{"id":43035,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-bfgoodrich-co-and-coltec.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-bfgoodrich-co-and-coltec","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-bfgoodrich-co-and-coltec.html","title":{"rendered":"Agreement and Plan of Merger &#8211; BFGoodrich Co. and Coltec Industries Inc."},"content":{"rendered":"<pre>\n                               AGREEMENT AND PLAN\n                                    OF MERGER\n                                   DATED AS OF\n                                NOVEMBER 22, 1998\n                                      AMONG\n                            THE B.F.GOODRICH COMPANY,\n                         RUNWAY ACQUISITION CORPORATION\n                                       AND\n                              COLTEC INDUSTRIES INC\n\n\n\n\n\n\n\n                                TABLE OF CONTENTS\n\n\n\n                                    ARTICLE I\n                                   THE MERGER\n         Section 1.1       The Merger ......................................1\n         Section 1.2       Effective Date of the Merger.....................1\n\n                                   ARTICLE II\n                            THE SURVIVING CORPORATION\n\n         Section 2.1       Articles of Incorporation and By-Laws............2\n         Section 2.2       Board of Directors; Officers.....................2\n         Section 2.3       Effects of Merger................................2\n\n                                   ARTICLE III\n                              CONVERSION OF SHARES\n\n         Section 3.1       Exchange Ratio...................................2\n         Section 3.2       Stock Options....................................2\n         Section 3.3       Parent to Make Certificates Available............4\n         Section 3.4       Dividends; Transfer Taxes........................4\n         Section 3.5       No Fractional Shares.............................5\n         Section 3.6       Exchange Agent...................................5\n         Section 3.7       Shareholders' Meetings...........................6\n         Section 3.8       Closing of the Company's Transfer Books..........6\n         Section 3.9       Assistance in Consummation of the Merger.........6\n         Section 3.10      Closing..........................................6\n\n                                   ARTICLE IV\n                    REPRESENTATIONS AND WARRANTIES OF PARENT\n\n         Section 4.1       Organization and Qualification...................6\n         Section 4.2       Capitalization...................................7\n         Section 4.3       Subsidiaries.....................................7\n         Section 4.4       Authority Relative to this Merger Agreement and \n                           the Cross Stock Option Agreements................8\n         Section 4.5       Reports and Financial Statements.................9\n         Section 4.6       Absence of Certain Changes or Events.............9\n         Section 4.7       Litigation.......................................9\n         Section 4.8       Takeover Provisions Inapplicable................10\n         Section 4.9       Compliance with Applicable Laws.................10\n         Section 4.10      Taxes...........................................10\n         Section 4.11      Product Liability; Airworthiness................12\n         Section 4.12      Environment.....................................12\n         Section 4.13      Accounting; Tax Matters.........................13\n\n\n\n                                      - 2 -\n\n\n\n\n         Section 4.14      Parent Action...................................13\n         Section 4.15      Lack of Ownership of Company Common Stock.......13\n         Section 4.16      Financial Advisor...............................13\n         Section 4.17      Fairness Opinion................................14\n\n                                  ARTICLE IV--A\n                  REPRESENTATIONS AND WARRANTIES REGARDING SUB\n\n         Section 4A.1      Organization....................................14\n         Section 4A.2      Capitalization..................................14\n         Section 4A.3      Authority Relative to this Merger Agreement.....14\n\n                                    ARTICLE V\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n         Section 5.1       Organization and Qualification..................15\n         Section 5.2       Capitalization..................................15\n         Section 5.3       Subsidiaries....................................16\n         Section 5.4       Authority Relative to this Merger Agreement\n                           and the Cross Stock Option Agreements...........16\n         Section 5.5       Reports and Financial Statements................17\n         Section 5.6       Absence of Certain Changes or Events............17\n         Section 5.7       Litigation......................................18\n         Section 5.8       Employee Benefit Plans..........................18\n         Section 5.9       Plan Compliance.................................18\n         Section 5.10      Takeover Provisions Inapplicable................19\n         Section 5.11      Compliance with Applicable Laws.................19\n         Section 5.12      Taxes...........................................19\n         Section 5.13      Certain Contracts...............................21\n         Section 5.14      Patents, Trademark, Etc.........................21\n         Section 5.15      Product Liability; Airworthiness................22\n         Section 5.16      Environment.....................................22\n         Section 5.17      Accounting; Tax Matters.........................22\n         Section 5.18      Company Action..................................22\n         Section 5.19      Lack of Ownership of Parent Common Stock........23\n         Section 5.20      Insurance Coverage..............................23\n         Section 5.21      Year 2000.......................................23\n         Section 5.22      Financial Advisor...............................23\n         Section 5.23      Fairness Opinion................................23\n\n                                   ARTICLE VI\n                     CONDUCT OF BUSINESS PENDING THE MERGER\n\n         Section 6.1       Conduct of Business by the Company Pending \n                           the Merger......................................23\n         Section 6.2       Conduct of Business by Parent and Sub Pending \n                           the Merger......................................26\n         Section 6.3       Notice of Breach................................27\n\n  \n\n                                      - 3 -\n\n\n\n \n\n                                   ARTICLE VII\n                              ADDITIONAL AGREEMENTS\n\n         Section 7.1       Access and Information..........................27\n         Section 7.2       Registration Statement\/Proxy Statement..........27\n         Section 7.3       Affiliates, Publication of Combined\n                           Financial Results...............................28\n         Section 7.4       Stock Exchange Listing..........................29\n         Section 7.5       Employment Arrangements.........................29\n         Section 7.6       Indemnification.................................29\n         Section 7.7       Consents........................................30\n         Section 7.8       Additional Agreements...........................30\n         Section 7.9       No Solicitation.................................31\n         Section 7.10      Accountants Letters.............................32\n         Section 7.11      Pooling of Interests............................33\n         Section 7.12      Trust Preferred Securities......................33\n         Section 7.13      Parent Board of Directors.......................33\n         Section 7.14      Post-Merger Operations..........................33\n         Section 7.15      Tax Representation Letters......................33\n         Section 7.16      Transfer Taxes..................................33\n\n                                  ARTICLE VIII\n                              CONDITIONS PRECEDENT\n\n         Section 8.1       Conditions to Each Party's Obligation to\n                           Effect the Merger...............................33\n         Section 8.2       Conditions to Obligation of the Company\n                           to Effect the Merger............................34\n         Section 8.3       Conditions to Obligations of Parent and \n                           Sub to Effect the Merger........................35\n         Section 8.4       Frustration of Closing Conditions...............35\n\n                                   ARTICLE IX\n                        TERMINATION, AMENDMENT AND WAIVER\n\n         Section 9.1       Termination.....................................35\n         Section 9.2       Effect of Termination...........................37\n         Section 9.3       Amendment.......................................39\n         Section 9.4       Waiver..........................................39\n\n                                    ARTICLE X\n                               GENERAL PROVISIONS\n\n         Section 10.1      Notices.........................................39\n         Section 10.2      Fees and Expenses...............................40\n         Section 10.3      Publicity.......................................40\n         Section 10.4      Specific Performance............................40\n\n\n\n                                      - 4 -\n\n\n\n\n\n         Section 10.5      Interpretation..................................41\n         Section 10.6      Third Party Beneficiaries.......................41\n         Section 10.7      Miscellaneous...................................42\n         Section 10.8      Cure Period.....................................42\n         Section 10.9      Non-Survival of Representations and Warranties..42\n         Section 10.10     Validity........................................42\n\n\n\n                                      - 5 -\n\n\n\n\n\n\n                          AGREEMENT AND PLAN OF MERGER\n                          ----------------------------\n\n         THIS AGREEMENT AND PLAN OF MERGER (this \"Merger  Agreement\"),  dated as\nof November 22, 1998, is among The B.F.Goodrich  Company, a New York corporation\n(\"Parent\"),  Runway Acquisition  Corporation,  a Pennsylvania  corporation and a\nwholly  owned  subsidiary  of Parent  (\"Sub\"),  and  Coltec  Industries  Inc,  a\nPennsylvania corporation (the \"Company\").\n\n                                    RECITALS:\n                                    --------\n\n         The Boards of Directors of Parent, Sub and the  Company  have  approved\nthe acquisition of the Company by Parent, to be  accomplished  by  the merger of\nSub  into  the  Company  (the  \"Merger\"),  upon  the  terms  and  subject to the\nconditions set forth below and in accordance with the  Business Corporation  Law\nof the Commonwealth of Pennsylvania (\"PBCL\").  It is intended for federal income\ntax purposes that the  Merger  shall  qualify  as a \"reorganization\"  within the\nmeaning of Section 368(a) of the Internal Revenue Code of 1986, as amended  (the\n\"Code\"), and that this Merger Agreement shall be a  plan  of  reorganization for\npurposes of Section 368 of the Code and,  for  accounting  purposes,  the Merger\nshall be a \"pooling of interests\".\n\n         As a condition and  inducement to entering into this Merger  Agreement,\nParent and the Company have entered  into a stock option  agreement  dated as of\nthe date hereof  pursuant to which Parent has granted the Company an option with\nrespect to certain  shares of Parent Common Stock (as defined in Section  3.1(b)\nbelow) (the \"Parent Stock Option  Agreement\") and a stock option agreement dated\nas of the date hereof pursuant to which the Company has granted Parent an option\nwith  respect to certain  shares of Company  Common Stock (as defined in Section\n3.1(b) below) (the \"Company Stock Option  Agreement\" and,  collectively with the\nParent Stock Option Agreement, the \"Cross Stock Option Agreements\") on the terms\nand subject to the conditions set forth therein.\n\n         NOW,   THEREFORE,  in   consideration   of   the   foregoing   and  the\nrepresentations, warranties and agreements set forth below, the parties agree as\nfollows:\n\n                                    ARTICLE I\n                                   THE MERGER\n\n         Section 1.1 The Merger.   Upon  the terms and subject to the conditions\nhereof,  on the Effective  Date (as defined below in Section 1.2),  Sub shall be\nmerged into the Company, the separate corporate existence of Sub shall thereupon\ncease, and the Company shall continue  its  corporate existence as the surviving\ncorporation in the Merger (the \"Surviving Corporation\").\n\n         Section 1.2   Effective  Date  of  the  Merger. The Merger shall become\neffective when properly executed Articles  of  Merger  are  duly  filed with the\nDepartment of State of the Commonwealth of  Pennsylvania,  which filing shall be\nmade on the date on which the closing of the  transactions  contemplated by this\nMerger  Agreement takes place in accordance with Section 3.10. When used in this\nMerger Agreement,  the  term \"Effective Date\" shall  mean  the  date and time at\nwhich  such  filing shall have been made.\n\n\n                                      - 6 -\n\n\n\n\n                                   ARTICLE II\n                            THE SURVIVING CORPORATION\n\n         Section 2.1   Articles  of  Incorporation  and  By-Laws.  The  Articles\nof Incorporation and  the  By-Laws  of  Sub in effect  immediately  prior to the\nEffective Date shall be the Articles of  Incorporation  and  the  By-Laws of the\nSurviving  Corporation  until  amended  in  accordance with  their  terms and as\nprovided by law.\n\n         Section  2.2  Board  of  Directors;  Officers.  The  directors  of  Sub\nimmediately prior to the Effective  Date shall be the directors of the Surviving\nCorporation  and  the  officers of  Sub  immediately prior to the Effective Date\nshall be the officers  of the  Surviving  Corporation,  in each case until their\nrespective successors are duly elected and qualified.\n\n         Section 2.3   Effects of Merger.  The Merger shall have the effects set\nforth in Section 1929 of the PBCL.\n\n                                   ARTICLE III\n                              CONVERSION OF SHARES\n\n         Section 3.1   Exchange Ratio.  As of the Effective Date, by  virtue  of\nthe Merger and without any action on the part of any holder of any capital stock\nof the Company, Parent or Sub:\n\n         (a)  All shares of capital  stock of the Company  which are held by the\nCompany, and  any shares of capital stock of the Company owned by Parent, Sub or\nany other subsidiary of Parent, shall be canceled.\n\n         (b)  Subject  to  Section  3.5,  each  remaining  outstanding  share of\ncommon stock, par value $.01 per share,  of the Company (\"Company Common Stock\")\nissued  and  outstanding  immediately  prior  to  the  Effective  Date  shall be\nconverted into .56 of a share (the \"Exchange  Ratio\") of common stock, par value\n$5 per share, of Parent (\"Parent  Common Stock\").  One preferred  share purchase\nright issuable pursuant to the Rights Agreement dated as of June 2, 1997 between\nParent  and  The  Bank  of  New  York  or  any  other  purchase  right issued in\nsubstitution thereof (the \"Parent Rights\")  shall  be  issued together with  and\nshall  attach  to  each  share  of  Parent  Common Stock issued pursuant to this\nSection 3.1(b).\n\n         (c) In the  event of any  change  in  Parent Common Stock by  reason of\nstock dividends, splitups, mergers, recapitalizations, combinations, exchange of\nshares or the like  after  the date of this  Merger  Agreement  and prior to the\nEffective Date, the Exchange Ratio shall be adjusted appropriately.\n\n         (d) Each issued and outstanding share of capital stock of Sub shall be\nconverted into and become one fully  paid  and  nonassessable  share  of  common\nstock, par value $.01 per share, of the Surviving Corporation.\n\n\n\n                                      - 7 -\n\n\n\n\n\n         Section 3.2 Stock  Options.  (a) As soon as  practicable  following the\ndate of this Merger  Agreement,  the Board of  Directors  of the Company (or, if\nappropriate,  any  committee  administering  the Company  Common Stock Plans (as\ndefined  below)) shall adopt such  resolutions or take such other actions as may\nbe required to effect the following in accordance  with the terms of the Company\nCommon Stock Plans:\n\n                          (i)     adjust the terms of all outstanding options to\npurchase  shares  of  Company Common Stock (the \"Company Stock Options\") granted\nunder any plan or  arrangement  providing  for  the grant of options to purchase\nshares of Company  Common  Stock  to  current  or  former  directors,  officers,\nemployees or  consultants  of  the  Company or its  subsidiaries  (the  \"Company\nCommon Stock  Plans\"), whether vested or unvested, as necessary to provide that,\nas of the Effective  Date,  each Company Stock  Option  outstanding  immediately\nprior to the  Effective  Date  shall be amended  and  converted  into an  option\nto  acquire,  on the  same  terms  and conditions as were  applicable  under the\nCompany  Stock  Option,  the number of shares of  Parent Common  Stock  (rounded\ndown to the nearest whole share) determined by multiplying  the number of shares\nof Company Common Stock  subject to such  Company  Stock Option by the  Exchange\nRatio,  at a price per  share of Parent  Common Stock equal to (A) the  exercise\nprice for the shares of  Company  Common Stock otherwise purchasable pursuant to\nsuch  Company  Stock  Option  divided  by (B) the  Exchange  Ratio  (each, as so\nadjusted, an \"Adjusted Option\");  provided  that  such  exercise price shall  be\nrounded up to the nearest whole cent; and\n\n                           (ii) make such other  changes to the  Company  Common\nStock  Plans  as Parent and the Company may agree are appropriate to give effect\nto the Merger.\n\n         (b) The duration and other terms of each  Adjusted  Option shall be the\nsame as the original  Company  Stock Option from which it was  converted  except\nthat all  references to the Company in such original  Company Stock Option shall\nbe deemed to be references to Parent.\n\n         (c) The  adjustments  provided herein with respect to any Company Stock\nOptions that are \"incentive stock options\" as defined in Section 422 of the Code\nshall be and are  intended to be effected in a manner which is  consistent  with\nSection 424(a) of the Code.\n\n         (d) No later than the  Effective  Date,  Parent shall  prepare and file\nwith the Securities and Exchange  Commission  (the  \"Commission\") a registration\nstatement  on Form S-8 (or another  appropriate  form),  which  shall  include a\nre-offer prospectus, registering a number of shares of Parent Common Stock equal\nto the  number of shares  subject to the  Adjusted  Options.  Such  registration\nstatement  shall  be kept  effective  (and the  current  status  of the  initial\noffering  prospectus or  prospectuses  required  thereby shall be maintained) at\nleast for so long as any Adjusted Options remain outstanding.\n\n         (e) As soon as  practicable  after the  Effective  Date,  Parent  shall\ndeliver to the holders of Company  Stock  Options  appropriate  notices  setting\nforth such holders' rights pursuant to the respective Company Common Stock Plans\nand the agreements  evidencing the grants of such Company Stock Options and that\nsuch Company Stock Options and  agreements  shall be assumed by Parent and shall\ncontinue in effect on the same terms and conditions  (subject to the adjustments\nrequired by this Section 3.2 after giving effect to the Merger).\n\n\n                                      - 8 -\n\n\n\n\n\n         (f) A holder of an Adjusted Option may exercise such Adjusted Option in\nwhole or in part in accordance with its terms by delivering a properly  executed\nnotice of exercise to Parent,  together with the consideration  therefor and any\nrequired federal withholding tax information and payment.\n\n         (g) Except as otherwise  contemplated by this Section 3.2 and except to\nthe extent  required under the respective  terms of the Company Stock Options or\nother  applicable  agreements,  all  restrictions or limitations on transfer and\nvesting with respect to Company Stock Options  awarded under the Company  Common\nStock Plans or any other plan,  program or  arrangement  of the Company,  to the\nextent that such restrictions or limitations shall not have lapsed, shall remain\nin full force and effect with respect to such options after giving effect to the\nMerger and the assumption by Parent as set forth above.