{"id":43071,"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-honeywell-inc-and-alliedsignal.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-honeywell-inc-and-alliedsignal","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-honeywell-inc-and-alliedsignal.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Honeywell Inc. and AlliedSignal Inc."},"content":{"rendered":"<pre>\n                        AGREEMENT AND PLAN OF MERGER\n\n                                dated as of\n\n                                June 4, 1999\n\n                                   among\n\n                              HONEYWELL INC.,\n\n                             ALLIEDSIGNAL INC.\n\n                                    and\n\n                         BLOSSOM ACQUISITION CORP.\n\n\n\n\n\n                             TABLE OF CONTENTS\n\n                                                                          Page\n                                                                          ----\n\n\n                                 ARTICLE I\n                                 THE MERGER\n\n      SECTION 1.1 The Merger.................................................2\n      SECTION 1.2 Conversion Of Shares.......................................2\n      SECTION 1.3 Surrender And Payment......................................3\n      SECTION 1.4  Stock Options and Equity Awards...........................5\n      SECTION 1.5 Adjustments................................................6\n      SECTION 1.6 Fractional Shares..........................................6\n      SECTION 1.7 Withholding Rights.........................................6\n      SECTION 1.8 Lost Certificates..........................................6\n      SECTION 1.9 Shares Held by Company Affiliates..........................7\n      SECTION 1.10 Appraisal Rights..........................................7\n\n                                 ARTICLE II\n                         CERTAIN GOVERNANCE MATTERS\n\n      SECTION 2.1 Parent Name Change.........................................7\n      SECTION 2.2 Parent Board of Directors; CEO.............................7\n      SECTION 2.3 Certificate of Incorporation of the Surviving Corporation..8\n      SECTION 2.4 By-laws of the Surviving Corporation.......................8\n      SECTION 2.5 Directors and Officers of the Surviving Corporation........8\n\n                                ARTICLE III\n                REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n      SECTION 3.1 Corporate Existence and Power..............................9\n      SECTION 3.2 Corporate Authorization....................................9\n      SECTION 3.3 Governmental Authorization................................10\n      SECTION 3.4 Non-Contravention.........................................10\n      SECTION 3.5 Capitalization............................................11\n      SECTION 3.6 Subsidiaries..............................................12\n      SECTION 3.7 Commission Filings........................................13\n      SECTION 3.8 Financial Statements......................................13\n      SECTION 3.9 Disclosure Documents......................................13\n      SECTION 3.10 Absence of Certain Changes...............................14\n      SECTION 3.11 No Undisclosed Material Liabilities......................15\n      SECTION 3.12 Litigation...............................................16\n      SECTION 3.13 Taxes....................................................16\n      SECTION 3.14 Employee Benefit Plans...................................17\n      SECTION 3.15 Compliance with Laws.....................................18\n      SECTION 3.16 Finders' or Advisors' Fees...............................18\n      SECTION 3.17 Environmental Matters....................................18\n      SECTION 3.18 Opinion of Financial Advisor.............................19\n      SECTION 3.19 Pooling; Tax Treatment...................................19\n      SECTION 3.21 Takeover Statutes and Charter Provisions.................19\n      SECTION 3.22 Rights Agreement.........................................20\n      SECTION 3.23 Intellectual Property Matters............................20\n      SECTION 3.24 Year 2000 Compliance Matters.............................20\n\n                                 ARTICLE IV\n                   REPRESENTATIONS AND WARRANTIES OF PARENT\n\n      SECTION 4.1 Corporate Existence and Power.............................21\n      SECTION 4.2 Corporate Authorization...................................21\n      SECTION 4.3 Governmental Authorization................................22\n      SECTION 4.4 Non-Contravention.........................................23\n      SECTION 4.5 Capitalization............................................23\n      SECTION 4.6 Subsidiaries..............................................24\n      SECTION 4.7 Commission Filings........................................25\n      SECTION 4.8 Financial Statements......................................25\n      SECTION 4.9 Disclosure Documents......................................25\n      SECTION 4.10 Absence of Certain Changes...............................26\n      SECTION 4.11 No Undisclosed Material Liabilities......................27\n      SECTION 4.12 Litigation...............................................28\n      SECTION 4.13 Taxes....................................................28\n      SECTION 4.14 Employee Benefit Plans...................................28\n      SECTION 4.15 Compliance with Laws.....................................30\n      SECTION 4.16 Finders' or Advisors' Fees...............................30\n      SECTION 4.17 Environmental Matters....................................30\n      SECTION 4.18 Opinion of Financial Advisor.............................30\n      SECTION 4.19 Pooling; Tax Treatment...................................30\n      SECTION 4.21 Takeover Statutes........................................31\n      SECTION 4.22 Intellectual Property Matters............................31\n      SECTION 4.23 Year 2000 Compliance Matters.............................31\n\n                                 ARTICLE V\n                          COVENANTS OF THE COMPANY\n\n      SECTION 5.1 Conduct of the Company....................................32\n      SECTION 5.2 Company Stockholder Meeting; Proxy Material...............34\n\n                                 ARTICLE VI\n                            COVENANTS OF PARENT\n\n      SECTION 6.1 Conduct of Parent.........................................35\n      SECTION 6.2 Obligations of Merger Subsidiary..........................38\n      SECTION 6.3 Director and Officer Liability............................38\n      SECTION 6.4 Parent Stockholder Meeting; Form S-4......................38\n      SECTION 6.5 Stock Exchange Listing....................................39\n      SECTION 6.6 Employee Benefits.........................................39\n      SECTION 6.7 Employment Agreement......................................42\n\n                                ARTICLE VII\n                    COVENANTS OF PARENT AND THE COMPANY\n\n      SECTION 7.1 Reasonable Best Efforts...................................42\n      SECTION 7.2 Certain Filings...........................................44\n      SECTION 7.3 Access to Information.....................................44\n      SECTION 7.4 Tax and Accounting Treatment..............................44\n      SECTION 7.5 Public Announcements......................................45\n      SECTION 7.6 Further Assurances........................................45\n      SECTION 7.7 Notices of Certain Events.................................45\n      SECTION 7.8 Affiliates................................................46\n      SECTION 7.9 Payment of Dividends......................................46\n      SECTION 7.10 No Solicitation..........................................47\n      SECTION 7.11 Letters from Accountants.................................49\n      SECTION 7.12 Takeover Statutes........................................49\n      SECTION 7.13 Headquarters.............................................50\n      SECTION 7.14 Integration..............................................50\n      SECTION 7.15 Transfer Statutes........................................50\n      SECTION 7.16 Section 16(b)............................................50\n\n                                ARTICLE VIII\n                          CONDITIONS TO THE MERGER\n\n      SECTION 8.1 Conditions to the Obligations of Each Party...............51\n      SECTION 8.2 Conditions to the Obligations of Parent and Merger\n                     Subsidiary.............................................52\n      SECTION 8.3 Conditions to the Obligations of the Company..............53\n\n                                 ARTICLE IX\n                                TERMINATION\n\n      SECTION 9.1 Termination...............................................54\n      SECTION 9.2 Effect of Termination.....................................55\n\n                                 ARTICLE X\n                               MISCELLANEOUS\n\n      SECTION 10.1 Notices..................................................55\n      SECTION 10.2  Non-Survival of Representations and Warranties..........56\n      SECTION 10.3 Amendments; No Waivers...................................57\n      SECTION 10.4 Expenses.................................................57\n      SECTION 10.5 Company Termination Fee..................................57\n      SECTION 10.6 Parent Termination Fee...................................59\n      SECTION 10.7 Successors and Assigns...................................60\n      SECTION 10.8 Governing Law............................................60\n      SECTION 10.9 Jurisdiction.............................................60\n      SECTION 10.10 Waiver of Jury Trial....................................61\n      SECTION 10.11 Counterparts; Effectiveness.............................61\n      SECTION 10.12 Entire Agreement........................................61\n      SECTION 10.13 Captions................................................61\n      SECTION 10.14 Severability............................................61\n\nEXHIBITS\nExhibit A - Form of By-laws Amendment\nExhibit B - Form of Employment Agreement\nExhibit C - Form of Parent Affiliate's Letter\nExhibit D - Form of Company Affiliate's Letter\n\n\n\n\n\n                                DEFINITIONS\n\n                                                            Section\n\n368 Reorganization......................................... SECTION 3.19(b)\nAcquisition Proposal....................................... SECTION 7.10(b)\nAffected Employees......................................... SECTION 6.6(b)\nAgreement.................................................. Preamble\nCanadian Act............................................... SECTION 4.3\nCertificate ............................................... SECTION 1.2(c)\nChange in Control.......................................... SECTION 6.6(a)\nClosing.................................................... SECTION 1.1(d)\nClosing Date............................................... SECTION 1.1(d)\nCode....................................................... Recitals\nCommon Stock Issuance...................................... SECTION 4.2(a)\nCommon Stock Issuance Approval ............................ SECTION 4.2(a)\nCommission................................................. Recitals\nCompany.................................................... Preamble\nCompany 10-K............................................... SECTION 3.6(b)\nCompany 10-Q............................................... SECTION 3.7(a)\nCompany Balance Sheet...................................... SECTION 3.8\nCompany Balance Sheet Date................................. SECTION 3.8\nCompany Commission Documents............................... SECTION 3.7(a)\nCompany Common Stock....................................... Recitals\nCompany Convertible Security............................... SECTION 3.5\nCompany Employee Plans..................................... SECTION 3.14(a)\nCompany Disclosure Schedules............................... Article III\nCompany Option Agreement................................... Recitals\nCompany Preferred Stock.................................... SECTION 3.5\nCompany Proxy Statement.................................... SECTION 3.9(a)\nCompany Rights............................................. SECTION 3.5\nCompany Rights Agreement................................... SECTION 3.5\nCompany Stock Option....................................... SECTION 1.4(a)\nCompany Stock Plans........................................ SECTION 1.4(a)\nCompany Stockholder Approval............................... SECTION 3.2\nCompany Stockholder Meeting................................ SECTION 5.2\nCompany Subsidiary Convertible Security.................... SECTION 3.6(b)\nConfidentiality Agreement.................................. SECTION 7.3\nDelaware Law............................................... SECTION 1.1(b)\nEC Merger Regulation....................................... SECTION 3.3\nEffective Time............................................. SECTION 1.1(a)\nEnd Date................................................... SECTION 9.1(b)(i)\nEnvironmental Laws......................................... SECTION 3.17(b)\nERISA...................................................... SECTION 3.14(a)\nExchange Act............................................... SECTION 3.3(f)\nExchange Agent............................................. SECTION 1.3(a)\nExchange Ratio............................................. SECTION 1.2(a)(iii)\nForm S-4................................................... SECTION 4.9(a)\nGAAP....................................................... Recitals\nHazardous Materials........................................ SECTION 3.17(b)\nHSR Act.................................................... SECTION 3.3\nIndemnitees................................................ SECTION 6.3(a)\nIntellectual Property...................................... SECTION 3.23(b)\nLien....................................................... SECTION 3.4\nMaterial Adverse Effect.................................... SECTION 3.1\nMerger..................................................... Recitals\nMerger Consideration....................................... SECTION 1.2(b)\nMerger Subsidiary.......................................... Preamble\nNYSE....................................................... SECTION 1.6\nOption Agreements.......................................... Recitals\nParent..................................................... Preamble\nParent 10-K................................................ SECTION 4.6(b)\nParent 10-Q................................................ SECTION 4.7(a)\nParent Balance Sheet....................................... SECTION 4.8\nParent Balance Sheet Date.................................. SECTION 4.8\nParent Commission Documents................................ SECTION 4.7(a)\nParent Common Stock........................................ Recitals\nParent Convertible Security................................ SECTION 4.5\nParent Disclosure Schedules................................ Article IV\nParent Employee Plans...................................... SECTION 4.14(a)\nParent Option Agreement.................................... Recitals\nParent Preferred Stock..................................... SECTION 4.5\nParent Proxy Statement..................................... SECTION 4.9(a)\nParent Stockholder Approval................................ SECTION 4.2(a)\nParent Stockholder Meeting................................. SECTION 6.4(a)\nParent Subsidiary Convertible Security..................... SECTION 4.6(b)\nPerson..................................................... SECTION 1.3(c)\nSecurities Act............................................. SECTION 1.4(c)\nShares..................................................... Recitals\nSubsidiary................................................. SECTION 3.6(a)\nSuperior Proposal.......................................... SECTION 7.10(b)\nSurviving Corporation...................................... SECTION 1.1(b)\nTax Returns................................................ SECTION 3.13\nTaxes...................................................... SECTION 3.13\n\n\n\n\n\n\n                        AGREEMENT AND PLAN OF MERGER\n\n\n     THIS AGREEMENT AND PLAN OF MERGER (this \"Agreement\") dated as of June\n4, 1999 by and among HONEYWELL INC., a Delaware corporation (the\n\"Company\"), ALLIEDSIGNAL INC., a Delaware corporation (\"Parent\"), and\nBLOSSOM ACQUISITION CORP., a newly formed Delaware corporation and a wholly\nowned subsidiary of Parent (\"Merger Subsidiary\").\n\n                            W I T N E S S E T H:\n\n     WHEREAS, the respective Boards of Directors of Parent, Merger\nSubsidiary and the Company have approved this Agreement, and deem it\nadvisable and in the best interests of their respective stockholders to\nconsummate the merger of Merger Subsidiary with and into the Company on the\nterms and conditions set forth in this Agreement (the \"Merger\");\n\n     WHEREAS, for United States federal income tax purposes, it is intended\nthat the Merger qualify as a \"reorganization\" within the meaning of Section\n368 of the Internal Revenue Code of 1986, as amended, and the rules and\nregulations promulgated thereunder (the \"Code\");\n\n     WHEREAS, for accounting purposes, it is intended that the Merger be\naccounted for as a \"pooling of interests\" under United States generally\naccepted accounting principles (\"GAAP\") and the rules and regulations of\nthe Securities and Exchange Commission (the \"Commission\"); and\n\n     WHEREAS, as a condition and inducement to each of Parent's and the\nCompany's willingness to enter into this Agreement, concurrently with the\nexecution and delivery of this Agreement, Parent and the Company are\nentering into (i) a Stock Option Agreement dated as of the date of this\nAgreement (the \"Parent Option Agreement\"), pursuant to which the Company is\ngranting to Parent an option to purchase shares of common stock, par value\n$1.50 per share, of the Company (\"Company Common Stock\") at $109.453 per\nshare, under certain circumstances, and (ii) a Stock Option Agreement dated\nas of the date of this Agreement (the \"Company Option Agreement\" and,\ntogether with the Parent Option Agreement, the \"Option Agreements\"),\npursuant to which Parent is granting to the Company an option to purchase\nshares of the common stock, par value $1.00 per share, of Parent (\"Parent\nCommon Stock\") at $58.375 per share, under certain circumstances.\n\n     NOW, THEREFORE, in consideration of the promises and the respective\nrepresentations, warranties, covenants, and agreements set forth herein,\nthe parties agree as follows:\n\n\n                                 ARTICLE I\n                                 THE MERGER\n\n     SECTION 1.1 The Merger.\n\n          (a)  As soon as practicable after satisfaction or, to the extent\npermitted hereunder, waiver of all conditions to the Merger, the Company\nand Merger Subsidiary will file a certificate of merger with the Secretary\nof State of the State of Delaware and make all other filings or recordings\nrequired by Delaware Law to be made in connection with the Merger. The\nMerger shall become effective at such time as the certificate of merger is\nduly filed with the Secretary of State of the State of Delaware or, if\nagreed to by the Company and Parent, at such later time as is specified in\nthe certificate of merger (the \"Effective Time\").\n\n          (b)  At the Effective Time, Merger Subsidiary shall be merged\nwith and into the Company in accordance with the requirements of the\nGeneral Corporation Law of the State of Delaware (the \"Delaware Law\"),\nwhereupon the separate existence of Merger Subsidiary shall cease, and the\nCompany shall be the surviving corporation in the Merger (the \"Surviving\nCorporation\").\n\n          (c)  From and after the Effective Time, the Surviving Corporation\nshall possess all the rights, privileges, powers and franchises and be\nsubject to all of the restrictions, disabilities and duties of the Company\nand Merger Subsidiary, all as provided under Delaware Law.\n\n          (d)  The closing of the Merger (the \"Closing\") shall take place\n(i) at the offices of Fried, Frank, Harris, Shriver &amp; Jacobson, One New\nYork Plaza, New York, New York, as soon as practicable, but in any event\nwithin three business days, after the day on which the last to be fulfilled\nor waived of the conditions set forth in Article VIII (other than those\nconditions that by their nature are to be fulfilled at the Closing, but\nsubject to the fulfillment or waiver of such conditions) shall be fulfilled\nor waived in accordance with this Agreement or (ii) at such other place and\ntime or on such other date as the Company and Parent may agree in writing\n(the \"Closing Date\").\n\n     SECTION 1.2    Conversion Of Shares.\n\n          (a)  At the Effective Time by virtue of the Merger and without\nany action on the part of the holder thereof:\n\n               (i)   each share of the Company Common Stock held by the\n     Company as treasury stock or owned by Parent or any subsidiary of\n     Parent or the Company immediately prior to the Effective Time shall be\n     canceled, and no payment shall be made with respect thereto;\n\n               (ii)  each share of common stock of Merger Subsidiary\n     outstanding immediately prior to the Effective Time shall be converted\n     into and become one share of common stock of the Surviving Corporation\n     with the same rights, powers and privileges as the shares so converted\n     and shall constitute the only outstanding shares of capital stock of\n     the Surviving Corporation; and\n\n               (iii) each share of Company Common Stock outstanding\n     immediately prior to the Effective Time shall, except as otherwise\n     provided in Section 1.2(a)(i), be converted into the right to receive\n     1.875 shares of Parent Common Stock (the \"Exchange Ratio\").\n\n          (b)  All Parent Common Stock issued as provided in Section\n1.2(a)(iii) shall be of the same class and shall have the same terms as the\ncurrently outstanding Parent Common Stock. The shares of Parent Common\nStock to be received as consideration pursuant to the Merger with respect\nto shares of Company Common Stock (together with cash in lieu of fractional\nshares of Parent Common Stock as specified below) is referred to herein as\nthe \"Merger Consideration.\"\n\n          (c)  From and after the Effective Time, all shares of Company\nCommon Stock converted in accordance with Section 1.2(a)(iii) shall no\nlonger be outstanding and shall automatically be canceled and retired and\nshall cease to exist, and each holder of a certificate representing any\nsuch shares (a \"Certificate\") shall cease to have any rights with respect\nthereto, except the right to receive the Merger Consideration and any\ndividends payable pursuant to Section 1.3(f). From and after the Effective\nTime, all certificates representing the common stock of Merger Subsidiary\nshall be deemed for all purposes to represent the number of shares of\ncommon stock of the Surviving Corporation into which they were converted in\naccordance with Section 1.2(a)(ii).\n\n     SECTION 1.3    Surrender And Payment.\n\n          (a)  Prior to the Effective Time, Parent shall appoint The Bank\nof New York or such other exchange agent reasonably acceptable to the\nCompany (the \"Exchange Agent\") for the purpose of exchanging Certificates\nfor the Merger Consideration. Parent will make available to the Exchange\nAgent, as needed, the Merger Consideration to be delivered in respect of\nthe shares of Company Common Stock. Promptly after the Effective Time,\nParent will send, or will cause the Exchange Agent to send, to each holder\nof record of shares of Company Common Stock as of the Effective Time, a\nletter of transmittal for use in such exchange (which shall specify that\nthe delivery shall be effected, and risk of loss and title shall pass, only\nupon proper delivery of the Certificates to the Exchange Agent) in such\nform as the Company and Parent may reasonably agree, for use in effecting\ndelivery of shares of Company Common Stock to the Exchange Agent.