the Deal Balance Sheet Date, have arisen
in the manner  consistent  with past practice of the Business,  represent  valid
obligations due to SiemensElema  or the  Shareholder  Affiliates,  and have been
documented by invoices and accompanying  documentation as required to permit and
support  collection in accordance  with  national,  provincial  and local law or
regulation.


                                  ARTICLE 5 

                     REPRESENTATIONS AND WARRANTIES OF SJM

                 SJM  represents and warrants to  Siemens-Elema  and agrees with
SiemensElema as follows:

                 5.1        CORPORATE POWER AND AUTHORITY; EFFECT OF AGREEMENT.

                 5.1.1 Each of SJM and SJM  International  is a corporation duly
organized, validly existing and in good standing under the laws of Minnesota and
Delaware,  respectively,  and has full corporate power and authority to carry on
its  business as it is now being  conducted.  All of the issued and  outstanding
capital stock of SJM International is owned by SJM.

                 5.1.2  Each of SJM and SJM  International  has  full  corporate
power  and  authority  to  execute  and  deliver  this  Agreement,  perform  its
obligations  hereunder and to consummate the transactions  contemplated  hereby.
The execution and delivery of this  Agreement,  the  performance  by SJM and SJM
International  of its obligations  hereunder and the consummation by SJM and SJM
International of the transactions  contemplated hereby have been duly authorized
by all necessary corporate action on the part of SJM and SJM International,  and
no  other  corporate  proceedings  on the part of SJM or SJM  International  are
necessary to authorize  the  execution  and  delivery of this  Agreement,  or to
consummate the transactions so contemplated. On the Closing Date each of the SJM
Affiliates  will have full corporate  power and authority to execute and deliver
the  Ancillary  Agreements  to  which  it is a party,  perform  its  obligations
thereunder and consummate the transactions  contemplated thereby. On the Closing
Date the execution and delivery of the Ancillary Agreements,  the performance by
each SJM Affiliate of its  obligations  thereunder and the  consummation by each
SJM  Affiliate  of the  transactions  contemplated  thereby  will have been duly
authorized by all necessary  corporate action on the part of each SJM Affiliate,
and no other  corporate  proceedings  on the part of any SJM  Affiliate  will be
necessary to authorize the execution and delivery of this  Ancillary  Agreement,
or to consummate the transactions contemplated thereby.

                 5.1.3 This  Agreement  has been duly  executed and delivered by
SJM  and  SJM  International  and  constitutes  the  legal,  valid  and  binding
obligation of SJM and SJM International,  enforceable against each such party in
accordance with its terms,  except to the extent that such enforceability may be
limited by bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws  relating to creditors'  rights  generally.  At the Closing,  the Ancillary
Agreements to which SJM and any SJM Affiliate is a party,  will be duly executed
and delivered by SJM and the  respective  SJM Affiliate and will  constitute the
legal,  valid and binding  obligation of SJM and the  respective  SJM Affiliate,
enforceable  against each such party in accordance with its terms, except to the
extent  that such  enforceability  may be  limited  by  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws relating to creditors'  rights
generally.

                 5.1.4 The  execution,  delivery and  performance by SJM and SJM
International  of this  Agreement  and by each SJM  Affiliate  of the  Ancillary
Agreements and the consummation by them of the transactions  contemplated hereby
and thereby do not and will not contravene or constitute a default under or give
rise to a right of  termination,  cancellation  or  acceleration of any right or
obligation of SJM, SJM  International  or any such SJM Affiliate or to a loss of
any  benefit  to which  SJM,  SJM  International  or any such SJM  Affiliate  is
entitled under (i) except as would not be materially  adverse to the operations,
results  of  operations,  assets  or  financial  condition  of SJM  and  the SJM
Affiliates,  taken as a whole, or have a material  adverse effect on the ability
of SJM or SJM International to consummate the transactions  contemplated by this
Agreement,   any  provision  of  applicable  law  or  regulation  (assuming  the
governmental  consents referred to in Section 5.2 have been obtained);  (ii) the
articles of  incorporation  or bylaws (or similar  organizational  documents) of
SJM,  SJM  International  or  any  such  SJM  Affiliate;   (iii)  any  judgment,
injunction,  order,  decree,  administrative  interpretation,   award  or  other
instrument  binding upon SJM, SJM  International  or any such SJM Affiliate;  or
(iv) result in the creation or  imposition  of any Lien on any asset of SJM, SJM
International  or any such SJM  Affiliate  which  would have a material  adverse
effect on their ability to consummate the transactions contemplated hereby.

                 5.2  CONSENTS.  Except for the filing with the Austrian  Cartel
Court, with the Treasury  Department of the French Ministry of Economy,  Finance
and Budget and otherwise as set forth in Schedule  5.2, no consent,  approval or
authorization  of,  or  exemption  by,  or  filing  with,  any  governmental  or
regulatory authority or any other third party is required in connection with the
execution, delivery or performance by SJM or SJM International of this Agreement
or the  taking  by SJM or SJM  International  of any other  action  contemplated
hereby, excluding, however, consents, approvals, authorizations,  exemptions and
filings,  if any,  which  Siemens-Elema  or any of its Affiliates is required to
obtain or make.

                 5.3  AVAILABILITY  OF FUNDS.  SJM has  available,  or will have
available on the Closing Date,  sufficient  funds to enable it to consummate the
transactions contemplated by this Agreement.

                 5.4  LITIGATION.  There is no  Litigation  pending or, to SJM's
knowledge, threatened, which seeks to enjoin or obtain damages in respect of the
consummation of the transactions contemplated hereby.

                 5.5  BROKERAGE.  Other than the fee  payable by SJM to CS First
Boston  Corporation,  its investment  banker,  there are no claims for brokerage
commissions,  finder's  fees or  similar  compensation  in  connection  with the
transactions  contemplated  by  this  Agreement  based  on  any  arrangement  or
agreement by SJM.

                 5.6  CERTAIN  OWNERSHIP  INTERESTS.  SJM  is  not  directly  or
indirectly  "significantly  funded"  (as  that  phrase  is  defined  in  Section
12(B)(c)(i)  of the Settlement  Agreement and Section  9.02(c)(i) of the License
Agreement),  nor is there,  directly or indirectly,  "significant  voting common
stock or other voting  equity  ownership"  (as that phrase is defined in Section
12(B)(c)(i) of the Settlement  Agreement) in SJM, by the Japanese  government or
investors of Japanese  nationality;  and (ii) it is not directly or  indirectly,
"significantly  funded" (as that term is defined in Section  12(B)(c)(ii) of the
Settlement  Agreement and Section 9.02(c)(ii) of the License Agreement),  nor is
there,  directly or indirectly  "significant voting common stock or other voting
equity  ownership"  (as that  phrase is defined in Section  12(B)(c)(ii)  of the
Settlement  Agreement  and  9.02(c)(ii)  of the License  Agreement) in SJM, by a
national government other than Japan.


                                   ARTICLE 6

                                   COVENANTS

                 6.1  COOPERATION.  Each  of the  parties  hereto  will  use its
reasonable  best  efforts  to  cause  the   consummation  of  the   transactions
contemplated  hereby in  accordance  with the terms and  conditions  hereof  and
applicable  law. Each of the parties hereto will use its reasonable best efforts
to obtain all  governmental  consents and approvals  necessary to consummate the
transactions  contemplated  by this Agreement and to cause the Closing to occur.
Siemens-Elema shall use, and shall cause each Shareholder  Affiliate to use, its
reasonable  best  efforts to obtain the consent or approval of third  Persons to
the transactions  contemplated hereby or by any of the Ancillary Agreements with
respect  to  the  Commitments  identified  in  Schedule  4.6  and  the  Permits.
Siemens-Elema  and SJM agree  that,  in the event any consent or approval of any
such third Person  necessary or desirable to preserve for the Business any right
or benefit  under any such  Commitment  or Permit is not  obtained  prior to the
Closing (and provided that SJM waives any resulting failure of a condition under
Article 8),  Siemens-Elema  will, and will cause the Shareholder  Affiliates to,
subsequent  to the  Closing,  cooperate  with  SJM  and the  SJM  Affiliates  in
attempting  to obtain  such  consent  or  approval  as  promptly  thereafter  as
practicable. If such consent or approval cannot be obtained, Siemens-Elema shall
use and shall  cause  each  Shareholder  Affiliate  to use its  reasonable  best
efforts to provide  SJM or the  respective  SJM  Affiliates  with the rights and
benefits of the affected Commitment or Permit for the term of such Commitment or
Permit, and, if and to the extent that Siemens-Elema or a Shareholder  Affiliate
provides the rights and benefits  under any such  Commitment  or Permit,  or any
other  contract for which  consent or approval  cannot be  obtained,  SJM or the
respective SJM Affiliate shall assume the obligations and burdens  thereunder to
such extent.  After the Closing,  Siemens-Elema  shall cooperate with SJM in the
preparation of any financial statements required to be filed by SJM with respect
to the Business pursuant to U.S. federal securities laws.