\n\n         (h) Parent  shall use all  reasonable  best  efforts to  implement  the\nprovisions of this Section 3.2.\n\n         Section 3.3  Parent  to  Make  Certificates  Available.  Prior  to  the\nEffective Date, Parent shall select The  Bank of New York or such  other  person\nor  persons reasonably satisfactory  to the Company to act as Exchange Agent for\nthe  Merger  (the \"Exchange Agent\").  As soon as practicable after the Effective\nDate, Parent shall deposit, or cause to be deposited, with the  Exchange  Agent,\nfor the benefit of the holders of  certificates  representing  shares of Company\nCommon Stock (each, a \"Certificate\"), and each holder of Company Common Stock to\nbe converted pursuant to Section 3.1 (each, a \"Company Holder\") will be entitled\nto receive, upon surrender to the Exchange Agent of one or more Certificates for\ncancellation,  certificates  representing  the number of shares of Parent Common\nStock and cash in lieu of  fractional  shares into which such  Company  Holder's\nshares of  Company  Common  Stock have been  converted  in the  Merger,  and any\ndividends or other  distributions  with respect to such shares of Parent  Common\nStock with a record date after the Effective  Date. Such shares of Parent Common\nStock  issued in the  Merger  shall  each be  deemed to have been  issued at the\nEffective Date.\n\n         Section  3.4  Dividends;   Transfer  Taxes.    No  dividends  or  other\ndistributions  that  are  declared or made on Parent Common Stock  with a record\ndate   after   the   Effective  Date  shall  be  paid  to  persons  entitled  to\nreceive  certificates representing  Parent Common  Stock pursuant to this Merger\nAgreement until such persons surrender their Certificates.  Upon such surrender,\nthere shall be paid to the person in whose name  the  certificates  representing\nsuch Parent  Common Stock  shall be  issued any dividends or other distributions\nwhich shall have become payable with respect to such  Parent Common Stock with a\nrecord date after the Effective  Date,  and,  at  the  appropriate payment date,\nthere shall  be  paid  to  such  person  the  amount  of  any dividends or other\ndistributions payable with respect to such shares of Parent Common Stock  with a\nrecord  date after the Effective Date and a payment  date occurring  after  such\nsurrender.  In no event shall the person  entitled  to receive such dividends or\nother  distributions be entitled to receive  interest on such dividends or other\ndistributions.  In  the  event  that any  certificates  for any shares of Parent\nCommon  Stock  are  to  be  issued  in  a  name  other  than  that  in which the\nCertificates  surrendered  in  exchange  therefor are registered,  it shall be a\ncondition  of  such  exchange that the person requesting such exchange shall pay\n\n\n                                      - 9 -\n\n\n\n\n\nto the Exchange Agent  any  transfer or other taxes  required  by reason of  the\nissuance of certificates  for such shares of Parent Common Stock in a name other\nthan that of the registered  holder  of  the Certificate  surrendered,  or shall\nestablish to the  satisfaction of the Exchange Agent that such tax has been paid\nor is not applicable.  In the event any Certificate shall have been lost, stolen\nor destroyed,  upon  the  making  of  an  affidavit  of  that fact by the person\nclaiming  such  Certificate  to  have  been  lost, stolen  or  destroyed and, if\nrequired by Parent,  the  posting  by  such  person  of a bond in such amount as\nParent may  determine  is  reasonably  necessary  as indemnity against any claim\nthat may be made against it with respect to such Certificate, the Exchange Agent\nshall issue in exchange for such  lost,  stolen  or  destroyed  Certificate  the\nshares of Parent Common  Stock,  any cash in lieu of fractional  shares  and any\ndividends or other distributions deliverable in respect thereof pursuant to this\nArticle III.  Notwithstanding  the foregoing, neither the Exchange Agent nor any\nparty hereto shall be liable to a Company Holder for any shares of Parent Common\nStock or dividends thereon delivered to a public official pursuant to any\napplicable escheat laws. \n\nSection 3.5 No Fractional  Shares.  No certificates or scrip  representing  less\nthan one whole share of Parent  Common  Stock  shall be issued  pursuant to this\nMerger Agreement.  In lieu of any such fractional share, each Company Holder who\nwould  otherwise  have been  entitled to a fraction of a share of Parent  Common\nStock shall be paid cash  (without  interest) in an amount equal to such Company\nHolder's  proportionate  interest in the net proceeds  from the sale or sales in\nthe open market by the Exchange Agent, on behalf of all such Company Holders, of\nthe aggregate  fractional  shares of Parent Common Stock issued pursuant to this\nSection 3.5. As soon as practicable  following the Effective  Date, the Exchange\nAgent shall  determine  the excess of (i) the number of shares of Parent  Common\nStock  delivered to the Exchange Agent by Parent over (ii) the aggregate  number\nof whole shares of Parent Common Stock to be distributed to the Company  Holders\n(such excess being herein called the \"Excess  Shares\"),  and the Exchange Agent,\nas  agent  for  the  Company  Holders,  shall  sell  the  Excess  Shares  at the\nthen-prevailing  prices on the New York Stock Exchange (the \"NYSE\"). The sale of\nthe Excess  Shares by the  Exchange  Agent shall be executed on the NYSE through\none or more member  firms of the NYSE and shall be executed in round lots to the\nextent  practicable.  The Exchange  Agent shall use its best efforts to complete\nthe sale of the Excess Shares as promptly  following  the Effective  Date as, in\nthe Exchange Agent's sole judgment, is practicable consistent with obtaining the\nbest execution of such sales in light of prevailing  market  conditions.  Parent\nshall pay all commissions,  transfer taxes and other  out-of-pocket  transaction\ncosts,  including the expenses and compensation of the Exchange Agent,  incurred\nin  connection  with such sale of the Excess  Shares.  Until the net proceeds of\nsuch sale have been distributed to the Company Holders, the Exchange Agent shall\nhold such  proceeds in trust for the  Company  Holders.  As soon as  practicable\nafter the  determination of the amount of cash to be paid to the Company Holders\nin lieu of any  fractional  share  interests,  the  Exchange  Agent  shall  make\navailable in accordance with this Merger  Agreement such amounts to such Company\nHolders.  The  fractional  Parent Common Stock  interests of each Company Holder\nwill be  aggregated,  and no Company Holder will receive cash in an amount equal\nto or greater than the value of one whole share of Parent Common Stock.\n\n\n\n                                      - 10 -\n\n\n\n\n\n         Section  3.6  Exchange  Agent.  Parent  shall use all  reasonable  best\nefforts to cause the  Exchange  Agent to take all steps and  perform all actions\nnecessary to fulfill the Exchange Agent's  responsibilities as set forth in this\nArticle III.\n\nSection 3.7 Shareholders'  Meetings.  (a) Subject to Sections 7.9(b), 7.9(c) and\n9.1(j),  the  Company  shall  take all  action  necessary,  in  accordance  with\napplicable  law and its  Amended and  Restated  Articles  of  Incorporation  and\nAmended  and  Restated  By-Laws,  to convene a meeting of the holders of Company\nCommon Stock (the \"Company  Meeting\") as promptly as practicable for the purpose\nof considering and taking action upon this Merger Agreement. Subject to Sections\n7.9(b), 7.9(c) and 9.1(j),  the Board of Directors of the Company will recommend\nthat holders of Company Common Stock vote in favor of and approve the Merger and\nthe adoption of this Merger Agreement at the Company Meeting.\n\n(b) Subject to Sections 7.9(b),  7.9(c) and 9.1(k), Parent shall take all action\nnecessary,  in accordance  with  applicable law and its Restated  Certificate of\nIncorporation and By-Laws,  to convene a meeting of the holders of Parent Common\nStock (the  \"Parent  Meeting\")  as  promptly as  practicable  for the purpose of\nconsidering  and acting  upon a proposal  (the  \"Stock  Issuance  Proposal\")  to\napprove the issuance of shares of Parent Common Stock as provided by this Merger\nAgreement. Subject to Sections 7.9(b), 7.9(c) and 9.1(k), the Board of Directors\nof Parent will  recommend  that  holders of Parent Common Stock vote in favor of\nand approve the Stock Issuance Proposal at the Parent Meeting.\n\nSection 3.8 Closing of the Company's  Transfer Books. At the Effective Date, the\nstock  transfer  books of the  Company  shall be closed and no  transfer  of any\nshares of Company  Common  Stock  shall be made  thereafter.  In the event that,\nafter  the  Effective  Date,   Certificates   are  presented  to  the  Surviving\nCorporation,  they shall be canceled and exchanged for the  securities of Parent\nand\/or cash as provided in Sections 3.1(b) and 3.5.\n\nSection 3.9 Assistance in  Consummation of the Merger.  Each of Parent,  Sub and\nthe Company  shall provide all  reasonable  assistance  to, and shall  cooperate\nwith,  each  other to bring  about  the  consummation  of the  Merger as soon as\npossible in accordance with the terms and conditions of this Merger Agreement.\n\nSection  3.10  Closing.  The closing of the  transactions  contemplated  by this\nMerger  Agreement  shall  take place (i) at the  offices  of  Squire,  Sanders &amp; Dempsey L.L.P., 4900 Key Tower, 127 Public Square,  Cleveland,  Ohio 44114-1304,\nat 9:00 A.M.  local time on the second  business  day after the day on which the\nlast of the  conditions set forth in Article VIII is fulfilled or waived or (ii)\nat such other time and place as Parent and the Company shall agree in writing.\n\n                                   ARTICLE IV\n                    REPRESENTATIONS AND WARRANTIES OF PARENT\n\nParent  represents  and  warrants  to the  Company,  except  as set  forth  in a\ndisclosure  schedule  delivered  by Parent  concurrently  herewith  (the \"Parent\nDisclosure Schedule\"), as follows:\n\n\n\n                                      - 11 -\n\n\n\n\n\nSection  4.1  Organization  and  Qualification.  Parent  is a  corporation  duly\norganized,  validly existing and in good standing under the laws of the State of\nNew York and has the corporate power to carry on its business as it is now being\nconducted or currently  proposed to be conducted.  Parent is duly qualified as a\nforeign  corporation  to  do  business,   and  is  in  good  standing,  in  each\njurisdiction  where the character of its properties owned or held under lease or\nthe nature of its activities makes such  qualification  necessary,  except where\nthe  failure to be so  qualified  would not have a Material  Adverse  Effect (as\ndefined in Section 10.5(b) below) on Parent.  Complete and correct copies of the\nRestated  Certificate of Incorporation and By-Laws of Parent as in effect on the\ndate  hereof are  included  in the Parent SEC Reports (as defined in Section 4.5\nbelow).\n\nSection 4.2  Capitalization.  The authorized capital stock of Parent consists of\n200,000,000  shares  of Parent  Common  Stock  and  10,000,000  shares of Series\nPreferred  Stock,  par  value $1 per share  (\"Parent  Preferred  Stock\").  As of\nNovember 18, 1998,  74,334,732 shares of Parent Common Stock were validly issued\nand  outstanding,  fully paid and  nonassessable  and 1,845,919 shares of Parent\nCommon Stock were held in treasury. As of November 18, 1998, no shares of Parent\nPreferred Stock were issued and outstanding. As of November 18, 1998, except for\nemployee stock options to acquire  4,098,764  shares of Parent Common Stock at a\nweighted average exercise price of $33.68 per share and the Parent Rights, there\nwere no options,  warrants,  calls or other rights,  agreements  or  commitments\noutstanding  obligating  Parent to issue,  deliver or sell shares of its capital\nstock or debt securities,  or obligating  Parent to grant,  extend or enter into\nany such option,  warrant,  call or other such right,  agreement or  commitment.\nExcept for the issuance of shares of Parent  Common  Stock  pursuant to employee\nstock options to acquire Parent Common Stock and as provided in the Parent Stock\nOption  Agreement,  during the period from  November  18, 1998  through the date\nhereof,  no shares of Parent  Common Stock or Parent  Preferred  Stock have been\nissued and Parent has not entered  into any  options,  warrants,  calls or other\nrights,  agreements or commitments  obligating Parent to issue,  deliver or sell\nshares of its capital stock or debt securities,  or obligating  Parent to grant,\nextend  or enter  into any  such  option,  warrant,  call or other  such  right,\nagreement or  commitment.  All of the shares of Parent Common Stock  issuable in\naccordance with this Merger Agreement in exchange for Company Common Stock as of\nthe  Effective  Date are duly  authorized  and will be, when so issued,  validly\nissued, fully paid and nonassessable.\n\n         Section 4.3 Subsidiaries.  Each \"significant  subsidiary\" (as such term\nis  defined  in Rule 1-02 of  Regulation  S-X of the  Commission)  (\"Significant\nSubsidiary\") of Parent is a corporation duly organized,  validly existing and in\ngood standing under the laws of its  jurisdiction of  incorporation  and has the\ncorporate  power  to carry  on its  business  as it is now  being  conducted  or\ncurrently  proposed to be conducted.  Each  Significant  Subsidiary of Parent is\nduly qualified as a foreign corporation to do business, and is in good standing,\nin each  jurisdiction  where the character of its properties owned or held under\nlease or the nature of its activities makes such qualification necessary, except\nwhere  failure to be so qualified  would not have a Material  Adverse  Effect on\nParent.  All the  outstanding  shares  of  capital  stock  of  each  Significant\nSubsidiary of Parent are validly issued,  fully paid and nonassessable and those\nowned by Parent or by a  subsidiary  of Parent  are owned  free and clear of any\nliens, claims or encumbrances. There are no existing options, warrants, calls or\n\n\n\n                                      - 12 -\n\n\n\n\nother rights,  agreements or commitments of any character relating to the issued\nor  unissued  capital  stock  or  other  securities  of any  of the  Significant\nSubsidiaries  of Parent.  Except as set forth in Parent's  Annual Report on Form\n10-K for the fiscal year ended  December 31,  1997,  Parent does not directly or\nindirectly own any interest in any other corporation, partnership, joint venture\nor other  business  association  or entity  which is  material to Parent and its\nsubsidiaries taken as a whole.\n\nSection 4.4  Authority  Relative to this  Merger  Agreement  and the Cross Stock\nOption  Agreements.  Parent has the  corporate  power to enter into this  Merger\nAgreement and the Cross Stock Option Agreements and to carry out its obligations\nhereunder and  thereunder.  The execution and delivery of this Merger  Agreement\nand the Cross Stock Option  Agreements and the  consummation of the transactions\ncontemplated  hereby and thereby have been duly  authorized by Parent's Board of\nDirectors.  This Merger  Agreement  and the Cross Stock Option  Agreements  each\nconstitute a valid and binding  obligation of Parent  enforceable  in accordance\nwith its terms  except as the same may be  limited  by  bankruptcy,  insolvency,\nfraudulent conveyance, reorganization, moratorium or other similar laws relating\nto or affecting the  enforcement  of  creditors'  rights  generally,  by general\nequitable  principles  (regardless of whether  enforceability is considered in a\nproceeding  in equity or at law) and by an  implied  covenant  of good faith and\nfair dealing. No other corporate proceedings on the part of Parent are necessary\nto authorize this Merger Agreement or the Cross Stock Option  Agreements and the\ntransactions  contemplated  hereby or  thereby,  other than the  approval of the\nStock  Issuance  Proposal by the holders of Parent  Common Stock,  which,  under\napplicable  rules and regulations of the NYSE currently in effect,  will require\nthe Stock  Issuance  Proposal to receive the approval of a majority of the votes\ncast thereon (provided that the total vote cast thereon  represents greater than\n50% in interest of all Parent  securities  entitled to vote thereon).  Parent is\nnot subject to or  obligated  under (i) any charter or by-law  provision or (ii)\nany  provision  of any  indenture  or other  loan  document  or other  contract,\nlicense,  franchise,  permit,  order,  decree,  concession,  lease,  instrument,\njudgment,  statute,  law, ordinance,  rule or regulation applicable to Parent or\nany of its subsidiaries or their respective properties or assets, which would be\nbreached or violated,  or under which there would be a default  (with or without\nnotice or lapse of time,  or both),  or under which there would arise a right of\ntermination,  cancellation  or  acceleration  of any obligation or the loss of a\nmaterial benefit, by its executing and carrying out this Merger Agreement or the\nCross Stock Option  Agreements  other than, in the case of clause (ii) only, (x)\nthe laws and regulations referred to in the next sentence and (y) such breaches,\nviolations,  defaults,  rights of termination,  cancellations,  accelerations or\nlosses of a material benefit which would not,  individually or in the aggregate,\nhave a Material  Adverse  Effect on Parent.  Except as  referred to herein or in\nconnection,  or in  compliance,  with the  provisions  of the  Hart-Scott-Rodino\nAntitrust  Improvements Act of 1976, as amended (the \"HSR Act\"), the Competition\nAct (Canada), the Securities Act of 1933, as amended (the \"Securities Act\"), the\nSecurities  Exchange Act of 1934,  as amended (the  \"Exchange  Act\"),  and other\ngovernmental  approvals  required  under  the  applicable  laws  of any  foreign\njurisdiction and the applicable environmental,  corporation,  securities or blue\nsky  laws  or  regulations  of the  various  states  (\"Applicable  State  Laws\")\n(collectively,   the  \"Parent  Required  Consents\"),  no  filing  by  Parent  or\nregistration by Parent with any  Governmental  Entity (as defined in Section 4.9\nbelow) is necessary  for, nor is any  authorization,  consent or approval of any\nGovernmental  Entity required to be obtained by Parent for, the  consummation of\n\n\n\n                                      - 13 -\n\n\n\n\nthe Merger or the other transactions contemplated by this Merger Agreement or by\nthe Cross  Stock  Option  Agreements  except  for such  filings,  registrations,\nauthorizations,  consents or  approvals,  the failure of which to obtain or make\nwould not,  individually or in the aggregate,  have a Material Adverse Effect on\nParent; provided that Parent makes no representation or warranty with respect to\nsuch of the foregoing as are required by reason of the regulatory  status of the\nCompany or any of its subsidiaries or facts specifically pertaining to them.\n\nSection 4.5 Reports and Financial  Statements.  Since December 31, 1996,  Parent\nhas timely filed all registration statements,  prospectuses,  forms, reports and\ndocuments  that Parent was required to file with the  Commission  (collectively,\nthe \"Parent SEC Reports\").  As of their respective dates, the Parent SEC Reports\ncomplied in all material respects with the requirements of the Securities Act or\nthe  Exchange  Act,  as the case may be,  and the rules and  regulations  of the\nCommission  thereunder  applicable  to such  Parent  SEC  Reports.  As of  their\nrespective dates, the Parent SEC Reports did not contain any untrue statement of\na material fact or omit to state a material  fact required to be stated  therein\nor necessary to make the statements therein, in light of the circumstances under\nwhich  they were  made,  not  misleading.  The  audited  consolidated  financial\nstatements and unaudited interim financial  statements of Parent included in the\nParent SEC Reports comply in all material  respects with  applicable  accounting\nrequirements and with the published rules and regulations of the Commission with\nrespect thereto, and the financial statements included in the Parent SEC Reports\nhave  been  prepared  in  accordance  with  United  States  generally   accepted\naccounting  principles  (\"GAAP\") applied on a consistent basis (except as may be\nindicated therein or in the notes thereto or, in the case of unaudited financial\nstatements, as permitted by Form 10-Q under the Exchange Act) and fairly present\nthe financial  position of Parent and its  subsidiaries  as at the dates thereof\nand the results of their  operations  and changes in financial  position for the\nperiods  then  ended,  subject,  in the  case  of  unaudited  interim  financial\nstatements,  to normal  year-end  audit  adjustments  and any other  adjustments\ndescribed therein.