\n\n          (b)  Each holder of shares of Company Common Stock that have been\nconverted into a right to receive the Merger Consideration, upon surrender\nto the Exchange Agent of a Certificate, together with a properly completed\nletter of transmittal, will be entitled to receive the Merger Consideration\nin respect of the shares of Company Common Stock represented by such\nCertificate. Until so surrendered, each such Certificate shall, after the\nEffective Time, represent for all purposes only the right to receive such\nMerger Consideration.\n\n          (c)  If any portion of the Merger Consideration is to be\nregistered in the name of a Person other than the Person in whose name the\napplicable surrendered Certificate is registered, it shall be a condition\nto the registration of the Merger Consideration that the surrendered\nCertificate shall be properly endorsed or otherwise be in proper form for\ntransfer and that the Person requesting such delivery of the Merger\nConsideration shall pay to the Exchange Agent any transfer or other taxes\nrequired as a result of such registration in the name of a Person other\nthan the registered holder of such Certificate or establish to the\nreasonable satisfaction of the Exchange Agent that such tax has been paid\nor is not payable. For purposes of this Agreement, \"Person\" means an\nindividual, a corporation, a limited liability company, a partnership, an\nassociation, a trust or any other entity or organization, including a\ngovernment or political subdivision or any agency or instrumentality\nthereof.\n\n          (d)  After the Effective Time, there shall be no further\nregistration of transfers of shares of Company Common Stock. If, after the\nEffective Time, Certificates are presented to the Exchange Agent, the\nSurviving Corporation or Parent, they shall be canceled and exchanged for\nthe Merger Consideration provided for, and in accordance with the\nprocedures set forth, in this Article I.\n\n          (e)  Any portion of the Merger Consideration made available to\nthe Exchange Agent pursuant to Section 1.3(a) that remains unclaimed by the\nholders of shares of Company Common Stock one year after the Effective Time\nshall be returned to Parent, upon demand, and any such holder who has not\nexchanged his shares of Company Common Stock for the Merger Consideration\nin accordance with this Section 1.3 prior to that time shall thereafter\nlook only to Parent for delivery of the Merger Consideration in respect of\nsuch holder's shares. Notwithstanding the foregoing, Parent shall not be\nliable to any holder of shares for any Merger Consideration delivered to a\npublic official pursuant to applicable abandoned property laws.\n\n          (f)  No dividends or other distributions with respect to shares\nof Parent Common Stock shall be paid to the holder of any unsurrendered\nCertificates until such Certificates are surrendered as provided in this\nSection 1.3. Subject to the effect of applicable laws, following such\nsurrender, there shall be paid, without interest, to the record holder of\nthe shares of Parent Common Stock issued in exchange therefor (i) at the\ntime of such surrender, all dividends and other distributions payable in\nrespect of such Parent Common Stock with a record date after the Effective\nTime and a payment date on or prior to the date of such surrender and not\npreviously paid and (ii) at the appropriate payment date, the dividends or\nother distributions payable with respect to such Parent Common Stock with a\nrecord date after the Effective Time but with a payment date subsequent to\nsuch surrender. For purposes of dividends or other distributions in respect\nof Parent Common Stock, all shares of Parent Common Stock to be issued\npursuant to the Merger shall be entitled to dividends pursuant to the\nimmediately preceding sentence as if issued and outstanding as of the\nEffective Time.\n\n     SECTION 1.4    Stock Options and Equity Awards.\n\n          (a)  At the Effective Time, each outstanding employee or director\noption to purchase shares of Company Common Stock (a \"Company Stock\nOption\") granted under the Company's plans or agreements pursuant to which\nCompany Stock Options or other stock-based awards of the Company have been\nor may be granted (collectively, the \"Company Stock Plans\"), whether vested\nor not vested, shall be deemed assumed by Parent. At and after the\nEffective Time (1) each Company Stock Option then outstanding shall entitle\nthe holder thereof to acquire the number (rounded down to the nearest whole\nnumber) of shares of Parent Common Stock determined by multiplying (x) the\nnumber of shares of Company Common Stock subject to such Company Stock\nOption immediately prior to the Effective Time by (y) the Exchange Ratio,\nand (2) the exercise price per share of Parent Common Stock subject to any\nsuch Company Stock Option at and after the Effective Time shall be an\namount (rounded down to the nearest one-hundredth of a cent) equal to (x)\nthe exercise price per share of Company Common Stock subject to such\nCompany Stock Option prior to the Effective Time, divided by (y) the\nExchange Ratio. Other than as provided above, as of and after the Effective\nTime, each Company Stock Option shall be subject to the same terms and\nconditions as in effect immediately prior to the Effective Time (including,\nbut not limited to, the acceleration of exercisability as of the date of\napproval of the Merger by the shareholders of the Company), but giving\neffect to the Merger. Prior to the approval of the Merger by the\nshareholders of the Company, the Company shall take all actions necessary\nto cause all restricted shares, restricted stock units and any other\nstock-based awards outstanding under the Company Stock Plans and the\nHoneywell Non-Employee Directors Fee and Stock Unit Plan which would\notherwise be settled in cash to be settled in shares of Parent Common Stock\n(with, in the case of restricted stock units, each such unit representing\none share of Company Common Stock and with the number of shares of Parent\nCommon Stock to be issued reflecting the Exchange Ratio). To the extent\nthat any such award of restricted shares, restricted stock units or other\nstock-based award does not become fully vested and free of restrictions in\nconnection with the transactions contemplated hereby, such award shall be\nconverted into a similar award for that number of shares of Parent Common\nStock equal to the product of (1) the number of shares of Company Common\nStock subject to the portion of such award which had not become fully\nvested and free of restrictions and (2) the Exchange Ratio, and shall\notherwise remain subject to the terms and conditions in effect immediately\nprior to the Effective Time (it being understood that any performance\ncriteria to which such award remains subject may be equitably adjusted by\nthe Management Development and Compensation Committee of Parent Board\n(taking into account the recommendation of the Personnel Committee of the\nCompany Board) to reflect the consummation of the Merger).\n\n          (b)  Parent shall take all corporate action necessary to\nreserve for issuance a sufficient number of shares of Parent Common Stock\nfor delivery upon exercise of Company Stock Options and settlement of other\nstock-based awards of the Company at and after the Effective Time.\n\n          (c)   On or as soon as practicable after the Effective Time,\nParent shall file with the Commission a registration statement on an\nappropriate form or a post-effective amendment to a previously filed\nregistration statement under the Securities Act of 1933, as amended (the\n\"Securities Act\"), with respect to the Parent Common Stock subject to\nCompany Stock Options and other stock-based awards of the Company, and\nshall use its reasonable best efforts to maintain the current status of the\nprospectus contained therein, as well as comply with any applicable state\nsecurities or \"blue sky\" laws, for so long as such options or other\nstock-based awards remain outstanding.\n\n     SECTION 1.5 Adjustments. If at any time during the period between the\ndate of this Agreement and the Effective Time, any change in the\noutstanding shares of capital stock of Parent or the Company shall occur by\nreason of any reclassification, recapitalization, stock split or\ncombination, exchange or readjustment of shares, or any similar\ntransaction, or any stock dividend thereon with a record date during such\nperiod, the Merger Consideration shall be appropriately adjusted to provide\nthe holders of shares of Company Common Stock the same economic effect as\ncontemplated by this Agreement prior to such event.\n\n     SECTION 1.6 Fractional Shares. No fractional shares of Parent Common\nStock shall be issued in the Merger, but in lieu thereof, each holder of\nshares of Company Common Stock otherwise entitled to a fractional share of\nParent Common Stock will be entitled to receive, from the Exchange Agent in\naccordance with the provisions of this Section 1.6, an amount of cash,\nwithout interest thereon (rounded to the nearest whole cent), equal to the\nproduct of (i) such fraction of a share of Parent Common Stock, multiplied\nby (ii) the average of the closing prices of the shares of Parent Common\nStock on the New York Stock Exchange (the \"NYSE\") Composite Transaction\nReporting System as reported in The Wall Street Journal (but subject to\ncorrection for typographical or other manifest errors in such reporting)\nover the ten trading-day period immediately preceding the Closing Date.\n\n     SECTION 1.7 Withholding Rights. Each of the Surviving Corporation and\nParent shall be entitled to deduct and withhold from the consideration\notherwise payable to any person pursuant to this Article 1 such amounts as\nit is required to deduct and withhold with respect to the making of such\npayment under any provision of federal, state, local or foreign tax law. To\nthe extent that amounts are so withheld by the Surviving Corporation or\nParent, as the case may be, such withheld amounts shall be treated for all\npurposes of this Agreement as having been paid to the holder of the shares\nof Company Common Stock in respect of which such deduction and withholding\nwas made by the Surviving Corporation or Parent, as the case may be.\n\n     SECTION 1.8 Lost Certificates. If any Certificate shall have been\nlost, stolen or destroyed, upon the making of an affidavit of that fact by\nthe Person claiming the Certificate to be lost, stolen or destroyed and, if\nrequired by Parent or the Surviving Corporation, the posting by that Person\nof a bond, in such reasonable amount as the Surviving Corporation may\ndirect (which shall not exceed amounts generally required by Parent from\nholders of Parent Common Stock under similar circumstances), as indemnity\nagainst any claim that may be made against it with respect to such\nCertificate, the Exchange Agent will issue in exchange for such lost,\nstolen or destroyed Certificate the Merger Consideration to be paid in\nrespect of the Shares represented by such Certificates as contemplated by\nthis Article I.\n\n     SECTION 1.9 Shares Held by Company Affiliates. Anything to the\ncontrary in this Agreement notwithstanding, no shares of Parent Common\nStock (or certificates therefor) shall be issued in exchange for any\nCertificate to any Person who may be an \"affiliate\" of the Company\n(identified pursuant to Section 7.8) until the Person shall have delivered\nto Parent and the Company a duly executed letter as contemplated by Section\n7.8.\n\n     SECTION 1.10 Appraisal Rights. In accordance with Section 262 of the\nDelaware Law, no appraisal rights shall be available to holders of shares\nof Company Common Stock in connection with the Merger.\n\n\n                                 ARTICLE II\n                         CERTAIN GOVERNANCE MATTERS\n\n     SECTION 2.1 Parent Name Change. At the Effective Time, Parent shall\ncause its certificate of incorporation to be amended to change its name to\n\" Honeywell International Inc.\" by causing a Subsidiary of Parent to be\nmerged with and into Parent and having the terms of such merger provide for\nsuch name change.\n\n     SECTION 2.2 Parent Board of Directors; CEO; By-law Amendment.\n\n          (a)  Prior to the Effective Time, the Board of Directors of\nParent shall take all action necessary to cause the Board of Directors of\nParent to consist, as of the Effective Time, of fifteen directors, (x) nine\nof whom shall be persons designated by Parent who were directors of Parent\nprior to the Effective Time and (y) six of whom shall be persons designated\nby the Company who were directors of the Company prior to the Effective\nTime. No more than one person who is an officer of Parent shall be\ndesignated by Parent, and no more than one person who is an officer of the\nCompany shall be designated by the Company, in each case pursuant to the\nprior sentence. If any such persons are not able to serve, the party on\nwhose Board such person presently sits shall select a replacement. The\npersons designated to serve as directors by each party shall be apportioned\nproportionately among each of the three classes of directors; it being\nunderstood, however, that Michael R. Bonsignore shall be elected to serve\nas a member of the class with the longest tenure as of the Effective Time.\n\n          (b)  Prior to the Effective Time, the Board of Directors of\nParent shall take all necessary actions to cause (x) the following\ncommittees of the Board of Directors of Parent to exist as of the Effective\nTime: Audit Committee, Corporate Governance Committee, Corporate\nResponsibility Committee, Management Development and Compensation\nCommittee, Retirement Plans and Finance Committee and Technology Committee;\nand (y) the Chairpersons of four of those committees to be persons\ndesignated by Parent and the Chairpersons of two of those committees to be\npersons designated by the Company.\n\n          (c)  Prior to the Effective Time, the Board of Directors of\nParent shall take all action necessary (x) to cause Michael R. Bonsignore\nto be elected as Chief Executive Officer of Parent as of the Effective\nTime, (y) to cause Michael R. Bonsignore to be elected as Chairman of the\nBoard of Directors of Parent effective as of April 1, 2000 or such earlier\ndate as Lawrence A. Bossidy shall retire as Chairman of the Board of\nDirectors of Parent, and (z) to create an Executive Office (the \"Executive\nOffice\") as of the Effective Time consisting of Lawrence A. Bossidy until\nhis retirement as Chairman of the Board of Directors of Parent, Michael R.\nBonsignore as the Chief Executive Officer of Parent and, after the\nretirement of Lawrence A. Bossidy, as Chairman of the Board of Directors of\nParent, and Robert D. Johnson and Giannantonio Ferrari, each of whom shall\nbe elected as a Chief Operating Officer and an Executive Vice President of\nParent.\n\n          (d)  At the Effective Time, Parent shall cause its By-laws to be\namended to incorporate the provisions set forth in Exhibit A hereto (such\namendment of the By-laws of Parent being referred to herein as the \"By-laws\nAmendment\").\n\n     SECTION 2.3 Certificate of Incorporation of the Surviving Corporation.\nThe certificate of incorporation of the Company in effect at the Effective\nTime shall be the certificate of incorporation of the Surviving Corporation\n(until amended in accordance with applicable law), except that the first\nsentence of Article FOURTH thereof shall be amended as of the Effective\nTime to read in its entirety as follows: \"The Corporation shall have the\nauthority to issue 1,000 shares of par value $1.50 per share designated as\nCommon Stock.\"\n\n     SECTION 2.4 By-laws of the Surviving Corporation. The by-laws of the\nCompany in effect at the Effective Time shall be the by-laws of the\nSurviving Corporation (until amended in accordance with applicable law).\n\n     SECTION 2.5 Directors and Officers of the Surviving Corporation. From\nand after the Effective Time, until successors are duly elected or\nappointed and qualified in accordance with applicable law, (a) the\ndirectors of Merger Subsidiary at the Effective Time shall be the directors\nof the Surviving Corporation, who shall consist as of the Effective Time of\nthose people mutually agreed upon by the chief executive officers of the\nCompany and Parent, and (b) the officers of the Company at the Effective\nTime shall be the officers of the Surviving Corporation.\n\n\n                                ARTICLE III\n               REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n     The Company represents and warrants to Parent that except as set forth\nin the disclosure schedules delivered by the Company to Parent\nsimultaneously with the execution of this Agreement (the \"Company\nDisclosure Schedules\") or the Company Commission Documents (as defined in\nSection 3.7(a)) filed prior to the date of this Agreement:\n\n     SECTION 3.1 Corporate Existence and Power. The Company is a\ncorporation duly incorporated, validly existing and in good standing under\nthe laws of the State of Delaware, and has all corporate powers and all\ngovernmental licenses, authorizations, consents and approvals required to\ncarry on its business as now conducted, except for those the absence of\nwhich would not, individually or in the aggregate, have a Material Adverse\nEffect on the Company. The Company is duly qualified to do business as a\nforeign corporation and is in good standing in each jurisdiction where the\ncharacter of the property owned or leased by it or the nature of its\nactivities makes such qualification necessary, except for those\njurisdictions where the failure to be so qualified would not, individually\nor in the aggregate, have a Material Adverse Effect on the Company. For\npurposes of this Agreement, a \"Material Adverse Effect\" with respect to any\nPerson means a material adverse effect on the financial condition,\nbusiness, liabilities, properties, assets or results of operations, taken\nas a whole, of this Person and its Subsidiaries, taken as a whole, except\nto the extent resulting from any changes in general United States or global\neconomic conditions or general economic conditions in industries in which\nthe Person competes or resulting from the announcement of the transaction\nor any action required to be taken by the terms hereof. The Company has\nheretofore made available to Parent true and complete copies of the\nCompany's certificate of incorporation and by-laws as currently in effect.\n\n     SECTION 3.2 Corporate Authorization.\n\n          (a)  The execution, delivery and performance by the Company of\nthis Agreement and the Option Agreements and the consummation by the\nCompany of the transactions contemplated hereby and thereby are within the\nCompany's corporate powers and, except for any required approval by the\nCompany's stockholders in accordance with Delaware Law (the \"Company\nStockholder Approval\") in connection with the consummation of the Merger,\nhave been duly authorized by all necessary corporate action. The\naffirmative vote of holders of the outstanding shares of Company Common\nStock having votes representing a majority of the votes of all such\noutstanding capital stock, voting together as a single class, in favor of\nthe approval and adoption of this Agreement and the Merger is the only vote\nof the holders of any of the Company's capital stock necessary in\nconnection with consummation of the Merger. Assuming due authorization,\nexecution and delivery of this Agreement and the Option Agreements by\nParent and\/or Merger Subsidiary, as applicable, each of this Agreement and\nthe Option Agreements constitutes a valid and binding agreement of the\nCompany enforceable against the Company in accordance with its terms,\nsubject to bankruptcy, insolvency, fraudulent transfer, reorganization,\nmoratorium and similar laws of general applicability relating to or\naffecting creditors' rights, and to general equity principles.\n\n          (b)  The Company's Board of Directors, at a meeting duly called\nand held, has (i) determined that this Agreement and the Option Agreements\nand the transactions contemplated hereby and thereby (including the Merger)\nare fair to and in the best interests of the Company's stockholders, (ii)\napproved and adopted this Agreement and the Option Agreements and the\ntransactions contemplated hereby and thereby (including the Merger), and\n(iii) resolved (subject to Section 5.2) to recommend that the Company\nstockholders vote for the approval and adoption of this Agreement and the\nMerger.\n\n     SECTION 3.3 Governmental Authorization. The execution, delivery and\nperformance by the Company of this Agreement and the Option Agreements and\nthe consummation by the Company of the transactions contemplated hereby and\nthereby require no action by or in respect of, or filing with, any\ngovernmental body, agency, official or authority other than (a) the filing\nof a certificate of merger in connection with the Merger in accordance with\nDelaware Law, (b) compliance with any applicable requirements of the\nHart-Scott-Rodino Antitrust Improvements Act of 1976 (the \"HSR Act\"), (c)\ncompliance with any applicable requirements of Council Regulation No.\n4064\/89 of the European Community, as amended (the \"EC Merger Regulation\"),\n(d) compliance with any other applicable requirements of foreign anti-trust\nor investment laws, (e) compliance with any applicable environmental\ntransfer statutes, (f) compliance with any applicable requirements of the\nSecurities Exchange Act of 1934, as amended, and the rules and regulations\npromulgated thereunder (the \"Exchange Act\"), (g) compliance with any\napplicable requirements of the Securities Act and (h) other actions or\nfilings which if not taken or made would not, individually or in the\naggregate, have a Material Adverse Effect on the Company or prevent or\nmaterially delay the Company's consummation of the Merger.\n\n     SECTION 3.4 Non-Contravention. The execution, delivery and performance\nby the Company of this Agreement and the Option Agreements and the\nconsummation by the Company of the transactions contemplated hereby and\nthereby do not and will not (a) contravene or conflict with the certificate\nof incorporation or by-laws of the Company, (b) assuming compliance with\nthe matters referred to in Section 3.3 and subject to receipt of the\nCompany Stockholder Approval, contravene or conflict with or constitute a\nviolation of any provision of any law, regulation, judgment, injunction,\norder or decree binding upon or applicable to the Company or any of its\nSubsidiaries (as defined in Section 3.6), (c) subject to receipt of the\nCompany Stockholder Approval, constitute a default under or give rise to\nany right of termination, cancellation or acceleration of any right or\nobligation of the Company or any of its Subsidiaries or to a loss of any\nbenefit to which the Company or any of its Subsidiaries is entitled under\nany provision of any agreement, contract or other instrument binding upon\nthe Company or any of its Subsidiaries or any license, franchise, permit or\nother similar authorization held by the Company or any of its Subsidiaries,\nor (d) result in the creation or imposition of any Lien on any asset of the\nCompany or any of its Subsidiaries, except for such contraventions,\nconflicts or violations referred to in clause (b) or defaults, rights of\ntermination, cancellation or acceleration, or losses or Liens referred to\nin clause (c) or (d) that would not, individually or in the aggregate, have\na Material Adverse Effect on the Company. For purposes of this Agreement,\n\"Lien\" means, with respect to any asset, any mortgage, lien, pledge,\ncharge, security interest or encumbrance of any kind in respect of such\nasset other than any such mortgage, lien, pledge, charge, security interest\nor encumbrance (i) for Taxes (as defined in Section 3.13) not yet due or\nbeing contested in good faith or (ii) which is a carriers', warehousemen's,\nmechanics', materialmen's, repairmen's or other like lien arising in the\nordinary course of business. Neither the Company nor any Subsidiary of the\nCompany is a party to any agreement that expressly limits the ability of\nthe Company or any Subsidiary of the Company to compete in or conduct any\nline of business or compete with any Person or in any geographic area or\nduring any period of time except to the extent that any such limitation,\nindividually or in the aggregate, would not have a Material Adverse Effect\non Parent or the Surviving Corporation immediately after the Effective\nTime.