                 6.2  CONDUCT  OF  BUSINESS.  From the  date  hereof  until  the
Closing,  Siemens-Elema shall cause the Business to be conducted in the ordinary
course  consistent with past practice.  Prior to the Closing,  without the prior
written  consent of SJM or unless  otherwise  contemplated  or permitted by this
Agreement,  none of Siemens-Elema or any Shareholder Affiliate in respect of the
Business will:

                 (a) merge or consolidate with any person,  acquire any stock or
other ownership interest in any Person or substantially all of the assets of any
business as an entity or  liquidate,  dissolve or otherwise  reorganize  or seek
protection from creditors;

                 (b) except as set forth in Schedule  6.2,  enter into any other
agreements, commitments or contracts (including without limitation joint venture
agreements or material license  agreements)  which are material to the Business,
except agreements,  commitments or contracts entered into in the ordinary course
for the  purchase,  sale or lease of goods or  services,  consistent  with  past
practice; or

                 (c) make any  investment of a capital nature either by purchase
of  stock  or  securities,  contributions  to  capital,  property  transfers  or
otherwise, or by the purchase of any property or assets of any other individual,
firm or corporation.

                 6.3        [RESERVED]

                 6.4        ACCESS.

                 6.4.1  From the date of this  Agreement  to and  including  the
Closing  Date,  Siemens-Elema  shall  provide,  and  shall  cause  each  of  the
Shareholder  Affiliates  to  provide,  SJM,  its  counsel,  financial  advisors,
auditors and other authorized representatives,  with such information pertaining
to the Business as SJM from time to time  reasonably may request with respect to
Siemens-Elema,  the  Shareholder  Affiliates,  the Assets and the Business,  and
shall permit, and shall cause each of the Shareholder  Affiliates to permit, SJM
and its  representatives  reasonable  access,  during regular business hours and
upon  reasonable  notice,  to the  offices,  properties,  books and  records  of
Siemens-Elema,  the Shareholder Affiliates and the Business, as SJM from time to
time  reasonably  may  request,  and will  instruct the  employees,  counsel and
financial advisors of Siemens-Elema and the Shareholder  Affiliates to cooperate
with the  investigation of the Business;  provided that no  investigation  shall
affect any warranties or  representations  given by Siemens-Elema to SJM in this
Agreement and provided further,  however,  that any such investigation  shall be
conducted in such a manner so as not to  interfere  with the  operations  of the
Business consistent with past practice.  This will include,  without limitation,
access promptly  following  execution of this Agreement to  information,  books,
records, and personnel regarding product pricing, supplier costs, specifications
for products in development and patent applications.  In addition, to the extent
not previously delivered or made available to SJM,  Siemens-Elema shall cause to
be delivered or made available to SJM all internal or third party  environmental
and health and safety studies and reports with respect to the Business,  in each
case after January 1, 1992.

                 6.4.2 In order to facilitate  the resolution of any claims made
by or against  Siemens-Elema or any Shareholder  Affiliate with respect to third
parties prior to or after the Closing,  upon  reasonable  notice,  SJM shall and
shall cause its  Affiliates  to,  after the  Closing:  (i) afford the  officers,
employees and authorized agents and representatives of Siemens-Elema  reasonable
access,  during regular  business hours, to the offices,  properties,  books and
records of SJM  International  (and any  successor  thereto) and its  Affiliates
relating to the Business, (ii) furnish to the officers, employees and authorized
agents and representatives of Siemens-Elema such additional  financial and other
information  regarding  the  Business  as  Siemens-Elema  may from  time to time
reasonably  request and (iii) make available to Siemens-Elema,  the employees of
SJM  International   (and  any  successor  thereto)  and  its  Affiliates  whose
assistance,  testimony  or  presence is  necessary  to assist  Siemens-Elema  in
evaluating any such claims and in defending such claims,  including the presence
of such persons as witnesses in hearings or trials for such purposes;  provided,
however,  that such  investigation  shall not  unreasonably  interfere  with the
businesses or operations of SJM, SJM  International or any of their  Affiliates;
provided further,  however,  that neither SJM nor any of its Affiliates shall be
obligated to disclose  any  information  which it holds under a legally  binding
obligation of confidentiality or which is protected by any privilege.

                 6.4.3 In order to facilitate  the resolution of any claims made
by or against SJM or any of its  Affiliates  with respect to third parties after
the Closing,  upon reasonable notice,  Siemens-Elema shall, and shall cause each
Shareholder Affiliate to, after the Closing: (i) afford the officers,  employees
and  authorized  agents and  representatives  of SJM reasonable  access,  during
regular  business  hours,  to the  offices,  properties,  books and  records  of
Siemens-Elema  and the Shareholder  Affiliates with respect to Siemens-Elema and
the  Shareholder  Affiliates  and the  Business,  (ii) furnish to the  officers,
employees  and  authorized  agents and  representatives  of SJM such  additional
financial and other  information  regarding the Business for the period prior to
the  Closing  as SJM may from time to time  reasonably  request  and (iii)  make
available to SJM, the employees of Siemens-Elema and the Shareholder  Affiliates
whose assistance, testimony or presence is necessary to assist SJM in evaluating
any such claims and in  defending  such claims,  including  the presence of such
persons as witnesses in hearings or trials for such purposes; provided, however,
that such  investigation  shall not unreasonably  interfere with the business or
operations of SiemensElema or its Affiliates;  provided further,  however,  that
neither  Siemens-Elema  nor any of its Affiliates shall be obligated to disclose
any  information  which  they  hold  under  a  legally  binding   obligation  of
confidentiality or which is protected by any privilege.

                 6.5  NON-DISCLOSURE  AGREEMENT.  The  terms  of  the  Bilateral
NonDisclosure  Agreement (the "Non-Disclosure  Agreement"),  dated as of October
27, 1993, between  Siemens-Pacesetter,  Inc. and SJM are hereby  incorporated by
reference,  except that  Section 10 thereof  shall be deemed  amended to provide
that Swiss law shall govern the  NonDisclosure  Agreement  and that any disputes
relating  thereto  shall be settled by  arbitration  in the manner  provided  in
Section 12.8 of this Agreement. Each of the parties hereto agrees to be bound by
the terms of the Non-Disclosure  Agreement incorporated herein by reference. The
Non-Disclosure  Agreement  shall  remain  in full  force  and  effect  until the
Closing.

                 6.6  ANTITRUST,   COMPETITION  LAW  FILINGS.   As  promptly  as
practicable after the execution of this Agreement,  each party to this Agreement
shall file or cause its Affiliates to file any reports or notifications that may
be required to be filed under such  competition,  investment,  foreign exchange,
tax or other  laws of such  jurisdictions  as may be  necessary  to  effect  the
transactions contemplated by this Agreement;  provided,  however, that SJM shall
be responsible  (with the cooperation of  Siemens-Elema  and its Affiliates) for
all filings of reports or notifications under all applicable antitrust laws.

                 6.7  SUMMARY  OF  TANGIBLE   PERSONAL   PROPERTY   AND  ASSETS.
SiemensElema  shall,  upon  request by SJM,  furnish or make  available to SJM a
summary of tangible personal property, owned or leased by, in the possession of,
or used by  Siemens-Elema  or the Shareholder  Affiliates in connection with the
Business.

                 6.8 CLAIMS HISTORY. Siemens-Elema shall promptly make available
and  furnish   access  to  SJM  a  products   claims  history  with  respect  to
Siemens-Elema and the Shareholder Affiliates in connection with the Business.

                 6.9 FDA  RECERTIFICATION.  Siemens-Elema  shall as regards  the
Business  promptly  furnish  or  make  available  such  information  as SJM  may
reasonably request regarding  compliance by Siemens-Elema  (Pacemaker  Division)
with  the  applicable  terms  of the  Consent  Decree  of  Permanent  Injunction
(captioned U.S. v. Siemens Medical Systems,  Inc. and dated March 23, 1994) (the
"Consent Decree").

                 6.10 GRANT OF LICENSE. SJM, SJM International and each of their
Affiliates   designated  pursuant  to  Section  1.1  hereby  grants  to  Siemens
Aktiengesellschaft  ("Siemens  AG"),  effective  at the  Closing,  a  worldwide,
irrevocable,  non-exclusive,  perpetual, royalty free, paid up right and license
to use the patents,  copyrights,  trade secrets,  designs,  drawings,  software,
know-how,  technology and other  intellectual  property and proprietary  matters
assigned or transferred  to SJM or one of its  Affiliates,  to make,  have made,
sell, have sold, use, lease,  license, or otherwise dispose of products intended
for use in or as products,  other than Cardiac  Stimulation  Devices (including,
without  limitation,  the right and license to make, have made, sell, have sold,
use,  lease,  license or  otherwise  dispose of Cardiac  Stimulation  Devices or
parts, components, modules, subsystems or subassemblies thereof, in or as parts,
components,  modules,  subsystems or subassemblies of or for,  products intended
for use other than as Cardiac Stimulation Devices),  and to render services with
respect  to any such  products  used or  intended  for use or uses other than as
Cardiac Stimulation  Devices. The rights and licenses granted under this Section
6.13 may be freely sublicensed,  assigned,  transferred or disposed of, in whole
or in part,  without the prior written  consent of SJM, any of its Affiliates or
any of the  successors  in  interest  of any  of  the  foregoing;  any  license,
assignment, transfer or other disposition by SJM, any of its Affiliates, and any
of the  successors in interest of any of the foregoing  shall be subject to such
rights and licenses granted to Siemens AG.

                 6.11       OTHER FINANCIAL STATEMENTS.

                 On or before the  earlier of (i) the date which is 30 days from
the date hereof and (ii) the Closing Date, Siemens-Elema shall deliver to SJM an
audited  combined  balance  sheet for the Business as of September  30, 1992, as
well as an audited  combined  income  statement and combined cash flow statement
for the fiscal year then ended  together  with the related  notes and  schedules
thereto in each case  prepared  from the books and  records of the  Business  in
accordance  with  U.S.  GAAP  on  a  consistent  basis.  Upon  the  delivery  by
Siemens-Elema  to SJM of the Closing  Balance  Sheet,  Siemens-Elema  shall also
deliver to SJM an audited  combined  income  statement  and  combined  cash flow
statement for the Business for the period  beginning  October 1, 1993 and ending
on the Closing Date together with related notes and schedules thereto. Within 30
calendar days after the end of June,  1994, and each calendar month  thereafter,
Siemens-Elema shall deliver to SJM unaudited profit and loss information for the
Business based on financial  information  normally prepared by Siemens-Elema for
delivery to Siemens AG.