\n\nSection 4.6 Absence of Certain  Changes or Events.  Except as  disclosed  in the\nParent SEC Reports filed prior to the date of this Merger Agreement (\"Previously\nFiled Parent SEC Reports\"), since September 30, 1998, there has not been (i) any\nevent,  condition,  transaction,   commitment,  dispute  or  other  circumstance\n(financial or otherwise) of any character (whether or not in the ordinary course\nof  business),  which,  individually  or in the  aggregate,  has had a  Material\nAdverse Effect on Parent;  (ii) any damage,  destruction or loss, whether or not\ncovered  by  insurance,  which,  individually  or in the  aggregate,  has  had a\nMaterial  Adverse  Effect on Parent;  (iii) any  declaration,  setting  aside or\npayment  of any  dividend  or other  distribution  (whether  in  cash,  stock or\nproperty)  with  respect to the capital  stock of Parent  (except for  regularly\nscheduled cash dividends out of current  earnings at a rate not greater than the\nrate in effect on  September  30,  1998);  or (iv) any  entry  into any  legally\nbinding commitment or transaction  material to Parent and its subsidiaries taken\nas a whole  (including any material  borrowing or material sale of assets) other\nthan  this  Merger  Agreement,   the  Cross  Stock  Option  Agreements  and  the\ntransactions contemplated hereby and thereby.\n\n         Section 4.7  Litigation.  Except as disclosed in the  Previously  Filed\nParent SEC Reports,  there is no suit,  action or proceeding  pending or, to the\nknowledge  of  Parent,  threatened  against  or  affecting  Parent or any of its\nsubsidiaries  which  would,  individually  or in the  aggregate,  be  reasonably\nexpected to have a Material Adverse Effect on Parent, nor is there any judgment,\ndecree,  injunction,  rule or order of any  Governmental  Entity  or  arbitrator\noutstanding against Parent or any of its subsidiaries which would,  individually\nor in the aggregate, have a Material Adverse Effect on Parent.\n\n\n\n                                      - 14 -\n\n\n\n\n\nSection 4.8 Takeover Provisions  Inapplicable.  As of the date hereof and at all\ntimes thereafter, until and including the Effective Date, Section 912 of the New\nYork Business Corporation Law (the \"NYBCL\") and the Parent Rights are, and shall\nbe, inapplicable to the Merger and the transactions  contemplated by this Merger\nAgreement.\n\n         Section  4.9  Compliance  with  Applicable  Laws.  (i)  Parent  and its\nsubsidiaries hold all material permits, licenses, variances,  exemptions, orders\nand approvals (the \"Parent  Permits\") of all applicable  courts,  administrative\nagencies or commissions or other governmental  authorities or instrumentalities,\ndomestic or foreign (each, a \"Governmental  Entity\"),  necessary in all material\nrespects for the  operation of the  businesses  of Parent and its  subsidiaries;\n(ii) Parent and its  subsidiaries are in compliance with the terms of the Parent\nPermits in all material  respects;  (iii) except as disclosed in the  Previously\nFiled Parent SEC Reports,  the businesses of Parent and its subsidiaries are not\nbeing  conducted  in  violation  of any  law,  ordinance  or  regulation  of any\nGovernmental  Entity except for such violations that would not,  individually or\nin the  aggregate,  have a  Material  Adverse  Effect  on  Parent;  and  (iv) no\ninvestigation or review by any Governmental Entity with respect to Parent or any\nof its subsidiaries is pending, or, to the knowledge of Parent,  threatened, nor\nhas any  Governmental  Entity  indicated an intention to conduct the same except\nfor such  investigations  or  reviews  that would  not,  individually  or in the\naggregate,  be reasonably  expected to have a Material Adverse Effect on Parent.\nNo  representation or warranty is made in this Section 4.9 with respect to Taxes\n(as defined in Section 4.10  below),  product  liability  and  airworthiness  or\nEnvironmental  Laws (as defined in Section  4.12 below),  which  matters are the\nsubject of Sections 4.10, 4.11 and 4.12, respectively.\n\nSection 4.10 Taxes. (a) Parent and its subsidiaries  have (i) filed or caused to\nbe  filed  all Tax  Returns  (as  defined  below)  required  to be  filed by any\njurisdiction  to which  any of them is  subject,  (ii)  paid in full on a timely\nbasis all Taxes due and claimed to be due by each such  jurisdiction,  and (iii)\nduly  collected or withheld  and timely paid all Taxes  required to be collected\nfrom others or deducted  and  withheld  from any amounts  paid to  employees  or\nothers,  except to the extent any failure to file,  pay or  withhold  would not,\nindividually or in the aggregate, have a Material Adverse Effect on Parent. Such\nTax Returns are accurate and  complete in all material  respects and  accurately\nreflect  the  Tax  liabilities  for  such  periods,  except  to the  extent  any\ninaccuracies  in  any  such  Tax  Returns  would  not,  individually  or in  the\naggregate,  have a Material  Adverse  Effect on  Parent.  No Tax  deficiency  or\npenalty has been asserted or threatened by any such jurisdiction  against Parent\nor any of its  subsidiaries,  except  to the  extent  any such  deficiencies  or\npenalties,  individually or in the aggregate,  have not had and would not have a\nMaterial Adverse Effect on Parent.\n\n(b) To the knowledge of Parent,  there is no audit of any material Tax Return of\nParent or any of its  subsidiaries in progress,  there is no threatened  action,\nsuit,  proceeding,  investigation,  audit,  or claim for or relating to material\nTaxes, there are no matters under discussion with any Governmental Entities with\nrespect to material Taxes that could result in an additional  amount of material\nTaxes being payable by Parent or any of its  subsidiaries,  and no  Governmental\nEntity has indicated  that it intends to audit any material Tax Return of Parent\nor any of its subsidiaries.\n\n\n\n                                      - 15 -\n\n\n\n\n\n(c)  Neither  Parent nor any of its  subsidiaries  (i) has waived any statute of\nlimitations  with respect to Tax  obligations or agreed to any extension of time\nwith respect to a Tax  assessment or  deficiency,  except to the extent any such\nTax  obligation,  assessment or  deficiency  would not,  individually  or in the\naggregate,  have a Material Adverse Effect on Parent, (ii) is a party to any Tax\nallocation or sharing agreement,  (iii) has been a member of an affiliated group\n(other than the affiliated  group of which Parent is the common parent) filing a\nconsolidated  federal income tax return,  nor is liable for material Taxes of an\naffiliated  group (other than the affiliated group of which Parent is the common\nparent)  under  Section  1.1502-6 of the  Treasury  Regulations  (or any similar\nprovision  of  state,  local or  foreign  law),  including  as a  transferee  or\nsuccessor, by contract or otherwise, or (iv) is currently the beneficiary of any\nextensions of time within which to file any Tax Return.\n\n(d) The earliest  taxable  period of Parent and its  subsidiaries  for which the\nstatute of limitations for federal,  state,  local and foreign Tax Returns filed\nby Parent is still open is the calendar year 1986.\n\n         (e) Neither Parent nor any of its subsidiaries has been a United States\nreal property holding corporation within the meaning of Section 897(c)(2) of the\nCode during the applicable period specified in Section  897(c)(1)(A)(ii)  of the\nCode.\n\n         (f)  Neither  Parent  nor any of its  subsidiaries  (i) has  agreed  or\nconsented at any time under Section 341(f) of the Code to have the provisions of\nSection  341(f)(2) of the Code apply to any disposition of any assets,  (ii) has\nagreed, or is required,  to make any adjustment under Section 481(a) of the Code\nby reason of a change in  accounting  method or  otherwise  that will affect the\nliability  of the  Company  or its  subsidiaries  for  Taxes,  (iii) has made an\nelection, or is required, to treat any asset as owned by another person pursuant\nto the  provisions  of  Section  168(f)  of the  Code,  (iv) has made any of the\nforegoing elections or is required to apply any of the foregoing rules under any\ncomparable  state or local tax provision,  or (v) owns any material  assets that\nwere  financed  directly or  indirectly  with,  or that  directly or  indirectly\nsecure,  debt the interest on which is tax-exempt  under  Section  103(a) of the\nCode.\n\n         (g)  The  transaction  contemplated  herein,  either  by  itself  or in\nconjunction  with any other  transactions  that Parent may have  entered into or\nagreed to, will not give rise to any federal income tax liability  under section\n355(e) of the Code for which Parent may in any way be held liable.\n\n         (h) Parent is not a party to any \"Gain Recognition  Agreements\" as such\nterm is used in the Treasury  Regulations  promulgated  under Section 367 of the\nCode.\n\n(i) Neither Parent nor any of its  subsidiaries  has made or become obligated to\nmake, nor will the Company,  Parent, Sub, or any of Parent's other subsidiaries,\nas a result of any event  connected  with any  transaction  contemplated  herein\nand\/or any termination of employment  related to any such  transaction,  make or\nbecome  obligated to make (with  respect to any employee of Parent or any of its\nsubsidiaries), any \"excess parachute payment\", as defined in Section 280G of the\nCode, to any employee of Parent or any of its subsidiaries.\n\n\n\n                                      - 16 -\n\n\n\n\n\n(j) There are no material liens for Taxes (other than for current Taxes that are\nnot yet due and payable or are being contested in good faith) upon the assets of\nParent or any of its subsidiaries.\n\n         (k) Parent has no excess loss account,  as such term is used in Section\n1.1502-19  of  the  Treasury  Regulations,  with  respect  to the  stock  of any\nsubsidiary.\n\n(l) The unpaid  Taxes of Parent  and its  subsidiaries  did not,  as of the most\nrecent  fiscal  month end prior to the date  hereof,  exceed the reserve for Tax\nliability (not  including any reserve for deferred Taxes  established to reflect\ntiming  differences  between  book and Tax  income) set forth on the face of the\nmost recent  balance sheet (other than in any notes  thereto) that has been made\navailable to the Company.\n\n(m) For  purposes of this  Merger  Agreement,  the term \"Tax\" shall  include all\nfederal,  state, local and foreign income, profits,  franchise,  gross receipts,\npayroll, sales, employment, use, property,  withholding, excise and other taxes,\nduties and  assessments  of any nature  whatsoever  together  with all interest,\npenalties and additions imposed with respect to such amounts.\n\n(n) For  purposes  of this Merger  Agreement,  the term \"Tax  Return\"  means any\nreturn,  declaration,  report,  claim  for  refund,  or  information  return  or\nstatement relating to Taxes, including any schedule or attachment, and including\nany amendment thereof.\n\nSection 4.11 Product  Liability;  Airworthiness.  (a) Parent has no knowledge of\nany claim, or the basis for any claim, against Parent or any of its subsidiaries\nfor injury to person or property of employees or any third parties suffered as a\nresult of the sale of any product or performance of any service by Parent or any\nof its  subsidiaries,  including  claims  arising out of the defective or unsafe\nnature of its products or services,  which claim would,  individually  or in the\naggregate, be reasonably expected to have a Material Adverse Effect on Parent.\n\n(b) To the knowledge of Parent, all goods and services designed, manufactured or\nsold by Parent or any of its  subsidiaries  comply with all laws,  requirements,\nspecifications, rules and regulations related to airworthiness of all applicable\nGovernmental  Entities and none of such products or services contain any defects\nin  manufacturing,  design or  performance  or other defect  which  renders such\nproducts  or   services  or  any   component   thereof   defective,   deficient,\nnonconforming  or  unsuitable  for their  intended use except to the extent that\nsuch failures to comply or defects would not,  individually or in the aggregate,\nhave a Material  Adverse  Effect on Parent.  There is no publicly  and  formally\nannounced rule or regulation by any Governmental  Entity of the United States or\nany state  thereof  that could  reasonably  be  expected  to affect the  various\nairworthiness approvals,  licenses,  permits or certifications applicable to the\ngoods, services, assets, facilities or operations of Parent and its subsidiaries\nexcept to the extent that such rules or regulations  would not,  individually or\nin the aggregate, have a Material Adverse Effect on Parent.\n\n\n\n                                      - 17 -\n\n\n\n\n\nSection 4.12  Environment.  (a) As used herein,  the term  \"Environmental  Laws\"\nmeans all  applicable  federal,  state,  local or  foreign  laws and  common law\nrelating to  pollution  or  protection  of health,  safety,  or the  environment\n(including  pollution or protection of ambient air, surface water,  groundwater,\nland surface,  subsurface strata,  natural resources,  humans and other life and\necosystems),  including  laws  relating to  emissions,  discharges,  releases or\nthreatened  releases  of  chemicals,  pollutants,   contaminants,  or  toxic  or\nhazardous  substances or wastes into the environment,  or otherwise  relating to\nthe manufacture,  import,  processing,  distribution,  use, treatment,  storage,\ndisposal, transport or handling of chemicals, pollutants, contaminants, or toxic\nor hazardous  substances or wastes  (including the  Comprehensive  Environmental\nResponse,  Compensation,  and  Liability Act of 1980,  as amended  (CERCLA),  42\nU.S.C.  ss.ss.  9601 et seq.,  the Resource  Conservation  and Recovery  Act, as\namended (RCRA), 42 U.S.C. ss.ss. 6901 et seq., the Clean Air Act, as amended, 42\nU.S.C. ss.ss. 7401 et seq., the Federal Water Pollution Control Act, as amended,\n33 U.S.C.  ss.ss. 1251 et seq., and the Toxic Substances Control Act, as amended\n(TSCA),   15  U.S.C.   ss.ss.  2601  et  seq.),  as  well  as  all  regulations,\nrequirements,  authorizations,  codes,  standards,  demands  or demand  letters,\ninjunctions,  judgments,  licenses,  notices or notice letters, orders, decrees,\npermits, or plans issued, entered, promulgated or approved thereunder.\n\n(b) To the  knowledge of Parent,  except as disclosed  in the  Previously  Filed\nParent  SEC  Reports,   there  are,  with  respect  to  Parent  or  any  of  its\nsubsidiaries,  no past or present violations of Environmental  Laws, releases or\nthreatened  releases  of  any  material  into  the  environment  or  contractual\nobligations which may reasonably be expected to give rise to any liability under\nany Environmental Laws and which would, individually or in the aggregate, have a\nMaterial Adverse Effect on Parent.\n\nSection 4.13 Accounting;  Tax Matters. Neither Parent nor, to its knowledge, any\nof its  affiliates,  has,  through the date hereof,  taken or agreed to take any\naction  nor do they  have  any  knowledge  of any fact or  circumstance  that is\nreasonably  likely to  prevent  (i)  Parent  from  accounting  for the  business\ncombination to be effected by the Merger as a \"pooling of interests\" or (ii) the\nMerger from  qualifying  for federal  income tax purposes as a  \"reorganization\"\nwithin the meaning of Section 368 (a) of the Code.\n\nSection 4.14 Parent Action.  The Board of Directors of Parent (at a meeting duly\ncalled and held) has by the requisite vote of directors  determined to recommend\nthe  approval of the Stock  Issuance  Proposal  by the holders of Parent  Common\nStock  and  directed  that  the  Stock   Issuance   Proposal  be  submitted  for\nconsideration  by Parent's  shareholders  entitled to vote thereon at the Parent\nMeeting.\n\n         Section 4.15 Lack of Ownership of Company Common Stock.  Neither Parent\nnor any of its  subsidiaries  owns any shares of Company  Common  Stock or other\nsecurities  convertible  into shares of Company  Common Stock  (exclusive of any\nshares owned by any Parent Benefit Plan).\n\n\n                                      - 18 -\n\n\n\n\n\nSection 4.16 Financial  Advisor.  Except for Morgan Stanley &amp; Co.  Incorporated,\nfinancial advisor to Parent, no broker,  finder or investment banker is entitled\nto any  brokerage,  finder's or other fee or commission  in connection  with the\nMerger or the  transactions  contemplated  by this Merger  Agreement  based upon\narrangements  made by or on behalf  of  Parent,  and the fees and other  amounts\npayable to Morgan Stanley &amp; Co.  Incorporated  as  contemplated  by this Section\n4.16 will be as provided in that certain  letter  agreement,  dated  October 22,\n1998, from Morgan Stanley &amp; Co. Incorporated to Parent.\n\nSection 4.17 Fairness Opinion. Parent has received the opinion of Morgan Stanley\n&amp; Co.  Incorporated,  financial advisor to Parent, dated the date hereof, to the\neffect that, as of the date hereof,  the Exchange  Ratio  pursuant to the Merger\nAgreement is fair from a financial point of view to Parent.\n\n                                  ARTICLE IV-A\n\n                 REPRESENTATIONS AND WARRANTIES RELATING TO SUB\n\nParent and Sub,  jointly and severally,  represent and warrant to the Company as\nfollows:\n\nSection 4A.1 Organization. Sub is a corporation duly organized, validly existing\nand in good standing under the laws of the Commonwealth of Pennsylvania. Sub has\nnot engaged in any business (other than certain organizational matters) since it\nwas incorporated.\n\nSection 4A.2  Capitalization.  The  authorized  capital stock of Sub consists of\n1,000 shares of common stock, par value $1 per share,  1,000 shares of which are\nvalidly issued and outstanding,  fully paid and  nonassessable  and are owned by\nParent free and clear of all liens, claims and encumbrances.\n\nSection 4A.3 Authority Relative to this Merger Agreement.  Sub has the corporate\npower to enter  into this  Merger  Agreement  and to carry  out its  obligations\nhereunder.  The  execution  and  delivery  of  this  Merger  Agreement  and  the\nconsummation of the transactions  contemplated  hereby have been duly authorized\nby  Sub's  Board  of  Directors  and sole  shareholder,  and no other  corporate\nproceedings on the part of Sub are necessary to authorize this Merger  Agreement\nand the  transactions  contemplated  hereby.  Sub is not subject to or obligated\nunder (i) any charter or by-law provision or (ii) any provision of any indenture\nor other loan document or other contract,  license,  franchise,  permit,  order,\ndecree, concession,  lease, instrument,  judgment, statute, law, ordinance, rule\nor  regulation  applicable to Sub or its  properties  or assets,  which would be\nbreached or violated,  or under which there would arise a right of  termination,\ncancellation  or  acceleration  of any  obligation  or the  loss  of a  material\nbenefit,  by its executing and carrying out this Merger Agreement other than, in\nthe case of clause  (ii) only,  (x) the Parent  Required  Consents  and (y) such\nbreaches,   violations,   defaults,   rights  of   termination,   cancellations,\naccelerations or losses of a material  benefit which would not,  individually or\nin the  aggregate,  have a Material  Adverse  Effect on  Parent.  Except for the\nParent  Required  Consents,  no filing or registration  with, or  authorization,\nconsent or approval of, any  Governmental  Entity is  necessary  for, nor is any\nauthorization,  consent,  or approval of any Governmental  Entity required to be\nobtained by Sub for, the  consummation by Sub of the Merger or the  transactions\ncontemplated by this Merger Agreement,  except for such filings,  registrations,\nauthorizations,  consents or  approvals,  the failure of which to obtain or make\n\n\n\n                                      - 19 -\n\n\n\n\nwould not,  individually or in the aggregate,  have a Material Adverse Effect on\nParent; provided that neither Parent nor Sub make any representation or warranty\nwith  respect  to  such  of the  foregoing  as are  required  by  reason  of the\nregulatory   status  of  the  Company  or  any  of  its  subsidiaries  or  facts\nspecifically  pertaining to them. This Merger Agreement  constitutes a valid and\nbinding obligation of Sub enforceable in accordance with its terms except as the\nsame  may  be  limited  by  bankruptcy,   insolvency,   fraudulent   conveyance,\nreorganization,  moratorium  and other similar laws relating to or affecting the\nenforcement of creditors'  rights  generally,  by general  equitable  principles\n(regardless of whether enforceability is considered in a proceeding in equity or\nat law) and by an implied covenant of good faith and fair dealing.