\n\n     SECTION 3.5 Capitalization. The authorized capital stock of the\nCompany consists of 375,000,000 shares of Company Common Stock and\n25,000,000 shares of preferred stock, par value $1.00 per share (of which\n2,000,000 are designated \"Series B Junior Participating Preferred Stock\"\nand the remaining shares of such preferred stock are not subject to any\ndesignation) (the \"Company Preferred Stock\"). As of the close of business\non June 1, 1999, there were outstanding (i) 126,841, 802 shares of Company\nCommon Stock and (ii) no shares of Company Preferred Stock (all of the\nSeries B Junior Participating Preferred Stock being reserved for issuance\nin accordance with the Rights Agreement (the \"Company Rights Agreement\"),\ndated as of January 16, 1996, by and between the Company and Chase Mellon\nShareholder Services, L.L.C., as Rights Agent, pursuant to which the\nCompany has issued rights to purchase the Series B Junior Participating\nPreferred Stock (\"Company Rights\")) and no other shares of capital stock or\nother voting securities of the Company were then outstanding. All\noutstanding shares of capital stock of the Company have been duly\nauthorized and validly issued and are fully paid and nonassessable. Except\nfor (a) Company Stock Options to acquire no more than 6,491,358 shares of\nCompany Common Stock issued pursuant to the Company Stock Plans, (b)\nCompany Rights none of which are exercisable, (c) the option granted\npursuant to the Parent Option Agreement, (d) stock units for no more than\n231,954 shares of Company Common Stock and (e) shares issuable under the\nCompany's employee stock purchase plans in the ordinary course of business\nconsistent with past practice, as of the close of business on June 1, 1999,\nthere were no outstanding options, warrants or other rights to acquire from\nthe Company, and no preemptive or similar rights, subscription or other\nrights, convertible or exchangeable securities, agreements, arrangements or\ncommitments of any character, relating to the capital stock of the Company,\nobligating the Company to issue, transfer or sell, any capital stock,\nvoting securities or securities convertible into or exchangeable for\ncapital stock or voting securities of the Company or obligating the Company\nto grant, extend or enter into any such option, warrant, subscription or\nother right, convertible or exchangeable security, agreement, arrangement\nor commitment (each of the foregoing, a \"Company Convertible Security\").\nSince the close of business on June 1, 1999, the Company has not issued any\nshares of capital stock or any Company Convertible Securities other than\nthe issuance of Company Common Stock in connection with the exercise of the\nCompany Stock Options described in clause (a) above and\/or as permitted by\nSection 5.1 hereof. Except as required by the terms of any Company Stock\nOptions, the Blossom Non-Employee Directors Fee and Stock Unit Plan and\/or\nas permitted by Section 5.1, there are no outstanding obligations of the\nCompany or any of its Subsidiaries to repurchase, redeem or otherwise\nacquire any shares of capital stock of the Company or any Company\nConvertible Securities.\n\n     SECTION 3.6 Subsidiaries.\n\n          (a)  Each Subsidiary of the Company is duly organized, validly\nexisting and in good standing under the laws of its jurisdiction of\norganization, has all powers and all governmental licenses, authorizations,\nconsents and approvals required to carry on its business as now conducted,\nexcept for those the absence of which would not, individually or in the\naggregate, reasonably be expected to have a Material Adverse Effect on the\nCompany. For purposes of this Agreement, the word \"Subsidiary\" when used\nwith respect to any Person means any other Person, whether incorporated or\nunincorporated, of which (i) more than fifty percent of the securities or\nother ownership interests or (ii) securities or other interests having by\ntheir terms ordinary voting power to elect more than fifty percent of the\nboard of directors or others performing similar functions with respect to\nsuch corporation or other organization, is directly owned or controlled by\nsuch Person or by any one or more of its Subsidiaries. Each Subsidiary of\nthe Company is duly qualified to do business and is in good standing in\neach jurisdiction where the character of the property owned or leased by it\nor the nature of its activities makes such qualification necessary, except\nfor those jurisdictions where failure to be so qualified would not,\nindividually or in the aggregate, have a Material Adverse Effect on the\nCompany.\n\n          (b)  Except for directors' qualifying shares and except as set\nforth in the Company's annual report on Form 10-K for the fiscal year ended\nDecember 31, 1998 (the \"Company 10-K\"), all of the outstanding capital\nstock of, or other ownership interests in, each Significant Subsidiary (as\nsuch term is defined in rule 12b-2 under the Exchange Act) of the Company\nis, directly or indirectly, owned by the Company. All shares of capital\nstock of, or other ownership interests in, Subsidiaries of the Company,\ndirectly or indirectly, owned by the Company are owned free and clear of\nany Lien and free of any other limitation or restriction (including any\nrestriction on the right to vote, sell or otherwise dispose of such capital\nstock or other ownership interests), except as would not, individually or\nin the aggregate, have a Material Adverse Effect on the Company. There are\nno outstanding options, warrants or other rights to acquire from the\nCompany or any of its Subsidiaries, and, except as may be required by\napplicable foreign corporate laws, no preemptive or similar rights,\nsubscriptions or other rights, convertible or exchangeable securities,\nagreements, arrangements or commitments of any character, relating to the\ncapital stock of any Subsidiary of the Company, obligating the Company or\nany of its Subsidiaries to issue, transfer or sell, any capital stock,\nvoting securities or other ownership interests in, or any securities\nconvertible into or exchangeable for any capital stock, voting securities\nor ownership interests in, any Subsidiary of the Company or obligating the\nCompany or any Subsidiary of the Company to grant, extend or enter into any\nsuch option, warrant, subscription or other right, convertible or\nexchangeable security, agreement, arrangement or commitment (each of the\nforegoing, a \"Company Subsidiary Convertible Security\"). There are no\noutstanding obligations of the Company or any of its Subsidiaries to\nrepurchase, redeem or otherwise acquire from any Person (other than the\nCompany or a wholly owned Subsidiary of the Company) any outstanding shares\nof capital stock of any Subsidiary of the Company or any Company Subsidiary\nConvertible Securities.\n\n     SECTION 3.7 Commission Filings.\n\n          (a)  The Company has made available to Parent (i) its annual\nreports on Form 10-K for its fiscal years ended December 31, 1996, 1997 and\n1998, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended\nafter December 31, 1998, (iii) its proxy or information statements relating\nto meetings of, or actions taken without a meeting by, the stockholders of\nthe Company held since December 31, 1998, and (iv) all of its other\nreports, statements, schedules and registration statements filed with the\nCommission since December 31, 1998 (the documents referred to in this\nSection 3.7(a) being referred to collectively as the \"Company Commission\nDocuments\"). The Company's quarterly report on Form 10-Q for its fiscal\nquarter ended April 4, 1999 is referred to as the \"Company 10-Q\".\n\n          (b)  As of its filing date, each Company Commission Document\ncomplied as to form in all material respects with the applicable\nrequirements of the Exchange Act and the Securities Act.\n\n          (c)  As of its filing date, each Company Commission Document\nfiled pursuant to the Exchange Act did not contain any untrue statement of\na material fact or omit to state any material fact necessary in order to\nmake the statements made therein, in the light of the circumstances under\nwhich they were made, not misleading.\n\n          (d)  Each registration statement, as amended or supplemented, if\napplicable, filed by the Company pursuant to the Securities Act since\nDecember 31, 1996, as of the date such statement or amendment became\neffective did not contain any untrue statement of a material fact or omit\nto state any material fact required to be stated therein or necessary to\nmake the statements therein not misleading.\n\n     SECTION 3.8 Financial Statements. The audited consolidated financial\nstatements and unaudited consolidated interim financial statements of the\nCompany (including any related notes and schedules) included in its annual\nreports on Form 10-K and the quarterly reports on Form 10-Q referred to in\nSection 3.7 present fairly, in all material respects, the financial\nposition of the Company and its subsidiaries as of the dates thereof and\ntheir results of operations and cash flows for the periods then ended\n(subject to normal year-end adjustments and the absence of notes in the\ncase of any unaudited interim financial statements), in each case in\nconformity GAAP applied on a consistent basis (except as may be indicated\nin the notes thereto). For purposes of this Agreement, \"Company Balance\nSheet\" means the consolidated balance sheet of the Company as of April 4,\n1999 set forth in the Company 10-Q and \"Company Balance Sheet Date\" means\nApril 4, 1999.\n\n     SECTION 3.9 Disclosure Documents.\n\n          (a)  Neither the proxy statement of the Company (the \"Company\nProxy Statement\") to be filed with the Commission in connection with the\nMerger, nor any amendment or supplement thereto, will, at the date the\nCompany Proxy Statement or any such amendment or supplement is first mailed\nto stockholders of the Company or at the time such stockholders vote on the\nadoption and approval of this Agreement and the transactions contemplated\nhereby, contain any untrue statement of a material fact or omit to state\nany material fact necessary in order to make the statements therein, in\nlight of the circumstances under which they were made, not misleading. The\nCompany Proxy Statement will, when filed, comply as to form in all material\nrespects with the requirements of the Exchange Act. No representation or\nwarranty is made by the Company in this Section 3.9 with respect to\nstatements made or incorporated by reference therein based on information\nsupplied by Parent or Merger Subsidiary for inclusion or incorporation by\nreference in the Company Proxy Statement.\n\n          (b)  None of the information supplied or to be supplied by the\nCompany for inclusion or incorporation by reference in the Parent Proxy\nStatement (as defined in Section 4.9) or in the Form S-4 (as defined in\nSection 4.9) or any amendment or supplement thereto will, at the time the\nParent Proxy Statement or any such supplement or amendment thereto is first\nmailed to the stockholders of Parent or at the time the stockholders vote\non the matters constituting the Parent Stockholder Approval (as defined in\nSection 4.2) or at the time the Form S-4 or any such amendment or\nsupplement becomes effective under the Securities Act or at the Effective\nTime, as the case may be, contain any untrue statement of a material fact\nor omit to state a material fact necessary in order to make the statements\ntherein, in light of the circumstances under which they were made, not\nmisleading.\n\n     SECTION 3.10 Absence of Certain Changes. Since the Company Balance\nSheet Date and, other than with respect to clause (a) below, prior to the\ndate hereof, the Company and its Subsidiaries have conducted their\nrespective businesses in the ordinary course, consistent with past\npractice, and there has not been:\n\n          (a)  any event, occurrence or development which, individually or\nin the aggregate, would have a Material Adverse Effect on the Company;\n\n          (b)  any declaration, setting aside or payment of any dividend or\nother distribution with respect to any shares of capital stock of the\nCompany (other than regular quarterly cash dividends payable by the Company\nin respect of the shares of Company Common Stock consistent with past\npractice), or any repurchase (other than repurchases of Company Common\nStock which occurred subsequent to the Company Balance Sheet Date and prior\nto the date hereof), redemption or other acquisition by the Company or any\nof its Significant Subsidiaries of any outstanding shares of their capital\nstock or any Company Convertible Securities or Company Subsidiary\nConvertible Securities (except (x) as required by the terms of any Company\nStock Option, (y) in accordance with any dividend reinvestment plan as in\neffect on the date of this Agreement in the ordinary course of the\noperation of such plan consistent with past practice and\/or (z) as\notherwise permitted by Section 5.1);\n\n          (c)  any amendment of any material term of any outstanding\nsecurity of the Company or any of its Significant Subsidiaries;\n\n          (d)  any transaction or commitment made, or any contract,\nagreement or settlement entered into, by (or judgment, order or decree\naffecting) the Company or any of its Subsidiaries relating to its assets or\nbusiness (including the acquisition or disposition of any material amount\nof assets) or any relinquishment by the Company or any of its Subsidiaries\nof any contract or other right, in either case, material to the Company and\nits Subsidiaries taken as a whole, other than transactions, commitments,\ncontracts, agreements or settlements (including without limitation\nsettlements of litigation and tax proceedings) in the ordinary course of\nbusiness consistent with past practice and those contemplated by this\nAgreement;\n\n          (e)  any change in any method of accounting or accounting\npractice (other than any change for tax purposes) by the Company or any of\nits Subsidiaries, except for any such change which is not material or which\nis required by reason of a concurrent change in GAAP;\n\n          (f)  any (i) grant of any severance or termination pay to (or\namendment to any such existing arrangement with) any director, officer or\nemployee of the Company or any of its Subsidiaries, (ii) entering into of\nany employment, deferred compensation, supplemental retirement or other\nsimilar agreement (or any amendment to any such existing agreement) with\nany director, officer or employee of the Company or any of its\nSubsidiaries, (iii) increase in, or accelerated vesting and\/or payment of,\nbenefits under any existing severance or termination pay policies or\nemployment agreements or (iv) increase in or enhancement of any rights or\nfeatures related to compensation, bonus or other benefits payable to\ndirectors, officers or employees of the Company or any of its Subsidiaries,\nin each case, other than in the ordinary course of business consistent with\npast practice or as permitted by this Agreement; or\n\n          (g)  any material Tax election made or changed, any material\naudit settled or any material amended Tax Returns filed.\n\n     SECTION 3.11 No Undisclosed Material Liabilities. There are no\nliabilities of the Company or any Subsidiary of the Company of any kind\nwhatsoever, whether accrued, contingent, absolute, determined, determinable\nor otherwise, other than:\n\n          (a)  liabilities disclosed or provided for in the Company Balance\nSheet or in the notes thereto;\n\n          (b)  liabilities incurred since such date in the ordinary course\nof business;\n\n          (c)  liabilities which, individually or in the aggregate, would\nnot have a Material Adverse Effect on the Company;\n\n          (d)  liabilities disclosed in the Company Commission Documents\nfiled prior to the date of this Agreement; and\n\n          (e)  liabilities under this Agreement.\n\n     SECTION 3.12 Litigation. There is no action, suit, investigation or\nproceeding pending against, or to the knowledge of the Company threatened\nagainst or affecting, the Company or any of its Subsidiaries or any of\ntheir respective properties or any of their respective officers or\ndirectors before any court or arbitrator or any governmental body, agency\nor official except as would not, individually or in the aggregate, have a\nMaterial Adverse Effect on the Company or prevent or materially delay the\nconsummation of the Merger.\n\n     SECTION 3.13 Taxes. Except as provided for in the Company Balance\nSheet (including the notes thereto) or as would not, individually or in the\naggregate, have a Material Adverse Effect on the Company, (i) all Company\nTax Returns required to be filed with any taxing authority by, or with\nrespect to, the Company and its Subsidiaries have been filed in accordance\nwith all applicable laws; (ii) the Company and its Subsidiaries have timely\npaid all Taxes shown as due and payable on the Company Tax Returns that\nhave been so filed, and, as of the time of filing, the Company Tax Returns\ncorrectly reflected the facts regarding the income, business, assets,\noperations, activities and the status of the Company and its Subsidiaries\n(other than Taxes which are being contested in good faith and for which\nadequate reserves are reflected on the Company Balance Sheet); (iii) the\nCompany and its Subsidiaries have made provision for all Taxes payable by\nthe Company and its Subsidiaries for which no Company Tax Return has yet\nbeen filed; (iv) the charges, accruals and reserves for Taxes with respect\nto the Company and its Subsidiaries reflected on the Company Balance Sheet\nare adequate under GAAP to cover the Tax liabilities accruing through the\ndate thereof; (v) there is no action, suit, proceeding, audit or claim now\nproposed or pending against or with respect to the Company or any of its\nSubsidiaries in respect of any Tax where there is a reasonable possibility\nof an adverse determination; and (vi) to the best of the Company's\nknowledge and belief, neither the Company nor any of its Subsidiaries is\nliable for any Tax imposed on any entity other than such Person, except as\nthe result of the application of Treas. Reg. Sections 1.1502-6 (and any\ncomparable provision of the tax laws of any state, local or foreign\njurisdiction) to the affiliated group of which the Company is the common\nparent. For purposes of this Agreement, \"Taxes\" shall mean any and all\ntaxes, charges, fees, levies or other assessments, including, without\nlimitation, all net income, gross income, gross receipts, excise, stamp,\nreal or personal property, ad valorem, withholding, social security (or\nsimilar), unemployment, occupation, use, production, service, service use,\nlicense, net worth, payroll, franchise, severance, transfer, recording,\nemployment, premium, windfall profits, environmental (including taxes under\nSection 59A of the Code), customs duties, capital stock, profits,\ndisability, sales, registration, value added, alternative or add-on\nminimum, estimated or other taxes, assessments or charges imposed by any\nfederal, state, local or foreign governmental entity and any interest,\npenalties, or additions to tax attributable thereto. For purposes of this\nAgreement, \"Tax Returns\" shall mean any return, report, form or similar\nstatement required to be filed with respect to any Tax (including any\nattached schedules), including, without limitation, any information return,\nclaim for refund, amended return or declaration of estimated Tax.\n\n     SECTION 3.14 Employee Benefit Plans.\n\n          (a)  For purposes of this Agreement, the term \"Company Employee\nPlans\" shall mean and include: each material management, consulting,\nnon-compete, employment, severance or similar contract, plan, including,\nwithout limitation, all Company Stock Plans, arrangement or policy\napplicable to any director, former director, employee or former employee of\nthe Company and each material plan, program, policy, agreement or\narrangement (written or oral), providing for compensation, bonuses,\nprofit-sharing, stock option or other stock related rights or other forms\nof incentive or deferred compensation, vacation benefits, insurance\ncoverage (including any self-insured arrangements), health or medical\nbenefits, disability benefits, workers' compensation, supplemental\nunemployment benefits, severance benefits and post-employment or retirement\nbenefits (including compensation, pension, health, medical or life\ninsurance benefits) or other employee benefits of any kind, whether funded\nor unfunded, which is maintained, administered or contributed to by the\nCompany or any Subsidiary and covers any employee or director or former\nemployee or director of the Company or any Subsidiary, or under which the\nCompany has any liability contingent or otherwise (including but not\nlimited to each material \"employee benefit plan,\" as defined in Section\n3(3) of the Employee Retirement Income Security Act of 1974, as amended\n(\"ERISA\"), but excluding any such plan that is a \"multiemployer plan,\" as\ndefined in Section 3(37) of ERISA).\n\n          (b)  Each Company Employee Plan has been established and\nmaintained in compliance with its terms and with the requirements\nprescribed by any and all statutes, orders, rules and regulations\n(including but not limited to ERISA and the Code) which are applicable to\nsuch Plan, except where failure to so comply would not, individually or in\nthe aggregate, have a Material Adverse Effect on the Company.\n\n          (c)  Neither the Company nor any affiliate of the Company has\nincurred a liability under Title IV of ERISA that has not been satisfied in\nfull, and no condition exists that presents a material risk to the Company\nor any affiliate of the Company of incurring any such liability other than\nliability for premiums due the Pension Benefit Guaranty Corporation (which\npremiums have been paid when due). All contributions required to be made\nunder the terms of any Company Employee Plan maintained in the United\nStates have been made, and, where applicable to a Company Employee Plan,\nthe Company and its affiliates have complied with the minimum funding\nrequirements under Section 412 of the Code and Section 302 of ERISA with\nrespect to each such Company Employee Plan.\n\n          (d)  Each Company Employee Plan which is intended to be qualified\nunder section 401(a) of the Code is so qualified and has been so qualified\nduring the period from its adoption to date, and each trust forming a part\nthereof is exempt from federal income tax pursuant to section 501(a) of the\nCode and, to the Company's knowledge, no circumstances exist which will\nadversely affect such qualification or exemption.\n\n          (e)  No director or officer or other employee of the Company or\nany of its Subsidiaries will become entitled to any retirement, severance\nor similar benefit or enhanced or accelerated benefit (including any\nacceleration of vesting or lapse of repurchase rights or obligations with\nrespect to any Company Stock Plans or other benefit under any compensation\nplan or arrangement of the Company) solely as a result of the transactions\ncontemplated hereby; and (ii) no payment made or to be made to any current\nor former employee or director of the Company or any of its affiliates by\nreason of the transactions contemplated hereby (whether alone or in\nconnection with any other event) will constitute an \"excess parachute\npayment\" within the meaning of Section 280G of the Code.\n\n          (f)  Since the Company Balance Sheet Date, there has been no\namendment to, or change in employee participation or coverage under, any\nCompany Employee Plan which would increase materially the expense of\nmaintaining such Company Employee Plan above the level of the expense\nincurred in respect thereof for the 12 months ended on the Company Balance\nSheet Date.