                 To the extent  necessary to permit SJM to comply with the rules
and  regulations  of the  United  States  Securities  and  Exchange  Commission,
Siemens-Elema shall provide to SJM financial  information prepared in accordance
with U.S. GAAP consisting of an unaudited interim balance sheet, dated as of the
last day of, and an income  statement and statement of cash flow, for the period
beginning January 1, 1994 and ending on the last day of such calendar quarter as
required by the applicable  rules and regulations of the Securities and Exchange
Commission.  If the last day of such calendar quarter is after the Closing Date,
Siemens-Elema  shall  cooperate in the  preparation  of such  interim  unaudited
financial statements.

                 6.12       AMENDMENTS TO SCHEDULES.

                 (a) No later than July 31, 1994, Siemens-Elema shall deliver to
SJM any Schedules referenced in Article 4 but not attached hereto as of the date
hereof,  as well as any updates to or corrections of Schedules  attached hereto,
which Schedules shall be corrected to delete any reference to "knowledge". If at
any time thereafter and prior to the Closing Date Siemens-Elema  learns that any
representation  contained  in Article 4 is or has become  untrue or incorrect in
any  material  respect,  Siemens-Elema  shall  promptly  notify  SJM of (i)  the
relevant facts and circumstances and (ii) the amendments to the Schedules hereto
which  Siemens-Elema  believes  in good  faith  would be  necessary  to make the
representations contained in Article 4 true and correct in all material respects
in  light  of such  facts  and  circumstances.  Each of such  new or  additional
Schedules  which  Siemens-Elema  is  obligated to deliver no later than July 31,
1994, as well as any subsequent  proposed  amendment is herein referred to as an
"Amendment".

                 (b) If the facts and  circumstances  underlying  any  Amendment
would have an adverse  effect  which is  material,  Siemens-Elema  and SJM shall
negotiate in good faith appropriate adjustments, if any, in the price to be paid
by SJM under  Section 2.1 and in the amount of  liability or  liabilities  to be
assumed by SJM or the SJM Affiliates under Section 1.2(b).


                                   ARTICLE 7

                              ADDITIONAL COVENANTS

                 7.1        LIABILITY FOR EMPLOYEES AND EMPLOYEE BENEFIT PLANS.

                 7.1.1 IN GENERAL.  Except as provided on Schedule  4.11,  as of
the Closing  Date,  SJM and an SJM  Affiliate  shall  employ  (where  employment
continues  by  operation  of law) or,  where  employment  does not  continue  by
operation of law, shall offer  employment  to, each Employee  listed on Schedule
4.11 employed on terms which are not less favorable to such Employee, taken as a
whole, as the terms in effect  immediately  prior to the Closing Date. Each such
Employee who continues in employment by operation of law or who accepts an offer
of  employment  pursuant to this  Section  7.1.1 is  hereafter  referred to as a
"Transferred Employee." Siemens-Elema shall indemnify and hold harmless SJM, and
any SJM  Affiliate  for any  Losses  as a result of any  severance,  termination
indemnity,  compensation,  or other benefit or amount under any Employee Benefit
Plan with respect to:

                 (a) any Employee who is not a Transferred Employee;

                 (b) any Employee who would otherwise be a Transferred Employee,
         but who  withholds  his  individual  consent or objects to the transfer
         under local labor law and thus  refuses to become an employee of SJM or
         an SJM Affiliate, as the case may be; and

                 (c) any  former  Employee  who  terminated  employment  for any
         reason prior to or on the Closing Date.

                 7.1.2  LIABILITY FOR EMPLOYEE  BENEFIT PLANS. As of the Closing
Date, SJM or the  appropriate  SJM Affiliate  shall assume the Employee  Benefit
Plans  listed on Schedule  7.1.2 which they are  required  under the laws of the
applicable   jurisdictions  to  assume  or  which  they,  with  the  consent  of
Siemens-Elema  and the Shareholder  Affiliates,  as appropriate,  have agreed to
assume (the "Assumed Employee Benefit Plans").  SiemensElema and the Shareholder
Affiliates  agree  to do all  things  reasonably  necessary  to  accomplish  the
assumption of the Assumed  Employee  Benefit Plans,  including,  with respect to
private plans,  the transfer to SJM or the designated SJM Affiliate of insurance
contracts and other assets to fully fund the Benefit  Obligations of the Sellers
under such plans as of the Closing Date, and shall not withhold their consent if
such  Employee  Benefit  Plans are  capable,  under  the laws of the  applicable
jurisdictions, of being assumed.

                 7.1.3 Nothing herein  expressed or implied is intended or shall
be construed to confer upon or give to any person,  firm or  corporation,  other
than the parties hereto and their respective  permitted  successors and assigns,
any rights or remedies under or by reason of this Agreement.

                 7.1.4  Siemens-Elema   shall,  or  shall  cause  a  Shareholder
Affiliate to,  indemnify,  save and hold harmless SJM and the SJM Affiliates and
the Affiliates of any of them from and against any and all Losses arising under:

                 (a) any Employee  Benefit Plan  maintained or contributed to by
         SiemensElema  or the  Shareholder  Affiliates,  other than any Employee
         Benefit  Plan and  obligations  assumed  by SJM and the SJM  Affiliates
         pursuant  to Section  7.1.2  above,  regardless  of whether  the Losses
         relate to or arise out of  conditions,  events  or  transactions  which
         exist or occur prior to, on or after the Closing Date; and

                 (b) any Employee Benefit Plan and obligations assumed by SJM or
         the SJM Affiliates  pursuant to Section 7.1.2 above, to the extent such
         Losses  relate to or arise out of  conditions,  events or  transactions
         which exist or occur on or prior to the  Closing  Date.  SJM shall,  or
         shall  cause a SJM  Affiliate  to,  indemnify,  save and hold  harmless
         Siemens-Elema  and the Shareholder  Affiliates from and against any and
         all Losses related to Employee Benefit Plans and obligations assumed by
         SJM and the SJM  Affiliates  pursuant to Section  7.1.2  above,  to the
         extent  such  Losses  relate to or arise out of  conditions,  events or
         transactions which exist or occur following the Closing Date.

                 7.2        SALES AND OTHER TAXES.

                 Each  of  Sellers  and  SJM  and  the  SJM  Affiliates  will be
responsible  for the payment of, and  Siemens-Elema  and SJM shall indemnify and
hold the other party and its Affiliates  harmless against,  50% of all transfer,
documentary,  recording,  notarial,  sales, use,  registration,  stamp and other
similar taxes, fees and expenses (including,  but not limited to, all applicable
stock  transfer or real  estate  transfer  taxes and  including  any  penalties,
interest and additions to such tax),  incurred in connection with this Agreement
or any Ancillary Agreement and the transactions  contemplated hereby or thereby.
Sellers and SJM and the SJM  Affiliates  shall  cooperate  in timely  making and
filing all Tax Returns as may be required to comply with the  provisions of laws
relating  to such  taxes.  SJM or an SJM  Affiliate  will bear 100% of any value
added tax (VAT)  imposed with  respect to its purchase of the Assets;  provided,
however,  that the relevant SJM Affiliate  will be entitled to a credit for such
VAT against such SJM Affiliate's VAT obligation and provided  further that where
allowed by local law,  SJM or the relevant  SJM  Affiliate  will be permitted to
satisfy its  obligation  to pay VAT by assigning  its claim for a refund of such
VAT to the applicable Seller.

                 7.3        NON-COMPETITION.

                 7.3.1 During the period from the date of this  Agreement to and
including the fourth  anniversary of the date hereof (or, if not enforceable for
such period in any country,  for such shorter  period as shall be enforceable in
such  country),  Siemens-Elema  shall  not,  nor  shall  it  permit  any  of its
Affiliates to,  directly or indirectly,  engage in the  development,  marketing,
production,  sale or distribution  anywhere in the world of Competitive Products
(as defined below).

                 7.3.2 As used in Section 7.3.1 hereof,  the phrase "directly or
indirectly,  engage  in"  includes  any  direct or  indirect  ownership,  profit
participation or other interest by  Siemens-Elema or its Affiliates,  whether as
owner,  stockholder,  partner, joint venturer,  beneficiary or otherwise, in any
Person;  provided,  however,  that the  foregoing  provisions  shall not prevent
Siemens-Elema  or any of its  Affiliates  from (a) investing in businesses  that
compete with the  Competitive  Products  where such  investments  are incidental
investments in public companies and constitute,  in the aggregate,  less than 5%
of the outstanding securities or voting interest of each of such companies,  (b)
acquiring  businesses  an  incidental  portion  (such portion being deemed to be
incidental  if the assets,  revenues or income  relating to the  business  which
competes with the Competitive  Products is less than 5% of the assets,  revenues
or income,  respectively,  of the  business  being  acquired) of the business of
which competes with the Competitive  Products  (unless the excess over 5% of the
competing  portion of such business is divested  within six months from the date
of  such  acquisition)  or (c)  investing  in  investment  funds  or  investment
partnerships  which in turn invest in companies or entities which may be engaged
in the  production,  sale or  distribution  of  Competitive  Products so long as
neither  Siemens-Elema  nor any of its  Affiliates  exercise  control  over such
investment decisions.