\n\n                                    ARTICLE V\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\nThe  Company  represents  and  warrants  to  Parent,  except  as set  forth in a\ndisclosure schedule delivered by the Company concurrently herewith (the \"Company\nDisclosure Schedule\"), as follows:\n\nSection 5.1  Organization and  Qualification.  The Company is a corporation duly\norganized,  validly  existing  and  in  good  standing  under  the  laws  of the\nCommonwealth  of  Pennsylvania  and has the  corporate  power  to  carry  on its\nbusiness as it is now being conducted or currently proposed to be conducted. The\nCompany is duly  qualified as a foreign  corporation  to do business,  and is in\ngood standing,  in each jurisdiction where the character of its properties owned\nor held under  lease or the nature of its  activities  makes such  qualification\nnecessary,  except where  failure to be so  qualified  would not have a Material\nAdverse  Effect on the Company.  Complete and correct  copies of the Amended and\nRestated  Articles of  Incorporation  and Amended  and  Restated  By-Laws of the\nCompany as in effect on the date hereof are  included in the Company SEC Reports\n(as defined in Section 5.5 below).\n\nSection 5.2 Capitalization. The authorized capital stock of the Company consists\nof 100,000,000  shares of Company Common Stock and 2,500,000 shares of Preferred\nStock, par value $.01 per share (\"Company  Preferred Stock\"). As of November 20,\n1998,  63,068,535 shares of Company Common Stock (excluding 25,000,000 shares of\nCompany  Common Stock held by a subsidiary of the Company)  were validly  issued\nand  outstanding,  fully  paid and  nonassessable,  7,526,960  shares of Company\nCommon Stock were held in treasury,  no shares of Company  Preferred  Stock have\nbeen issued,  and there have been no material  changes in such numbers of shares\nthrough the date hereof.  As of November 20, 1998,  except for (x) Company Stock\nOptions granted under the Company Common Stock Plans to acquire 5,502,000 shares\nof Company  Common  Stock,  (y) pursuant to the  conversion  terms of the 5 1\/4%\nConvertible  Preferred  Securities,  liquidation  amount $50 per security,  Term\nIncome  Deferrable  Equity  Securities  (TIDES)SM of Coltec  Capital  Trust (the\n\"Trust Preferred  Securities\")  and of the Company's 5 1\/4%  Convertible  Junior\nSubordinated  Deferrable  Interest  Debentures due 2028,  there were no options,\nwarrants,   calls  or  other  rights,   agreements  or  commitments  outstanding\nobligating the Company to issue,  deliver or sell shares of its capital stock or\ndebt  securities,  or obligating the Company to grant,  extend or enter into any\nsuch option, warrant, call or other such right, agreement or commitment.  Except\n\n\n\n                                      - 20 -\n\n\n\n\n\n\nfor the  issuance of shares of Company  Common Stock  pursuant to Company  Stock\nOptions and as provided in the Company Stock Option Agreement, during the period\nfrom  November  20, 1998 through the date  hereof,  no shares of Company  Common\nStock or Company  Preferred  Stock  have been  issued  and the  Company  has not\nentered  into  any  options,  warrants,  calls or other  rights,  agreements  or\ncommitments  obligating  the  Company to issue,  deliver  or sell  shares of its\ncapital stock or debt securities,  or obligating the Company to grant, extend or\nenter into any such  option,  warrant,  call or other such right,  agreement  or\ncommitment.\n\nSection  5.3  Subsidiaries.  Each  Significant  Subsidiary  of the  Company is a\ncorporation duly organized, validly existing and in good standing under the laws\nof its jurisdiction of incorporation and has the corporate power to carry on its\nbusiness as it is now being  conducted  or currently  proposed to be  conducted.\nEach  Significant  Subsidiary  of the  Company  is duly  qualified  as a foreign\ncorporation to do business,  and is in good standing, in each jurisdiction where\nthe character of its  properties  owned or held under lease or the nature of its\nactivities  makes such  qualification  necessary,  except where failure to be so\nqualified  would not have a  Material  Adverse  Effect on the  Company.  All the\noutstanding  shares  of  capital  stock of each  Significant  Subsidiary  of the\nCompany are validly issued,  fully paid and nonassessable and those owned by the\nCompany or by a subsidiary of the Company are owned free and clear of any liens,\nclaims or encumbrances.  There are no existing options, warrants, calls or other\nrights,  agreements or  commitments  of any character  relating to the issued or\nunissued   capital  stock  or  other   securities  of  any  of  the  Significant\nSubsidiaries of the Company.  Except as set forth in the Company's Annual Report\non Form 10-K for the year ended December 31, 1997, the Company does not directly\nor  indirectly  own any interest in any other  corporation,  partnership,  joint\nventure or other business association or entity which is material to the Company\nand its subsidiaries taken as a whole.\n\nSection 5.4  Authority  Relative to this  Merger  Agreement  and the Cross Stock\nOption Agreements. The Company has the corporate power to enter into this Merger\nAgreement and the Cross Stock Option  Agreements  and,  subject to the requisite\napproval of this  Merger  Agreement by the holders of Company  Common Stock,  to\ncarry out its obligations  hereunder and thereunder.  The execution and delivery\nof  this  Merger  Agreement  and  the  Cross  Stock  Option  Agreements  and the\nconsummation of the transactions  contemplated hereby and thereby have been duly\nauthorized by the Company's  Board of Directors.  This Merger  Agreement and the\nCross Stock Option Agreements each constitute a valid and binding  obligation of\nthe Company  enforceable in accordance  with its terms except as the same may be\nlimited  by  bankruptcy,  insolvency,  fraudulent  conveyance,   reorganization,\nmoratorium,  and other similar laws relating to or affecting the  enforcement of\ncreditors' rights  generally,  by general  equitable  principles  (regardless of\nwhether enforceability is considered in a proceeding in equity or at law) and by\nan implied  covenant of good faith and fair  dealing.  Except for the receipt of\nthe  affirmative  vote of a  majority  of the  votes  cast  by all  shareholders\nentitled  to vote  thereon  in the  case  of this  Merger  Agreement,  no  other\ncorporate proceedings on the part of the Company are necessary to authorize this\nMerger  Agreement  or the Cross Stock  Option  Agreements  and the  transactions\ncontemplated hereby or thereby. The Company is not subject to or obligated under\n(i) any charter or by-law  provision or (ii) any  provision of any  indenture or\nother loan  document  or other  contract,  license,  franchise,  permit,  order,\ndecree, concession,  lease, instrument,  judgment, statute, law, ordinance, rule\n\n\n\n                                      - 21 -\n\n\n\n\n\nor  regulation  applicable  to the Company or any of its  subsidiaries  or their\nrespective  properties or assets, which would be breached or violated,  or under\nwhich  there  would be a default  (with or without  notice or lapse of time,  or\nboth), or under which there would arise a right of termination,  cancellation or\nacceleration  of any  obligation  or the  loss  of a  material  benefit,  by its\nexecuting  and  carrying  out this Merger  Agreement  or the Cross Stock  Option\nAgreements,  other  than,  in the case of  clause  (ii)  only,  (x) the laws and\nregulations referred to in the next sentence and (y) such breaches,  violations,\ndefaults,  rights of termination,  cancellations,  accelerations  or losses of a\nmaterial  benefit  which would not,  individually  or in the  aggregate,  have a\nMaterial  Adverse  Effect on the  Company.  Except as  referred  to herein or in\nconnection,  or  in  compliance,  with  the  provisions  of  the  HSR  Act,  the\nCompetition  Act  (Canada),  the  Securities  Act, the  Exchange  Act, and other\ngovernmental  approvals  required  under  the  applicable  laws  of any  foreign\njurisdiction  and Applicable  State Laws  (collectively,  the \"Company  Required\nConsents\"),  no filing by the Company or  registration  by the Company  with any\nGovernmental  Entity is  necessary  for,  nor is any  authorization,  consent or\napproval of any Governmental  Entity required to be obtained by the Company for,\nthe  consummation of the Merger or the other  transactions  contemplated by this\nMerger  Agreement  or by the  Cross  Stock  Option  Agreements  except  for such\nfilings,  registrations,  authorizations,  consents or approvals, the failure of\nwhich to obtain or make  would not,  individually  or in the  aggregate,  have a\nMaterial  Adverse  Effect on the  Company;  provided  that the Company  makes no\nrepresentation or warranty with respect to such of the foregoing as are required\nby reason of the regulatory status of Parent or any of its subsidiaries or facts\nspecifically pertaining to them.\n\nSection 5.5 Reports and  Financial  Statements.  Since  December 31,  1996,  the\nCompany  has timely  filed all  registration  statements,  prospectuses,  forms,\nreports and documents  that the Company was required to file with the Commission\n(collectively,  the \"Company SEC Reports\").  As of their  respective  dates, the\nCompany SEC Reports  complied in all material  respects with the requirements of\nthe  Securities  Act or the Exchange  Act, as the case may be, and the rules and\nregulations of the Commission thereunder applicable to such Company SEC Reports.\nAs of their respective dates, the Company SEC Reports did not contain any untrue\nstatement  of a material  fact or omit to state a material  fact  required to be\nstated  therein or necessary  to make the  statements  therein,  in light of the\ncircumstances   under  which  they  were  made,  not  misleading.   The  audited\nconsolidated  financial statements and unaudited interim financial statements of\nthe  Company  included  in the  Company  SEC  Reports  comply  as to form in all\nmaterial respects with applicable accounting requirements and with the published\nrules and regulations of the Commission with respect thereto,  and the financial\nstatements  included in the Company SEC Reports have been prepared in accordance\nwith GAAP applied on a consistent  basis (except as may be indicated  therein or\nin the notes  thereto  or, in the case of  unaudited  financial  statements,  as\npermitted by Form 10-Q under the Exchange Act) and fairly  present the financial\nposition  of the Company and its  subsidiaries  as at the dates  thereof and the\nresults of their  operations  and changes in financial  position for the periods\nthen ended, subject, in the case of unaudited interim financial  statements,  to\nnormal year-end audit adjustments and any other adjustments described therein.\n\n\n\n                                      - 22 -\n\n\n\n\n\nSection 5.6 Absence of Certain  Changes or Events.  Except as  disclosed  in the\nCompany  SEC  Reports  filed  prior  to  the  date  of  this  Merger   Agreement\n(\"Previously  Filed Company SEC Reports\"),  since September 30, 1998,  there has\nnot been (i) any event, condition,  transaction,  commitment,  dispute  or other\ncircumstance  (financial or  otherwise) of any character  (whether or not in the\nordinary course of business), which, individually or in the aggregate, has had a\nMaterial  Adverse Effect on the Company;  (ii) any damage,  destruction or loss,\nwhether or not covered by insurance,  which,  individually  or in the aggregate,\nhas had a Material Adverse Effect on the Company; (iii) any declaration, setting\naside or payment of any dividend or other  distribution  (whether in cash, stock\nor property) with respect to the capital stock of the Company; or (iv) any entry\ninto any legally binding  commitment or transaction  material to the Company and\nits subsidiaries  taken as a whole (including any material borrowing or material\nsale of  assets), other  than this  Merger  Agreement,  the Cross  Stock  Option\nAgreements and the transactions contemplated hereby and thereby.\n\nSection 5.7 Litigation.  Except as disclosed in the Previously Filed Company SEC\nReports,  there is no suit, action or proceeding pending or, to the knowledge of\nthe  Company,  threatened  against  or  affecting  the  Company  or  any  of its\nsubsidiaries  which  would,  individually  or in the  aggregate,  be  reasonably\nexpected  to have a Material  Adverse  Effect on the  Company,  nor is there any\njudgment,  decree,  injunction,  rule or order  of any  Governmental  Entity  or\narbitrator  outstanding  against  the Company or any of its  subsidiaries  which\nwould,  individually or in the aggregate,  have a Material Adverse Effect on the\nCompany.\n\nSection 5.8  Employee  Benefit  Plans.  Section  5.8 of the  Company  Disclosure\nSchedule lists (i) each employee pension benefit plan as defined in Section 3(2)\nof the Employee  Retirement Income Security Act of 1974, as amended (\"ERISA\") (a\n\"Company  Pension Plan\");  (ii) each material  employee  welfare benefit plan as\ndefined in Section 3(1) of ERISA (a \"Company Welfare Plan\"); (iii) each material\nemployment agreement and each material supplemental  executive compensation plan\n(a \"Company Executive Benefit Arrangement\"); and (iv) each multiemployer plan as\ndefined in Section  3(37) of ERISA  which is  maintained  by the  Company or any\nsubsidiary,  or trade or business that is part of the same controlled  group, or\nunder common control with, or part of an affiliated  service group that includes\nthe Company within the meaning of Sections 414(b),  (c), (m), or (o) of the Code\n(a \"Company ERISA  Affiliate\")  for directors,  former  directors,  employees or\nformer  employees,  or to which the Company or any Company ERISA Affiliate makes\ncontributions with respect to directors, former directors,  employees, or former\nemployees.  The Company has made available to Parent correct and complete copies\nof the plan documents and material employment  agreements (or in the case of any\nunwritten Company Executive Benefit Arrangement, a description thereof), summary\nplan  descriptions,   participant   informational   material,  the  most  recent\ndetermination  letter received from the Internal Revenue  Service,  the two most\nrecent  Form 5500  annual  reports  (including  all  schedules  and  attachments\nthereto),  the two most recent  audited  financial  statements  for any plan for\nwhich audited financial  statements are required,  the two most recent actuarial\nreports for any plan for which  actuarial  reports have been  prepared,  and all\nrelated trust  agreements,  insurance  contracts  and other  funding  agreements\nrelating  to such  Company  Pension  Plans,  Company  Welfare  Plans and Company\nExecutive Benefit Arrangements (together, \"Company Benefit Plans\").\n\n\n\n                                      - 23 -\n\n\n\n\n\nSection 5.9 Plan Compliance.  Each Company Benefit Plan has been administered in\ncompliance  with its terms and any applicable  provision of ERISA,  the Code and\nany other  applicable law except for any instances of  noncompliance  that would\nnot,  individually  or in the aggregate,  have a Material  Adverse Effect on the\nCompany. Each Company Pension Plan which is intended to meet the requirements of\nSection  401(a) of the Code has been  determined  within the remedial  amendment\nperiod under Section  401(b) of the Code by the Internal  Revenue  Service to be\nqualified  under said Section  401(a) and each trust  maintained in  conjunction\nwith any such Company Pension Plan has been  determined by the Internal  Revenue\nService to be exempt  from  taxation  under  Section  501(a) of the Code and the\nCompany has not  amended any such  Company  Pension  Plan or related  trust in a\nmanner that would result in the  disqualification  thereof.  No Company  Pension\nPlan which is subject to the  provisions of Section 412 of the Code has incurred\nan  accumulated  funding  deficiency.  Neither the Company nor any Company ERISA\nAffiliate has any unsatisfied liability under Title IV of ERISA, or knows of any\nfact which would give rise to  liability  under Title IV of ERISA,  in an amount\nthat would,  individually or in the aggregate, have a Material Adverse Effect on\nthe Company. No reportable event, within the meaning of Section 4043(c) of ERISA\nfor which the  30-day  notice  requirement  of ERISA  has not been  waived,  has\noccurred with respect to any Company  Pension  Plan.  Except as set forth in the\nPreviously Filed Company SEC Reports, there are no pending, filed, or threatened\ndisputes, lawsuits, claims (other than routine benefit claims),  investigations,\nor audits by any person or  Governmental  Entity  with  respect  to any  Company\nBenefit  Plan  that  would,  individually  or in the  aggregate,  be  reasonably\nexpected  to have a Material  Adverse  Effect on the  Company  and no  condition\nexists which could  reasonably be expected to subject the Company or any Company\nERISA  Affiliate to any  liability  (other than for routine  benefit  claims and\nother than  pursuant to the  current  terms of any  Company  Benefit  Plan) with\nrespect to any Company Benefit Plan in an amount that would,  individually or in\nthe aggregate, have a Material Adverse Effect on the Company.\n\nSection 5.10 Takeover Provisions Inapplicable.  As of the date hereof and at all\ntimes thereafter, until and including the Effective Date, Subchapters D (Section\n2538),  E, F, G, H, I and J of  Chapter  25 of the  PBCL,  are,  and  shall  be,\ninapplicable  to the Merger and the  transactions  contemplated  by this  Merger\nAgreement.\n\nSection  5.11  Compliance  with  Applicable   Laws.  (i)  The  Company  and  its\nsubsidiaries hold all material permits, licenses, variances,  exemptions, orders\nand approvals (the \"Company Permits\") of all Governmental  Entities necessary in\nall material respects for the operation of the businesses of the Company and its\nsubsidiaries;  (ii) the Company and its  subsidiaries are in compliance with the\nterms of the Company Permits in all material respects; (iii) except as disclosed\nin the Previously  Filed Company SEC Reports,  the businesses of the Company and\nits subsidiaries  are not being conducted in violation of any law,  ordinance or\nregulation of any Governmental Entity except for such violations that would not,\nindividually or in the aggregate, have a Material Adverse Effect on the Company;\nand (iv) no investigation  or review by any Governmental  Entity with respect to\nthe Company or any of its  subsidiaries is pending,  or, to the knowledge of the\nCompany,  threatened,  nor has any Governmental Entity indicated an intention to\nconduct  the same  except for such  investigations  or  reviews  that would not,\nindividually  or in the  aggregate,  be  reasonably  expected to have a Material\nAdverse  Effect on the Company.  No  representation  or warranty is made in this\nSection 5.11 with respect to employee benefit plans,  Taxes,  product  liability\nand  airworthiness  or  Environmental  Laws,  which  matters  are the subject of\nSections 5.8 and 5.9, 5.12, 5.15 and 5.16, respectively.\n\n\n\n                                      - 24 -\n\n\n\n\n\nSection 5.12      Taxes.\n\n         (a) The  Company  and its  subsidiaries  have (i) filed or caused to be\nfiled all Tax Returns  required to be filed by any  jurisdiction to which any of\nthem is subject,  (ii) paid in full on a timely  basis all Taxes due and claimed\nto be due by each such  jurisdiction,  and (iii) duly  collected or withheld and\ntimely paid all Taxes  required  to be  collected  from  others or deducted  and\nwithheld from any amounts paid to employees or others,  except to the extent any\nfailure to file,  pay or withhold would not,  individually  or in the aggregate,\nhave a Material Adverse Effect on the Company. Such Tax Returns are accurate and\ncomplete in all material respects and accurately reflect the Tax liabilities for\nsuch  periods,  except to the extent any  inaccuracies  in any such Tax  Returns\nwould not,  individually or in the aggregate,  have a Material Adverse Effect on\nthe Company. No Tax deficiency or penalty has been asserted or threatened by any\nsuch jurisdiction against the Company or any of its subsidiaries,  except to the\nextent any such  deficiencies  or penalties,  individually  or in the aggregate,\nhave not had and would not have a Material Adverse Effect on the Company.\n\n(b) To the  knowledge  of the  Company,  there is no audit of any  material  Tax\nReturn  of the  Company  or any of its  subsidiaries  in  progress,  there is no\nthreatened  action,  suit,  proceeding,  investigation,  audit,  or claim for or\nrelating to  material  Taxes,  there are no matters  under  discussion  with any\nGovernmental  Entities  with  respect to material  Taxes that could result in an\nadditional  amount of material  Taxes being payable by the Company or any of its\nsubsidiaries,  and no Governmental Entity has indicated that it intends to audit\nany material Tax Return of the Company or any of its subsidiaries.