\n\n          (g)  The Company and its Subsidiaries are in compliance with all\napplicable federal, state, local and foreign statutes, laws, (including\nwithout limitation, common law), judicial decisions, regulations,\nordinances, rules, judgments, orders and codes respecting employment,\nemployment practices, labor, terms and conditions of employment and wages\nand hours, and no work stoppage or labor strike against the Company and its\nSubsidiaries are pending or threatened, nor are the Company and its\nSubsidiaries involved in or threatened with any labor dispute, grievance,\nor litigation relating to labor matters involving any employees, in each\ncase except as would not, individually or in the aggregate, have a Material\nAdverse Effect on the Company. There are no suits, actions, disputes,\nclaims (other than routine claims for benefits), investigations or audits\npending or, to the knowledge of the Company, threatened in connection with\nany Company Employee Plan, but excluding any of the foregoing which would\nnot have a Material Adverse Effect on the Company.\n\n\n     SECTION 3.15 Compliance with Laws. Neither the Company nor any of its\nSubsidiaries is in violation of, or has since January 1, 1997 violated, any\napplicable provisions of any laws, statutes, ordinances or regulations\nexcept for any violations that, individually or in the aggregate, would not\nhave a Material Adverse Effect on the Company.\n\n     SECTION 3.16 Finders' or Advisors' Fees. Except for Bear, Stearns &amp; Co. Inc., a copy of whose engagement agreement has been provided to Parent,\nthere is no investment banker, broker, finder or other intermediary which\nhas been retained by or is authorized to act on behalf of the Company or\nany of its Subsidiaries who might be entitled to any fee or commission in\nconnection with the transactions contemplated by this Agreement.\n\n     SECTION 3.17 Environmental Matters.\n\n          (a)  Except for matters which, individually or in the aggregate,\nwould not have a Material Adverse Effect on the Company, (i) no written\nnotice, notification, demand, request for information, citation, summons,\ncomplaint or order has been received by, and no investigation, action,\nclaim, suit, proceeding or review is pending or, to the knowledge of the\nCompany or any of its Subsidiaries, threatened by any Person against, the\nCompany or any of its Subsidiaries, and no penalty has been assessed within\nthe past three years against the Company or any of its Subsidiaries, in\neach case, with respect to any matters relating to or arising out of any\nEnvironmental Law; (ii) the Company and its Subsidiaries are in compliance\nwith all Environmental Laws; and (iii) to the knowledge of the Company,\nthere are no liabilities of or relating to the Company or any of its\nSubsidiaries relating to or arising out of any Environmental Law and, to\nthe knowledge of the Company, there is no existing condition, situation or\nset of circumstances which could reasonably be expected to result in such a\nliability.\n\n          (b)  For purposes of this Section 3.17 and Section 4.17, the term\n\"Environmental Laws\" means federal, state, local and foreign statutes,\nlaws, judicial decisions, regulations, ordinances, rules, judgments,\norders, codes, injunctions, permits and governmental agreements relating to\nhuman health and the environment, including, but not limited to, Hazardous\nMaterials; and the term \"Hazardous Material\" means all substances or\nmaterials regulated as hazardous, toxic, explosive, dangerous, flammable or\nradioactive under any Environmental Law including, but not limited to: (i)\npetroleum, asbestos, or polychlorinated biphenyls and (ii) in the United\nStates, all substances defined as Hazardous Substances, Oils, Pollutants or\nContaminants in the National Oil and Hazardous Substances Pollution\nContingency Plan, 40 C.F.R. ss. 300.5.\n\n     SECTION 3.18 Opinion of Financial Advisor. The Company has received\nthe opinion of Bear, Stearns &amp; Co. Inc. to the effect that, as of the date\nof its opinion, the Exchange Ratio is fair from a financial point of view\nto the holders of shares of Company Common Stock.\n\n     SECTION 3.19 Pooling; Tax Treatment.\n\n          (a)  The Company intends that the Merger be accounted for under\nthe \"pooling of interests\" method under the requirements of Opinion No. 16\n(Business Combinations) of the Accounting Principles Board of the American\nInstitute of Certified Public Accountants and the rules and regulations of\nthe SEC.\n\n          (b)  Neither the Company nor any of its affiliates has taken or\nagreed to take any action or is aware of any fact or circumstance with\nrespect to the Company or its affiliates that would prevent the Merger from\nqualifying (i) for \"pooling of interests\" accounting treatment as described\nin (a) above or (ii) as a reorganization within the meaning of Section 368\nof the Code (a \"368 Reorganization\").\n\n     SECTION 3.20 Takeover Statutes and Charter Provisions. The Board of\nDirectors of the Company has taken the necessary action to render Section\n203 of the Delaware Law, any other potentially applicable anti-takeover or\nsimilar statute or regulation and the provisions of Sections A and B.2 of\nArticle EIGHTH of the Company's certificate of incorporation inapplicable\nto this Agreement and the Parent Option Agreement and the transactions\ncontemplated hereby and thereby.\n\n     SECTION 3.21 Rights Agreement. The Board of Directors of the Company\nhas resolved to, and the Company promptly after the execution hereof will,\ntake all action necessary to render the rights issued pursuant to the terms\nof the Company Rights Agreement inapplicable to the Merger, this Agreement,\nthe Parent Option Agreement and the other transactions contemplated hereby\nand thereby and for the rights to expire as of the Effective Time.\n\n     SECTION 3.22 Intellectual Property Matters.\n\n          (a)  The Company and its Subsidiaries own, free and clear of all\nLiens, or have the right to use pursuant to valid license, sublicense,\nagreement or permission all items of Intellectual Property (as defined in\nSection 3.23(b)) necessary for their operations as presently conducted or\nas contemplated to be conducted, except where the failure to have such\nrights, individually or in the aggregate, would not have a Material Adverse\nEffect on the Company. The conduct of the Company's and its Subsidiaries'\nbusinesses as currently conducted or contemplated to be conducted does not\ninterfere, infringe, misappropriate or violate any of the Intellectual\nProperty rights of any third party, except for interferences,\ninfringements, misappropriations and violations which, individually or in\nthe aggregate, would not have a Material Adverse Effect on the Company. To\nthe best of the Company's knowledge, no third party has interfered with,\ninfringed upon, misappropriated, diluted, violated or otherwise come into\nconflict with any Intellectual Property rights of the Company or any of its\nSubsidiaries, except for misappropriations and violations which,\nindividually or in the aggregate, would not have a Material Adverse Effect\non the Company.\n\n          (b)  The term \"Intellectual Property\" as used in this Agreement\nmeans, collectively, patents, trademarks, service marks, trade dress,\nlogos, trade names, Internet domain names, designs, slogans and general\nintangibles of like nature, copyrights and all registrations, applications,\nreissuances, continuations, continuations-in-part, revisions, extensions,\nreexaminations and associated good will with respect to each of the\nforegoing, computer software (including source and object codes), computer\nprograms, computer data bases and related documentation and materials,\ndata, documentation, technology, trade secrets, confidential business\ninformation (including ideas, formulae, algorithms, models, methodologies,\ncompositions, know-how, manufacturing and production processes and\ntechniques, research and development information, drawings, designs, plans,\nproposals and technical data, financial, marketing and business data and\npricing and cost information) and other intellectual property rights (in\nwhatever form or medium).\n\n     SECTION 3.23 Year 2000 Compliance Matters. Except for matters which,\nindividually and in the aggregate, would not have a Material Adverse Effect\non the Company, all proprietary and third-party licensed computer systems\nincluding computer hardware and software owned, leased or licensed by the\nCompany and computer software incorporated in products manufactured by the\nCompany and its Subsidiaries (a) will, prior to December 31, 1999,\naccurately and without interruption recognize the advent of the year 2000\nwithout any adverse change in operation associated with such recognition,\n(b) can accurately and without interruption recognize and manipulate date\ninformation relating to dates prior to, on and after January 1, 2000 and\n(c) can accurately and without interruption interact with other year 2000\ncompliant computer systems and computer software in a way that does not\ncompromise their ability to correctly recognize the advent of the year 2000\nor to accurately and without interruption recognize and manipulate date\ninformation relating to dates prior to, on or after January 1, 2000. The\ncosts of the adaptations to such computer systems, hardware and software\nbeing made by the Company and its Subsidiaries in order to achieve year\n2000 compliance are not expected to have a Material Adverse Effect on the\nCompany.\n\n\n                                 ARTICLE IV\n                  REPRESENTATIONS AND WARRANTIES OF PARENT\n\n     Parent represents and warrants to the Company that except as set forth\nin the disclosure schedules delivered by Parent to the Company\nsimultaneously with the execution of this Agreement (the \"Parent Disclosure\nSchedules\") and Parent Commission Documents (as defined in Section 4.7)\nfiled prior to the date hereof:\n\n     SECTION 4.1 Corporate Existence and Power. Each of Parent and Merger\nSubsidiary is a corporation duly incorporated, validly existing and in good\nstanding under the laws of its jurisdiction of incorporation and has all\ncorporate powers and all governmental licenses, authorizations, consents\nand approvals required to carry on its business as now conducted, except\nfor those the absence of which would not, individually or in the aggregate,\nhave a Material Adverse Effect on Parent. Parent is duly qualified to do\nbusiness as a foreign corporation and is in good standing in each\njurisdiction where the character of the property owned or leased by it or\nthe nature of its activities makes such qualification necessary, except for\nthose jurisdictions where the failure to be so qualified would not,\nindividually or in the aggregate, have a Material Adverse Effect on Parent.\nSince the date of its incorporation, Merger Subsidiary has not engaged in\nany activities other than in connection with or as contemplated by this\nAgreement. Parent has heretofore made available to the Company true and\ncomplete copies of Parent's and Merger Subsidiary's certificate of\nincorporation and by-laws as currently in effect. As of the date hereof,\nneither Parent nor any of its Subsidiaries owns any shares of Company\nCommon Stock.\n\n     SECTION 4.2 Corporate Authorization.\n\n          (a)  The execution, delivery and performance by Parent and Merger\nSubsidiary of this Agreement, and by Parent of the Option Agreements, and\nthe consummation by Parent and Merger Subsidiary of the transactions\ncontemplated hereby and thereby are within the corporate powers of Parent\nand Merger Subsidiary and have been duly authorized by all necessary\ncorporate action, and, except for the required approval of Parent's\nstockholders, for the issuance of Parent Common Stock (the \"Common Stock\nIssuance\") in connection with the Merger (the \"Common Stock Issuance\nApproval\" or the \"Parent Stockholders Approval\"), the Common Stock Issuance\nis in accordance with the rules and regulations of the NYSE. The\naffirmative vote of the holders of shares of Parent Common Stock having\nvotes representing a majority of the votes cast with respect to the Common\nStock Issuance, voting together as a single class, in favor of the Common\nStock Issuance (provided that the total number of the votes cast in favor\nand against the Common Stock Issuance represents over 50% of all of votes\neligible to be cast by all holders of Parent Common Stock) is the only vote\nof the holders of any of Parent's capital stock necessary in connection\nwith obtaining the Common Stock Issuance Approval. Assuming due\nauthorization, execution and delivery of this Agreement and the Option\nAgreements by the Company, this Agreement constitutes a valid and binding\nagreement of each of Parent and Merger Subsidiary and the Option Agreements\nconstitute valid and binding agreements of Parent, in each case enforceable\nagainst such party in accordance with its terms, subject to bankruptcy,\ninsolvency, fraudulent transfer, reorganization, moratorium and similar\nlaws of general applicability relating to or affecting creditors' rights\nand to general equity principles. The shares of Parent Common Stock issued\npursuant to the Merger, when issued in accordance with the terms hereof,\nwill be duly authorized, validly issued, fully paid and nonassessable and\nnot subject to preemptive rights.\n\n          (b)  Parent's Board of Directors, at a meeting duly called and\nheld, has (i) determined that this Agreement and the Option Agreements and\nthe transactions contemplated hereby and thereby (including the Merger) are\nfair to and in the best interests of Parent's stockholders, (ii) approved\nthis Agreement and the Option Agreements and the transactions contemplated\nhereby and thereby (including the Merger, the Common Stock Issuance and the\nBy-laws Amendment), and (iii) resolved (subject to Section 6.4) to\nrecommend that Parent's stockholders vote in favor of the Common Stock\nIssuance.\n\n     SECTION 4.3 Governmental Authorization. The execution, delivery and\nperformance by Parent and Merger Subsidiary of this Agreement, and by\nParent of the Option Agreements, and the consummation by Parent and Merger\nSubsidiary of the transactions contemplated hereby and thereby require no\naction by or in respect of, or filing with, any governmental body, agency,\nofficial or authority other than (a) the filing of a certificate of merger\nin connection with the Merger, and a certificate of merger in connection\nwith the merger contemplated by Section 2.1, in each case in accordance\nwith Delaware Law, (b) compliance with any applicable requirements of the\nHSR Act, (c) compliance with any applicable requirements of the EC Merger\nRegulation, (d) compliance with any other applicable requirements of\nforeign anti-trust or investments laws, (e) compliance with any applicable\nenvironmental transfer statutes, (f) compliance with any applicable\nrequirements of the Exchange Act, (g) compliance with any applicable\nrequirements of the Securities Act, and (h) other actions or filings which\nif not taken or made would not, individually or in the aggregate, have a\nMaterial Adverse Effect on Parent or prevent or materially delay Parent's\nand\/or Merger Subsidiary's consummation of the Merger.\n\n     SECTION 4.4 Non-Contravention. The execution, delivery and performance\nby Parent and Merger Subsidiary of this Agreement, and by Parent of the\nOption Agreements, and the consummation by Parent and Merger Subsidiary of\nthe transactions contemplated hereby and thereby do not and will not (a)\ncontravene or conflict with the certificate of incorporation or by-laws of\nParent or Merger Subsidiary, (b) assuming compliance with the matters\nreferred to in Section 4.3 and subject to receipt of the Parent Stockholder\nApproval, contravene or conflict with or constitute a violation of any\nprovision of any law, regulation, judgment, injunction, order or decree\nbinding upon or applicable to Parent or any of its Subsidiaries, (c)\nsubject to receipt of the Parent Stockholder Approval, constitute a default\nunder or give rise to any right of termination, cancellation or\nacceleration of any right or obligation of Parent or any of its\nSubsidiaries or to a loss of any benefit to which Parent or any of its\nSubsidiaries is entitled under any provision of any agreement, contract or\nother instrument binding upon Parent or any of its Subsidiaries or any\nlicense, franchise, permit or other similar authorization held by Parent or\nany of its Subsidiaries or (d) result in the creation or imposition of any\nLien on any asset of Parent or any of its Subsidiaries, except for such\ncontraventions, conflicts or violations referred to in clause (b) or\ndefaults, rights of termination, cancellation or acceleration, or losses or\nLiens referred to in clause (c) or (d) that would not, individually or in\nthe aggregate, have a Material Adverse Effect on Parent. Neither Parent nor\nany Subsidiary of Parent is a party to any agreement that expressly limits\nthe ability of Parent or any Subsidiary of Parent to compete in or conduct\nany line of business or compete with any Person or in any geographic area\nor during any period of time except to the extent that any such limitation,\nindividually or in the aggregate, would not have a Material Adverse Effect\non Parent immediately after the Effective Time.\n\n     SECTION 4.5 Capitalization. The authorized capital stock of Parent\nconsists of 1,000,000,000 shares of Parent Common Stock and 20,000,000\nshares of preferred stock, without par value (of which 51,250 are\ndesignated \"$91.25 Series A Cumulative Preferred Shares\", 3,593,281 are\ndesignated \"$6.74 Series C Cumulative Convertible Preferred Shares\",\n984,089 are designated \"$12 Series D Cumulative Convertible Preferred\nShares\", 2,755,173 are designated \"Adjustable Rate Series F Cumulative\nPreferred Shares,\" 24,929 are designated \"$86.25 Series G Cumulative\nPreferred Shares\", 968,754 are designated \"8.25% Series AA Cumulative\nConvertible Preferred Shares,\" and the remaining shares of such preferred\nstock are not subject to any designation) (\"Parent Preferred Stock\"). As of\nthe close of business on June 3, 1999, there were outstanding 549,289,134\nshares of Parent Common Stock, no shares of Parent Preferred Stock and no\nother shares of capital stock or other voting securities of Parent were\noutstanding. All outstanding shares of capital stock of Parent have been\nduly authorized and validly issued and are fully paid and nonassessable.\nExcept for (a) employee or director stock options to acquire no more than\n38,472,492 shares of Parent Common Stock, (b) shares of Parent Common Stock\nto be issued in connection with the Merger, (c) the option granted pursuant\nto the Company Option Agreement and (d) 1,458,867 shares issuable pursuant\nto Parent's employee stock purchase plans in the ordinary course of\nbusiness consistent with past practice, as of the close of business on June\n3, 1999, there were no outstanding options, warrants or other rights to\nacquire from Parent, and no preemptive or similar rights, subscription or\nother rights, convertible or exchangeable securities, agreements,\narrangements, or commitments of any character, relating to the capital\nstock of Parent, obligating Parent to issue, transfer or sell any capital\nstock, voting securities or securities convertible into or exchangeable for\ncapital stock or voting securities of Parent or obligating Parent to grant,\nextend or enter into any such option, warrant, subscription or other right,\nconvertible or exchangeable security, agreement, arrangement or commitment\n(each of the foregoing, a \"Parent Convertible Security\"). Since the close\nof business on June 3, 1999, Parent has not issued any shares of capital\nstock or Parent Convertible Securities, other than in connection with the\nexercise of employee stock options described in clause (a) above and\/or as\npermitted by Section 6.1 hereof. Except as required by the terms of any\nemployee or director stock options and\/or as permitted by 6.1, there are no\noutstanding obligations of Parent or any of its Subsidiaries to repurchase,\nredeem or otherwise acquire any shares of capital stock of Parent and of\nany Parent Convertible Securities.\n\n     SECTION 4.6 Subsidiaries.\n\n          (a)  Each Subsidiary of Parent is duly organized, validly\nexisting and in good standing under the laws of its jurisdiction of\norganization, has all powers and all governmental licenses, authorizations,\npermits, consents and approvals required to carry on its business as now\nconducted, except for those the absence of which would not, individually or\nin the aggregate, reasonably be expected to have a Material Adverse Effect\non Parent. Each Subsidiary of Parent is duly qualified to do business and\nis in good standing in each jurisdiction where the character of the\nproperty owned or leased by it or the nature of its activities makes such\nqualifications necessary, except for those jurisdictions where failure to\nbe so qualified would not, individually or in the aggregate, have a\nMaterial Adverse Effect on Parent.\n\n          (b)  Except for directors' qualifying shares and except as set\nforth in Parent's annual report on Form 10-K for the fiscal year ended\nDecember 31, 1998 (\"Parent 10-K\"), all of the outstanding capital stock of,\nor other ownership interests in, each Significant Subsidiary of Parent is\nowned, directly or indirectly, by Parent. All shares of capital stock of,\nor other ownership interests in, Subsidiaries of the Parent owned, directly\nor indirectly, by Parent are owned free and clear of any Lien and free of\nany other limitation or restriction (including any restriction on the right\nto vote, sell or otherwise dispose of such capital stock or other ownership\ninterests), except as would not, individually or in the aggregate, have a\nMaterial Adverse Effect on the Parent. There are no outstanding options,\nwarrants or other rights to acquire, and, except as may be required by\napplicable foreign corporate laws, no preemptive or similar rights,\nsubscriptions or other rights, convertible or exchangeable securities,\nagreements, arrangements or commitments of any character, relating to the\ncapital stock of any Subsidiary of Parent, obligating Parent or any of its\nSubsidiaries to issue, transfer or sell, any capital stock, voting\nsecurities or other ownership interests in, or any securities convertible\ninto or exchangeable for any capital stock, voting securities or ownership\ninterests in, any Subsidiary of Parent or obligating Parent or any\nSubsidiary of Parent to grant, extend or enter into any such option,\nwarrant, subscription or other right, convertible or exchangeable security,\nagreement, arrangement or commitment (each of the foregoing, a \"Parent\nSubsidiary Convertible Security\"). There are no outstanding obligations of\nParent or any of its Subsidiaries to repurchase, redeem or otherwise\nacquire from any Person (other than Parent or a wholly owned Subsidiary of\nParent) any outstanding shares of capital stock of any Subsidiary of Parent\nor any Parent Subsidiary Convertible Securities.\n\n     SECTION 4.7 Commission Filings.\n\n          (a)  Parent has made available to the Company (i) its annual\nreports on Form 10-K for its fiscal years ended December 31, 1996, 1997 and\n1998, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended\nafter December 31, 1998, (iii) its proxy or information statements relating\nto meetings, of, or actions taken without a meeting by, the stockholders of\nParent held since December 31, 1998, and (iv) all of its other reports,\nstatements, schedules and registration statements filed with the Commission\nsince December 31, 1998 (the documents referred to in this Section 4.7(a)\nbeing referred to collectively as the \"Parent Commission Documents\").\nParent's quarterly report on Form 10-Q for its fiscal quarter ended March\n31, 1999 is referred to as the \"Parent 10-Q\".\n\n          (b)  As of its filing date, each Parent Commission Document\ncomplied as to form in all material respects with the applicable\nrequirements of the Exchange Act and the Securities Act.