                 7.3.3 As used in this Section 7.3, (i)  "Competitive  Products"
means  "Cardiac  Stimulation  Devices"  (as  defined in Section  13.1) and other
devices  performing  the same  purpose or function  as, or that are  competitive
with, Cardiac Stimulation  Devices,  and shall include products intended for use
in or as  products  that are Cardiac  Stimulation  Devices  (including,  without
limitation, parts, components,  modules, subsystems or subassemblies thereof, or
parts,  components,  modules,  subsystems or subassemblies of and for,  products
intended for use as or products that are Cardiac Stimulation  Devices) except to
the extent that they are intended  for use in or as products  other than Cardiac
Stimulation  Devices and (ii) "Affiliate" does not include any Person once it is
no longer an Affiliate of Siemens AG.

                 7.4  NON-SOLICITATION.  For thirty-six  months from the Closing
Date, neither Siemens-Elema nor any Shareholder Affiliate,  on the one hand, nor
SJM nor any of its Affiliates,  on the other hand, shall specifically solicit to
hire any current  employees of the other party without the prior written consent
of such latter party,  provided that nothing  herein shall  restrict or preclude
the rights of either party to make generalized  searches for employees by use of
advertisements in the media (including  without  limitation,  trade media) or by
engaging search firms to engage in searches which are not targeted or focused on
the employees of the other party.

                 7.5 SIEMENS  NAME.  Immediately  after the  Closing,  except as
otherwise  permitted under the License  Agreement  referred to in Section 3.2.3,
SJM will take, and will cause each SJM Affiliate to take,  all action  necessary
to cease the use of the name  "Siemens"  (or any  variant  thereof)  and related
trademarks,  corporate names, and trade names  incorporating the name "Siemens",
and any "Siemens"  logos and trade dress,  in each case in  connection  with the
conduct of the Business.  Effective upon the Closing,  Siemens-Elema shall cause
the Shareholder  Affiliate in France and its  shareholders to take all necessary
action to change its name to exclude the word "Pacesetter."

                 7.6  CONFIDENTIALITY.  Except  as  otherwise  provided  in this
Agreement,  after the  Closing  Sellers  and their  Affiliates  shall not use or
disclose to third  parties any  information  disclosed  to and  transferred  and
assigned,  licensed or  otherwise  made  available to SJM or its  Affiliates  in
connection  with  the  Business  and  transfer  of  Assets  hereunder.   Without
limitation,  this  obligation  of  confidentiality  shall  apply to  information
related to the Products,  business plans, strategies,  technologies,  and future
business relationships of the Business. This obligation of confidentiality shall
not apply to the  extent  any such  information  (a) is or  becomes  part of the
public domain through no fault of Sellers (but only after and only to the extent
that it is published or otherwise becomes part of the public domain);  (b) after
the Closing comes into the possession of Sellers from a third party who was not,
to Sellers'  knowledge,  under a  continuing  obligation  of  confidence  to the
disclosing   party;  or  (c)  is  disclosed  by  Sellers  pursuant  to  judicial
compulsion, provided that disclosing party is notified at the time such judicial
action is  initiated.  Disclosures  relating to the  Products,  business  plan,s
strategies and future business  relationships of SJM or the Sellers shall not be
deemed to be in the public domain or in the  possession  of the receiving  party
merely because they are embraced (but not  disclosed) by general  disclosures in
the public domain or the possession of the receiving party.

                 7.7 ACCOUNTS RECEIVABLE.  Regarding accounts receivable sold as
part of the  Assets  sold  hereunder,  SJM  may,  by  written  notice  given  to
Siemens-Elema at any time prior to one year after the Closing Date, sell back to
Siemens-Elema,  and Siemens-Elema  shall repurchase,  at their face value any or
all such accounts  receivable not collected because they were not at the Closing
Date documented by invoices and accompanying documentation as required to permit
and support collection in accordance with national,  provincial and local law or
regulation.  SJM shall deliver to  Siemens-Elema  an assignment of such accounts
receivable to be sold back to Siemens-Elema,  and Siemens-Elema shall deliver to
SJM immediately available funds in the amount of such accounts receivable within
30 days after the date of SJM's written notice referred to above. Following such
assignment,  SiemensElema  shall  be free to use any  efforts  to  collect  such
accounts receivable it has purchased as Siemens-Elema shall determine.


                                   ARTICLE 8

                        CONDITIONS TO SJM'S OBLIGATIONS

The  obligations  of SJM to consummate  the  transactions  contemplated  by this
Agreement shall be subject to the satisfaction (or waiver by SJM in writing), on
or prior to the Closing Date, of all of the following conditions:

                 8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SIEMENS-ELEMA.
Siemens-Elema  shall have in all material  respects  performed and complied with
all of its agreements and covenants contained herein to be performed at or prior
to the Closing Date and the  representations  and  warranties  of  Siemens-Elema
contained  herein  shall  be true  on and as of  Closing  Date  in all  material
respects.

                 8.2 NO PROHIBITION.  No statute, rule or regulation or order of
any  court  or  administrative   agency  shall  be  in  effect  which  prohibits
consummation of the transactions contemplated hereby.

                 8.3 DELIVERIES.  Siemens-Elema  shall have made or caused to be
made delivery to SJM of the items set forth in Section 3.2 hereof.

                 8.4 NO MATERIAL ADVERSE EFFECT. No occurrences or events which,
individually  or in the  aggregate,  have a Material  Adverse  Effect shall have
occurred after September 30, 1993 and be continuing;  and  Siemens-Elema and SJM
shall  not  have  failed  to  agree  on  the  consequences  to an  Amendment  as
contemplated in Section 6.12(b).

                 8.5 GOVERNMENTAL AND OTHER APPROVALS. All governmental filings,
authorizations  and approvals which are identified on Schedules 4.9 and 5.2 that
are required for the consummation of the transactions  contemplated hereby or to
permit  SJM and the  SJM  Affiliates,  after  consummation  of the  transactions
contemplated  hereby, to carry on the Business in the manner now conducted,  and
each of the consents and  approvals  identified  on Schedule 4.6, the absence of
which would have,  individually or in the aggregate,  a Material Adverse Effect,
and each of those  consents  listed  on  Schedule  8.5,  will  have been made or
obtained.

                 8.6 U.S. ASSET PURCHASE AGREEMENT.  The closing of the purchase
and sale under the U.S.  Asset  Purchase  Agreement (as defined in Section 13.1)
shall have occurred.


                                   ARTICLE 9

                   CONDITIONS TO SIEMENS-ELEMA'S OBLIGATIONS

The obligations of Siemens-Elema to consummate the transactions  contemplated by
this Agreement shall be subject to the  satisfaction (or waiver by Siemens-Elema
in  writing),  on or  prior  to the  Closing  Date,  of  all  of  the  following
conditions:

                 9.1  REPRESENTATIONS,  WARRANTIES AND COVENANTS OF SJM. SJM and
SJM  International  each  shall  have in all  material  respects  performed  and
complied  with all of their  agreements  and  covenants  contained  herein to be
performed at or prior to the Closing Date, and all of the representations of SJM
contained  herein  shall be true on and as of the Closing  Date in all  material
respects.

                 9.2 NO PROHIBITION.  No statute, rule or regulation or order of
any  court  or  administrative   agency  shall  be  in  effect  which  prohibits
consummation of the transactions contemplated hereby.

                 9.3  DELIVERIES.  SJM  shall  have  made or  caused  to be made
delivery to Siemens-Elema of the items set forth in Section 3.3 hereof.

                 9.4   GOVERNMENTAL   APPROVALS.   All   governmental   filings,
authorizations  and  approvals  that are  required for the  consummation  of the
transactions contemplated hereby or to permit SJM and the SJM Affiliates,  after
consummation of the  transactions  contemplated  hereby,  will have been made or
obtained.

                 9.5 U.S. ASSET PURCHASE AGREEMENT.  The closing of the purchase
and sale under the U.S. Asset Purchase Agreement shall have occurred.

                                 ARTICLE 10

                      INDEMNIFICATION AND RELATED MATTERS

                 10.1 SURVIVAL.  Subject to the limitations and other provisions
of this Agreement,  the  representations and warranties of SJM and Siemens-Elema
contained  herein  shall  survive the Closing and shall remain in full force and
effect,  regardless  of  any  investigation  made  by or on  behalf  of  SJM  or
Siemens-Elema, as the case may be, Siemens-Elema, for a period of one year after
the Closing Date; provided, however, that (A) the representations and warranties
in Sections 4.1.1, 4.1.2, 4.1.3, 4.3.1, 4.14 and 4.17 shall survive for a period
of two years after the Closing Date, (B) the  representations  and warranties in
Sections 4.2,  4.3.15 and 4.3.16 shall only survive until the  adjustment to the
Cash  Consideration  has been  resolved  pursuant  to Section  2.2,  and (C) the
representations  and  warranties  in Sections 4.7 and 4.18 shall not survive the
Closing.

                 10.2 INDEMNIFICATION BY SIEMENS-ELEMA. Subject to the terms and
conditions  of this Article 10,  Siemens-Elema  agrees to indemnify and hold SJM
and its Affiliates,  including, in each case, any of their respective directors,
officers, employees and representatives, harmless from and against:

                 10.2.1  any and all  Losses  resulting  from any  breach of any
representation or warranty as of the Closing Date, or any knowing,  negligent or
wilfull  act or  omission  in  breach  of any  covenant  or other  agreement  of
Siemens-Elema  contained in this Agreement  (other than Sections 7.1 and 7.2, it
being  understood  that the sole remedy for breach  thereof shall be pursuant to
Sections 7.1 and 7.2, as the case may be); and

                 10.2.2 any and all Losses resulting from Excluded Liabilities.