\n\n         (c) Neither the Company nor any of its  subsidiaries (i) has waived any\nstatute  of  limitations  with  respect  to Tax  obligations  or  agreed  to any\nextension of time with respect to a Tax assessment or deficiency,  except to the\nextent any such Tax obligation, assessment or deficiency would not, individually\nor in the aggregate,  have a Material  Adverse Effect on the Company,  (ii) is a\nparty to any Tax allocation or sharing agreement,  (iii) has been a member of an\naffiliated  group (other than the  affiliated  group of which the Company is the\ncommon parent) filing a  consolidated  federal income tax return,  nor is liable\nfor material Taxes of an affiliated  group (other than the  affiliated  group of\nwhich the Company is the common  parent) under Section  1.1502-6 of the Treasury\nRegulations  (or any  similar  provision  of  state,  local,  or  foreign  law),\nincluding as a transferee or successor,  by contract,  or otherwise,  or (iv) is\ncurrently the beneficiary of any extensions of time within which to file any Tax\nReturn.\n\n                  (d)  The  earliest  taxable  period  of the  Company  and  its\nsubsidiaries for which the statute of limitations for federal,  state, local and\nforeign Tax  Returns  filed by the  Company is still open is the  calendar  year\n1987.\n\n         (e) Neither the Company nor any of its  subsidiaries  has been a United\nStates real property holding corporation within the meaning of Section 897(c)(2)\nof the Code during the applicable  period specified in Section  897(c)(1)(A)(ii)\nof the Code.\n\n\n\n                                      - 25 -\n\n\n\n\n\n         (f) Neither the Company nor any of its  subsidiaries  (i) has agreed or\nconsented at any time under Section 341(f) of the Code to have the provisions of\nSection  341(f)(2) of the Code apply to any disposition of any assets,  (ii) has\nagreed, or is required,  to make any adjustment under Section 481(a) of the Code\nby reason of a change in  accounting  method or  otherwise  that will affect the\nliability  of the  Company  or its  subsidiaries  for  Taxes,  (iii) has made an\nelection, or is required, to treat any asset as owned by another person pursuant\nto the provisions of Section  168(f) of the Code or as tax-exempt  bond financed\nproperty or  tax-exempt  use  property  within the meaning of Section 168 of the\nCode,  (iv) has made any of the foregoing  elections or is required to apply any\nof the foregoing rules under any comparable state or local tax provision, or (v)\nowns any material assets that were financed directly or indirectly with, or that\ndirectly or indirectly  secure,  debt the interest on which is tax-exempt  under\nSection 103(a) of the Code.\n\n         (g)  The  transaction  contemplated  herein,  either  by  itself  or in\nconjunction with any other transaction that the Company may have entered into or\nagreed to, will not give rise to any federal income tax liability  under section\n355(e) of the Code for which the Company may in any way be held liable.\n\n         (h) The Company is not a party to any \"Gain Recognition  Agreements\" as\nsuch term is used in the Treasury  Regulations  promulgated under Section 367 of\nthe Code.\n\n         (i) Neither the Company nor any of its  subsidiaries has made or become\nobligated  to  make,  nor  will  Parent,   Sub,  the  Company,  or  any  of  its\nsubsidiaries,   as  a  result  of  any  event  connected  with  any  transaction\ncontemplated  herein and\/or any  termination  of employment  related to any such\ntransaction,  make or become  obligated to make (with respect to any employee of\nthe Company or any of its  subsidiaries),  any \"excess  parachute  payment\",  as\ndefined in Section 280G of the Code to any employee of the Company or any of its\nsubsidiaries.\n\n         (j) There are no material liens for Taxes (other than for current Taxes\nthat are not yet due and payable or are being  contested in good faith) upon the\nassets of the Company or any of the subsidiaries.\n\n         (k) The  Company has no excess  loss  account,  as such term is used in\nSection 1.1502-19 of the Treasury Regulations,  with respect to the stock of any\nsubsidiary.\n\n(l) The unpaid Taxes of the Company and its subsidiaries did not, as of the most\nrecent  fiscal  month end prior to the date  hereof,  exceed the reserve for Tax\nLiability (not  including any reserve for deferred Taxes  established to reflect\ntiming  differences  between  book and Tax  income) set forth on the face of the\nmost recent  balance sheet (other than in any notes  thereto) that has been made\navailable to Parent.\n\nSection 5.13 Certain Contracts. Except as filed as an exhibit to the Company SEC\nReports,  neither the Company nor any of its subsidiaries is a party to or bound\nby any contract,  arrangement,  commitment or understanding  (whether written or\noral) (i) which, as of the date hereof, is a \"material  contract\" (as defined in\nItem  601(b)(10) of Regulation S-K of the Commission) or has been filed with the\nCommission to be performed after the date of this Merger Agreement or (ii) which\nmaterially restricts the conduct of any line of business of the Company.\n\n\n\n                                      - 26 -\n\n\n\n\n\nSection 5.14 Patents, Trademarks, Etc. The Company and its subsidiaries have all\npatents,  trademarks,  trade names, service marks, trade secrets, copyrights and\nlicenses  and  other  proprietary  intellectual  property  rights  and  licenses\n(\"Company  Intellectual  Property\")  as are  necessary  in  connection  with the\nbusinesses  of the Company and its  subsidiaries,  and the Company does not have\nany  knowledge  of any  conflict  between  the  rights  of the  Company  and its\nsubsidiaries  and the rights of others  therein,  except to the extent  that the\nfailure of the Company to have,  or any  conflicts  with respect to, the Company\nIntellectual  Property  would  not,  individually  or in the  aggregate,  have a\nMaterial Adverse Effect on the Company.\n\nSection 5.15 Product Liability;  Airworthiness. (a) The Company has no knowledge\nof any claim,  or the basis for any  claim,  against  the  Company or any of its\nsubsidiaries  for injury to person or property of employees or any third parties\nsuffered as a result of the sale of any product or performance of any service by\nthe  Company or any of its  subsidiaries,  including  claims  arising out of the\ndefective  or unsafe  nature of its  products  or services, which  claim  would,\nindividually  or in the  aggregate,  be  reasonably  expected to have a Material\nAdverse Effect on the Company.\n\n         (b) To the knowledge of the Company,  all goods and services  designed,\nmanufactured or sold by the Company or any of its  subsidiaries  comply with all\nlaws,   requirements,   specifications,   rules  and   regulations   related  to\nairworthiness of all applicable  Governmental Entities and none of such products\nor services contain any defects in manufacturing, design or performance or other\ndefect  which  renders  such  products  or  services  or any  component  thereof\ndefective, deficient, nonconforming or unsuitable for their intended use, except\nto the extent that such failure to comply or defects would not,  individually or\nin the aggregate,  have a Material  Adverse  Effect on the Company.  There is no\npublicly and formally announced rule or regulation by any Governmental Entity of\nthe United  States or any state  thereof  that could  reasonably  be expected to\naffect the various airworthiness approvals,  licenses, permits or certifications\napplicable  to the goods,  services,  assets,  facilities  or  operations of the\nCompany  and  its  subsidiaries,  except  to  the  extent  that  such  rules  or\nregulations would not, individually or in the aggregate, have a Material Adverse\nEffect on the Company.\n\nSection 5.16 Environment.  To the knowledge of the Company,  except as disclosed\nin the  Previously  Filed  Company SEC Reports,  there are,  with respect to the\nCompany  or  any  of  its  subsidiaries,   no  past  or  present  violations  of\nEnvironmental  Laws,  releases or  threatened  releases of any material into the\nenvironment or contractual  obligations which may reasonably be expected to give\nrise to any liability under any Environmental Laws and which would, individually\nor in the aggregate, have a Material Adverse Effect on the Company.\n\nSection 5.17 Accounting; Tax Matters. Neither the Company nor, to its knowledge,\nany of its affiliates, has, through the date hereof, taken or agreed to take any\naction nor do they have knowledge of any fact or circumstance that is reasonably\nlikely to prevent (i) Parent from accounting for the business  combination to be\neffected  by the  Merger  as a  \"pooling  of  interests,\"  or  (ii)  the  Merger\nqualifying  for federal  income tax  purposes as a  \"reorganization\"  within the\nmeaning of Section 368(a) of the Code.\n\n\n\n                                      - 27 -\n\n\n\n\n\nSection 5.18 Company Action. The Board of Directors of the Company (at a meeting\nduly called and held) has by the requisite vote of directors (a) determined that\nthe Merger is in the best  interests  of the Company and its  shareholders,  (b)\napproved this Merger Agreement in accordance with the provisions of Section 1922\nof the PBCL,  and (c)  determined  to  recommend  the  approval  of this  Merger\nAgreement and the Merger by the holders of the Company Common Stock.\n\nSection 5.19 Lack of Ownership of Parent Common  Stock.  Neither the Company nor\nany of its  subsidiaries  owns  any  shares  of  Parent  Common  Stock  or other\nsecurities  convertible  into shares of Parent  Common Stock  (exclusive  of any\nshares owned by any Company Benefit Plan).\n\nSection 5.20 Insurance Coverage. The Company believes that as of the date hereof\nit has adequate  insurance  coverage from solvent,  viable insurance carriers in\naccordance with current industry practices except where the failure to have such\ninsurance coverage would not, individually or in the aggregate,  have a Material\nAdverse Effect on the Company.\n\nSection 5.21 Year 2000.  Except as disclosed in the Previously Filed Company SEC\nReports,  the Company's products and information systems are Year 2000 Compliant\nexcept to the extent  that their  failure to be Year 2000  Compliant  would not,\nindividually or in the aggregate, have a Material Adverse Effect on the Company.\nFor purposes of this Merger  Agreement,  Year 2000 Compliant shall mean that the\nCompany's  products and information  systems  accurately  process date\/time data\n(including,  but not limited to,  calculating,  comparing and sequencing)  from,\ninto and between the twentieth and  twenty-first  centuries,  and the years 1999\nand 2000 and leap year calculations.\n\nSection  5.22  Financial   Advisor.   Except  for  Credit  Suisse  First  Boston\nCorporation,  no  broker,  finder  or  investment  banker  is  entitled  to  any\nbrokerage,  finder's or other fee or commission in connection with the Merger or\nthe transactions  contemplated by this Merger Agreement based upon  arrangements\nmade by or on behalf of the  Company,  and the fees and  commissions  payable to\nCredit Suisse First Boston Corporation as contemplated by this Section 5.22 will\nbe the amount set forth in that certain  letter,  dated November 11, 1998,  from\nCredit Suisse First Boston Corporation to the Company.\n\nSection 5.23  Fairness  Opinion.  The Company has received the opinion of Credit\nSuisse First Boston  Corporation,  financial  advisor to the Company,  dated the\ndate  hereof,  to the effect  that the  Exchange  Ratio is fair from a financial\npoint of view to the holders of shares of Company Common Stock.\n\n                                   ARTICLE VI\n                     CONDUCT OF BUSINESS PENDING THE MERGER\n\nSection 6.1 Conduct of Business by the Company Pending the Merger.  (a) Prior to\nthe  Effective  Date,  unless  Parent shall  otherwise  consent in writing (such\nconsent not to be unreasonably  withheld,  delayed or conditioned) and except as\n\n\n\n                                      - 28 -\n\n\n\n\nspecifically  provided herein (including  Section 6.1(b)) or as set forth in the\nCompany Disclosure Schedule,  from and after the date hereof, the Company shall,\nand shall cause its subsidiaries to, carry on their respective businesses in the\nusual,  regular and ordinary course in the same manner as heretofore  conducted,\nand  shall,  and shall  cause its  subsidiaries  to, use their  reasonable  best\nefforts to preserve intact their present business organizations,  keep available\nthe  services  of their  present  officers  and  employees  and  preserve  their\nrelationships with customers, suppliers and others having business dealings with\nthem to the end that their goodwill and ongoing  businesses  shall be unimpaired\nat the Effective Date. The Company shall,  and shall cause its  subsidiaries to,\nin the  ordinary  course of business (A) maintain  insurance  coverages  and its\nbooks, accounts and records in the usual manner consistent with prior practices;\n(B) comply with all material laws,  ordinances and  regulations of  Governmental\nEntities  applicable to the Company and its subsidiaries;  (C) maintain and keep\nits  properties  and  equipment in good  repair,  working  order and  condition,\nordinary wear and tear  excepted;  and (D) perform in all material  respects its\nobligations  under all  contracts and  commitments  to which it is a party or by\nwhich it is bound.\n\n         (b) Without  limiting the  generality of Section  6.1(a),  prior to the\nEffective Date,  unless Parent shall otherwise  consent in writing (such consent\nnot to be unreasonably withheld, delayed or conditioned) and except as set forth\nin the Company Disclosure Schedule, from and after the date hereof:\n\n(i) the  Company  shall not and  shall not  propose  to (A)  except as  required\npursuant to any  indenture,  loan documents or contract in effect as of the date\nhereof,  sell or pledge or agree to sell or pledge any capital stock owned by it\nin any of its  Significant  Subsidiaries  (unless already pledged as of the date\nhereof), (B) amend its Amended and Restated Articles of Incorporation or Amended\nand Restated By-Laws,  (C) split,  combine or reclassify its outstanding capital\nstock or issue or authorize or propose the issuance of any other  securities  in\nrespect  of, in lieu of or in  substitution  for shares of capital  stock of the\nCompany, or declare, set aside or pay any dividend or other distribution payable\nin cash,  stock or property,  or (D) except as required  pursuant to any Company\nBenefit Plan,  directly or indirectly  redeem,  purchase or otherwise acquire or\nagree to redeem,  purchase or  otherwise  acquire any shares of Company  capital\nstock;\n\n(ii) the Company shall not, nor shall it permit any of its  subsidiaries to, (A)\nother than pursuant to the exercise of Company Stock Options  outstanding on the\ndate hereof or otherwise  in  accordance  with the present  terms of any Company\nBenefit  Plan and except as permitted  by  Section  6.1(b)(iii)  or by the Cross\nStock Option Agreements,  issue, deliver or sell or agree to issue,  deliver  or\nsell any  additional  shares of, or rights of any kind to acquire any shares of,\nits capital stock of any class, or any option, rights or warrants to acquire, or\nsecurities convertible into, shares of capital stock (other than,  in each case,\nto the Company or direct or indirect  wholly-owned subsidiaries of the Company);\n(B) acquire, lease or dispose or  agree  to  acquire,  lease  or  dispose of any\ncapital  assets or any other  assets  other  than  in  the  ordinary  course  of\nbusiness,  (C) incur  additional  indebtedness or encumber  or grant a  security\ninterest  in any  asset or  enter  into  any  other  material transaction  other\n\n\n\n                                      - 29 -\n\n\n\n\nthan in each case in the  ordinary course of  business;  (D) acquire or agree to\nacquire by merging or consolidating with, or by purchasing a substantial  equity\ninterest  in,  or  by  any  other  manner,  any  business  or  any  corporation,\npartnership, association or other business organization or division thereof;  or\n(E) enter into any contract,  agreement,  commitment or arrangement with respect\nto any of the foregoing which is binding; \n\n(iii) the Company shall not, nor shall it permit any  of  its  subsidiaries  to,\nexcept  as  required  to  comply   with  applicable  law,  and  except  for  (w)\ncompensation  payments and changes or benefit adjustments  made in the  ordinary\ncourse   of  business (which  shall  include  (1)  normal  periodic  performance\nreviews  and  related  compensation  and benefit increases and (2) the provision\nof individual  Company Benefit Plans  consistent with past practice for promoted\nor newly hired officers and employees) and which do not involve the grant of any\nactual  or  phantom  equity  interests  in  the  Company, (x)  awards  under the\nCompany's 1994  Long-Term  Incentive Plan and CAP Plus Plan, in each case in the\nordinary  course of  business,  (y)  grants of  options  with respect to Company\nCommon  Stock  in  the  ordinary  course of business to newly-hired  or promoted\nofficers and employees and (z)  (following  notice  to Parent) grants of options\nwith respect to no more than 200,000  shares  of  Company  Common  Stock  in the\naggregate  in  the  ordinary  course  of  business, (A)(1)  adopt,  enter  into,\nterminate or (2) in  any way that would  materially increase the cost thereof to\nthe   Company  or  expand  the  applicability  of,  or  amend, any bonus, profit\nsharing,   compensation,   severance,   termination,  stock   option,   pension,\nretirement,  deferred   compensation,  employment  or   other   Company  Benefit\nPlan,  agreement, trust,  fund  or other  arrangement for the benefit or welfare\nof any  director, officer  or  current  or  former employee, (B) increase in any\nmanner  the compensation or fringe benefit of any director, officer or employee,\n(C) pay any benefit not provided  under any  existing  plan or arrangement,  (D)\ngrant any awards under any bonus,  incentive,  performance or other compensation\nplan  or  arrangement  or  Company  Benefit  Plan  (including the grant of stock\noptions, stock  appreciation  rights,  stock  based  or  stock  related  awards,\nperformance   units  or  restricted   stock,  or   the   removal   of   existing\nrestrictions in any benefit plans or agreements or awards made thereunder),  (E)\ntake any action to fund or in any other way secure the  payment of  compensation\nor benefits  under any  employee plan,  agreement,  contract  or  arrangement or\nCompany Benefit Plan other than in the ordinary  course  of business  consistent\nwith past  practice  or  as  required  under  the  present  terms of any Company\nBenefit Plan, or (F)  adopt,  enter  into,  amend  or  terminate  any  contract,\nagreement,  commitment  or  arrangement  to  do  any  of  the foregoing which is\nbinding;\n\n(iv) except as required by or in connection with the Trust Preferred Securities,\nthe Company shall not, nor shall it permit any of its  subsidiaries to, make any\ninvestments in non-investment  grade debt securities (other than  non-investment\ngrade debt securities issued by the Company or any of its subsidiaries);\n\n(v) the Company shall not, nor shall it permit any of its  subsidiaries to, take\nor cause to be taken any action,  whether  before or after the  Effective  Date,\nwhich would  disqualify  the Merger as a \"pooling of interests\"  for  accounting\npurposes or as a  \"reorganization\"  within the meaning of Section 368 (a) of the\nCode; and\n\n\n\n                                      - 30 -\n\n\n\n\n\n(vi) neither the Company, nor any subsidiary of the Company, shall make or amend\nany material Tax election,  agree to waive or extend any statute of limitations,\nor resolve or agree to resolve any audit or proceeding  relating to any material\nTax liability other than in the ordinary course of business consistent with past\npractice;  provided,  however,  that the Company and its  subsidiaries  shall be\npermitted to make any Tax election  and take any action in  connection  with the\nsettling of its and their federal tax liabilities for the 1992, 1993, 1994, 1995\nand 1996  tax  years so long as such  elections  or  actions  do not  result  in\naggregate  additional  Tax  liabilities to the Company and its  subsidiaries  in\nexcess  of  the  reserve  established   therefor  on  the  most  recent  audited\nconsolidated financial statements of the Company, and provided that any settling\nof such audit and liabilities shall require the consent of Parent, which consent\nshall not  unreasonably  be withheld.  