\n\n          (c)  As of its filing date, each Parent Commission Document filed\npursuant to the Exchange Act did not contain any untrue statement of a\nmaterial fact or omit to state any material fact necessary in order to make\nthe statements made therein, in the light of the circumstances under which\nthey were made, not misleading.\n\n          (d)  Each registration statement, as amended or supplemented, if\napplicable, filed by Parent pursuant to the Securities Act since December\n31, 1996, as of the date such statement or amendment became effective did\nnot contain any untrue statement of a material fact or omit to state any\nmaterial fact required to be stated therein or necessary to make the\nstatements therein not misleading.\n\n     SECTION 4.8 Financial Statements. The audited consolidated financial\nstatements and unaudited consolidated interim financial statements of\nParent (including any related notes and schedules) included in the annual\nreports on Form 10-K and the quarterly reports on Form 10-Q referred to in\nSection 4.7 present fairly, in all material respects, the financial\nposition of Parent and its subsidiaries as of the dates thereof and their\nresults of operations and cash flows for the periods then ended (subject to\nnormal year-end adjustments and the absence of notes in the case of any\nunaudited interim financial statements), in each case in conformity with\nGAAP applied on a consistent basis (except as may be indicated in the notes\nthereto). For purposes of this Agreement, \"Parent Balance Sheet\" means the\nconsolidated balance sheet of Parent as of March 31, 1999 set forth in the\nParent 10-Q and \"Parent Balance Sheet Date\" means March 31, 1999.\n\n     SECTION 4.9 Disclosure Documents.\n\n          (a)  The proxy statement of Parent (the \"Parent Proxy Statement\")\nto be filed with the Commission in connection with the Merger and the\nRegistration Statement on Form S-4 of Parent (the \"Form S-4\") to be filed\nunder the Securities Act relating to the issuance of Parent Common Stock in\nthe Merger, and any amendments or supplements thereto, will, when filed,\nsubject to the last sentence of Section 4.9(b), comply as to form in all\nmaterial respects with the applicable requirements of the Securities Act.\n\n          (b)  Neither the Parent Proxy Statement nor any amendment or\nsupplement thereto, will, at the date the Parent Proxy Statement or any\nsuch amendment or supplement is first mailed to stockholders of Parent or\nat the time such stockholders vote on the matters constituting the Parent\nStockholder Approval, contain any untrue statement of a material fact or\nomit to state any material fact necessary in order to make the statements\ntherein, in light of the circumstances under which they were made, not\nmisleading. Neither the Form S-4 nor any amendment or supplement thereto\nwill at the time it becomes effective under the Securities Act or at the\nEffective Time contain any untrue statement of a material fact or omit to\nstate a material fact required to be stated therein or necessary to make\nthe statements therein not misleading. No representation or warranty is\nmade by Parent in this Section 4.9 with respect to statements made or\nincorporated by reference therein based on information supplied by the\nCompany for inclusion or incorporation by reference in the Parent Proxy\nStatement or the Form S-4.\n\n          (c)  None of the information supplied or to be supplied by Parent\nfor inclusion or incorporation by reference in the Company Proxy Statement\nor any amendment or supplement thereto will, at the date the Company Proxy\nStatement or any amendment or supplement thereto is first mailed to the\nstockholders of the Company or at the time the stockholders vote on the\nadoption and approval of this Agreement and the transactions contemplated\nhereby, contain any untrue statement of a material fact or omit to state\nany material fact necessary in order to make the statements therein, in\nlight of the circumstances under which they were made, not misleading.\n\n     SECTION 4.10 Absence of Certain Changes. Since the Parent Balance\nSheet Date, and, other than with respect to clause (a) below, prior to the\ndate hereof, Parent and its Subsidiaries have conducted their respective\nbusinesses in the ordinary course, consistent with past practice and there\nhas not been:\n\n          (a)  any event, occurrence or development which, individually or\nin the aggregate, would have a Material Adverse Effect on Parent;\n\n          (b)  any declaration, setting aside or payment of any dividend or\nother distribution with respect to any shares of capital stock of Parent\n(other than regular quarterly cash dividends payable by Parent in respect\nof shares of Parent Common Stock consistent with past practice) or any\nrepurchase (other than repurchases of Parent Common Stock which occurred\nsubsequent to the Parent Balance Sheet Date and prior to the date hereof),\nredemption or other acquisition by Parent or any of its Significant\nSubsidiaries of any outstanding shares of its capital stock or any Parent\nConvertible Securities (except (x) as required by the terms of any employee\nor stock option plan or compensation plan or arrangement, (y) in accordance\nwith any dividend reinvestment plan as in effect as of the date of this\nAgreement in the ordinary course of operation of such plan consistent with\npast practice, and\/or (z) as otherwise permitted by Section 6.1); or\n\n          (c)  any amendment of any material term of any outstanding\nsecurity of Parent or any of its Significant Subsidiaries;\n\n          (d)  any transaction or commitment made, or any contract,\nagreement or settlement entered into, by (or judgment, order or decree\naffecting) Parent or any of its Subsidiaries relating to its assets or\nbusiness (including the acquisition or disposition of any material amount\nof assets) or any relinquishment by Parent or any of its Subsidiaries of\nany contract or other right, in either case, material to Parent and its\nSubsidiaries taken as a whole, other than transactions, commitments,\ncontracts, agreements or settlements (including without limitation\nsettlements of litigation and tax proceedings) in the ordinary course of\nbusiness consistent with past practice and those contemplated by this\nAgreement;\n\n          (e)  any change prior to the date hereof in any method of\naccounting or accounting practice (other than any change for tax purposes)\nby Parent or any of its Subsidiaries, except for any such change which is\nnot material or which is required by reason of a concurrent change in GAAP;\nor\n\n          (f)  any (i) grant of any severance or termination pay to (or\namendment to any such existing arrangement with) any director, officer or\nemployee of Parent or any of its Subsidiaries, (ii) entering into of any\nemployment, deferred compensation, supplemental retirement or other similar\nagreement (or any amendment to any such existing agreement) with any\ndirector, officer or employee of Parent or any of its Subsidiaries, (iii)\nincrease in, or accelerated vesting and\/or payment of, benefits under any\nexisting severance or termination pay policies or employment agreements or\n(iv) increase in or enhancement of any rights or features related to\ncompensation, bonus or other benefits payable to directors, officers or\nemployees of Parent or any of its Subsidiaries, in each case, other than in\nthe ordinary course of business consistent with past practice or as\npermitted by this Agreement; or\n\n          (g)  any material Tax election made or changed, any material\naudit settled or any material amended Tax Returns filed.\n\n     SECTION 4.11 No Undisclosed Material Liabilities. There are no\nliabilities of Parent or any Subsidiary of Parent of any kind whatsoever,\nwhether accrued, contingent, absolute, determined, determinable or\notherwise, other than:\n\n          (a)  liabilities disclosed or provided for in the Parent Balance\nSheet or in the notes thereto;\n\n          (b)  liabilities incurred since such date in the ordinary course\nof business;\n\n          (c)  liabilities which, individually or in the aggregate, would\nnot have a Material Adverse Effect on Parent;\n\n          (d)  liabilities disclosed in the Parent Commission Documents\nfiled prior to the date of this Agreement; and\n\n          (e)  liabilities under this Agreement.\n\n     SECTION 4.12 Litigation. There is no action, suit, investigation or\nproceeding pending against, or to the knowledge of Parent threatened\nagainst or affecting, Parent or any of its Subsidiaries or any of their\nrespective properties or any of their respective officers or directors\nbefore any court or arbitrator or any governmental body, agency or official\nexcept as would not, individually or in the aggregate, have a Material\nAdverse Effect on Parent or prevent or materially delay the consummation of\nthe Merger.\n\n     SECTION 4.13 Taxes. Except as provided for in the Parent Balance Sheet\n(including the notes thereto) or as would not, individually or in the\naggregate, have a Material Adverse Effect on Parent, (i) all Parent Tax\nReturns required to be filed with any taxing authority by, or with respect\nto, Parent and its Subsidiaries have been filed in accordance with all\napplicable laws; (ii) Parent and its Subsidiaries have timely paid all\nTaxes shown as due and payable on Parent Tax Returns that have been so\nfiled, and, as of the time of filing, the Parent Tax Returns correctly\nreflected the facts regarding the income, business, assets, operations,\nactivities and the status of Parent and its Subsidiaries (other than Taxes\nwhich are being contested in good faith and for which adequate reserves are\nreflected on the Parent Balance Sheet); (iii) Parent and its Subsidiaries\nhave made provision for all Taxes payable by Parent and its Subsidiaries\nfor which no Parent Tax Return has yet been filed; (iv) the charges,\naccruals and reserves for Taxes with respect to Parent and its Subsidiaries\nreflected on the Parent Balance Sheet are adequate under GAAP to cover the\nTax liabilities accruing through the date thereof; (v) there is no action,\nsuit, proceeding, audit or claim now proposed or pending against or with\nrespect to Parent or any of its Subsidiaries in respect of any Tax where\nthere is a reasonable possibility of an adverse determination; and (vi) to\nthe best of Parent's knowledge and belief, neither Parent nor any of its\nSubsidiaries is liable for any Tax imposed on any entity other than such\nPerson, except as the result of the application of Treas. Reg. Sections\n1.1502-6 (and any comparable provision of the tax laws of any state, local\nor foreign jurisdiction) to the affiliated group of which Parent is the\ncommon parent.\n\n     SECTION 4.14 Employee Benefit Plans.\n\n          (a)  For purposes of this Agreement, the term \"Parent Employee\nPlans\" shall mean and include: each material management, consulting,\nnon-compete, employment, severance or similar contract, plan, arrangement\nor policy applicable to any director, former director, employee or former\nemployee of Parent and each material plan, program, policy, agreement or\narrangement (written or oral), providing for compensation, bonuses,\nprofit-sharing, stock option or other stock related rights or other forms\nof incentive or deferred compensation, vacation benefits, insurance\ncoverage (including any self-insured arrangements), health or medical\nbenefits, disability benefits, workers' compensation, supplemental\nunemployment benefits, severance benefits and post-employment or retirement\nbenefits (including compensation, pension, health, medical or life\ninsurance benefits) or other employee benefits of any kind, whether funded\nor unfunded, which is maintained, administered or contributed to by Parent\nor any Subsidiary and covers any employee or director or former employee or\ndirector of Parent, or under which Parent or any Subsidiary has any\nliability, contingent or otherwise (including but not limited to each\nmaterial \"employee benefit plan,\" as defined in Section 3(3) of ERISA, but\nexcluding any such plan that is a \"multiemployer plan,\" as defined in\nSection 3(37) of ERISA).\n\n          (b)  Each Parent Employee Plan has been established and\nmaintained in compliance with its terms and with the requirements\nprescribed by any and all statutes, orders, rules and regulations\n(including but not limited to ERISA and the Code) which are applicable to\nsuch Plan, except where failure to so comply would not, individually or in\nthe aggregate, have a Material Adverse Effect on Parent.\n\n          (c)  Neither Parent nor any affiliate of Parent has incurred a\nliability under Title IV of ERISA that has not been satisfied in full, and\nno condition exists that presents a material risk to Parent or any\naffiliate of Parent of incurring any such liability other than liability\nfor premiums due the Pension Benefit Guaranty Corporation (which premiums\nhave been paid when due). All contributions required to be made under the\nterms of any Parent Employee Plan maintained in the United States have been\nmade, and, where applicable to a Parent Employee Plan, Parent and its\naffiliates have complied with the minimum funding requirements under\nSection 412 of the Code and Section 302 of ERISA with respect to each such\nParent Employee Plan.\n\n          (d)  Each Parent Employee Plan which is intended to be qualified\nunder section 401(a) of the Code is so qualified and has been so qualified\nduring the period from its adoption to date, and each trust forming a part\nthereof is exempt from federal income tax pursuant to section 501(a) of the\nCode and, to Parent's knowledge, no circumstances exist which will\nadversely affect such qualification or exception.\n\n          (e)  No director or officer or other employee of Parent or any of\nits Subsidiaries will become entitled to any retirement, severance or\nsimilar benefit or enhanced or accelerated benefit (including any\nacceleration of vesting or lapse of repurchase rights or obligations with\nrespect to any Parent Stock Plans or other benefit under any compensation\nplan or arrangement of Parent) solely as a result of the transactions\ncontemplated in this Agreement.\n\n          (f)  Since the Parent Balance Sheet Date, there has been no\namendment to, or change in employee participation or coverage under, any\nParent Employee Plan which would increase materially the expense of\nmaintaining such Employee Plan above the level of the expense incurred in\nrespect thereof for the 12 months ended on the Parent Balance Sheet Date.\n\n          (g)  Parent and its Subsidiaries are in compliance with all\napplicable federal, state, local and foreign statutes, laws (including,\nwithout limitation, common law), judicial decisions, regulations,\nordinances, rules, judgments, orders and codes respecting employment,\nemployment practices, labor, terms and conditions of employment and wages\nand hours, and no work stoppage or labor strike against Parent and its\nSubsidiaries is pending or threatened, nor is Parent or its Subsidiaries\ninvolved in or threatened with any labor dispute, grievance or litigation\nrelating to labor matters involving any employees, in each case except as\nwould not, individually or in the aggregate, have a Material Adverse Effect\non Parent. There are no suits, actions, disputes, claims (other than\nroutine claims for benefits), investigations or audits pending or, to the\nknowledge of the Company, threatened in connection with any Parent Employee\nPlan, but excluding any of the foregoing which would not have a Material\nAdverse Effect on Parent.\n\n     SECTION 4.15 Compliance with Laws. Neither Parent nor any of its\nSubsidiaries is in violation of, or has since January 1, 1997 violated, any\napplicable provisions of any laws, statutes, ordinances or regulations\nexcept for any violations that, individually or in the aggregate, would not\nhave a Material Adverse Effect on Parent.\n\n     SECTION 4.16 Finders' or Advisors' Fees. Except for J.P. Morgan &amp; Co.\nIncorporated whose fees will be paid by Parent, there is no investment\nbanker, broker, finder or other intermediary which has been retained by or\nis authorized to act on behalf of Parent or any of its Subsidiaries who\nmight be entitled to any fee or commission in connection with the\ntransactions contemplated by this Agreement.\n\n     SECTION 4.17 Environmental Matters. Except for matters which,\nindividually or in the aggregate, would not have a Material Adverse Effect\non Parent, (i) no written notice, notification, demand, request for\ninformation, citation, summons, complaint or order has been received by,\nand no investigation, action, claim, suit, proceeding or review is pending\nor, to the knowledge of Parent or any of its Subsidiaries, threatened by\nany Person against, Parent or any of its Subsidiaries, and no penalty has\nbeen assessed within the past three years against Parent or any of its\nSubsidiaries, in each case, with respect to any matters relating to or\narising out of any Environmental Law; (ii) Parent and its Subsidiaries are\nin compliance with all Environmental Laws; and (iii) to the knowledge of\nParent, there are no liabilities of or relating to Parent or any of its\nSubsidiaries relating to or arising out of any Environmental Law, and, to\nthe knowledge of Parent, there is no existing condition, situation or set\nof circumstances which could reasonably be expected to result in such a\nliability.\n\n     SECTION 4.18 Opinion of Financial Advisor. Parent has received the\nopinion of J.P. Morgan &amp; Co. Incorporated to the effect that, as of the\ndate of this Agreement, the consideration to be paid by Parent in the\nMerger is fair, from a financial point of view, to Parent.\n\n     SECTION 4.19 Pooling; Tax Treatment.\n\n          (a)  Parent intends that the Merger be accounted for as a\n\"pooling of interests\" as described in Section 3.19(a).\n\n          (b)  Neither Parent nor any of its affiliates has taken or agreed\nto take any action or is aware of any fact or circumstance with respect to\nParent or its affiliates that would prevent the Merger from qualifying (i)\nfor \"pooling of interests\" accounting treatment as described in Section\n3.19(a) or (ii) as a 368 Reorganization.\n\n     SECTION 4.20 Takeover Statutes. The Board of Directors of Parent has\ntaken the necessary action to render Section 203 of the Delaware Law, and\nany other potentially applicable anti-takeover or similar statute or\nregulation inapplicable to this Agreement and the Company Option Agreement\nand the transactions contemplated hereby and thereby.\n\n     SECTION 4.21 Intellectual Property Matters. Parent and its\nSubsidiaries own, free and clear of all Liens, or have the right to use\npursuant to valid license, sublicense, agreement or permission all items of\nIntellectual Property necessary for their operations as presently conducted\nor as contemplated to be conducted, except where the failure to have such\nrights, individually or in the aggregate, would not have a Material Adverse\nEffect on Parent. The conduct of Parent's and its Subsidiaries' businesses\nas currently conducted or as contemplated to be conducted does not\ninterfere, infringe, misappropriate or violate any of the Intellectual\nProperty rights of any third party, except for interferences,\ninfringements, misappropriations and violations which, individually or in\nthe aggregate, would not have a Material Adverse Effect on Parent. To the\nbest of Parent's knowledge, no third party has interfered with, infringed\nupon, misappropriated, diluted, violated or otherwise come into conflict\nwith any Intellectual Property rights of Parent or any of its Subsidiaries,\nexcept for misappropriations and violations which, individually or in the\naggregate, would not have a Material Adverse Effect on Parent.\n\n     SECTION 4.22 Year 2000 Compliance Matters. Except for matters which,\nindividually and in the aggregate, would not have a Material Adverse Effect\non Parent, all proprietary and third-party licensed computer systems\nincluding computer hardware and software owned, leased or licensed by\nParent and computer software incorporated in products manufactured by\nParent and its Subsidiaries (a) will, prior to December 31, 1999,\naccurately and without interruption recognize, the advent of the year 2000\nwithout any adverse change in operation associated with such recognition,\n(b) can accurately and without interruption recognize and manipulate date\ninformation relating to dates prior to, on and after January 1, 2000 and\n(c) can accurately and without interruption interact with other year 2000\ncompliant computer systems and computer software in a way that does not\ncompromise their ability to correctly recognize the advent of the year 2000\nor to accurately and without interruption recognize and manipulate date\ninformation relating to dates prior to, on or after January 1, 2000. The\ncosts of the adaptations to such computer systems, hardware and software\nbeing made by Parent and its Subsidiaries in order to achieve year 2000\ncompliance are not expected to have a Material Adverse Effect on Parent.