                 10.3   INDEMNIFICATION   BY  SJM.  Subject  to  the  terms  and
conditions  of this Article 10, SJM agrees to indemnify  and hold  Siemens-Elema
and its  Affiliates,  including,  in each case,  any of its or their  respective
directors, officers, employees and representatives, harmless from and against:

                 10.3.1  any and all  Losses  resulting  from any  breach of any
representation or warranty as of the Closing Date, or any knowing,  negligent or
wilfull act or omission in breach of any covenant or agreement of SJM  contained
in this Agreement (other than Sections 7.1 and 7.2, it being understood that the
sole remedy for breach thereof shall be pursuant to Sections 7.1 and 7.2, as the
case may be); and

                 10.3.2 any and all Losses resulting from Assumed Liabilities.

                 10.4   LIMITATION   ON   INDEMNIFICATION    LIABILITIES.    The
indemnification  obligations of  Siemens-Elema  contained in Section 10.2 hereof
shall not be effective  until the  aggregate  dollar  amount of all Losses which
would otherwise be indemnifiable  under Section 10.2 exceeds  US$2,000,000  (the
"Threshold  Amount"),  and then only to the extent such aggregate amount exceeds
the Threshold Amount.  The  indemnification  obligations of Siemens-Elema  under
Section 10.2 shall be effective  only until the dollar amount paid in respect of
the Losses indemnified  against under such Section aggregates to an amount equal
to US$30,000,000  (the "Liability  Cap"). The Threshold Amount and the Liability
Cap  contained in this Section 10.4 shall not apply to any  obligations  arising
under Section 2.2.4 regarding fees and expenses,  Sections 6.1, 6.4.1, 6.5, 6.6,
6.11,  Article  7  or  Article  12  or  to  any  Losses  arising  from  Excluded
Liabilities.

                 10.5  NOTICE  OF  INDEMNIFICATION.   In  the  event  any  legal
proceeding  shall be  threatened  or  instituted or any claim or demand shall be
asserted  by any person in respect of which  payment  may be sought by one party
hereto from the other party under the  provisions of this  Agreement,  the party
seeking  indemnification  (the "Indemnitee") shall promptly cause written notice
of the assertion of any such claim of which it has knowledge which is covered by
this  indemnity  to be  forwarded  to the other party (the  "Indemnitor")  which
notice,  in the case of a claim  arising  under  Section 7.1, 7.2, 10.2 or 10.3,
must be  received  by the  Indemnitor  before  the  expiration  of the  relevant
survival  period set forth in Section  10.1.  Any notice of a claim by reason of
any of the  representations,  warranties,  covenants or agreements  contained in
this Agreement shall state specifically the representation,  warranty,  covenant
or agreement  with respect to which the claim is made,  the facts giving rise to
an alleged basis for the claim, and the amount of the liability asserted against
the Indemnitor by reason of the claim.

                 10.6  INDEMNIFICATION  PROCEDURE FOR THIRD-PARTY CLAIMS. In the
event that an Indemnitee  receives  written  notice of the  commencement  of any
action  or  proceeding,  the  assertion  of any  claim  by a third  party or the
imposition  of any  penalty  or  assessment  for which  indemnity  may be sought
pursuant to this Article 10 (a "Third-Party Claim"), and such Indemnitee intends
to seek  indemnity  pursuant to this Article 10, the  Indemnitee  shall promptly
provide the Indemnitor with notice of such action, proceeding, claim, penalty or
assessment,  and the Indemnitor  shall, upon receipt of such notice, be entitled
to participate in or, at the Indemnitor's option, assume the defense,  appeal or
settlement of such action, proceeding, claim, penalty or assessment with respect
to which such  indemnity has been invoked with counsel of its own choosing,  and
the Indemnitee will cooperate fully with the Indemnitor in connection therewith.
In the  event  that the  Indemnitor  fails to  assume  the  defense,  appeal  or
settlement of such action,  proceeding,  claim,  penalty or assessment within 30
days after receipt of notice thereof from the Indemnitee,  the Indemnitee  shall
have the right to  undertake  the  appeal  of such  action,  proceeding,  claim,
penalty or assessment at the Indemnitor's expense,  subject to the rights of the
Indemnitor in the immediately  succeeding  sentence.  If the Indemnitee  assumes
such defense and proposes to settle or compromise  any such action,  proceeding,
claim,  penalty or  assessment  then the  Indemnitee  shall give written  notice
thereof and the Indemnitor shall have the right to participate in the settlement
or assume or reassume the defense of such action, proceeding,  claim, penalty or
assessment.

                 10.7 WAIVERS OF CERTAIN  RESTRICTIONS.  Siemens-Elema on behalf
of itself and the Shareholder  Affiliates hereby waives, and neither SJM nor any
of its Affiliates  shall be obligated to comply with,  any applicable  statutory
provision  requiring SJM or any of its Affiliates to examine the Business or any
of the Assets after  receipt and to notify  Sellers  without delay of any defect
discovered.  The parties  hereby agree that any claims  hereunder may be made at
any time during the applicable survival period.

                 10.8 RIGHT TO CURE.  Any party that is obligated to  indemnify,
defend and/or hold harmless any Person pursuant to any provision of this Article
10 shall  have  the  right to  cure,  within a  reasonable  time and in a manner
reasonably  satisfactory  to  such  Person,  any  matter  giving  rise  to  such
obligation;  provided,  however,  that any such cure shall not relieve or reduce
any such obligation to the extent that such cure is inadequate.


                                   ARTICLE 11

                          TERMINATION PRIOR TO CLOSING

                 11.1 TERMINATION.  This Agreement may be terminated at any time
prior to the Closing:

                 11.1.1     by the mutual written consent of the parties; or

                 11.1.2 by either Siemens-Elema, on the one hand, or SJM and SJM
International,  on the other  hand,  if there  has been a breach  of a  material
representation  or breach of a material  covenant on the part of the other party
in the representations,  warranties and covenants contained herein,  unless such
breach is cured within 30 days of receipt of notice of such breach; or

                 11.1.3 by either Siemens-Elema, on the one hand, or SJM and SJM
International, on the other hand, if the Closing has not occurred by October 31,
1994;  provided  that no party may  terminate  this  Agreement  pursuant to this
clause if such  party's  failure to fulfill  any of its  obligations  under this
Agreement  shall  have been the  reason  that the  Closing  Date  shall not have
occurred on or before said date;  and  provided  further that such date shall be
extended  until  December  31,  1994,  if the Closing did not occur by such date
because  of the  failure  of  SJM,  Siemens-Elema  or one  of  their  respective
Affiliates  to  receive  one of the  governmental  approvals  or  authorizations
contemplated by this Agreement because of the failure of any applicable  waiting
period to expire; or

                 11.1.4 by either Siemens-Elema, on the one hand, or SJM and SJM
International,  on the other hand, if there shall be any law or regulation  that
makes  consummation  of the  Acquisition or any other material  component of the
transactions  contemplated  hereby  illegal or  otherwise  prohibited  or if any
judgment,  injunction,  order or decree  enjoining SJM,  Siemens-Elema or one of
their respective  Affiliates from  consummating  the  transactions  contemplated
hereby is entered and such  judgment,  injunction,  order or decree shall become
final and nonappealable.

                 11.2 EFFECT OF  TERMINATION.  If this  Agreement is  terminated
pursuant to Section 11.1, this Agreement shall become void and of no effect with
no  liability  on the  part of any  party  hereto,  except  (i) as set  forth in
Sections 6.5 and 12.6 and (ii) that nothing  shall  relieve any party hereto for
liability for any breach of this Agreement.


                                   ARTICLE 12

                                 MISCELLANEOUS

                 12.1 ENTIRE AGREEMENT.  This Agreement  (including the exhibits
hereto,  the  Schedules  and the  documents  referred  to  herein  and the other
documents executed on the date hereof) and the Non-Disclosure  Agreement contain
the entire  understanding of the parties hereto in respect of the subject matter
contained herein and supersede all prior agreements and  understandings  between
the parties  with  respect to such subject  matter.  There are no  restrictions,
promises,  representations,  warranties,  covenants, or undertakings, other than
those expressly set forth or referred to herein or therein.

                 12.2  AMENDMENT;  WAIVER.  No  waiver  and no  modification  or
amendment  of  any  provision  of  this  Agreement  shall  be  effective  unless
specifically made in writing and duly signed by the parties to be bound thereby.
Waiver  by a party  of any  breach  of or  failure  to  comply  with  any of the
provisions  of this  Agreement by any other party shall not be construed  as, or
constitute,  a  continuing  waiver  of, or a waiver of any other  breach  of, or
failure to comply with, any other provision of this Agreement.

                 12.3  ASSIGNMENT.  This  Agreement  and  all of the  provisions
hereof shall be binding upon and inure to the benefit of the parties  hereto and
their respective  successors and permitted  assigns,  but neither this Agreement
nor any of the rights,  interests or obligations  hereunder shall be assigned by
any of the  parties  hereto  without  the  prior  written  consent  of the other
parties;  provided,  however, that SJM may assign this Agreement and its rights,
interests and obligations  hereunder in whole or in part to one or more directly
or  indirectly  wholly  owned   subsidiaries  of  SJM  without  the  consent  of
Siemens-Elema;  provided, however, that such assignment shall not relieve SJM of
any of its obligations hereunder.