The Company and its  subsidiaries  shall,\nprior to the Closing  Date,  terminate  all tax  allocation  agreements  and tax\nsharing  agreements  (if any) with  respect to the Company and its  subsidiaries\n(other than the Tax Sharing  Agreement  dated September 13, 1996, by and between\nthe Company,  Garrison Litigation Management Group, Ltd., and The Anchor Packing\nCompany) and shall ensure that such agreements are of no further force or effect\nas to the Company and its  subsidiaries  on and after the Closing Date and there\nshall be no further liability of the Company or its subsidiaries  under any such\nagreements.\n\n         Section 6.2.  Conduct of Business by Parent and Sub Pending the Merger.\n(a) Parent.  Prior to the Effective  Date,  unless the Company  shall  otherwise\nconsent in writing (such  consent not to be  unreasonably  withheld,  delayed or\nconditioned)  and except as specifically  provided herein including as set forth\nin the Parent Disclosure Schedule,  from and after the date hereof Parent shall,\nand shall cause its subsidiaries to, carry on their respective businesses in the\nusual,  regular and ordinary course in the same manner as heretofore  conducted,\nand  shall,  and shall  cause its  subsidiaries  to, use their  reasonable  best\nefforts to preserve intact their present business organizations,  keep available\nthe  services  of their  present  officers  and  employees  and  preserve  their\nrelationships with customers, suppliers and others having business dealings with\nthem to the end that their goodwill and ongoing  businesses  shall be unimpaired\nat the Effective Date.  Subject  to  Section 6.2(b),  the  foregoing  shall  not\nprevent  Parent   from   acquiring   or   agreeing   to  acquire  by  merging or\nconsolidating with, or by purchasing a substantial equity interest in, or by any\nother manner, any assets, business or any corporation,  partnership, association\nor  other  business   organization  or  division  thereof,  for  such  aggregate\nconsideration in cash, Parent Common Stock or a combination  thereof,  as Parent\nmay deem appropriate from time to time.\n\n         (b) Prior to the Effective  Date,  neither Parent nor its  subsidiaries\nshall,  unless the Company shall otherwise  consent in writing (such consent not\nto be unreasonably withheld, delayed or conditioned), acquire, merge or agree to\nacquire or be acquired,  by merging or  consolidating  with,  or by purchasing a\nsubstantial  equity  interest  in or by selling  50% or more of the  outstanding\nParent Common Stock (or securities  convertible into Parent Common Stock) to, or\nby any other manner, any business or any corporation,  partnership, association,\nor other business  organization or division thereof,  in each case participating\n\n\n\n                                      - 31 -\n\n\n\n\nin a  line  of  business  or  related  business  of  the  Company  or any of its\nsubsidiaries,  which  transaction,  either  alone  or in  conjunction  with  the\ntransactions  contemplated  by this Merger  Agreement,  is reasonably  likely to\nraise antitrust,  competition law or trade regulatory issues that are reasonably\nlikely to materially delay, impede or prohibit the consummation of the Merger.\n\n         (c) Without  limiting the  generality of Section  6.2(a),  prior to the\nEffective  Date,  unless the Company  shall  otherwise  consent in writing (such\nconsent not to be unreasonably  withheld,  delayed or conditioned) and except as\nset forth in the Parent  Disclosure  Schedule,  from after the date hereof:  (i)\nParent shall not, nor shall it permit any of its  subsidiaries to, take or cause\nto be taken any action,  whether before or after the Effective Date, which would\ndisqualify or would be reasonably  likely to disqualify the Merger as a \"pooling\nof  interests\"  for  accounting  purposes  or as a  \"reorganization\"  within the\nmeaning of Section  368(a) of the Code and (ii) Parent  shall not enter into any\ncontract,  agreement,  commitment  or  arrangement  with  respect  to any of the\nforegoing which is binding.\n\n(d)  Sub.  During  the  period  from the date of this  Merger  Agreement  to the\nEffective  Date,  Sub shall not engage in any activities of any nature except as\nprovided in or contemplated by this Merger Agreement.\n\nSection 6.3 Notice of Breach.  Each party shall  promptly give written notice to\nthe other party upon  becoming  aware of the  occurrence  or, to its  knowledge,\nimpending or threatened occurrence, of any event which would cause or constitute\na breach of any of its covenants  contained in this Merger  Agreement,  or would\ncause  any of  its  representations  or  warranties  contained  in  this  Merger\nAgreement  to be  inaccurate,  and  shall use its best  efforts  to  prevent  or\npromptly remedy the same. No such  notification  shall be deemed an amendment of\nthe Company Disclosure Schedule or the Parent Disclosure Schedule.\n\n                                   ARTICLE VII\n                              ADDITIONAL AGREEMENTS\n\nSection  7.1 Access and  Information.  Each of the  Company and Parent and their\nrespective   subsidiaries   shall  afford  to  the  other  and  to  the  other's\naccountants,  counsel  and  other  representatives  full  access  during  normal\nbusiness  hours (and at such other  times as the  parties  may  mutually  agree)\nthroughout  the period  prior to the  Effective  Date to all of its  properties,\nbooks,  contracts,  commitments,  records and personnel and, during such period,\neach shall furnish promptly to the other (i) a copy of each report, schedule and\nother document filed or received by it pursuant to the  requirements  of federal\nor state  securities  laws,  and (ii)  subject  to  applicable  law,  all  other\ninformation  concerning its business,  properties and personnel as the other may\nreasonably  request.  Each of the Company and Parent shall hold, and shall cause\ntheir  respective   employees  and  agents  to  hold,  in  confidence  all  such\ninformation in accordance with the terms of the Confidentiality  Agreement dated\nas of October 21, 1998  between  Parent and the  Company  (the  \"Confidentiality\nAgreement\").\n\nSection  7.2  Registration   Statement\/Proxy   Statement.  (a)  As  promptly  as\npracticable after the execution of this Merger Agreement, the Company and Parent\nshall prepare and file with the  Commission a joint proxy  statement (the \"Proxy\n\n\n\n                                      - 32 -\n\n\n\n\nStatement\")  in preliminary  form for use at the Company  Meeting and the Parent\nMeeting.  As  promptly as  practicable  after  comments  are  received  from the\nCommission with respect to the preliminary form of the Proxy Statement and after\nthe  furnishing  by the  Company  and Parent of all  information  required to be\ncontained  therein,  the Company and Parent shall file with the  Commission  the\nProxy  Statement  in  definitive  form for use at their  respective  shareholder\nmeetings and Parent shall file with the Commission a  registration  statement on\nForm S-4 under the Securities  Act for the purpose of registering  the shares of\nParent Common Stock to be issued in the Merger (the  \"Registration  Statement\").\nParent  and the  Company  shall use all  reasonable  best  efforts  to cause the\nRegistration  Statement to become  effective as soon  thereafter as practicable.\nNone of the  information  furnished by the Company or its  subsidiaries  (in the\ncase of the  Company) or by Parent or its  subsidiaries  (in the case of Parent)\nfor inclusion or incorporation by reference in (i) the Registration Statement or\n(ii) the  Proxy  Statement  will,  in the  case of the  Proxy  Statement  or any\namendments  or  supplements  thereto,  at the time of the  mailing  of the Proxy\nStatement and any  amendments  or  supplements  thereto,  and at the time of the\nCompany Meeting and Parent Meeting to be held in connection with the Merger, or,\nin the case of the Registration  Statement, at the time it becomes effective and\nat the Effective Date,  contain any untrue  statement of a material fact or omit\nto state any material fact  required to be stated  therein or necessary in order\nto make the statements  therein,  in light of the circumstances under which they\nare made, not misleading.  No  representation,  covenant or agreement is made by\nany party  hereto with  respect to  information  supplied by any other party for\ninclusion in the Proxy Statement or the Registration Statement. No filing of, or\namendment or supplement to, the Proxy Statement or Registration  Statement shall\nbe  made  by  Parent  or the  Company  without  providing  the  other  with  the\nopportunity to review and comment thereon. If at any time prior to the Effective\nDate  any  information  relating  to  Parent  or the  Company,  or any of  their\nrespective affiliates,  directors or officers, should be discovered by Parent or\nthe Company which should be set forth in an amendment or supplement to the Proxy\nStatement or Registration  Statement so that the Proxy Statement or Registration\nStatement would not include any misstatement of a material fact or omit to state\nany material  fact  necessary to make the  statements  therein,  in light of the\ncircumstances  under  which  they were made,  not  misleading,  the party  which\ndiscovers such information shall promptly notify the other parties hereto and an\nappropriate  amendment  or  supplement  describing  such  information  shall  be\npromptly  filed  with  the  Commission  and,  to the  extent  required  by  law,\ndisseminated to the shareholders of Parent and the Company.\n\n         (b) The  Company  and Parent  shall  make all  necessary  filings  with\nrespect to the Merger  under the  Securities  Act and the  Exchange  Act and the\nrules and  regulations  thereunder,  and under  applicable  blue sky or  similar\nsecurities  laws and  shall  each use its  reasonable  best  efforts  to  obtain\nrequired approvals and clearances with respect thereto.\n\nSection 7.3 Affiliates,  Publication of Combined Financial Results. (a) Not less\nthan 45 days prior to the Effective  Date,  each of Parent and the Company shall\ndeliver to the other a list of names or  addresses  of each  person  who, in its\nreasonable  judgment,  is an affiliate  of Parent or the Company,  respectively,\nwithin the meaning of Rule 145 of the rules and  regulations  promulgated  under\nthe Securities Act or otherwise applicable  Commission  accounting releases with\nrespect to \"pooling of  interests\"  accounting  treatment  (each such person,  a\n\"Pooling  Affiliate\")  of Parent or the Company,  respectively.  Each such party\nshall provide the other with such  information  and documents as the other shall\nreasonably request for purposes of reviewing such list.\n\n\n\n                                      - 33 -\n\n\n\n\n\n(b) Each of the  Company and Parent  shall use its  reasonable  best  efforts to\ncause each of its respective  Pooling  Affiliates,  as soon as practicable after\nthe date of this Merger Agreement, and no less than 30 days prior to the date of\nthe Company  Meeting  and the Parent  Meeting,  respectively,  to deliver to the\nother party an affiliate  letter in customary form.  Parent shall be entitled to\nplace  legends  as  specified  in such  affiliate  letters  on the  certificates\nevidencing  any of the  Parent  Common  Stock  to be  received  by such  Pooling\nAffiliates  pursuant  to the  terms  of  this  Merger  Agreement,  and to  issue\nappropriate  stop  transfer  instructions  to the transfer  agent for the Parent\nCommon Stock, consistent with the terms of such letters.\n\n(c) Parent shall publish  combined  sales and net income  figures  reflecting at\nleast 30 days of  post-Merger  combined  operations  as  contemplated  by and in\naccordance  with the terms of Commission  Accounting  Series Release No. 135, no\nlater than 20 days after the end of the first  fiscal  quarter of Parent  ending\nafter the Effective Date in which there are at least 30 days of such post-Merger\ncombined operations.\n\nSection 7.4 Stock Exchange Listing. Parent shall use its reasonable best efforts\nto list on the NYSE,  upon  official  notice of  issuance,  the shares of Parent\nCommon Stock to be issued pursuant to the Merger.\n\n         Section 7.5  Employment  Arrangements.  (a) After the  Effective  Date,\nParent shall,  or shall cause the Surviving  Corporation to, honor in accordance\nwith  their  terms,  all  Company  Benefit  Plans,   including  all  employment,\nseverance,  consulting and other  compensation  contracts between the Company or\nany of its subsidiaries and any current or former director,  officer or employee\nthereof,  and all provisions for vested or unvested  benefits or other vested or\nunvested amounts earned or accrued through the Effective Date and all provisions\nunder any Company Benefit Plan (as amended in compliance herewith or as modified\nby Section 7.5 of the Company  Disclosure  Schedule)  except for changes thereto\nwhich are (i) set forth on Section 7.5 of the Company Disclosure Schedule,  (ii)\nrequired under the present terms of any Company Benefit Plan, or (iii) otherwise\nagreed to by the parties hereto and, if applicable, the affected individual.\n\n(b) From and after the Effective  Date and for a period of one year  thereafter,\nemployees of the Company and its  subsidiaries  shall receive  compensation  and\nbenefits from the Surviving  Corporation (or any successor thereto) that, in the\naggregate,  are no less favorable than either (i) the  compensation and benefits\nprovided to similarly  situated  employees of Parent or its subsidiaries or (ii)\nthe  compensation  and benefits  provided to such  employees as of the Effective\nDate by the Company and its subsidiaries.\n\n(c) The Company  and, if  applicable,  Parent  agree (i) to take all actions set\nforth on Section 7.5 of the Company  Disclosure  Schedule and (ii) that any such\naction  shall not be deemed  to  violate  any  other  provision  of this  Merger\nAgreement.\n\n\n\n                                      - 34 -\n\n\n\n\n\nSection 7.6 Indemnification. (a) From and after the Effective Date, Parent shall\nindemnify, defend and hold harmless the officers, directors and employees of the\nCompany and its subsidiaries  (the  \"Indemnified  Parties\")  against all losses,\nexpenses,  claims, damages or liabilities arising prior to the Effective Date to\nthe fullest  extent  permitted  or required  under (A)  applicable  law, (B) any\nindemnification  agreements  between  the Company and any such person or (C) the\nCompany's  Amended  and  Restated  Articles  of  Incorporation  and  Amended and\nRestated By-Laws.\n\n(b) Parent  shall use its best  efforts to cause the  Indemnified  Parties to be\ncovered for a period of six (6) years from the Effective  Date (or the period of\nthe  applicable  statute  of  limitations,  if  longer)  by the  directors'  and\nofficers'  liability  insurance policy  maintained by the Company (provided that\nParent  may  substitute  therefor  policies  of at least the same  coverage  and\namounts  containing terms and conditions which are not less  advantageous to the\nIndemnified  Parties  than  such  policy)  with  respect  to acts  or  omissions\noccurring  prior to the Effective Date which were committed by such  Indemnified\nParties in their  capacity as such;  provided,  however,  that in no event shall\nParent  be  required  to  expend on an annual  basis  more  than  $730,000  (the\n\"Insurance  Amount\") to maintain or procure  insurance  coverage pursuant hereto\nand  provided  further  that if  Parent  is unable  to  maintain  or obtain  the\ninsurance  called for by this Section  7.6(b),  Parent shall use its  reasonable\nbest  efforts  to obtain  as much  comparable  insurance  as  available  for the\nInsurance Amount.\n\n         (c) In the event that any action,  suit,  proceeding  or  investigation\nrelating hereto or to the transactions  contemplated by this Merger Agreement is\ncommenced,  whether before or after the Effective Date, the parties hereto agree\nto cooperate  and use their  respective  reasonable  best efforts to  vigorously\ndefend against and respond thereto.\n\nSection 7.7  Consents.  (a) Each of the  parties shall use its  reasonable  best\nefforts to obtain as promptly as  practicable  all consents of any  Governmental\nEntity or any other  person  required  in  connection  with,  and waivers of any\nviolations or rights of termination  that may be caused by, the  consummation of\nthe transactions contemplated by this Merger Agreement.\n\n         (b) In furtherance and not in limitation of the foregoing,  each of the\nparties  shall use its  reasonable  best  efforts  to  resolve  as  promptly  as\npracticable  such  objections,  if any, as may be asserted  with  respect to the\ntransactions   contemplated  by  this  Merger  Agreement  under  any  antitrust,\ncompetition or trade  regulatory  laws, rules or regulations of any Governmental\nEntity;  provided  however,  that nothing in this Merger Agreement shall require\nParent to agree to hold separate or to divest any of the business, product lines\nor assets of Parent or the Company or any of their  respective  subsidiaries  or\ntake any other action,  if such holding  separate,  divestiture  or other action\nwould have a Material Adverse Effect on Parent or the Company.\n\n         (c)  Each of the  parties  shall  promptly  inform  the  others  of any\nmaterial  communication  from  any  Governmental  Entity  regarding  any  of the\ntransactions  contemplated  by  this  Merger  Agreement.  If  any  party  or any\naffiliate  thereof receives a request for additional  information or documentary\nmaterial  from any such  Governmental  Entity with  respect to the  transactions\ncontemplated by this Merger  Agreement,  then such party shall make, or cause to\n\n\n\n                                      - 35 -\n\n\n\n\nbe made, as soon as reasonably practicable and after consultation with the other\nparty, an appropriate  response in compliance with such request.  Parent and the\nCompany shall consult and cooperate  with one another with respect to (and prior\nto) any  understandings,  undertakings or agreements (oral or written) which are\nproposed to be made or entered into with any  Governmental  Entity in connection\nwith the transactions  contemplated by this Merger Agreement and the Cross Stock\nOption Agreements.\n\n         Section  7.8  Additional  Agreements.  (a)  Subject  to the  terms  and\nconditions herein provided  (including  Section 7.7), each of the parties hereto\nagrees to use its  reasonable  best efforts to take,  or cause to be taken,  all\nactions  and to do,  or  cause to be  done,  all  things  necessary,  proper  or\nadvisable under applicable laws and regulations to consummate and make effective\nthe   transactions   contemplated  by  this  Merger  Agreement  as  promptly  as\npracticable, including using its reasonable best efforts to obtain all necessary\nwaivers,  consents and  approvals,  to effect all  necessary  registrations  and\nfilings (including, but not limited to, filings with all applicable Governmental\nEntities)  and  defending  any  lawsuits  or other  legal  proceedings,  whether\njudicial or  administrative,  challenging  this Merger  Agreement or the Merger,\nincluding  seeking  to lift any  injunction,  temporary  restraining  order  or,\nsubject to any required vote of the shareholders of the Company, other legal bar\nto the Merger (and, in such case, to proceed with the Merger as expeditiously as\npossible)  and  the  transactions  contemplated  hereby.    Notwithstanding  the\nforegoing,  but subject to Section 7.7, there shall be no action  required to be\ntaken and no action will be taken in order to consummate  and make effective the\ntransactions  contemplated  by  this  Merger  Agreement  if such  action  would,\nindividually  or in the aggregate,  have a Material  Adverse Effect on Parent or\nthe Company.\n\n         (b) In case at any time after the Effective  Date any further action is\nnecessary or desirable to carry out the purposes of this Merger  Agreement,  the\nproper  officers  and\/or  directors  of Parent,  the Company  and the  Surviving\nCorporation shall take all such necessary action.\n\nSection 7.9 No Solicitation.  (a) Neither the Company nor Parent shall, directly\nor indirectly,  take (nor shall the Company or Parent instruct its subsidiaries,\ndirectors, officers, employees, representatives,  investment bankers, attorneys,\naccountants or other agents or affiliates, (collectively, \"Representatives\")) to\ntake any action to (i)  encourage,  solicit or initiate  the  submission  of any\nAcquisition  Proposal (as defined below) with respect to such party,  (ii) enter\ninto any agreement with respect to any Acquisition Proposal with respect to such\nparty or (iii)  participate in any way in discussions or  negotiations  with, or\nfurnish any  information  to, any person in  connection  with, or take any other\naction  to  facilitate  any  inquiries  or  the  making  of  any  proposal  that\nconstitutes,  or may reasonably be expected to lead to, any Acquisition Proposal\nwith  respect  to such  party.  