\n\n\n                                 ARTICLE V\n                          COVENANTS OF THE COMPANY\n\n     The Company agrees that:\n\n     SECTION 5.1 Conduct of the Company. From the date of this Agreement\nuntil the Effective Time, the Company and its Subsidiaries shall, subject\nto the last sentence of this Section 5.1, conduct their business in the\nordinary course consistent with past practice and shall use their\nreasonable best efforts to preserve intact their business organizations and\nrelationships with third parties. Without limiting the generality of the\nforegoing and subject to the last sentence of this Section 5.1, with the\nprior written consent of Parent (which shall not be unreasonably withheld)\nor as contemplated by this Agreement or the Option Agreements, from the\ndate of this Agreement until the Effective Time:\n\n          (a)  the Company will not, and will not permit any of its\nSubsidiaries to, adopt or propose any change in its certificate of\nincorporation or by-laws;\n\n          (b)  the Company will not, and will not permit any Subsidiary of\nthe Company to, adopt a plan or agreement of complete or partial\nliquidation, dissolution, merger, consolidation, restructuring,\nrecapitalization or other reorganization of the Company or any of its\nSubsidiaries (other than transactions between direct and\/or indirect wholly\nowned Subsidiaries of the Company);\n\n          (c)  the Company will not, and will not permit any Subsidiary of\nthe Company to, issue, sell, transfer, pledge, dispose of or encumber any\nshares of, or securities convertible into or exchangeable for, or options,\nwarrants, calls, commitments or rights of any kind to acquire, any shares\nof capital stock of any class or series of the Company or its any of its\nSubsidiaries other than (i) issuances of Company Common Stock pursuant to\nthe exercise of Company Stock Options that are outstanding on the date of\nthis Agreement, or pursuant to Company Stock Options or other stock based\nawards granted in accordance with clause (ii) below and (ii) additional\nCompany Stock Options or other stock-based awards to acquire shares of\nCompany Common Stock granted under the terms of any employee or director\nstock option or compensation plan or arrangement of the Company as in\neffect on the date of this Agreement in the ordinary course of business\nconsistent with past practice;\n\n          (d)  the Company will not (i) split, combine, subdivide or\nreclassify its outstanding shares of capital stock, or (ii) declare, set\naside or pay any dividend or other distribution payable in cash, stock or\nproperty with respect to its capital stock other than, subject to Sections\n7.4 and 7.9, regular quarterly cash dividends payable by the Company in\nrespect of shares of Company Stock consistent with past practice;\n\n          (e)  the Company will not, and will not permit any Subsidiary of\nthe Company to, redeem, purchase or otherwise acquire directly or\nindirectly any of the Company's capital stock, Company Convertible\nSecurities or Company Subsidiary Convertible Securities, except for\nrepurchases, redemptions or acquisitions (x) required by or in connection\nwith the terms of any Company Stock Plan or (y) in accordance with any\ndividend reinvestment plan as in effect on the date of this Agreement in\nthe ordinary course of the operations of such plan consistent with past\npractice and, in the case of each of (x) and (y) above, only to the extent\nconsistent with Section 7.4;\n\n          (f)  the Company will not amend the terms (including the terms\nrelating to accelerating the vesting or lapse of repurchase rights or\nobligations) of any employee or director stock options or other stock based\nawards;\n\n          (g)  the Company will not, and will not permit any Subsidiary of\nthe Company to, (i) grant any severance or termination pay to (or amend any\nsuch existing arrangement with) any director, officer or employee of the\nCompany or any of its Subsidiaries, (ii) enter into any employment,\ndeferred compensation or other similar agreement (or any amendment to any\nsuch existing agreement) with any director, officer or employee of the\nCompany or any of its Subsidiaries, (iii) increase any benefits payable\nunder any existing severance or termination pay policies or employment\nagreements, (iv) increase (or amend the terms of) any compensation, bonus\nor other benefits payable to directors, officers or employees of the\nCompany or any of its Subsidiaries or (v) permit any director, officer or\nemployee who is not already a party to an agreement or a participant in a\nplan providing benefits upon or following a \"change in control\" to become a\nparty to any such agreement or a participant in any such plan, in the case\nof each of clauses (i) through (iv), other than in the ordinary course of\nbusiness consistent with past practice but subject to Sections 7.4 and 7.9\nand, in the case of the establishment of any retention and\/or pay-to-stay\nplans or individual severance arrangements that the Company reasonably\nbelieves to be appropriate, after notice to Parent and the Company's\ngood-faith effort to obtain Parent's approval;\n\n          (h)  the Company will not, and will not permit any of its\nSubsidiaries to, acquire a material amount of assets or property of any\nother Person except in the ordinary course of business consistent with past\npractice;\n\n          (i)  other than as contemplated by Section 7.1, the Company will\nnot, and will not permit any of its Subsidiaries to, sell, lease, license\nor otherwise dispose of any material amount of assets or property except\npursuant to existing contracts or commitments and except in the ordinary\ncourse of business consistent with past practice;\n\n          (j)  except for any such change which is not material or which is\nrequired by reason of a concurrent change in GAAP, the Company will not,\nand will not permit any Subsidiary of the Company to, change any method of\naccounting or accounting practice (other than any change for tax purposes)\nused by it;\n\n          (k)  the Company will not, and will not permit any Subsidiary of\nthe Company to, enter into any material joint venture, partnership or other\nsimilar arrangement;\n\n          (l)  the Company will not, and will not permit any of its\nSubsidiaries to, take any action that would make any representation or\nwarranty of the Company hereunder inaccurate in any material respect at, or\nas of any time prior to, the Effective Time;\n\n          (m)  the Company will not enter into any standstill agreement, or\namend or waive any provisions of, or grant any approval under, any\nstandstill agreement; provided that the Board of Directors of the Company\nmay grant a waiver of provisions of, or approval under, a standstill\nagreement with any Person solely to permit such Person to make a Superior\nProposal if the Board of Directors of the Company determines in its good\nfaith judgment, after receiving the advice of outside legal counsel, that,\nin light of the Superior Proposal, there is a reasonable possibility that\nthe Board of Directors would be in violation of its fiduciary duties under\napplicable law if it failed to grant such waiver;\n\n          (n)  the Company will not make or change any material Tax\nelection, settle any material audit or file any material amended Tax\nReturns, except in the ordinary course of business consistent with past\npractice; and\n\n          (o)  the Company will not, and will not permit any of its\nSubsidiaries to, agree or commit to do any of the foregoing.\n\nNotwithstanding the foregoing but subject to Section 7.4, from the date\nhereof until the Effective Time, the Company and its Subsidiaries may (x)\nmake acquisitions of property, assets or any business (other than pursuant\nto a merger or consolidation with or into the Company) solely for cash so\nlong as no one acquisition or series of related acquisitions involves the\npayment of consideration in an amount in excess of $ 500 million, and all\nacquisitions pursuant to this clause (x) do not involve the payment of\nconsideration in excess of $ 500 million, in the aggregate, and (y) sell,\ntransfer or otherwise dispose of assets or property so long as the Company\nand its Subsidiaries do not sell, transfer and otherwise dispose of assets\nand property pursuant to this clause (y) having a fair market value in\nexcess of $ 500 million, in the aggregate.\n\n     SECTION 5.2    Company Stockholder Meeting; Proxy Material.\n\n          (a)  The Company shall cause a meeting of its stockholders (the\n\"Company Stockholder Meeting\") to be duly called and noticed, and, to the\nextent practicable, held on the same date as the Parent Stockholder Meeting\n(as defined below) for the purpose of obtaining the Company Stockholder\nApproval. In connection with the Company Stockholder Meeting, the Company\n(x) will promptly prepare and file with the Commission, will use its\nreasonable best efforts to have cleared by the Commission and will\nthereafter mail to its stockholders as promptly as practicable, the Company\nProxy Statement and all other proxy materials for the Company Stockholder\nMeeting, (y) will use its reasonable best efforts, subject to paragraph (b)\nof this Section 5.2, to obtain the Company Stockholder Approval and (z)\nwill otherwise comply with all legal requirements applicable to the Company\nStockholder Meeting.\n\n          (b)  Except as provided in the next sentence, the Board of\nDirectors of the Company shall recommend approval and adoption of this\nAgreement and the Merger by the Company's stockholders. The Board of\nDirectors of the Company shall be permitted (i) not to recommend to the\nCompany's stockholders that they give the Company Stockholder Approval or\n(ii) to withdraw or modify in a manner adverse to Parent its recommendation\nto the Company's stockholders that they give the Company Stockholder\nApproval, only (w) if after receiving an Acquisition Proposal that\nconstitutes a Superior Proposal (each as defined in Section 7.10 below),\nthe Board of Directors of the Company determines in its good faith\njudgment, after receiving the advice of outside legal counsel, that, in\nlight of this Superior Proposal, there is a reasonable possibility that the\nBoard of Directors would be in violation of its fiduciary duties under\napplicable law if it failed to withdraw or modify its recommendation, (x)\nafter the fifth business day following delivery by the Company to Parent of\nwritten notice advising Parent that the Board of Directors of the Company\nintends to resolve to so withdraw or modify its recommendation absent\nmodification of the terms and conditions of this Agreement, (y) if,\nassuming this Agreement was amended to reflect all adjustments to the terms\nand conditions hereof proposed by Parent during such five business day\nperiod, such Acquisition Proposal would nonetheless constitute a Superior\nProposal (it being understood that Parent shall be permitted to propose\nadjustments to the terms and conditions hereof, notwithstanding anything\ncontained in the Confidentiality Agreement (as defined in Section 7.3));\nand (z) if the Company has complied, in all material respects, with its\nobligations set forth in Section 7.10; provided, however, that nothing in\nthis paragraph (b) shall be interpreted to excuse the Company from\ncomplying with its obligations under paragraph (a) of this Section 5.2.\n\n\n                                 ARTICLE VI\n                            COVENANTS OF PARENT\n\n     Parent agrees that:\n\n     SECTION 6.1 Conduct of Parent. From the date of this Agreement until\nthe Effective Time, Parent and its Subsidiaries shall, subject to the last\nsentence of this Section 6.1 and except as set forth on the Parent\nDisclosure Schedules, conduct their business in the ordinary course\nconsistent with past practice and shall use their reasonable best efforts\nto preserve intact their business organizations and relationships with\nthird parties. Without limiting the generality of the foregoing and subject\nto the last sentence of this Section 6.1 and except as set forth on the\nParent Disclosure Schedules, with the prior written consent of the Company\n(which shall not be unreasonably withheld) or as contemplated by this\nAgreement or the Option Agreements, from the date of this Agreement until\nthe Effective Time:\n\n          (a)  Parent will not, and will not permit any of its Subsidiaries\nto, adopt or propose any change in its certificate of incorporation or\nby-laws, except as contemplated by Sections 2.1 and 2.2, and except for\nsuch changes to increase the number of authorized shares of Parent Common\nStock to no more than 2 billion shares and the number of authorized shares\nof Parent Preferred Stock to no more than 40 million shares and to delete\nthe provisions currently contained in such certificate of incorporation\nsetting forth the terms of series of Parent Preferred Stock designated\ntherein;\n\n          (b)  Parent will not, and will not permit any of its Subsidiaries\nto, adopt a plan or agreement of complete or partial liquidation,\ndissolution, merger, consolidation, restructuring, recapitalization or\nother reorganization of Parent or any of its Subsidiaries (other than\ntransactions between direct and\/or indirect wholly owned Subsidiaries of\nParent);\n\n          (c)  Parent will not, and will not permit any Subsidiary of\nParent to, issue, sell, transfer, pledge, dispose of or encumber any shares\nof, or securities convertible into or exchangeable for, or options,\nwarrants, calls, commitments or rights of any kind to acquire, any shares\nof capital stock of any class or series of Parent or any of its\nSubsidiaries, other than (i) issuances of Parent Common Stock pursuant to\nthe exercise of employee or director stock options outstanding on the date\nof this Agreement or that are granted in accordance with clause (ii) below,\nor (ii) additional options or stock-based awards to acquire Parent Common\nStock granted under the terms of any employee or director stock option or\ncompensation plan or arrangement of Parent as in effect as of the of this\nAgreement in the ordinary course consistent with past practice;\n\n          (d)  Parent will not (i) split, combine, subdivide or reclassify\nits outstanding shares of capital stock or (ii) declare, set aside or pay\nany dividend or other distribution payable in cash, stock or property with\nrespect to its capital stock other than, subject to Sections 7.4 and 7.9,\nregular quarterly cash dividends payable by Parent in respect of the shares\nof Parent Common Stock consistent with past practice;\n\n          (e)  Parent will not, and will not permit any Subsidiary of\nParent to, redeem, purchase or otherwise acquire directly or indirectly any\nof Parent's capital stock, Parent Convertible Securities or Parent\nSubsidiary Convertible Securities, except for repurchases, redemptions or\nacquisitions (x) required by or in connection with the respective terms of\nany employee stock option plan or compensation plan or arrangement of\nParent, or (y) in accordance with any dividend reinvestment plan as in\neffect as of the date of this Agreement in the ordinary course of the\noperation of such plan consistent with past practice and, in the case of\neach of (x) and (y) above, only to the extent consistent with Section 7.4;\n\n          (f)  Parent will not amend the terms (including the terms\nrelating to accelerating the vesting or lapse of repurchase rights or\nobligations) of any employee or director stock options or other stock based\nawards;\n\n          (g)  Parent will not, and will not permit any Subsidiary of\nParent to, (i) grant any severance or termination pay to (or amend any such\nexisting arrangement with) any director, officer or employee of Parent or\nany of its Subsidiaries, (ii) enter into any employment, deferred\ncompensation or other similar agreement (or any amendment to any such\nexisting agreement) with any director, officer or employee of Parent or any\nof its Subsidiaries, (iii) increase any benefits payable under any existing\nseverance or termination pay policies or employment agreements, (iv)\nincrease (or amend the terms of) any compensation, bonus or other benefits\npayable to directors, officers or employees of Parent or any of its\nSubsidiaries or (v) permit any director, officer or employee who is not\nalready a party to an agreement or a participant in a plan providing\nbenefits upon or following a \"change in control\" to become a party to any\nsuch agreement or a participant in any such plan, in the case of each of\nclauses (i) through (iv), other than in the ordinary course of business\nconsistent with past practice but subject to Sections 7.4 and 7.9 and, in\nthe case of the establishment of any retention and\/or pay-to-stay plans or\nindividual severance arrangements that Parent reasonably believes to be\nappropriate, after notice to the Company and Parent's good-faith effort to\nobtain the Company's approval;\n\n          (h)  Parent will not, and will not permit any of its Subsidiaries\nto, acquire a material amount of assets or property of any other Person\nexcept in the ordinary course of business consistent with past practice;\n\n          (i)  Other than as contemplated by Section 7.1, Parent will not,\nand will not permit any of its Subsidiaries to, sell, lease, license or\notherwise dispose of any material amount of assets or property except\npursuant to existing contracts or commitments and except in the ordinary\ncourse of business consistent with past practice;\n\n          (j)  except for any such change which is not material or which is\nrequired by reason of a concurrent change in GAAP, Parent will not, and\nwill not permit any Subsidiary of Parent to, change any method of\naccounting or accounting practice (other than any change for tax purposes)\nused by it;\n\n          (k)  Parent will not, and will not permit any Subsidiary of\nParent to, enter into any material joint venture, partnership or other\nsimilar arrangement;\n\n          (l)  Parent will not, and will not permit any of its Subsidiaries\nto, take any action that would make any representation or warranty of\nParent hereunder inaccurate in any material respect at, or as of any time\nprior to, the Effective Time;\n\n          (m)  Parent will not enter into any standstill agreement, or\namend or waive any provisions of, or grant any approval under, any\nstandstill agreement; provided that the Board of Directors of Parent may\ngrant a waiver of provisions of, or approval under, a standstill agreement\nwith any Person solely to permit such Person to make a Superior Proposal if\nthe Board of Directors of Parent determines in its good faith judgment,\nafter receiving the advice of outside legal counsel that, in light of the\nSuperior Proposal, there is a reasonable possibility that the Board of\nDirectors would be in violation of its fiduciary duties under applicable\nlaw if it failed to grant such waiver;\n\n          (n)  Parent will not make or change any material Tax election,\nsettle any material audit or file any material amended Tax Returns, except\nin the ordinary course of business, consistent with past practice; and\n\n          (o)  Parent will not, and will not permit any of its Subsidiaries\nto, agree or commit to do any of the foregoing.\n\nNotwithstanding the foregoing but subject to Section 7.4, from the date\nhereof until the Effective Time, Parent and its Subsidiaries may (x) make\nacquisitions of property, assets or any business for cash, securities\n(including equity securities) or other consideration, pursuant to a merger,\nconsolidation, reorganization or otherwise, so long as no one acquisition\nor series of related acquisitions involves the payment of consideration\nhaving a fair market value in excess of $1 billion and all acquisitions\npursuant to this clause (x) do not involve the payment of consideration\nhaving a fair market value in excess of $2 billion, in the aggregate, and\n(y) sell, transfer or otherwise dispose of assets or property of Parent and\nits Subsidiaries so long as Parent and its Subsidiaries do not sell,\ntransfer or otherwise dispose of assets and property pursuant to this\nclause (y) having a fair market value in excess of $1 billion, in the\naggregate.\n\n     SECTION 6.2 Obligations of Merger Subsidiary. Parent will take all\naction necessary to cause Merger Subsidiary to perform its obligations\nunder this Agreement and to consummate the Merger on the terms and\nconditions set forth in this Agreement.\n\n     SECTION 6.3 Director and Officer Liability.\n\n          (a)  Parent shall indemnify and hold harmless, to the fullest\nextent permitted under applicable law, the individuals who on or prior to\nthe Effective Time were officers, directors and employees of the Company or\nits Subsidiaries (collectively, the \"Indemnitees\") with respect to all acts\nor omissions by them in their capacities as such or taken at the request of\nthe Company or any of its Subsidiaries at any time on or prior to the\nEffective Time. Following the Effective Time, Parent shall cause the\nSurviving Corporation to honor all indemnification obligations presently\nprovided under the Company's certificate of incorporation and by-laws in\neffect on the date hereof. Parent shall cause the Surviving Corporation to\nhonor all indemnification agreements with Indemnitees (including under the\nCompany's by-laws) in effect as of the date of this Agreement in accordance\nwith the terms thereof. The Company has disclosed to Parent all such\nindemnification agreements prior to the date of this Agreement.\n\n          (b)  For six years after the Effective Time, Parent shall procure\nthe provision of officers' and directors' liability insurance in respect of\nacts or omissions occurring prior to the Effective Time covering each such\nPerson currently covered by the Company's officers' and directors'\nliability insurance policy on terms with respect to coverage and in amounts\nno less favorable than those of such policy in effect on the date hereof;\nprovided, that if the aggregate annual premiums for such insurance at any\ntime during such period shall exceed 200% of the per annum rate of premium\npaid by the Company and its Subsidiaries as of the date hereof for such\ninsurance, then Parent shall, or shall cause its Subsidiaries to, provide\nonly such coverage as shall then be available at an annual premium equal to\n200% of such rate.\n\n          (c)  The obligations of Parent under this Section 6.3 shall not\nbe terminated or modified in such a manner as to adversely affect any\nIndemnitee to whom this Section 6.3 applies without the consent of the\naffected Indemnitee (it being expressly agreed that the Indemnitees to whom\nthis Section 6.3 applies shall be third party beneficiaries of this Section\n6.3).\n\n     SECTION 6.4    Parent Stockholder Meeting; Form S-4.\n\n          (a)  Parent shall cause a meeting of its stockholders (the\n\"Parent Stockholder Meeting\") to be duly called and noticed, and, to the\nextent practicable, held on the same day as the Company Stockholder Meeting\nfor the purpose of obtaining the Parent Stockholders Approval. In\nconnection with the Parent Stockholder Meeting, Parent (x) will promptly\nprepare and file with the Commission, will use its reasonable best efforts\nto have cleared by the Commission and will thereafter mail to its\nstockholders as promptly as practicable, the Parent Proxy Statement and all\nother proxy materials for such meeting, (y) will use its reasonable best\nefforts, subject to paragraph (b) of this Section 6.4, to obtain the Parent\nStockholder Approval and (z) will otherwise comply with all legal\nrequirements applicable to the Parent Stockholder Meeting. Subject to the\nterms and conditions of this Agreement, Parent shall prepare and file with\nthe Commission under the Securities Act the Form S-4, and shall use its\nreasonable best efforts to cause the Form S-4 to be declared effective by\nthe Commission as promptly as practicable. Parent shall promptly take any\naction required to be taken under foreign or state securities or Blue Sky\nlaws in connection with the issuance of Parent Common Stock in connection\nwith the Merger.\n\n          (b)  Except as provided in the next sentence, the Board of\nDirectors of Parent shall recommend approval of the Common Stock Issuance.\nThe Board of Directors of Parent shall be permitted (i) not to recommend to\nParent's stockholders that they give the Parent Stockholder Approval or\n(ii) to withdraw or modify in a manner adverse to the Company its\nrecommendation to the Parent's stockholders that they give the Parent\nStockholder Approval, only (w) if after receiving an Acquisition Proposal\nthat constitutes a Superior Proposal, the Board of Directors of Parent\ndetermines in its good faith judgment, after receiving the advice of\noutside legal counsel, that, in light of this Superior Proposal, there is a\nreasonable possibility that the Board of Directors would be in violation of\nits fiduciary duties under applicable law if it failed to withdraw or\nmodify its recommendation, (x) after the fifth business day following\ndelivery by Parent to the Company of written notice advising the Company\nthat the Board of Directors of Parent intends to resolve to so withdraw or\nmodify its recommendation absent modification to the terms and conditions\nof this Agreement (y) if, assuming this Agreement was amended to reflect\nall adjustments to the terms and conditions hereof proposed by the Company\nduring such five business day period, such Acquisition Proposal would\nnonetheless constitute a Superior Proposal (it being understood that the\nCompany shall be permitted to propose adjustments to the terms and\nconditions hereof, notwithstanding anything contained in the\nConfidentiality Agreement); and (z) if Parent has complied, in all material\nrespects, with it obligations set forth in Section 7.10; provided, however,\nthat nothing in this paragraph (b) shall be interpreted to excuse Parent\nfrom complying with its obligations contained in paragraph (a) of this\nSection 6.4.\n\n      SECTION 6.5 Stock Exchange  Listing.  Parent shall use its reasonable\nbest  efforts  to cause the shares of Parent  Common  Stock to be issued in\nconnection with the Merger to be approved for listing on the NYSE,  subject\nto official notice of issuance.\n\n      SECTION 6.6 Employee Benefits.\n\n          (a)  From and after the Effective Time, Parent shall cause the\nSurviving Corporation to honor in accordance with their terms all benefits\nand obligations under the Company Employee Plans, each as in effect on the\ndate of this Agreement (or as amended as contemplated hereby or with the\nprior written consent of Parent). Subject to the previous sentence, no\nprovision of this Agreement shall be construed as a limitation on the right\nof Parent or the Surviving Corporation to amend or terminate any Company\nEmployee Plan to the extent permitted by the terms thereof (as in effect on\nthe date hereof) and applicable law, and no provision of this Agreement\nshall be construed to create a right in any employee or beneficiary of such\nemployee under a Company Employee Plan that such employee or beneficiary\nwould not otherwise have under the terms of that Company Employee Plan.