                 12.4 HEADINGS;  USAGE. The paragraph  headings contained herein
are for the purposes of convenience only and are not intended to define or limit
the contents of said  paragraphs.  The meanings of any terms defined  herein are
equally applicable to both the singular and plural forms of the terms defined.

                 12.5 COOPERATION. Each party hereto shall cooperate, shall take
further  action and shall  execute and deliver such further  documents as may be
reasonably requested by the other party in order to carry out the provisions and
purposes of this Agreement.

                 12.6  EXPENSES.  Except as provided in Section  7.2,  SJM shall
bear  its and SJM  International's,  and  Siemens-Elema  shall  bear its and the
Shareholder  Affiliates'  costs and expenses in connection with the negotiation,
preparation,  performance and consummation of the  transactions  contemplated by
this Agreement,  including all taxes of any type, the fees and  disbursements of
all attorneys, accountants, appraisers, investment bankers and advisors retained
by or  representing  them in connection  with the preparation and performance of
this Agreement;  provided that  Siemens-Elema and SJM shall each bear 50% of the
cost of all patent and trademark registrations contemplated hereby.

                 12.7  GOVERNING  LAW. This  Agreement  shall be governed by and
construed in accordance with the  substantive law of Switzerland  other than the
UNCITRAL purchasing law and/or any law relating to conflict of law.

                 12.8       ARBITRATION.

                 12.8.1 All disputes  arising out of or in connection  with this
Agreement or any  Ancillary  Agreement,  including  any question  regarding  the
existence,  validity or termination hereof or thereof,  shall be finally settled
under Rules of Arbitration of the  International  Chamber of Commerce,  Paris by
three arbitrators in accordance with the said Rules.

                 12.8.2   Each  party  shall   nominate   one   arbitrator   for
confirmation by the competent  authority under the applicable Rules  (Appointing
Authority). Both arbitrators shall agree on the third arbitrator within 30 days.
Should the two arbitrators fail within the above time-limit,  to reach agreement
on the third arbitrator,  he shall be appointed by the Appointing Authority.  If
there are two or more  defendants,  any  nomination  of an  arbitrator  by or on
behalf of such  defendants  must be by joint  agreement  between  them.  If such
defendant  fail,  within the time-limit  fixed by the Appointing  Authority,  to
agree on such joint  nomination,  the  proceedings  against each of them must be
separated.

                 12.8.3 The seat of arbitration shall be Berne, Switzerland. The
procedural law of this place shall apply where the Rules are silent.

                 12.8.4.  The language to be used in the arbitration  proceeding
shall be English.

                 12.8.5 The arbitrators  appointed pursuant to this Section 12.8
shall have the power to grant  temporary  and  permanent  injunctive  relief and
specific  performance.  The  arbitrators  shall  not  have  the  power to act as
"amiable   compositeurs"   with  respect  to  any  dispute   submitted  to  such
arbitration,  but rather shall make their decision based on their  understanding
and interpretation of the applicable law and facts.

                 12.8.6 Either party to this Agreement may commence  arbitration
proceedings  in respect  of which a notice has been  timely  given  pursuant  to
Section  10.5 at any time  within one year from the date upon which such  notice
was given to the other party.

                 12.9 SEVERABILITY.  Whenever  possible,  each provision of this
Agreement  will be interpreted in such manner as to be effective and valid under
the  applicable  law,  but if any  provision  of  this  Agreement  is held to be
prohibited  by  or  invalid  under   applicable  law,  such  provision  will  be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

                 12.10  COUNTERPART.  This  Agreement  may be executed in one or
more counterparts,  all of which taken together will constitute one and the same
instrument.

                 12.11  INTERPRETATION.  This  Agreement  has been  prepared and
executed  in the English  language.  In case of any  conflict  or  inconsistency
between the English  language  version and any  translation  hereof made for any
purpose,  the English language shall govern the  interpretation and construction
hereof,  and for any  and all  other  purposes,  except  as may be  required  by
applicable law.

                 12.12 NOTICES.  All notices,  requests and other communications
to any party hereunder shall be in writing and shall be given or made (and shall
be deemed to have been duly given or made upon  receipt)  by delivery in person,
by courier  service,  by cable,  by  facsimile  transmission,  by telegram or by
registered or certified mail (postage prepaid,  return receipt requested) to the
respective  parties at the  following  addresses (or at such other address for a
party as shall be specified in a notice  given in  accordance  with this Section
12.12):



                 if to Siemens-Elema, to:

                                 Siemens-Elema AB
                                 Rontgenvagen 2
                                 Solna, Sweden
                                 Facsimile No.: 46-8-29 6974
                                 Attention: Carl-Goran Myrin

                 with a copy to:

                                 Siemens AG
                                 Legal Department
                                 Werner-von-Siemens-Strasse 50
                                 D-91052 Erlangen
                                 Facsimile No.: 49-9131-7-28667
                                 Attention: Dr. Jurgen Biermann


                 if to SJM to:

                                 St. Jude Medical, Inc.
                                 One Lillehei Plaza
                                 St. Paul, Minnesota  55117
                                 Attention:  Ronald A. Matricaria, President
                                             and Chief Executive Officer
                                 Attention:  Diane M. Johson, Vice President
                                             and General Counsel

                 with a copy to:

                                 Lindquist & Vennum
                                 4200 IDS Center
                                 80 South Eighth Street
                                 Minneapolis, MN  55402
                                 Attention:  Joel H. Green

                 and

                                 Baker & McKenzie
                                 One Prudential Plaza
                                 130 East Randolph Drive
                                 Chicago, Illinois  60601
                                 Attention:  John E. Morrow


                 12.13 PUBLICITY.  Upon execution of this Agreement, the parties
shall  jointly  issue a press  release,  as agreed upon by them.  Neither  party
shall,  without the prior written  consent of the other,  issue any statement or
communication to the public or to the press regarding this Agreement,  or any of
the terms,  conditions or other facts with respect to the  Agreement,  except as
required by law or the rules of any recognized stock exchange.

                 12.14  NO  THIRD-PARTY  BENEFICIARY.  The  provisions  of  this
Agreement are for the sole benefit of the parties to this  Agreement and are not
for the benefit of any third party.


                                   ARTICLE 13

                                  DEFINITIONS

                 13.1 DEFINITIONS. For purposes of this Agreement, the following
terms have the meaning set forth below:

                 "Affiliate" means as to any Person controlling,  controlled by,
or under common control with, such Person.

                 "Cash  Consideration"  shall  have the  meaning  given to it in
Section 2.1.

                 "Ancillary  Agreements"  means the  Assignments,  the  Business
Transfer Agreements,  the Siemens  Transitional  Services Agreements and the SJM
Transitional Services Agreements.

                 "Assets" shall have the meaning given to it in Section 1.1(a).

                 "Assignments"  shall  have the  meaning  given to it in Section
3.2.5.

                 "Assumed  Liabilities"  shall have the  meaning  given to it in
Section 1.2(b).

                 "Benefit  Obligations"  shall have the  meaning  given to it in
Section 4.10.5(c).

                 "Business"  means  the  research,  development,  manufacturing,
assembly,  marketing,  sales,  maintenance  and  service of Cardiac  Stimulation
Devices by  Siemens-Elema  and the  Shareholder  Affiliates or their  Affiliates
(other than Siemens-Pacesetter,  Inc., a Delaware corporation,  its Subsidiaries
and Siemens Electric Limited, a Canadian corporation).

                 "Business  Day" means any day that is not a Saturday,  a Sunday
or a day on which banks are  required or  permitted to be closed in the State of
New York and the Kingdom of Sweden.

                 "Business  Transfer  Agreements"  means the  Business  Transfer
Agreements  to be executed  by the  Sellers on the Closing  Date in a form to be
agreed upon by Siemens-Elema and SJM providing for the transfer of Assets to and
assumption of Assumed Liabilities by the respective SJM Affiliates.

                 "Cardiac  Stimulation  Devices" means devices for  electrically
stimulating  or  shocking  the  heart and  internal  (but not  external)  holter
monitors which, in each case, are suitable for use by human patients, including,
without   limitation:    cardiac   pacemakers,    antitachycardia    pacemakers,
cardioverters  and  defibrillator,   including  combinations  thereof,   whether
implantable or not; pulse  generators  and other waveform  generators  specially
designed  for,  and used with,  such  devices;  leads,  electrodes  and  sensors
specially  designed for, and used with,  such devices;  mechanisms  designed for
coupling such generators in a stimulating,  shocking or sensing  relationship to
the heart;  data dispensing,  processing and gathering systems designed for such
devices, including programmers,  pacing system analyzers,  defibrillation system
analyzers,  testers, encoders,  decoders,  transmitters,  receivers and computer
software-controlled  systems (including the software) specially designed for use
with or as part of such  devices.  External  defibrillator  that shock the heart
from the surface of the body through the tissue are excluded.

                 "Closing" shall have the meaning given to it in Section 3.1.

                 "Closing  Balance  Sheet" shall have the meaning given to it in
Section 2.2.2.

                 "Closing  Date" shall have the  meaning  given to it in Section
3.1.

                 "Commitments"  shall  have the  meaning  given to it in Section
4.6.

                 "Competitive  Products"  shall have the meaning  given to it in
Section 7.3.3.

                 "Deal  Balance  Sheet"  shall have the  meaning  given to it in
Section 4.2

                 "Designated  Amount"  shall  have  the  meaning  given to it in
Section 2.2.3.