Each of the  Company  and Parent  will  promptly\ncommunicate  to the other that such a  solicitation  has been received by it, or\nthat any such  information has been requested from it or that such  negotiations\nor discussions  have been sought to be initiated with it or that it has received\na written  communication with respect to an Acquisition Proposal with respect to\nit. For  purposes  of this Merger  Agreement,  the term  \"Acquisition  Proposal\"\nmeans, with respect to each of the Company and Parent,  any proposed (A) merger,\nconsolidation or similar  transaction  involving the Company (in the case of the\nCompany) or merger,  consolidation or similar transaction  involving Parent upon\nconsummation  of which the holders of Parent  Common Stock will not own at least\n\n\n\n                                      - 36 -\n\n\n\n\n\n50% of the common stock of Parent or, if Parent is not the surviving entity, the\ncombined entity (in the case of Parent),  (B) sale,  lease or other  disposition\ndirectly or indirectly by merger, consolidation,  share exchange or otherwise of\nassets of the  Company  (in the case of the  Company)  or Parent (in the case of\nParent) or its subsidiaries  representing 15% or more of the consolidated assets\nof the Company and its  subsidiaries (in the case of the Company) or 50% or more\nof the  consolidated  assets  of  Parent  and its  subsidiaries  (in the case of\nParent),  (C) issue,  sale, or other disposition of (including by way of merger,\nconsolidation,  share exchange or any similar  transaction),  or acquisition of,\nsecurities  (or  options,   rights  or  warrants  to  purchase,   or  securities\nconvertible into, such securities)  representing 15% or more of the voting power\nof the Company (in the case of the  Company) or 50% or more of the voting  power\nof Parent (in the case of Parent).\n\n         (b)  Notwithstanding  anything in this Merger Agreement to the contrary\n(including  clause (a) of this Section 7.9), to the extent the Company or Parent\nor its respective  Representatives  receive a  communication  with respect to an\nAcquisition   Proposal  with  respect  to  it,  which  its  Board  of  Directors\ndetermines,  after consultation with its financial  advisors,  may be reasonably\nlikely to result in a Superior  Proposal  (as defined  below) or, in the case of\nParent,  a  transaction  that  would not  otherwise  conflict  with this  Merger\nAgreement,  including  Section 6.2(b),  such party and its  Representatives  may\nengage in any negotiations  concerning,  or provide any confidential information\nor  data  to,  or  have  any  discussions  with,  any  person  relating  to such\nAcquisition  Proposal,  or otherwise facilitate any effort or attempt to make or\nimplement such Acquisition  Proposal;  provided,  however, that upon engaging in\nsuch  negotiations  or  discussions,  providing  such  information  or otherwise\nfacilitating  any  effort  or  attempt  to make or  implement  such  Acquisition\nProposal,  the  Company or Parent (as the case may be) shall give  notice to the\nother  of its  engagement  in such  activities.  For  purposes  of  this  Merger\nAgreement,  the term \"Superior  Proposal\" means,  with respect to each of Parent\nand the Company,  any Acquisition  Proposal with respect to it (and for purposes\nof this  definition  of the term  \"Superior  Proposal\",  the  term  \"Acquisition\nProposal\"  with  respect  to the  Company  shall have the  meaning  set forth in\nSection  7.9(a) except that the references to \"15%\" in such Section 7.9(a) shall\nbe deemed  references to \"50%\") that is more favorable to its shareholders  than\nthe Merger  (taking into  account the nature of the  Acquisition  Proposal,  the\nnature and amount of the  consideration,  the  likelihood of completion  and any\nother factors deemed appropriate by the Board of Directors). Prior to furnishing\nnonpublic information to, or entering into discussions or negotiations with, any\nother  persons  or  entities,  the  Company or Parent (as the case may be) shall\nenter into a customary  confidentiality agreement with such person or entity, it\nbeing understood that such  confidentiality  agreement (x) shall not include any\nprovision  calling for an exclusive right to negotiate with such party, (y) need\nnot contain  \"standstill\" or similar  provisions and such party shall advise the\nother of the  nature of such  nonpublic  information  delivered  to such  person\nreasonably promptly following its delivery to the requesting party.\n\n         (c)  Nothing  contained  herein,  including  this  Section  7.9,  shall\nprohibit Parent or the Company from taking and disclosing to its  shareholders a\nposition  contemplated  by Rule 14e-2(a)  promulgated  under the Exchange Act or\nfrom making any disclosure to its  shareholders if in the good faith judgment of\nits Board of Directors,  after consultation with outside counsel,  failure so to\ndisclose  would be  inconsistent  with its  obligations  under  applicable  law;\nprovided,  however, that neither Parent nor the Company, as the case may be, nor\n\n\n\n                                      - 37 -\n\n\n\n\nits Board of Directors nor any committee  thereof shall  withdraw or modify,  or\npropose publicly to withdraw or modify, its position with respect to this Merger\nAgreement, or approve or recommend, or propose publicly to approve or recommend,\nan  Acquisition  Proposal  with  respect to it.  This  Section  7.9(c)  does not\nprohibit the termination of this Merger Agreement as specified in Section 9.1(j)\nin the case of the Company or Section 9.1(k) in the case of Parent.\n\nSection 7.10 Accountants' Letters. (a) The Company shall use its reasonable best\nefforts to cause to be  delivered to Parent a letter from Arthur  Andersen  LLP,\ndated  within  two  business  days  before  the date on which  the  Registration\nStatement shall become effective and addressed to Parent,  in form and substance\nreasonably  satisfactory  to Parent and  customary  in scope and  substance  for\ncomfort letters delivered by independent  public  accountants in connection with\nregistration statements similar to the Registration Statement.\n\n(b) Parent shall use its reasonable best efforts to cause to be delivered to the\nCompany a letter from Ernst &amp; Young LLP,  dated within two business  days before\nthe  date on  which  the  Registration  Statement  shall  become  effective  and\naddressed to the Company, in form and substance  reasonably  satisfactory to the\nCompany and customary in scope and substance  for comfort  letters  delivered by\nindependent  public  accountants  in  connection  with  registration  statements\nsimilar to the Registration Statement.\n\nSection 7.11 Pooling of Interests.  Each of Parent and the Company shall use its\nreasonable best efforts to cause the Merger to be accounted for as a \"pooling of\ninterests\",  and  such  accounting  treatment  to be  accepted  by  each  of the\nCompany's and Parent's  independent  certified  public  accountants,  and by the\nCommission,  respectively,  and each of Parent and the  Company  agrees  that it\nshall voluntarily take no action that would cause such accounting  treatment not\nto be obtained.\n\nSection 7.12 Trust Preferred Securities.  Parent shall take all actions required\nin connection with the  transactions  contemplated  by this Merger  Agreement to\nprovide for the  compliance by the Company with Section 13.04 of the  Indenture,\ndated as of April 14,  1998,  between the  Company and The Bank of New York,  as\nTrustee, governing the Trust Preferred Securities.\n\nSection  7.13   Parent  Board of  Directors.  The Board of  Directors  of Parent\nshall  take such  action as may be necessary (including  increasing  the size of\nthe  Board of  Directors  of  Parent)  to  appoint  to the Board of Directors of\nParent as of the Effective Date John W. Guffey,  Jr. and two other  directors of\nthe Company  selected by the Board of Directors of Parent.\n\nSection 7.14 Post-Merger  Operations.  Following the Effective Date,  Parent and\nthe  Surviving  Corporation's  principal  executive  offices shall be located in\nCharlotte, North Carolina.\n\n         Section  7.15  Tax  Representation  Letters.  For  purposes  of the tax\nopinions described in Sections 8.2(b) and 8.3(b) of this Merger Agreement,  each\nof Parent and the Company shall provide representation letters, substantially in\nthe form of  Exhibits  E and F,  each  dated on or  about  the date  that is two\nbusiness  days  prior  to  the  date  the  Proxy  Statement  is  mailed  to  the\nshareholders of the Company and reissued as of the Effective Date.\n\n\n\n                                      - 38 -\n\n\n\n\n\n                  Section 7.16  Transfer  Taxes.  All state,  local,  foreign or\nprovincial sales, use, real property transfer,  stock transfer or similar taxes,\nincluding any interest or penalties with respect  thereto,  attributable  to the\nMerger shall be paid by the Company.\n\n                                  ARTICLE VIII\n                              CONDITIONS PRECEDENT\n\nSection 8.1  Conditions  to Each Party's  Obligation  to Effect the Merger.  The\nrespective  obligations  of each party to effect the Merger  shall be subject to\nthe fulfillment or waiver by each party at or prior to the Effective Date of the\nfollowing conditions:\n\n(a) This Merger  Agreement  shall have been adopted by the requisite vote of the\nholders of the Company Common Stock.\n\n(b) The Stock  Issuance  Proposal shall have been approved by the requisite vote\nof the holders of Parent Common Stock.\n\n(c) The Parent  Common Stock  issuable in the Merger shall have been  authorized\nfor listing on the NYSE upon official notice of issuance.\n\n(d) The waiting periods  applicable to the  consummation of the Merger under the\nHSR Act and the  Competition  Act (Canada) shall have expired or been terminated\nand all other Company  Required  Consents and Parent  Required  Consents in each\ncase required to be obtained prior to consummation of the Merger shall have been\nobtained,  except  where the  failure  to obtain  such  other  Company  Required\nConsents or Parent Required Consents would not have a Material Adverse Effect on\nthe Company or Parent, as the case may be.\n\n(e) The  Registration  Statement shall have become  effective in accordance with\nthe  provisions  of  the  Securities  Act  and  no  stop  order  suspending  the\neffectiveness  of the  Registration  Statement  shall  have  been  issued by the\nCommission and remain in effect.\n\n(f) No preliminary or permanent  injunction or other order by any court or other\nGovernmental Entity of competent jurisdiction  (collectively,  \"Restraints\") (i)\nprohibiting  or  preventing  the  consummation  of the Merger or (ii)  requiring\nParent or the Company to hold separate or to divest any of the business, product\nlines or assets of Parent or the Company or any of their respective subsidiaries\nor take any other action, if such holding separate,  divestiture or other action\nwould have a Material  Adverse Effect on Parent or the Company,  shall have been\nissued and remain in effect;  provided,  however, that each of the parties shall\nhave used its best  efforts to prevent the entry of any such  Restraints  and to\nappeal as promptly as possible any such Restraints that may be entered\n\n\n\n                                      - 39 -\n\n\n\n\n\n(g) Parent and the Company  shall have  received  letters from Ernst &amp; Young LLP\nand Arthur  Andersen LLP,  respectively,  dated as of the Effective  Date to the\neffect that such firm  concurs  with  management's  conclusion  that,  as of the\nEffective Date, no conditions  exist that would preclude such party from being a\nparty to a business  combination  for which  \"pooling of  interests\"  accounting\ntreatment  would be  available if  consummated  in  accordance  with this Merger\nAgreement.\n\nSection 8.2  Conditions to  Obligation of the Company to Effect the Merger.  The\nobligation  of the  Company  to  effect  the  Merger  shall  be  subject  to the\nfulfillment  at or  prior  to the  Effective  Date of the  additional  following\nconditions, unless waived by the Company:\n\n(a) (i) Parent and Sub shall  have  performed  in all  material  respects  their\nagreements  contained  in this Merger  Agreement  required to be performed on or\nprior to the  Effective  Date and (ii) the  representations  and  warranties  of\nParent and Sub contained in this Merger  Agreement shall be true in all respects\nwhen made and on and as of the Effective Date as if made on and as of such date,\nexcept for  representations and warranties which are by their express provisions\nmade as of a specific date or dates,  which were or will be true in all respects\nat such  time or times as stated  therein  (provided  that,  in each  case,  the\ncondition set forth in this Section 8.2(a)(ii) shall be deemed satisfied so long\nas any failures of such  representations  and warranties to be true and correct,\ntaken  together,  would not have a Material  Adverse Effect on Parent),  and the\nCompany shall have received a  certificate  of the President or Chief  Executive\nOfficer or a Vice President of Parent and Sub, respectively, to that effect.\n\n(b) The  Company  shall have  received an opinion  substantially  in the form of\nExhibit  C of  Cravath,  Swaine &amp; Moore,  counsel  to the  Company,  dated  the\nEffective Date, to the effect that the Merger will constitute a \"reorganization\"\nfor federal  income tax  purposes  within the  meaning of Section  368(a) of the\nCode.  In rendering  such  opinion,  such counsel shall be entitled to rely upon\nrepresentations  provided by the  parties  hereto  substantially  in the form of\nExhibits E and F.\n\nSection 8.3  Conditions to  Obligations  of Parent and Sub to Effect the Merger.\nThe  obligations  of Parent and Sub to effect the Merger shall be subject to the\nfulfillment  at or  prior  to the  Effective  Date of the  additional  following\nconditions, unless waived by Parent:\n\n(a) (i) The Company shall have performed in all material respects its agreements\ncontained in this Merger  Agreement  required to be performed on or prior to the\nEffective  Date and (ii)  the  representations  and  warranties  of the  Company\ncontained in this Merger  Agreement  shall be true in all respects when made and\non and as of the  Effective  Date as if made on and as of such date,  except for\nrepresentations  and warranties which are by their express provisions made as of\na specific date or dates which were or will be true in all respects at such date\nor dates  (provided  that, in each case, the condition set forth in this Section\n8.3(a)(ii)   shall  be  deemed  satisfied  so  long  as  any  failures  of  such\nrepresentations and warranties to be true and correct, taken together, would not\nhave a Material  Adverse  Effect on the Company),  and Parent and Sub shall have\nreceived a  certificate  of the President or Chief  Executive  Officer or a Vice\nPresident of the Company to that effect.\n\n\n\n                                      - 40 -\n\n\n\n\n\n(b) The Parent  shall have  received  an  opinion  substantially  in the form of\nExhibit D of Squire,  Sanders &amp; Dempsey  L.L.P.,  counsel  to Parent,  dated the\nEffective Date, to the effect that the Merger will constitute a \"reorganization\"\nfor federal  income tax  purposes  within the  meaning of Section  368(a) of the\nCode.  In rendering  such  opinion,  such counsel shall be entitled to rely upon\nrepresentations  provided by the  parties  hereto  substantially  in the form of\nExhibits E and F.\n\n8.4 Frustration of Closing  Conditions.  No party may rely on the failure of any\ncondition  set  forth in  Section  8.1,  8.2 or 8.3,  as the case may be,  to be\nsatisfied if such failure  results from such party's  breach of any provision of\nthis Merger  Agreement or the failure of such party to use its  reasonable  best\nefforts to cause the Merger to be consummated.\n\n\n                                   ARTICLE IX\n                        TERMINATION, AMENDMENT AND WAIVER\n\nSection 9.1  Termination.  This Merger  Agreement  may be terminated at any time\nprior  to  the  Effective  Date,   whether  before  or  after  approval  by  the\nshareholders of the Company:\n\n(a)      by mutual consent of Parent and the Company;\n\n(b) by  either  Parent  or the  Company  if  the  Merger  shall  not  have  been\nconsummated on or before March 31, 2000; provided, that the terminating party is\nnot  otherwise in material  breach of its  covenants  hereunder and none of such\nterminating party's  representations and warranties  contained herein, which are\nqualified as to  materiality,  shall be inaccurate  in any respect,  and none of\nsuch terminating party's  representations and warranties contained herein, which\nare not so qualified, shall be inaccurate in any material respect, in each case,\nas  if  made  as  of  the  date  of  such  purported   termination  (except  for\nrepresentations  and  warranties  that by their express  provisions are or shall\nhave  been  made as of a  specific  date or dates,  which  shall  only be deemed\ninaccurate  to the  extent  that they were  inaccurate  at such  times as stated\ntherein);\n\n(c) by either Parent or the Company if the adoption by the  shareholders  of the\nCompany of this  Merger  Agreement  shall not have been  obtained at the Company\nMeeting or at any adjournment or postponement thereof;\n\n(d) by either  Parent or the  Company if the  approval  by the  shareholders  of\nParent of the Stock Issuance Proposal shall not have been obtained at the Parent\nMeeting or at any adjournment or postponement thereof;\n\n(e) by the Company if any of the  conditions  specified  in Sections 8.1 and 8.2\nhave not been met or waived by the Company at such time as such  condition is no\nlonger capable of satisfaction;\n\n(f) by Parent if any of the  conditions  specified  in Sections 8.1 and 8.3 have\nnot been met or waived by  Parent  at such time as such  condition  is no longer\ncapable of satisfaction;\n\n\n\n                                      - 41 -\n\n\n\n\n\n(g) by Parent if the  Company's  Board of  Directors  shall have (i) accepted or\nresolved to accept a Superior  Proposal  (provided  that the  Company  shall not\naccept or resolve to accept a Superior  Proposal  unless (x) it provides  Parent\nwith notice of the  material  terms of such  proposal at least two days prior to\nsuch acceptance and (y) at the time of such acceptance the Board of Directors of\nthe  Company  determines  in good faith  that such  proposal  continues  to be a\nSuperior  Proposal after taking into account any  amendments  Parent and Sub may\nhave  offered to make to this Merger  Agreement)  or (ii)  refused to affirm its\nrecommendation concerning the Merger referred to in Section 3.7(a) hereof within\n10 business  days after  receipt of any written  request from Parent to do so at\nany time when an  Acquisition  Proposal  with respect to the Company  shall have\nbeen made and not rejected by the Company's Board of Directors;\n\n(h) by Parent or the  Company if any  Restraint  having any of the  effects  set\nforth in  Section  8.1(f)  shall be in effect and shall  have  become  final and\nnonappealable;  provided,  however,  that the party  seeking to  terminate  this\nMerger Agreement  pursuant to this Section 9.1(h) shall have used its reasonable\nbest efforts to prevent the entry of and to remove such Restraint;\n\n(i) by the Company if Parent's  Board of  Directors  shall have (i)  accepted or\nresolved to accept a Superior  Proposal  contemplating  the  termination of this\nMerger  Agreement  (provided that Parent shall not accept or resolve to accept a\nSuperior Proposal unless (x) it provides the Company with notice of the material\nterms of such proposal at least two days prior to such acceptance and (y) at the\ntime of such  acceptance  the Board of  Directors of Parent  determines  in good\nfaith that such proposal  continues to be a Superior  Proposal after taking into\naccount  any  amendments  the  Company  may have  offered to make to this Merger\nAgreement)  or (ii) refused to affirm its  recommendation  concerning  the Stock\nIssuance  Proposal  referred to in Section 3.7(b) hereof within 10 business days\nafter receipt of any written  request from the Company to do so at any time when\nan  Acquisition  Proposal  with  respect to Parent  shall have been made and not\nrejected by Parent's Board of Directors;\n\n(j) by the Company if the Board of  Directors  of the  Company  has  accepted or\nresolved to accept a Superior  Proposal;  provided  that the  Company  shall not\naccept or resolve to accept a Superior  Proposal  unless (i) it provides  Parent\nwith notice of the  material  terms of such  proposal at least two days prior to\nsuch  acceptance and (ii) at the time of such  acceptance the Board of Directors\nof the Company  determines  in good faith that such proposal  continues to be a\nSuperior  Proposal after taking into account any  amendments  Parent and Sub may\nhave offered to make to this Merger Agreement; or\n\n(k) by Parent if the Board of  Directors  of Parent has  accepted or resolved to\naccept a Superior Proposal;  provided that Parent shall not accept or resolve to\naccept a Superior Proposal unless (i) it provides the Company with notice of the\nmaterial  terms of such proposal at least two days prior to such  acceptance and\n(ii) at the time of such acceptance the Board of Directors of Parent  determines\nin good faith that such  proposal  continues  to be a  Superior  Proposal  after\ntaking into account any  amendments the Company may have offered to make to this\nMerger Agreement.