\nParent and the Company hereby agree that (i) except as contemplated by\nclause (i) of Section 6.6(e), approval of the Merger by the Company's\nshareholders shall constitute a \"Change in Control\" for purposes of all\nCompany Employee Plans and other employee plans or arrangements of the\nCompany which contain \"change in control\" provisions, pursuant to the terms\nof such plans in effect on the date hereof, and (ii) neither the execution\nof this Agreement nor the consummation of the transactions contemplated\nhereby shall constitute an \"Acceleration Event\" or a \"Change in Control\"\nfor purposes of any Parent Employee Plan or other employee plan or\narrangement of Parent which contains an \"acceleration event\" or \"change in\ncontrol\" provision, pursuant to the terms of such plan in effect on the\ndate hereof.\n\n          (b)  Following the Effective Time, Parent shall provide to\nindividuals who are employed by the Company and its Subsidiaries as of the\nEffective Time (\"Affected Employees\"), for so long as such Affected\nEmployees remain so employed, employee benefits (including salary,\nincentive compensation and stock-based benefits) which, in the aggregate,\nare substantially equivalent to the benefits provided, at Parent's option,\neither (i) pursuant to the Company's or its Subsidiaries' employee benefit\nplans, programs, policies and arrangements immediately prior to the\nEffective Time, or (ii) pursuant to employee benefit plans, programs,\npolicies or arrangements maintained by Parent or any Subsidiary of Parent\nto employees of Parent and its Subsidiaries in positions comparable to\npositions held by Affected Employees with Parent or its Subsidiaries from\ntime to time after the Effective Time; provided, however, that neither of\nthe foregoing clauses (i) or (ii) shall be construed to limit Parent's\nflexibility in determining the design of any benefit plan or program.\n\n          (c)  Parent will, or will cause the Surviving Corporation to,\ngive Affected Employees full credit for purposes of eligibility, vesting,\nbenefit accrual and determination of the level of benefits under any\nemployee benefit plans or arrangements maintained by Parent or any\nSubsidiary of Parent for such Affected Employees' service with the Company\nor any Subsidiary of the Company to the same extent recognized by the\nCompany immediately prior to the Effective Time; provided, however, that\n(i) in the case of a qualified or non-qualified defined benefit plan of\nParent or any of its Subsidiaries, Parent need not recognize the\npre-Effective Time service of an Affected Employee with the Company or any\nof its Subsidiaries for benefit accrual purposes so long as the failure to\nrecognize such service does not adversely affect the accrued benefits of\nsuch Affected Employee as of the Effective Time under the qualified and\nnon-qualified defined benefit plans of the Company or any of its\nSubsidiaries in which such Affected Employee then participated, and (ii) in\nthe case of a qualified or non-qualified defined contribution plan of\nParent or any of its Subsidiaries, Parent shall be required only to\nrecognize pre-Effective Time participation of an Affected Employee in a\nqualified or non-qualified defined contribution plan of the Company or any\nof its Subsidiaries for purposes of determining eligibility for matching or\nother contributions and the level of such contributions.\n\n          (d)  Prior to the date hereof, the Company has taken or has\ncaused to be taken all action necessary such that neither the execution of\nthis Agreement nor any of the transactions contemplated in this Agreement\n(including but not limited to approval of the Merger by the stockholders of\nthe Company) shall constitute an event that requires the funding of any\nrabbi trust or similar trust; provided, however, that any such trust may be\nrequired to be funded following the Effective Time should any participant\nin any plan covered by any such trust fail, promptly after written notice\nhas been given Parent, to be paid any benefit required to be paid under\nsuch covered plan.\n\n          (e)  Prior to approval of the Merger by the stockholders of the\nCompany, (i) the Company shall take or shall cause to be taken all action\n(including but not limited to the adoption of amendments to applicable\nplans and trusts) necessary such that neither approval of the Merger by the\nstockholders of the Company nor consummation of the transactions\ncontemplated hereby shall constitute a \"Change in Control\" for purposes of\nSection 11.4 of the Company's Retirement Benefit Plan (the \"RBP\") or any\nsimilar provision in any other defined benefit plan maintained by the\nCompany or any of its Subsidiaries, in any case as in effect on the date\nhereof (provided, however, that in the event the RBP or such other plan is\nterminated within three years following the approval of the Merger by the\nshareholders of the Company or if, within such three-year period, a\ntax-qualified plan of Parent or any of its Subsidiaries with which the RBP\nor such other plan has been merged or consolidated or to which any assets\nor liabilities of the RBP or such other plan has been transferred (a\n\"Successor Plan\") is terminated, the provisions of Section 11.4 of the RBP\nor the applicable provision of such other plan shall be applied to the RBP\nor such other plan or any Successor Plan, as the case may be, as if such\napproval of the Merger had constituted a \"Change in Control\"), and (ii) the\nCompany may take or cause to be taken such action as may be necessary such\nthat participants in the Company's Corporate Executive Compensation Plan,\nSupplemental Defined Benefit Retirement Plan and other plans providing for\nthe deferral of cash payments or the accelerated payment of lump sum\nbenefits may continue to defer the payment of awards or benefits thereunder\nuntil termination of employment following the Effective Time or otherwise\nin accordance with the terms of such plan.\n\n          (f)  For purposes of the Company's Tier 1-A severance agreements,\nthe amount of the \"on-plan\" bonus under the Corporate Executive\nCompensation Plan referred to under such an agreement for each executive\nwho is a party thereto has been disclosed to Parent prior to the date\nhereof.\n\n          (g)  Parent will, or will cause the Surviving Corporation to, (i)\nwaive all limitations as to preexisting conditions, exclusions and waiting\nperiods with respect to participation and coverage requirements applicable\nto the Affected Employees under any welfare benefit plans that such\nemployees may be eligible to participate in after the Effective Time, other\nthan limitations or waiting periods that are already in effect with respect\nto such employees and that have not been satisfied as of the Effective Time\nunder any welfare plan maintained for the Affected Employees immediately\nprior to the Effective Time, and (ii) provide each Affected Employee with\ncredit for any co-payments and deductibles paid prior to the Effective Time\nin satisfying any applicable deductible or out-of-pocket requirements under\nany welfare plans that such employees are eligible to participate in after\nthe Effective Time.\n\n     SECTION 6.7 Employment Agreement. At the Effective Time, Parent shall\nenter into an agreement with Michael R. Bonsignore substantially in the\nform of Exhibit B attached hereto.\n\n\n                                ARTICLE VII\n                    COVENANTS OF PARENT AND THE COMPANY\n\n     The parties hereto agree that:\n\n     SECTION 7.1    Reasonable Best Efforts.\n\n          (a)  Subject to Sections 7.1(b) and 7.1(c), the Company and\nParent shall each cooperate with the other and use (and shall cause their\nrespective Subsidiaries to use) their respective reasonable best efforts to\npromptly (i) take or cause to be taken all necessary actions, and do or\ncause to be done all things, necessary, proper or advisable under this\nAgreement and applicable laws to consummate and make effective the Merger\nand the other transactions contemplated by this Agreement as soon as\npracticable, including, without limitation, preparing and filing promptly\nand fully all documentation to effect all necessary filings, notices,\npetitions, statements, registrations, submissions of information,\napplications and other documents and (ii) obtain all approvals, consents,\nregistrations, permits, authorizations and other confirmations required to\nbe obtained from any third party necessary, proper or advisable to\nconsummate the Merger and the other transactions contemplated by this\nAgreement. Subject to applicable laws relating to the exchange of\ninformation, the Company and Parent shall have the right to review in\nadvance, and to the extent practicable each will consult the other on, all\nthe information relating to the Company and its Subsidiaries or Parent and\nits Subsidiaries, as the case may be, that appears in any filing made with,\nor written materials submitted to, any third party and\/or any governmental\nauthority in connection with the Merger and the other transactions\ncontemplated by this Agreement.\n\n          (b)  Without limiting Section 7.1(a), Parent and the Company\nshall, subject to Section 7.1(c):\n\n               (i)  each use its reasonable best efforts to avoid the entry\nof, or to have vacated or terminated, any decree, order, or judgment that\nwould restrain, prevent or delay the Closing, on or before the End Date (as\ndefined in Section 9.1(b)(i)), including without limitation defending\nthrough litigation on the merits any claim asserted in any court by any\nPerson; and\n\n               (ii) each use its reasonable best efforts to avoid or\neliminate each and every impediment under any antitrust, competition or\ntrade regulation law that may be asserted by any governmental authority\nwith respect to the Merger so as to enable the Closing to occur as soon as\nreasonably possible (and in any event no later than the End Date),\nincluding, without limitation (x) proposing, negotiating, committing to and\neffecting, by consent decree, hold separate order, or otherwise, the sale,\ndivestiture or disposition of such assets or businesses of Parent or the\nCompany (or any of their respective Subsidiaries) and (y) otherwise taking\nor committing to take actions that limit its or its Subsidiaries' freedom\nof action with respect to, or its ability to retain, one or more of its or\nits Subsidiaries' businesses, product lines or assets, in each case as may\nbe required in order to avoid the entry of, or to effect the dissolution\nof, any injunction, temporary restraining order, or other order in any suit\nor proceeding, which would otherwise have the effect of preventing or\nmaterially delaying the Closing. At the request of Parent, the Company\nshall agree to divest, sell, dispose or, hold separate, or otherwise take\nor commit to take any action that limits its freedom of action with respect\nto, its or its Subsidiaries' ability to retain, any of the businesses,\nproduct lines or assets of the Company or any of its Subsidiaries, provided\nthat any such action is conditioned upon the consummation of the Merger and\nsuch action when taken together with any similar action by Parent would not\nhave a Material Adverse Effect on Parent at and after the Effective Time.\nThe Company agrees and acknowledges that, notwithstanding anything to the\ncontrary in this Section 7.1, in connection with any filing or submission\nrequired, action to be taken or commitment to be made by Parent, the\nCompany or any of their respective Subsidiaries to consummate the Merger or\nother transactions contemplated in this Agreement, neither the Company nor\nany of its Subsidiaries shall, without Parent's prior written consent\n(which shall not be unreasonably withheld), sell, divest or dispose of any\nassets, commit to any sale, divestiture or disposal of assets or businesses\nof the Company and its Subsidiaries or take any other action or commit to\ntake any action that would limit the Company's, Parent's or any of their\nSubsidiaries' freedom of action with respect to, or their ability to retain\nany of, their businesses, product lines or assets. Parent also agrees and\nacknowledges that notwithstanding anything to the contrary in this Section\n7.1, in connection with any filing or submission required, action to be\ntaken or commitment to be made by Parent, the Company or any of their\nrespective Subsidiaries to consummate the Merger or other transactions\ncontemplated in this Agreement, neither Parent nor any of its Subsidiaries\nshall, without the Company's prior written consent (which shall not be\nunreasonably withheld), sell, divest or dispose of any assets, commit to\nany sale, divestiture or disposal of assets or businesses of Parent and its\nSubsidiaries or take any other action or commit to take any action that\nwould limit the Company's, Parent's or any of their Subsidiaries' freedom\nof action with respect to, or their ability to retain any of, their\nbusinesses, product lines or assets.\n\n          (c)  The provisions of this Section 7.1 shall not be construed to\nrequire Parent to agree to the sale, transfer, divestiture or other\ndisposition of any businesses, product lines or assets of Parent, the\nCompany or any of their respective subsidiaries if the action would, or\nwould reasonably be expected to, have a Material Adverse Effect on Parent\nat and after the Effective Time. The provisions of this Section 7.1 shall\nnot be construed to require the Company to agree to the sale, transfer,\ndivestiture or other disposition of any businesses, product lines or assets\nof the Company or any of its subsidiaries unless any such action, if such\naction would reasonably be expected to have a Material Adverse Effect on\nthe Company, is subject to consummation of the Merger and such action would\nnot have a Material Adverse Effect on Parent at and after the Effective\nTime. Any actions taken by Parent or the Company to comply with their\nrespective obligations under Section 7.1(b), including a decision by Parent\nor the Company to waive any of the provisions of Section 7.1(b), shall be\ndeemed not to have or be reasonably expected not to have a Material Adverse\nEffect on Parent at and after the Effective Time.\n\n     SECTION 7.2 Certain Filings. The Company and Parent shall cooperate\nwith one another (a) in connection with the preparation of the Company\nProxy Statement, the Parent Proxy Statement and the Form S-4, (b) in\ndetermining whether any action by or in respect of, or filing with, any\ngovernmental body, agency or official, or authority is required, or any\nactions, consents, approvals or waivers are required to be obtained from\nparties to any material contracts, in connection with the consummation of\nthe transactions contemplated by this Agreement and (c) in seeking any such\nactions, consents, approvals or waivers or making any such filings,\nfurnishing information required in connection therewith or with the Company\nProxy Statement, the Parent Proxy Statement or the Form S-4 and seeking\ntimely to obtain any such actions, consents, approvals or waivers.\n\n     SECTION 7.3 Access to Information. From the date hereof until the\nEffective Time, to the extent permitted by applicable law, the Company and\nParent will upon reasonable request give the other party, its counsel,\nfinancial advisors, auditors and other authorized representatives access to\nthe offices, properties, books and records of such party and its\nSubsidiaries during normal business hours, furnish to the other party, its\ncounsel, financial advisors, auditors and other authorized representatives\nsuch financial and operating data and other information as such Persons may\nreasonably request and will instruct its own employees, counsel and\nfinancial advisors to cooperate with the other party in its investigation\nof the business of the Company or Parent, as the case may be; provided that\nno investigation of the other party's business shall affect any\nrepresentation or warranty given by either party hereunder, and neither\nparty shall be required to provide any such information if the provision of\nsuch information may cause a waiver of an attorney-client privilege. All\ninformation obtained by Parent or the Company pursuant to this Section 7.3\nshall be kept confidential in accordance with, and shall otherwise be\nsubject to the terms of, the Confidentiality Agreement dated May 5, 1999\nbetween Parent and the Company (the \"Confidentiality Agreement\").\n\n     SECTION 7.4 Tax and Accounting Treatment.\n\n          (a)  Neither Parent nor the Company shall, nor shall they permit\ntheir Subsidiaries to, take any action or fail to take any action which\naction or failure to act would prevent, or would be reasonably likely to\nprevent, the Merger from qualifying (a) for \"pooling of interests\"\naccounting treatment under GAAP and the rules and regulations of the\nCommission or (b) as a 368 Reorganization.\n\n          (b)  Parent shall use its reasonable best efforts to provide to\nFried, Frank, Harris, Shriver and Jacobson and Skadden, Arps, Slate,\nMeagher and Flom LLP a certificate substantially in the form agreed to by\nthe Company and Parent prior to the date of this Agreement. The Company\nshall use its reasonable best efforts to provide to Fried, Frank, Harris,\nShriver and Jacobson and Skadden, Arps, Slate, Meagher and Flom LLP a\ncertificate substantially in the form agreed to by the Company and Parent\nprior to the date of this Agreement.\n\n     SECTION 7.5 Public Announcements. Parent and the Company will consult\nwith each other before issuing any press release or making any public\nstatement with respect to this Agreement and the transactions contemplated\nhereby and shall not issue any press release or make any public statement\nwithout the prior consent of the other party, which consent shall not be\nunreasonably withheld. Notwithstanding the foregoing, any such press\nrelease or public statement as may be required by applicable law or any\nlisting agreement with any national securities exchange may be issued prior\nto such consultation, if the party making the release or statement has used\nits reasonable efforts to consult with the other party.\n\n     SECTION 7.6 Further Assurances. At and after the Effective Time, the\nofficers and directors of the Surviving Corporation will be authorized to\nexecute and deliver, in the name and on behalf of the Company or Merger\nSubsidiary, any deeds, bills of sale, assignments or assurances and to take\nany other actions and do any other things, in the name and on behalf of the\nCompany or Merger Subsidiary, reasonably necessary to vest, perfect or\nconfirm of record or otherwise in the Surviving Corporation any and all\nright, title and interest in, to and under any of the rights, properties or\nassets of the Company acquired or to be acquired by the Surviving\nCorporation as a result of, or in connection with, the Merger.\n\n     SECTION 7.7 Notices of Certain Events.\n\n          (a)  Each of the Company and Parent shall promptly notify the\nother party of:\n\n               (i)  any notice or other communication from any Person\n     alleging that the consent of such Person is or may be required in\n     connection with the transactions contemplated by this Agreement if the\n     failure of the Company or Parent, as the case may be, to obtain such\n     consent would be material to the Company or Parent as applicable; and\n\n               (ii) any notice or other communication from any governmental\n     or regulatory agency or authority in connection with the transactions\n     contemplated by this Agreement.\n\n          (b)  The Company and Parent shall promptly notify the other party\nof any actions, suits, claims, investigations or proceedings commenced or,\nto the best of its knowledge threatened against, relating to or involving\nor otherwise affecting such party or any of its Subsidiaries which relate\nto the consummation of the transactions contemplated by this Agreement.\n\n     SECTION 7.8    Affiliates.\n\n          (a)  Not less than 30 days prior to the Effective Time, each of\nParent and the Company (i) shall have delivered to the other party a letter\nidentifying all Persons who, in the opinion of the party delivering the\nletter, may be, as of the date of the Company Stockholder Meeting or Parent\nStockholder Meeting, as applicable, its \"affiliates\" for purposes of SEC\nAccounting Series Releases 130 and 135 and\/or, in the case of the Company,\nfor purposes of Rule 145 under the Securities Act, and (ii) shall use its\nreasonable best efforts to cause each Person who is identified as an\n\"affiliate\" of it in such letter to deliver, as promptly as practicable but\nin no event later than 20 days prior to the Closing (or after such later\ndate as the Parent and the Company may agree), a signed agreement to Parent\nin the case of affiliates of Parent, substantially in the form attached as\nExhibit C, and in the case of affiliates of the Company, substantially in\nthe form attached as Exhibit D. Each of Parent and the Company shall notify\nthe other party from time to time after the delivery of the letter\ndescribed in Section 7.8(a)(i) of any Person not identified on such letter\nwho then is, or may be, such an \"affiliate\" and use its reasonable best\nefforts to cause each additional Person who is identified as an \"affiliate\"\nto execute a signed agreement as set forth in this Section 7.8(a).\n\n          (b)  Shares of Parent Common Stock and shares of Company Common\nStock beneficially owned by each such \"affiliate\" of Parent or Company who\nhas not provided a signed agreement in accordance with Section 7.8(a) shall\nnot be transferable during any period prior to and after the Effective Time\nif, as a result of this transfer during any such period, taking into\naccount the nature, extent and timing of this transfer and similar\ntransfers by all other \"affiliates\" of Parent and the Company, this\ntransfer will, in the reasonable judgment of accountants of Parent,\ninterfere with, or prevent the Merger from being accounted for, as a\n\"pooling of interests\" under GAAP and\/or the rules and regulations of the\nSEC. Neither Parent nor the Company shall register, or allow its transfer\nagent to register, on its books any transfer of any shares of Parent Common\nStock or Company Common Stock of any affiliate of Parent or the Company who\nhas not provided a signed agreement in accordance with Section 7.8(a). The\nrestrictions on the transferability of shares held by Persons who execute\nan agreement pursuant to Section 7.8(a) shall be as provided in those\nagreements.\n\n     SECTION 7.9 Payment of Dividends. From the date of the Agreement until\nthe Effective Time, Parent and the Company will coordinate with each other\nregarding the declaration of dividends in respect of the shares of Parent\nCommon Stock and the shares of Company Common Stock and the record dates\nand payment dates relating thereto, it being the intention of the parties\nthat holders of shares of Company Common Stock will not receive two\ndividends, or fail to receive one dividend, for any single calendar quarter\nwith respect to their shares of Company Common Stock and the shares of\nParent Common Stock any holder of shares of Company Common Stock receives\nin exchange therefor in connection with the Merger.\n\n     SECTION 7.10 No Solicitation.