                 "dollars"  and the symbol  "US$" means  lawful  currency of the
United States of America.

                 "Employee"  shall  have  the  meaning  given  to it in  Section
4.10.5.

                 "Employee  Benefit  Plan" shall have the meaning given to it in
Section 4.10.5.

                 "Excluded Assets" shall have the meaning given to it in Section
1.1(b).

                 "Excluded  Liabilities"  shall have the meaning  given to it in
Section 1.2(a).


                 "FDA" shall have the meaning given to it in Section 4.3.8.

                 "Financial  Statements"  shall have the meaning  given to it in
Section 4.2.

                 "Liabilities"   means  any  and  all  debts,   liabilities  and
obligations,  whether  accrued  or fixed,  absolute  or  contingent,  matured or
unmatured.

                 "License  Agreement" means the License Agreement,  dated August
26, 1992, between Siemens AG and Medtronics, Inc.

                 "Lien"  means  any  mortgage,   claim,  lien,  pledge,  charge,
usufruct,  security interest,  option,  preemptive right,  assessment,  security
interest, restriction on transfer or encumbrance of any kind.

                 "Litigation" means any claim, action, suit or proceeding in any
court or before any arbitrator or governmental body, agency or official.

                 "Losses" means any and all  Liabilities,  obligations,  duties,
demands, claims, actions, causes of action, assessments, losses, costs, damages,
deficiencies, taxes, fines or expenses, including, without limitation, interest,
penalties,  reasonable  attorneys'  fees and all amounts paid in  investigation,
defense or  settlement  of any of the  foregoing;  provided,  however,  that the
foregoing shall not include consequential damages.

                 "Material  Adverse  Effect"  means any change in, or effect on,
the  Business as currently  conducted  that is, or is  reasonably  likely to be,
materially adverse to the operations, results of operations, assets or financial
condition of the Business,  taken as a whole, except for such changes or effects
that are the result of changes in general  economic  conditions  or changes that
generally affect the industry in which the Business is operated.

                 "Medtronics  Assignment"  shall have the meaning given to it in
Section 3.2.2.

                 "Net  Book  Value"  means  the  assets  minus  the  liabilities
reflected on the applicable balance sheet, as adjusted.

                 "Non-Disclosure  Agreement"  shall have the meaning given to it
in Section 6.5.

                 "Permitted  Liens" mean (i) Liens for inchoate  mechanics'  and
materialmen's  liens for  construction  in progress and workmen's,  repairmen's,
warehousemen's  and  carriers'  liens  arising  in the  ordinary  course  of the
Business which in the aggregate have a value of less than US$100,000, (ii) Liens
for Taxes not yet payable and for Taxes being contested in good faith, and (iii)
Liens and  imperfections  of title the  existence of which would not  materially
affect  the use of the  property  subject  to such  lien,  consistent  with past
practice.

                 "Person"   means   any   individual,    sole    proprietorship,
partnership,  joint venture, trust, unincorporated  association,  corporation or
other such entity or government  (whether  domestic,  foreign,  Federal,  state,
county, city or otherwise,  including,  without limitation, any instrumentality,
division, agency or department thereof).

                 "Post-Closing  Litigation  Losses"  means all Losses  resulting
from any  Litigation  against  Siemens-Elema  or any  Shareholder  Affiliate  in
respect of the  Business or the  Business  that are not  Pre-Closing  Litigation
Losses.

                 "Post-Closing  Products  Liability  Losses"  means  any  Losses
resulting from any product liability claims for Products  implanted or otherwise
used with a patient on,  before or after the Closing  Date arising from a death,
injury,  explant  or other  similar  occurrence  happening  or  alleged  to have
happened after the Closing Date.

                 "Pre-Closing Litigation Losses" means any Losses resulting from
any Litigation  pending or threatened  against  Siemens-Elema or any Shareholder
Affiliate  at any time in respect of the conduct or condition of the Business or
the Assets on or before the Closing Date.

                 "Pre-Closing   Products  Liability  Losses"  means  any  Losses
resulting from any product liability claims for Products  implanted or otherwise
used with a patient on or before the Closing Date arising from a death,  injury,
explant or other similar occurrence  happening or alleged to have happened on or
before the Closing Date.

                 "Products"  shall  have  the  meaning  given  to it in  Section
4.13.1.

                 "Sellers" has the meaning given to it in Section 1.1.

                 "Settlement  Agreement"  means the Settlement  Agreement  dated
September 9, 1992 between Siemens AG and Medtronics, Inc.

                 "Shareholder  Affiliate"  shall have the meaning given to it in
Section 1.1(a).

                 "Siemens AG" has the meaning given to it in Section 6.9.

                 "Siemens  Transitional  Services  Agreements"  shall  have  the
meaning given to it in Section 1.4.1.

                 "SJM's  Accountants"  shall  have  the  meaning  given to it in
Section 2.2.4.

                 "SJM Affiliates"  shall have the meaning given to it in Section
1.1(a).

                 "SJM Transitional  Services  Agreements" shall have the meaning
given to it in Section 1.4.2.

                 "Subsidiary"  means in respect of any Person any corporation of
which the securities  having a majority of the ordinary voting power in electing
the board of directors are, at the time as of which any  determination  is being
made, owned by such Person either directly or through one or more Subsidiaries.

                 "Tax" or "Taxes"  means with respect to any Person any federal,
state,  county,  local or foreign  income,  gross  receipts,  profits,  capital,
franchise,  estimated,  alternative minimum, add-on minimum,  estimated,  sales,
use, occupancy, transfer, registration, value added, ad valorem, excise, natural
resources,    severance,   stamp,   occupation,    premium,   windfall   profit,
environmental,  customs,  duties,  levies,  real  property,  personal  property,
capital  stock,   mercantile,   social  security  (or  similar),   unemployment,
disability,  payroll,  license,  employment,  employee or other withholding,  or
other tax, governmental fee or like assessment or charge of any kind whatsoever,
including any interest,  penalties or additions to tax or additional  amounts in
respect of the  foregoing,  whether  disputed or not and  whether  computed on a
separate,  consolidated,  unitary,  combined or any other basis;  the  foregoing
shall include any transferee or secondary  liability for a Tax and any liability
assumed by agreement or arising as a result of being (or ceasing to be) a member
of any  Affiliated  Group (or being included (or required to be included) in any
Tax Return  relating  thereto) or as a result of any spin-off,  distribution  or
other  reorganization  related to the  disposition  of any assets or business of
such Person or any other member of an  Affiliated  Group of which such Person is
or was a member.

                 "Tax Returns" means  returns,  amendments,  statements,  forms,
information,  elections,  declarations,  reports, claims for refund, information
returns or other  documents  (including  any  related or  supporting  schedules,
statements or information)  filed or required to be filed in connection with the
determination,  assessment  or  collection  of any  Taxes  of any  party  or the
administration of any laws, regulations or administrative  requirements relating
to any Taxes.

                 "U.S.  Asset  Purchase  Agreement"  means  the  Asset  Purchase
Agreement  of even date  herewith  among  Siemens-Pacesetter,  Inc.,  a Delaware
corporation,  SJM,  SJM  International,  and Siemens  Medical  Systems,  Inc., a
Delaware corporation.

                 "U.S.  GAAP"  shall  have the  meaning  given to it in  Section
2.2.2.

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

                                                          ST. JUDE MEDICAL, INC.


                                        By______________________________________
                                                            Ronald A. Matricaria
                                           President and Chief Executive Officer


                                            ST. JUDE MEDICAL INTERNATIONAL, INC.


                                        By______________________________________
                                                            Ronald A. Matricaria
                                                                       President


                                                                SIEMENS-ELEMA AB


                                         By_____________________________________
                                           

                                           _____________________________________







                                   [NON-U.S.]

                            ASSET PURCHASE AGREEMENT

                                     AMONG

                            ST. JUDE MEDICAL, INC.,

                      ST. JUDE MEDICAL INTERNATIONAL, INC.

                                      AND

                                SIEMENS-ELEMA AB



                                  dated as of

                                 June 26, 1994



                               TABLE OF CONTENTS


                                   ARTICLE 1

                               TRANSFER OF ASSETS

1.1   Assets to Be Sold . . . . . . . . . . . . . . . . . . . . . .    1
1.2   Assumption and Exclusion of Liabilities . . . . . . . . . . .    4
1.3   Transfer Documentation and Possession . . . . . . . . . . . .    5
1.4   Transitional Services . . . . . . . . . . . . . . . . . . . .    5

                                   ARTICLE 2

                      CONSIDERATION AND MANNER OF PAYMENT

2.1   Consideration and Payment . . . . . . . . . . . . . . . . . .    6
2.2   Cash Consideration Adjustment . . . . . . . . . . . . . . . .    6
2.3   Allocation of Purchase Price  . . . . . . . . . . . . . . . .    9

                                   ARTICLE 3

                                    CLOSING

3.1   The Closing . . . . . . . . . . . . . . . . . . . . . . . . .    9
3.2   Deliveries of Siemens-Elema . . . . . . . . . . . . . . . . .    9
3.3   Deliveries of SJM . . . . . . . . . . . . . . . . . . . . . .   10
3.4   Further Documents . . . . . . . . . . . . . . . . . . . . . .   11