\n\n\n\n                                      - 42 -\n\n\n\n\n\nSection  9.2  Effect of  Termination.  (a) In the event of  termination  of this\nMerger Agreement by either Parent or the Company, as provided above, this Merger\nAgreement shall forthwith  become void and (except (x) for the willful breach of\nthis Merger  Agreement  by, or fraud of, any party hereto and (y) as provided in\nthe  proviso  to  Section  9.2(c) or  9.2(e),  respectively)  there  shall be no\nliability on the part of either the Company,  Parent or Sub or their  respective\ndirectors  or  officers;  provided  that the last  sentence of Section  7.1, and\nSections 9.2 and 10.2 shall survive the termination.\n\n         (b)  Unless (x) any of the  representations  and  warranties  of Parent\ncontained  herein,  which  are  qualified  as to  materiality,  were or shall be\ninaccurate  in any respect,  or any of the  representations  and  warranties  of\nParent contained herein, which are not so qualified, were or shall be inaccurate\nin any  material  respect,  in each  case,  when  made and as of the date of any\ntermination  of  this  Merger  Agreement,  as if  made  as of the  date  of such\ntermination  (except for  representations  and warranties  that by their express\nprovisions  are made as of a specific date or dates,  which shall only be deemed\ninaccurate  to the extent that they were or shall have been  inaccurate  at such\ntimes as stated therein),  respectively, or (y) at the time of such termination,\nParent is in material breach of any covenant contained herein, the Company shall\nmake a payment to Parent (by wire  transfer or cashiers  check) of a breakup fee\nin the  amount of $45  million  (the  \"Termination  Fee\") (i) in the event  this\nMerger  Agreement is terminated  pursuant to Section 9.1(g) or Section 9.1(j) or\n(ii) in the event this Merger  Agreement  is  terminated  following  the Company\nMeeting  pursuant to Section 9.1(c) and an Acquisition  Proposal with respect to\nthe  Company  shall have been  publicly  disclosed  to the  shareholders  of the\nCompany (and not  withdrawn  or  terminated)  prior to the Company  Meeting and,\nwithin 12 months after such  termination of this Merger  Agreement,  the Company\nshall have  entered  into an  agreement  providing  for the  consummation  of an\nAcquisition  Proposal with respect to the Company (it being  understood  that no\nconfidentiality   agreement  with  respect  to  an  Acquisition  Proposal  shall\nconstitute  such an  agreement) or an  Acquisition  Proposal with respect to the\nCompany shall have been  consummated.  For purposes of this Section 9.2(b),  the\nterm  Acquisition  Proposal  shall have the meaning set forth in Section  7.9(a)\nexcept  that the  references  to \"15%\" in such  Section  7.9(a)  shall be deemed\nreferences to \"50%\".\n\n         (c) The  Company  shall make a payment to Parent (by wire  transfer  or\ncashiers check) of an expense  reimbursement fee in the amount of $5 million (i)\nin the event the  Termination  Fee becomes  due and payable  pursuant to Section\n9.2(b) or (ii) in the event this  Merger  Agreement  is  terminated  pursuant to\nSection  9.1(f) and at the time of such  termination  the Company is in material\nbreach of any  representation,  warranty  or  material  covenant  of the Company\ncontained herein;  provided, that, in the event the expense reimbursement fee is\npayable   pursuant  to  the  foregoing  clause  (ii)  of  this  Section  9.2(c),\nnotwithstanding Section 9.2(a) or the termination of this Merger Agreement,  the\nCompany shall remain liable for, and no payment pursuant to the foregoing clause\n(ii) of this Section  9.2(c) shall  release the Company  from,  any liability or\ndamage suffered or incurred by Parent to the extent any such liability or damage\nexceeds the amount of such expense reimbursement fee.\n\n         (d) Unless (x) any of the representations and warranties of the Company\ncontained  herein,  which  are  qualified  as to  materiality,  were or shall be\ninaccurate in any respect,  or any of the  representations and warranties of the\nCompany  contained  herein,  which  are  not so  qualified,  were  or  shall  be\ninaccurate in any material  respect,  in each case, when made and as of the date\n\n\n\n                                      - 43 -\n\n\n\n\nof any termination of this Merger  Agreement,  as if made as of the date of such\ntermination  (except for  representations  and warranties  that by their express\nprovisions  are made as of a specific date or dates,  which shall only be deemed\ninaccurate  to the extent that they were or shall have been  inaccurate  at such\ntimes as stated therein),  respectively, or (y) at the time of such termination,\nthe Company is in material breach of any covenant contained herein, Parent shall\nmake  a  payment  to  Company  (by  wire  transfer  or  cashiers  check)  of the\nTermination Fee (i) in the event this Merger Agreement is terminated pursuant to\nSection 9.1(i) or Section  9.1(k) or (ii) in the event this Merger  Agreement is\nterminated  following  the Parent  Meeting  pursuant  to  Section  9.1(d) and an\nAcquisition  Proposal with respect to Parent shall have been publicly  disclosed\nto the  shareholders  of Parent (and not withdrawn or  terminated)  prior to the\nParent  Meeting  and,  within 12 months  after such  termination  of this Merger\nAgreement,  Parent  shall  have  entered  into an  agreement  providing  for the\nconsummation  of an  Acquisition  Proposal  with  respect  to  Parent  (it being\nunderstood  that no  confidentiality  agreement  with respect to an  Acquisition\nProposal shall  constitute  such an agreement) or an  Acquisition  Proposal with\nrespect to Parent shall have been consummated.\n\n         (e)  Parent  shall  make a payment  to  Company  (by wire  transfer  or\ncashiers check) of an expense  reimbursement fee in the amount of $5 million (i)\nin the event the  Termination  Fee becomes  due and payable  pursuant to Section\n9.2(d) or (ii) in the event this  Merger  Agreement  is  terminated  pursuant to\nSection 9.1(e) and at the time of such termination  Parent is in material breach\nof any representation, warranty or material covenant contained herein; provided,\nthat,  in the event the  expense  reimbursement  fee is payable  pursuant to the\nforegoing clause (ii) of this Section 9.2(e),  notwithstanding Section 9.2(a) or\nthe termination of this Merger Agreement, Parent shall remain liable for, and no\npayment  pursuant to the  foregoing  clause (ii) of this  Section  9.2(e)  shall\nrelease Parent from, any liability or damage suffered or incurred by the Company\nto the extent any such  liability  or damage  exceeds the amount of such expense\nreimbursement fee.\n\nSection  9.3  Amendment.  This  Merger  Agreement  may be amended by the parties\nhereto at any time before or after approval  hereof by the  shareholders  of the\nCompany or Parent, but, after such approval, no amendment shall be made which by\nlaw  requires  further  approval  by the  shareholders  of the Company or Parent\nwithout such further  approval.  This Merger Agreement may not be amended except\nby an instrument in writing signed on behalf of each of the parties hereto.\n\nSection 9.4 Waiver.  At any time prior to the Effective Date, the parties hereto\nmay (i) extend the time for the  performance of any of the  obligations or other\nacts  of  the  other  parties  hereto,   (ii)  waive  any  inaccuracies  in  the\nrepresentations  and warranties  contained herein or in any documents  delivered\npursuant  hereto  or  (iii)  waive  compliance  with  any of the  agreements  or\nconditions  contained herein;  provided,  however,  that no such waiver shall be\ngiven that by law requires  further  approval by the shareholders of the Company\nor Parent without such further  approval  having been obtained.  No agreement on\nthe part of a party hereto to any such extension or waiver shall be valid unless\nset forth in an instrument in writing signed on behalf of such party.\n\n\n\n                                      - 44 -\n\n\n\n\n\n                                    ARTICLE X\n                               GENERAL PROVISIONS\n\nSection  10.1  Notices.  All notices or other  communications  under this Merger\nAgreement  shall be in  writing  and shall be given (and shall be deemed to have\nbeen duly given upon  receipt)  by  delivery in person,  by  overnight  courier,\ntelecopy,  or by registered or certified mail,  postage prepaid,  return receipt\nrequested, addressed as follows:\n\n             If to the Company:\n\n             Coltec Industries Inc\n             3 Coliseum Centre\n             2550 West Tyvola Road\n             Charlotte, NC  28217\n\n             Attention:   Corporate Secretary\n                          Fax:  (704) 423-7011\n\n             With copies to:\n\n             Cravath, Swaine &amp; Moore\n             825 Eighth Avenue\n             New York, NY  10019\n\n             Attention:   George W. Bilicic, Jr., Esq. and Allen Finkelson, Esq.\n                          Fax:  (212) 474-3700\n\n            If to Parent or Sub:\n\n            The B.F.Goodrich Company\n            4020 Kinross Lakes Pkwy.\n            Richfield, OH  44286-9368\n\n            Attention:    Terrence G. Linnert\n                          Sr. Vice President and General Counsel\n                          Fax:  (330) 659-7737\n\n            With a copy to:\n            Squire, Sanders &amp; Dempsey L.L.P.\n            4900 Key Tower\n            127 Public Square\n            Cleveland, Ohio  44114-1304\n\n            Attention:    Gordon S. Kaiser, Esq.\n                          Fax:  (216) 479-8780\n\nor to such other address as any party may have furnished to the other parties in\nwriting in accordance with this Section.\n\n\n\n                                      - 45 -\n\n\n\n\n\nSection 10.2 Fees and Expenses.  Whether or not the Merger is  consummated,  all\ncosts and expenses  incurred in  connection  with this Merger  Agreement and the\ntransactions  contemplated  by this Merger  Agreement shall be paid by the party\nincurring such expenses, except that Parent and Company agree to each pay 50% of\nall printing,  mailing and delivery  expenses  incurred by the parties hereto in\nconnection with the Proxy Statement.\n\nSection 10.3 Publicity.  So long as this Merger Agreement is in effect,  Parent,\nSub and the  Company  agree to  consult  with each  other in  issuing  any press\nrelease  or  otherwise   making  any  public   statement  with  respect  to  the\ntransactions contemplated by this Merger Agreement, and none of them shall issue\nany press  release  or make any  public  statement  prior to such  consultation,\nexcept as may be required by law.\n\nSection 10.4 Specific  Performance.  The parties  hereto agree that  irreparable\ndamage  would  occur in the  event  that any of the  provisions  of this  Merger\nAgreement  were not performed in accordance  with their  specific  terms or were\notherwise  breached.  It is accordingly  agreed that the parties hereto shall be\nentitled to an  injunction  or  injunctions  to prevent  breaches of this Merger\nAgreement and to enforce  specifically  the terms and  provisions  hereof in any\ncourt of the  United  States or any state  having  jurisdiction,  this  being in\naddition to any other remedy to which they are entitled at law or in equity.\n\nSection  10.5  Interpretation.  (a)  When a  reference  is made  in this  Merger\nAgreement  to  subsidiaries  of Parent or the Company,  the word  \"subsidiaries\"\nmeans  corporations  more than 50% of whose  outstanding  voting  securities are\ndirectly or indirectly  owned by Parent or the Company,  as the case may be. The\ntable of  contents  and  headings  contained  in this Merger  Agreement  are for\nreference  purposes  only  and  shall  not  affect  in any  way the  meaning  or\ninterpretation of this Merger  Agreement.  When reference is made in this Merger\nAgreement to Articles,  Sections, Schedules or Exhibits, such reference shall be\nto an Article,  Section,  Schedule or Exhibit of this Merger  Agreement,  as the\ncase  may  be,  unless  otherwise  indicated.   Whenever  the  words  \"include\",\n\"includes\" or \"including\" are used in this Merger Agreement and are not followed\nby the words  \"without  limitation\",  they shall be deemed to be followed by the\nwords \"without  limitation.\"  The words  \"hereof\",  \"herein\" and \"hereunder\" and\nwords of similar import when used in this Merger  Agreement  shall refer to this\nMerger  Agreement as a whole and not to any particular  provision of this Merger\nAgreement.  Whenever \"or\" is used in this Merger Agreement it shall be construed\nin the nonexclusive sense. The phrases \"transactions contemplated by this Merger\nAgreement\" and  \"transactions  contemplated  hereby\" shall include  transactions\ncontemplated by the Cross Stock Option Agreements.\n\n         (b) As used in this Merger  Agreement,  any  reference  to any state of\nfacts,  event,  change or effect having a \"Material  Adverse  Effect\" on or with\nrespect to any party, as the case may be, shall mean such state of facts, event,\nchange or effect  that has had,  or would  reasonably  be  expected  to have,  a\nmaterial adverse effect on the business,  properties,  financial  condition,  or\nresults  of  operations  of such  party  and its  subsidiaries  taken as a whole\n(excluding  any state of facts,  event,  change  or effect  relating  to (i) the\neconomy or  securities  markets in general,  (ii) this Merger  Agreement  or the\ntransactions  contemplated  hereby  or the  announcement  thereof  or (iii)  the\naerospace industry in general).\n\n         (c) As used in this Merger  Agreement,  \"knowledge\"  shall  mean,  with\nrespect to the matter in  question,  the actual  knowledge of such matter by any\nexecutive officer of Parent or the Company, as applicable.\n\n\n\n                                      - 46 -\n\n\n\n\n\n         (d) The  inclusion of an item on any schedule to this Merger  Agreement\nshall not be deemed to be indicative of the materiality of such item.\n\nSection 10.6 Parties in Interest; No Assignment; Third Party Beneficiaries.  (a)\nThis Merger  Agreement  shall be binding upon and inure solely to the benefit of\neach party hereto, and their respective successors and permitted assigns. Except\nas  expressly  provided  for in  this  Merger  Agreement,  neither  this  Merger\nAgreement  nor the rights or  obligations  of any party  hereto are  assignable,\nexcept by  operation  of law or with the  written  consent  of the other  party.\nExcept  as  expressly  provided  in  Section  10.6(b),  nothing  in this  Merger\nAgreement,  express or implied, is intended to confer upon any person other than\nthe parties hereto and their respective permitted assigns any rights or remedies\nhereunder.\n\n         (b) The provisions of Sections 3.2,  7.5(a),  7.5(c) and 7.6 hereof and\nSection 7.5 of the Company  Disclosure  Schedule  (i) are intended to be for the\nbenefit of, and will be enforceable by, each individual  benefitted  thereunder,\nhis or her heirs and his or her representatives and (ii) are in addition to, and\nnot in substitution for, any other rights,  including rights to  indemnification\nor contribution, that any such person may have by contract or otherwise.\n\nSection 10.7 Miscellaneous.  This Merger Agreement  (including the documents and\ninstruments  referred  to  herein)  (a)  constitutes  the entire  agreement  and\nsupersedes all other prior agreements and understandings, both written and oral,\namong the parties,  or any of them,  with respect to the subject  matter  hereof\n(other than the Confidentiality  Agreement, as the same may be amended); and (b)\nshall be  governed  in all  respects,  including  validity,  interpretation  and\neffect,  by the laws of the Commonwealth of Pennsylvania  (without giving effect\nto the  provisions  thereof  relating to conflicts of law to the extent that the\napplication of the laws of another jurisdiction would be required thereby). This\nMerger  Agreement  may be executed in two or more  counterparts  which  together\nshall  constitute  a  single  agreement  and  each of which  shall  only  become\neffective  when one or more  counterparts  have been  signed  by each  party and\ndelivered to the other parties.\n\nSection  10.8 Cure  Period.  No party  shall have any rights  under this  Merger\nAgreement for any actual or  threatened  breach of a  representation,  warranty,\ncovenant  or  agreement  contained  herein,  if such  breach is capable of being\ncured, until (i) the non-breaching party has notified the breaching party of its\ndetermination  of  the  existence  (or  threatened  existence)  of a  basis  for\ntermination,  and  (ii)  the  breaching  party  shall  have  a  reasonable  time\n(considering  the nature of the breach and the actions required for cure, but in\nno event longer than 60 days) to cure such breach.\n\nSection 10.9 Non-Survival of Representations and Warranties.  No representations\nor warranties in this Merger Agreement shall survive the Effective Date.\n\nSection 10.10 Validity.  (a) The invalidity or unenforceability of any provision\nof this Merger Agreement shall not affect the validity or  enforceability of the\nother provisions of this Merger Agreement,  which shall remain in full force and\neffect.\n\n\n\n                                      - 47 -\n\n\n\n(b) In the event any court of competent jurisdiction holds any provision of this\nMerger  Agreement to be null,  void or  unenforceable,  the parties hereto shall\nnegotiate  in good faith the  execution  and  delivery of an  amendment  to this\nMerger Agreement in order, as nearly as possible,  to effectuate,  to the extent\npermitted  by law,  the  intent  of the  parties  hereto  with  respect  to such\nprovision and the economic effects thereof.\n\n(c) Each party agrees that, should any court of competent  jurisdiction hold any\nprovision  of  this  Merger  Agreement  or  part  hereof  to be  null,  void  or\nunenforceable,  or order any party to take any action inconsistent  herewith, or\nnot take any action  required  herein,  the other party shall not be entitled to\nspecific  performance  of such  provision or part hereof or to any other remedy,\nincluding but not limited to money  damages,  for breach thereof or of any other\nprovision of this Merger  Agreement or part hereof as the result of such holding\nor order.\n\nIN WITNESS  WHEREOF,  the parties hereto have caused this Merger Agreement to be\nsigned by their  respective  officers  thereunder  duly authorized all as of the\ndate first written above.\n\n                                THE B.F.GOODRICH COMPANY\n\n\n                                By:\n                                     Name:  David L. Burner\n                                     Title: Chairman and Chief Executive Officer\n\n\n                                RUNWAY ACQUISITION CORPORATION\n\n\n                                By:\n                                     Name:  Terrence G. Linnert\n                                     Title: Vice President\n\n\n                                COLTEC INDUSTRIES INC\n\n\n                                By:\n                                     Name:  John W. Guffey, Jr. \n                                     Title: Chairman and Chief Executive Officer\n\n\n\n                                      - 48 -\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7661],"corporate_contracts_industries":[9476],"corporate_contracts_types":[9622,9626],"class_list":["post-43035","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-goodrich-corp","corporate_contracts_industries-aerospace__space","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43035"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43035"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43035"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}