                                   ARTICLE 4

                REPRESENTATIONS AND WARRANTIES OF SIEMENS-ELEMA

4.1   Authority, Organization, Capitalization and Qualification; Effect
         of Agreement . . . . . . . . . . . . . . . . . . . . . . .   11
4.2   Financial Statements. . . . . . . . . . . . . . . . . . . . .   13
4.3   Absence of Certain Developments. . . . . . . . . . . . . . .    13
4.4   Title to Personal Property and Assets . . . . . . . . . . . .   15
4.5   Patents, Trademarks and Copyrights .  . . . . . . . . . . . .   15
4.6   Commitments . . . . . . . . . . . . . . . . . . . . . . . . .   16
4.7   Litigation. . . . . . . . . . . . . . . . . . . . . . . . . .   17
4.8   Permits . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
4.9   Governmental Consents . . . . . . . . . . . . . . . . . . . .   18
4.10  Employee Benefit Plans. . . . . . . . . . . . . . . . . . . .   18
4.11  Employees . . . . . . . . . . . . . . . . . . . . . . . . . .   21
4.12  [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . .   21
4.13  Company Products; Regulation  . . . . . . . . . . . . . . . .   21
4.14  Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . .   22
4.15  [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . .   22
4.16  Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . .   22
4.17  Affiliated Transactions . . . . . . . . . . . . . . . . . . .   23
4.18  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .   23
4.19  [Reserved]  . . . . . . . . . . . . . . . . . . . . . . . . .   23
4.20  Inventory . . . . . . . . . . . . . . . . . . . . . . . . . .   23
4.21  Accounts and Notes Receivable . . . . . . . . . . . . . . . .   23

                                   ARTICLE 5

                     REPRESENTATIONS AND WARRANTIES OF SJM

5.1   Corporate Power and Authority; Effect of Agreement  . . . . .   24
5.2   Consents  . . . . . . . . . . . . . . . . . . . . . . . . . .   25
5.3   Availability of Funds . . . . . . . . . . . . . . . . . . . .   25
5.4   Litigation  . . . . . . . . . . . . . . . . . . . . . . . . .   25
5.5   Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . .   25
5.6   Certain Ownership Interests . . . . . . . . . . . . . . . . .   26

                                   ARTICLE 6

                                   COVENANTS

6.1   Cooperation . . . . . . . . . . . . . . . . . . . . . . . . .   26
6.2   Conduct of Business . . . . . . . . . . . . . . . . . . . . .   27
6.3   [Reserved]  . . . . . . . . . . . . . . . . . . . . . . . . .   27
6.4   Access  . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
6.5   Non-Disclosure Agreement  . . . . . . . . . . . . . . . . . .   29
6.6   Antitrust, Competition Law Filings  . . . . . . . . . . . . .   29
6.7   Summary of Tangible Personal Property and Assets  . . . . . .   29
6.8   Claims History  . . . . . . . . . . . . . . . . . . . . . . .   29
6.9   FDA Recertification.  . . . . . . . . . . . . . . . . . . . .   29
6.10  Grant of License. . . . . . . . . . . . . . . . . . . . . . .   29
6.11  Other Financial Statements  . . . . . . . . . . . . . . . . .   30
6.12  Amendments to Schedules . . . . . . . . . . . . . . . . . . .   30

                                   ARTICLE 7

                              ADDITIONAL COVENANTS

7.1   Liability for Employees and Employee Benefit Plans  . . . . .   31
7.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   32
7.3   Non-Competition . . . . . . . . . . . . . . . . . . . . . . .   33
7.4   Non-Solicitation  . . . . . . . . . . . . . . . . . . . . . .   34
7.5   Siemens Name  . . . . . . . . . . . . . . . . . . . . . . . .   34
7.6   Confidentiality . . . . . . . . . . . . . . . . . . . . . . .   34
7.7   Accounts Receivable . . . . . . . . . . . . . . . . . . . . .   34

                                   ARTICLE 8

                        CONDITIONS TO SJM'S OBLIGATIONS

8.1   Representations, Warranties and Covenants of Siemens-Elema  .   35
8.2   No Prohibition  . . . . . . . . . . . . . . . . . . . . . . .   35
8.3   Deliveries  . . . . . . . . . . . . . . . . . . . . . . . . .   35
8.4   No Material Adverse Effect  . . . . . . . . . . . . . . . . .   35
8.5   Governmental and Other Approvals  . . . . . . . . . . . . . .   35
8.6   U.S. Asset Purchase Agreement . . . . . . . . . . . . . . . .   36

                                   ARTICLE 9

                   CONDITIONS TO SIEMENS-ELEMA'S OBLIGATIONS

9.1   Representations, Warranties and Covenants of SJM  . . . . . .   36
9.2   No Prohibition  . . . . . . . . . . . . . . . . . . . . . . .   36
9.3   Deliveries  . . . . . . . . . . . . . . . . . . . . . . . . .   36
9.4   Governmental Approvals  . . . . . . . . . . . . . . . . . . .   36
9.5   U.S. Asset Purchase Agreement . . . . . . . . . . . . . . . .   36

                                   ARTICLE 10

                      INDEMNIFICATION AND RELATED MATTERS
10.1  Survival  . . . . . . . . . . . . . . . . . . . . . . . . . .   37
10.2  Indemnification by Siemens-Elema  . . . . . . . . . . . . . .   37
10.3  Indemnification by SJM  . . . . . . . . . . . . . . . . . . .   37
10.4  Limitation on Indemnification Liabilities . . . . . . . . . .   37
10.5  Notice of Indemnification . . . . . . . . . . . . . . . . . .   38
10.6  Indemnification Procedure for Third-Party Claims  . . . . . .   38
10.7  Waivers of Certain Restrictions.  . . . . . . . . . . . . . .   39
10.8  Right to Cure . . . . . . . . . . . . . . . . . . . . . . . .   39

                                   ARTICLE 11

                          TERMINATION PRIOR TO CLOSING

11.1  Termination . . . . . . . . . . . . . . . . . . . . . . . . .   39
11.2  Effect of Termination . . . . . . . . . . . . . . . . . . . .   40

                                   ARTICLE 12

                                 MISCELLANEOUS

12.1  Entire Agreement  . . . . . . . . . . . . . . . . . . . . . .   40
12.2  Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . .   40
12.3  Assignment  . . . . . . . . . . . . . . . . . . . . . . . . .   40
12.4  Headings; Usage . . . . . . . . . . . . . . . . . . . . . . .   40
12.5  Cooperation . . . . . . . . . . . . . . . . . . . . . . . . .   41
12.6  Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . .   41
12.7  Governing Law . . . . . . . . . . . . . . . . . . . . . . . .   41
12.8  Arbitration . . . . . . . . . . . . . . . . . . . . . . . . .   41
12.9  Severability. . . . . . . . . . . . . . . . . . . . . . . . .   42
12.10 Counterpart.  . . . . . . . . . . . . . . . . . . . . . . . .   42
12.11 Interpretation  . . . . . . . . . . . . . . . . . . . . . . .   42
12.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
12.13 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . .   44
12.14 No Third-Party Beneficiary  . . . . . . . . . . . . . . . . .   44

                                   ARTICLE 13

                                  DEFINITIONS

13.1  Definitions . . . . . . . . . . . . . . . . . . . . . . . . .   44


                                    EXHIBITS


            NUMBER            NAME OF EXHIBIT



            1.4.1       Form of Siemens Transitional Services Agreement

            3.2.2       Form of Medtronics Assignment and Assumption Agreement


                                   SCHEDULES


            NUMBER      NAME OF SCHEDULE

            1.1(a)      Shareholder Affiliates
            1.1(a)(i)   Furniture, Fixtures, Equipment, Machinery and Other
                        Tangible Personal Property
            1.1(a)(ii)  Vehicles
            1.1(a)(iii) Inventories
            1.1(a)(iv)  Accounts Receivable
            1.1(a)(viii)Contracts, Licenses, etc.
            1.1(a)(ix)  Intellectual Property
            1.1(a)(xiii)Advances, Deposits, Prepaid Invoices and Other Prepaid
                        Expenses
            1.1(a)(xv)  Interests in Real Property Leases
            2.2.2       Adjustments
            2.2.2.1     Intercompany Eliminations
            4.1.4       Consents
            4.1.5       Defaults
            4.2         Financial Statements
            4.3         Certain Developments
            4.4(a)      Title to Personal Property
            4.4(b)      Condition of Equipment and Fixed Assets
            4.5(a)      Patents, Trademarks, Service Marks, Trade Names,
                        Copyrights; Registrations; Applications for
                        Registration
            4.5(b)      License Agreements
            4.5(c)      Claims and Disputes Regarding Intellectual Property
            4.5(d)      Outstanding Orders, Judgments and Decrees Restricting
                        Use of Intellectual Property
            4.5(e)      Liens on Intellectual Property
            4.6(a)      Commitments
            4.6(b)      Commitments Requiring Consent
            4.7         Litigation
            4.8         Missing Permits; Consents
            4.9         Governmental Consents
            4.10.1      Material Employee Benefit Plans
            4.10.3      Consequences Resulting from Consummation of 
                        Transactions; No Change in Control Provisions
            4.10.4      Statements By Authorized Representatives
            4.11(a)     Employees
            4.11(b)     Works Councils, Unions, Other Labor Organizations and 
                        Collective Bargaining Agreements
            [4.11(c)    Material Compliance with Laws
            4.11(d)     Complaints, Demand Letters, Charges]
            4.13.1(a)   Governmental Notices, Citations and Decisions Regarding 
                        Products
            4.13.1(b)   Field Notifications, etc.
            [4.14.1     U.S. Real Property]
            4.14.2      Permanent Establishments
            4.17        Affiliated Transactions
            4.18        Insurance
            5.2         Consents
            6.2         Conduct of Business; Agreements, etc.
            7.1.2       Assumed Employee Benefit Plans
            8.5         Certain Consents