\n\n          (a)  Each of Parent and the Company and their respective\nSubsidiaries will not, and will use their reasonable best efforts to cause\ntheir respective officers, directors, employees, investment bankers,\nconsultants, attorneys, accountants, agents and other representatives not\nto, directly or indirectly, take any action to solicit, initiate, encourage\nor facilitate the making of any Acquisition Proposal (including without\nlimitation, in the case of the Company, by amending, or granting any waiver\nunder, the Company Rights Agreement) or any inquiry with respect thereto or\nengage in substantive discussions or negotiations with any Person with\nrespect thereto, or in connection with any Acquisition Proposal or\npotential Acquisition Proposal, disclose any nonpublic information relating\nto it or its Subsidiaries or afford access to the properties, books or\nrecords of it or its Subsidiaries to, any Person that has made, or to such\nparty's knowledge, is considering making, any Acquisition Proposal;\nprovided, however, that, in the event that (x) Parent or the Company shall\nreceive a Superior Proposal that was not solicited by it and did not\notherwise result from a breach of this Section 7.10, (y) prior to receipt\nof the Parent Stockholder Approval (in the case of Parent) or the Company\nStockholder Approval (in the case of the Company), the Board of Directors\nof either Parent or the Company, as applicable, determines in its good\nfaith judgment, after receiving the advice of outside counsel that, in\nlight of this Superior Proposal, if Parent or the Company, as applicable,\nfails to participate in such discussions or negotiations with, or provide\nsuch information to, the party making the Superior Proposal, there is a\nreasonable possibility that such Board of Directors would be in violation\nof its fiduciary duties under applicable law, and (z) after giving the\nother party two business days' notice of its intention to do so, the party\nreceiving such Superior Proposal may (i) furnish information with respect\nto it and its subsidiaries to the Person making such Superior Proposal\npursuant to a customary confidentiality agreement containing terms\ngenerally no less restrictive than the terms contained in the\nConfidentiality Agreement (but not containing any exclusivity provision and\npermitting the Person to submit to the Board of Directors of the Company or\nParent, as applicable, Acquisition Proposals with respect to the Company or\nParent, as applicable, provided that any such Acquisition Proposal is\nsubject to the approval of the Board of Directors of the Company or Parent,\nas applicable, (which approval may be granted solely in accordance with the\nterms of Sections 5.1(m) or 6.1(m) hereof)), provided that a copy of all\nsuch written information is simultaneously provided to the other party\nhereto and (ii) participate in discussions and negotiations regarding such\nSuperior Proposal.\n\n          (b)  Nothing contained in this Agreement shall prevent the Board\nof Directors of Parent or the Company from complying with Rule 14e-2 under\nthe Exchange Act with regard to an Acquisition Proposal; provided that the\nBoard of Directors of that party shall not recommend that the stockholders\nof that party tender their shares in connection with a tender offer except\nto the extent, after receiving a Superior Proposal, the Board of Directors\nof that party determines in its good faith judgment, after receiving the\nadvice of outside legal counsel, that, in light of the Superior Proposal,\nthere is a reasonable possibility that the Board of Directors would be in\nviolation of its fiduciary duties under applicable law if it fails to make\nsuch a recommendation.\n\n          (c)  Any party receiving an Acquisition Proposal will (A)\npromptly (and in no event later than 48 hours after receipt of any\nAcquisition Proposal) notify (which notice shall be provided orally and in\nwriting and shall identify the Person making the Acquisition Proposal and\nset forth the material terms thereof) the other party to this Agreement\nafter receipt of any Acquisition Proposal, or any request for nonpublic\ninformation relating to such party or any Subsidiary of such party or for\naccess to the properties, books or records of such party or any Subsidiary\nof such party by any Person that has made, or to such party's knowledge may\nbe considering making, an Acquisition Proposal, and (B) will keep the other\nparty to this Agreement reasonably informed of any changes to the material\nterms of any such Acquisition Proposal or request. Each of Parent and the\nCompany shall, and shall cause their respective Subsidiaries to,\nimmediately cease and cause to be terminated, and use reasonable best\nefforts to cause its officers, directors, employees, investment bankers,\nconsultants, attorneys, accountants, agents and other representatives to,\nimmediately cease and cause to be terminated, all discussions and\nnegotiations, if any, that have taken place prior to the date hereof with\nany Persons with respect to any Acquisition Proposal.\n\n     For purposes of this Agreement, \"Acquisition Proposal\" means any\nwritten offer or proposal for, or any written indication of interest in,\nany (i) direct or indirect acquisition or purchase of a business or asset\nof Parent or the Company or any of their respective Subsidiaries that\nconstitutes 20% or more of the net revenues, net income or assets of such\nparty and its Subsidiaries, taken as a whole; (ii) direct or indirect\nacquisition or purchase of 20% or more of any class of equity securities of\nParent or the Company or any of their respective Subsidiaries whose\nbusiness constitutes 20% or more of the net revenues, net income or assets\nof such party and its Subsidiaries, taken as a whole; (iii) tender offer or\nexchange offer that, if consummated, would result in any Person\nbeneficially owning 20% or more of any class of equity securities of Parent\nor the Company or any of their respective Subsidiaries whose business\nconstitutes 20% or more the net revenues, net income or assets of such\nparty and its Subsidiaries, taken as a whole; or (iv) merger,\nconsolidation, business combination, recapitalization, liquidation,\ndissolution or similar transaction involving Parent or the Company or any\nof their respective Subsidiaries whose business constitutes 20% or more of\nthe net revenue, net income or assets of such party and its Subsidiaries,\ntaken as a whole, other than the transactions contemplated by this\nAgreement. For purposes of this Agreement, \"Superior Proposal\" means any\nbona fide written Acquisition Proposal for or in respect of all of the\noutstanding shares of Company Common Stock, or Parent Common Stock, as\napplicable, (i) on terms that the Board of Directors of Parent or the\nCompany, as applicable, determines in its good faith judgment (after\nconsultation with a financial advisor of nationally recognized reputation\nand taking into account all the terms and conditions of the Acquisition\nProposal deemed relevant by such Board of Directors, including any break-up\nfees, expense reimbursement provisions, conditions to consummation, and the\nability of the party making such proposal to obtain financing for such\nAcquisition Proposal) are more favorable (other than in immaterial\nrespects) from a financial point of view to its stockholders than the\nMerger; and (ii) that constitutes a transaction that, in such Board of\nDirectors' judgment, is reasonably likely to be consummated on the terms\nset forth, taking into account all legal, financial, regulatory and other\naspects of such proposal.\n\n          (d)  Nothing contained in this Agreement shall prohibit a\ndeferral of the distribution of rights issued pursuant to the Company\nRights Agreement following the commencement of a tender offer or an\nexchange offer for Company Common Stock.\n\n          (e)  Each of the Company and Parent agrees that it will take the\nnecessary steps promptly to inform its officers, directors, investment\nbankers, consultants, attorneys, accountants, agents and other\nrepresentatives of the obligations undertaken in this Section 7.10.\n\n     SECTION 7.11 Letters from Accountants.\n\n          (a)  Parent shall use reasonable best efforts to cause to be\ndelivered to Parent and the Company two letters from PricewaterhouseCoopers\nLLP, one dated no earlier than three business days prior to the date on\nwhich the Form S-4 shall become effective and one dated no earlier than\nthree business days prior to the Closing Date, each addressed to the Boards\nof Directors of Parent and the Company, in form reasonably satisfactory to\nthe Company and customary in scope for comfort letters delivered by\nindependent public accountants in connection with registration statements\nsimilar to the Form S-4.\n\n          (b)  Parent shall use reasonable best efforts to cause to be\ndelivered to Parent and the Company a letter from PricewaterhouseCoopers\nLLP, dated as of the Closing Date, addressed to the Boards of Directors of\nParent and the Company, stating that PricewaterhouseCoopers LLP concurs\nwith Parent's management's conclusion that accounting for the Merger as a\n\"pooling of interests\" under Opinion No. 16 (Business Combination) of the\nAccounting Principles Board of the American Institute of Certified Public\nAccountants and the rules and regulations of the Commission is appropriate\nif the Merger is closed and consummated in accordance with the terms\nhereof.\n\n          (c)  The Company shall use reasonable best efforts to cause to be\ndelivered to the Company and Parent two letters from Deloitte &amp; Touche LLP,\none dated no earlier than three business days prior to the date on which\nthe Form S-4 shall become effective and one dated no earlier than three\nbusiness days prior to the Closing Date, each addressed to the Boards of\nDirectors of the Company and Parent, in form reasonably satisfactory to\nParent and customary in scope for comfort letters delivered by independent\npublic accountants in connection with registration statements similar to\nthe Form S-4.\n\n          (d)  The Company shall use reasonable best efforts to cause to be\ndelivered to Parent a letter from Deloitte &amp; Touche LLP, dated as of the\nClosing Date, addressed to the Boards of Directors of the Company and\nParent, stating that Deloitte &amp; Touche LLP concurs with the Company's\nmanagement's conclusion that the Company is eligible to participate in a\ntransaction accounted for as a \"pooling of interests\" under Opinion No. 16\n(Business Combination) of the Accounting Principles Board of the American\nInstitute of Certified Public Accountants and the rules and regulations of\nthe Commission.\n\n     SECTION 7.12 Takeover Statutes. If any anti-takeover or similar\nstatute or regulation is or may become applicable to the transactions\ncontemplated hereby, each of the parties and its Board of Directors shall\ngrant such approvals and take all such actions as are legally permissible\nso that the transactions contemplated hereby may be consummated as promptly\nas practicable on the terms contemplated hereby and otherwise act to\neliminate or minimize the effects of any such statute or regulation on the\ntransactions contemplated hereby.\n\n     SECTION 7.13 Headquarters.\n\n          (a)  After the Effective Time, the headquarters of Parent shall\ncontinue to be located in Morristown, N.J.\n\n          (b)  Both Parent and the Company acknowledge the long-standing,\nmutually beneficial relationship between the Company and the Greater Twin\nCity community. In recognition of this, Parent and the Company hereby\nconfirm their intention to maintain this relationship subsequent to the\nEffective Time, including, by continuing, following the Effective Time, to\nprovide funding to The Honeywell Foundation and to otherwise maintain the\nCompany's charitable and communal endeavors in the Twin City community, in\neither instance at levels at least as great as the Company provided or\nmaintained prior to the Effective Time. Parent and the Company also confirm\ntheir intention, following the Effective Time, to explore opportunities to\nminimize the effects, if any, on the local communities served by the\nCompany that the provisions of Section 7.13(a) may have.\n\n     SECTION 7.14 Integration. Prior to the Effective Time, Parent and the\nCompany shall appoint an integration team (the \"Integration Team\") half the\nmembers of which shall be persons designated by Parent and half the members\nof which shall be persons designated by the Company. The Integration Team\nshall have two co-chairpersons, one designated by Parent and one designated\nby the Company. Prior to the Effective Time, the Integration Team shall\nreport to the persons contemplated by Section 2.2(c) to constitute the\nExecutive Office as of the Effective Time. As of and after the Effective\nTime, the Integration Team shall report to the Executive Office.\n\n     SECTION 7.15 Transfer Statutes. Each of Parent and the Company agrees\nto use its commercially reasonable efforts to comply promptly with all\nrequirements of the New Jersey, Connecticut and other state property\ntransfer statutes to the extent applicable to the transactions contemplated\nhereby, and to take all actions necessary to cause the transactions\ncontemplated hereby to be effected in compliance with such statutes. Parent\nand the Company agree that they will consult with each other to determine\nwhat, if any, actions must be taken prior to or after the Effective time to\nensure compliance with such statutes. Each of Parent and the Company agrees\nto provide the other with any documents to be submitted to the relevant\nstate agencies prior to submission. For purposes of this section, the New\nJersey and Connecticut Property Transfer Statutes means the New Jersey\nIndustrial Site Recovery Act, 1993 N.J. Laws 139, and the Connecticut\nTransfer Act, Conn. Gen. Stat. Ann. ss.22a.-134(b).\n\n     SECTION 7.16 Section 16(b). Parent and the Company shall take all such\nsteps reasonably necessary to cause the transactions contemplated hereby\nand any other dispositions of equity securities of the Company (including\nderivative securities) or acquisitions of Parent equity securities\n(including derivative securities) in connection with this Agreement by each\nindividual who (a) is a director or officer of the Company or (b) at the\nEffective Time, will become a director or officer of Parent, to be exempt\nunder Rule 16b-3 promulgated under the Exchange Act.10\n\n\n                                ARTICLE VIII\n                          CONDITIONS TO THE MERGER\n\n     SECTION 8.1 Conditions to the Obligations of Each Party. The\nobligations of the Company, Parent and Merger Subsidiary to consummate the\nMerger are subject to the satisfaction (or, to the extent legally\npermissible, waiver) of the following conditions:\n\n          (a)  this Agreement and the Merger shall have been approved and\nadopted by the stockholders of the Company in accordance with Delaware Law;\n\n          (b)  the Common Stock Issuance shall have been approved by the\nstockholders of Parent in accordance with the rules and regulations of the\nNYSE;\n\n          (c)  any applicable waiting period (including any extension\nthereof) under the HSR Act relating to the Merger shall have expired or\nbeen terminated;\n\n          (d)  the approval by the European Commission of the transactions\ncontemplated by this Agreement shall have been obtained pursuant to the EC\nMerger Regulation;\n\n          (e)  no provision of any applicable law or regulation and no\njudgment, injunction, order or decree shall prohibit or enjoin the\nconsummation of the Merger;\n\n          (f)  the Form S-4 shall have been declared effective under the\nSecurities Act and no stop order suspending the effectiveness of the Form\nS-4 shall be in effect and no proceedings for such purpose shall be pending\nbefore or threatened by the SEC;\n\n          (g)  the shares of Parent Common Stock to be issued in the Merger\nshall have been approved for listing on the NYSE, subject to official\nnotice of issuance;\n\n          (h)  the letters of PricewaterhouseCoopers LLP and Deloitte &amp; Touche LLP contemplated by paragraphs (b) and (d) of Section 7.11 shall\nhave been delivered as contemplated thereby; and\n\n          (i)  (i) all required approvals or consents of any governmental\nauthority (whether domestic, foreign or supranational) in connection with\nthe Merger and the consummation of the other transactions contemplated\nhereby shall have been obtained (and all relevant statutory, regulatory or\nother governmental waiting periods, whether domestic, foreign or\nsupranational, shall have expired) unless the failure to receive any such\napproval or consent would not, and would not be reasonably expected to,\nhave a Material Adverse Effect on Parent at or after the Effective Time and\n(ii) all such approvals and consents which have been obtained shall be on\nterms that would not, and would not reasonably be expected to, have a\nMaterial Adverse Effect on Parent at or after the Effective Time.\n\n     SECTION 8.2 Conditions to the Obligations of Parent and Merger\nSubsidiary. The obligations of Parent and Merger Subsidiary to consummate\nthe Merger are subject to the satisfaction (or, to the extent legally\npermissible, waiver) of the following further conditions:\n\n          (a)  (i) the Company shall have performed in all material\nrespects all of its obligations hereunder required to be performed by it at\nor prior to the Effective Time, (ii) the representations and warranties of\nthe Company contained in this Agreement and in any certificate or other\nwriting delivered by the Company pursuant hereto shall be true and correct\n(without giving effect to any limitation as to \"materiality\" or \"Material\nAdverse Effect\" set forth therein) at and as of the Effective Time as if\nmade at and as of such time (except to the extent expressly made as of an\nearlier date, in which case as of such earlier date), except where the\nfailure of such representations and warranties to be true and correct\n(without giving effect to any limitation as to \"materiality\" or \"Material\nAdverse Effect\" set forth therein) would not, individually or in the\naggregate, have a Material Adverse Effect on the Company, and (iii) Parent\nshall have received a certificate signed by an executive officer of the\nCompany to the foregoing effect;\n\n          (b)  there shall not be instituted or pending any action or\nproceeding by any governmental authority (whether domestic, foreign or\nsupranational) before any court or governmental authority or agency,\ndomestic, foreign or supranational, seeking to (i) restrain, prohibit or\notherwise interfere with the ownership or operation by Parent or any\nSubsidiary of Parent of all or any portion of the business of the Company\nor any of its Subsidiaries or of Parent or any of its Subsidiaries or to\ncompel Parent or any Subsidiary of Parent to dispose of or hold separate\nall or any portion of the business or assets of the Company or any of its\nSubsidiaries or of Parent or any of its Subsidiaries; (ii) to impose or\nconfirm limitations on the ability of Parent or any Subsidiary of Parent\neffectively to exercise full rights of ownership of the shares of Company\nCommon Stock (or shares of stock of the Surviving Corporation) including,\nwithout limitation, the right to vote any shares of Company Common Stock\n(or shares of stock of the Surviving Corporation) on any matters properly\npresented to stockholders; or (iii) seeking to require divestiture by\nParent or any Subsidiary of Parent of any shares of Company Common Stock\n(or shares of stock of the Surviving Corporation), if any such matter\nreferred in subclauses (i), (ii) and (iii) would, or would reasonably be\nexpected to, have a Material Adverse Effect on Parent at or after the\nEffective Time.\n\n          (c)  there shall not be any statute, rule, regulation,\ninjunction, order or decree, enacted, enforced, promulgated, entered,\nissued or deemed applicable to the Merger and the other transactions\ncontemplated hereby (or in the case of any statute, rule or regulation,\nawaiting signature or reasonably expected to become law), by any court,\ngovernment or governmental authority or agency or legislative body,\ndomestic, foreign or supranational, that would, or would reasonably be\nexpected to, have a Material Adverse Effect on Parent at or after the\nEffective Time.\n\n          (d)  Parent shall have received an opinion of Fried, Frank,\nHarris, Shriver &amp; Jacobson (or other counsel reasonably acceptable to\nParent) in form and substance reasonably satisfactory to Parent, on the\nbasis of customary representations and assumptions set forth in such\nopinion, dated the Effective Time, to the effect that the Merger will be\ntreated for federal income tax purposes as a reorganization qualifying\nunder the provisions of Section 368(a) of the Code and that each of Parent,\nMerger Subsidiary and the Company will be a party to the reorganization\nwithin the meaning of Section 368(b) of the Code. In rendering its opinion,\ncounsel shall be entitled to rely upon customary representations of\nofficers of Parent and the Company reasonably requested by counsel,\nincluding, without limitation, those contained in certificates\nsubstantially in the form agreed to by the Company and Parent prior to the\ndate of this Agreement.\n\n     SECTION 8.3 Conditions to the Obligations of the Company. The\nobligation of the Company to consummate the Merger is subject to the\nsatisfaction (or, to the extent legally permissible, waiver) of the\nfollowing further conditions:\n\n          (a)  (i) Parent shall have performed in all material respects all\nof its obligations hereunder required to be performed by it at or prior to\nthe Effective Time, (ii) the representations and warranties of Parent and\nMerger Sub contained in this Agreement and in any certificate or other\nwriting delivered by Parent pursuant hereto shall be true and correct\n(without giving effect to any limitation as to \"materiality\" or \"Material\nAdverse Effect\" set forth herein) at and as of the Effective Time as if\nmade at and as of such time (except to the extent expressly made as of an\nearlier date, in which case as of such earlier date, except where the\nfailure of such representations to be true and correct (without giving\neffect to any limitation as to \"materiality\" or \"Material Adverse Effect\"\nset forth herein) would not, individually as in the aggregate, have a\nMaterial Adverse Effect on Parent and (iii) the Company shall have received\na certificate signed by a vice-president of Parent to the foregoing effect;\nand\n\n          (b)  the Company shall have received an opinion of Skadden, Arps,\nSlate, Meagher &amp; Flom LLP (or other counsel reasonably acceptable to the\nCompany) in form and substance reasonably satisfactory to the Company, on\nthe basis of customary representations and assumptions set forth in such\nopinion, dated the Effective Time, to the effect that the Merger will be\ntreated for federal income tax purposes as a reorganization qualifying\nunder the provisions of Section 368(a) of the Code and that each of Parent,\nMerger Subsidiary and the Company will be a party to the reorganization\nwithin the meaning of Section 368(b) of the Code. In rendering this\nopinion, counsel shall be entitled to rely upon customary representations\nof officers of Parent and the Company reasonably requested by counsel,\nincluding, without limitation, those contained in certificates\nsubstantially in the form agreed to by the Company and Parent prior to the\ndate of this Agreement.\n\n          (c)  Parent shall have taken all such actions as shall be\nnecessary so that the By-laws Amendment shall become effective not later\nthan the Effective Time.\n\n\n                                 ARTICLE IX\n                                TERMINATION\n\n     SECTION 9.1 Termination. This Agreement may be terminated and the\nMerger may be abandoned at any time prior to the Effective Time\n(notwithstanding any approval of this Agreement by the stockholders of the\nCompany or any approval of the Common Stock Issuance by the stockholders of\nParent):\n\n          (a)  by mutual written consent of the Company and Parent;\n\n          (b)  by either the Company or Parent,\n\n               (i)   if the Merger has not been consummated as of the eight\n     month anniversary hereof (the \"End Date\"); provided, however, that if\n     (x) the Effective Time has not occurred by such date by reason of\n     nonsatisfaction of any of the conditions set forth in Section 8.1(c),\n     8.1(d), 8.1(e), 8.1(i), 8.2(b) and 8.2(c) and (y) all other conditions\n     set forth in Article 8 have heretofore been satisfied or waived or are\n     then capable of being satisfied, 60 days after such eight month\n     anniversary (which shall then be the \"End Date\"); provided, further\n     that at the End Date the right to terminate this Agreement under this\n     Section 9.1(b)(i) shall not be available to any party whose failure to\n     fulfill in any material respect any obligation under this Agreement\n     has caused or resulted in the failure of the Effective Time to occur\n     on or before the End Date;\n\n               (ii)  if the Company Stockholder Approval shall not have been\n     obtained by reason of the failure to obtain the required vote at a\n     duly held meeting of stockholders or any adjournment thereof; or\n\n               (iii)  if the Common Stock Issuance Approval shall not have\n     been obtained by reason of the failure to obtain the required vote at\n     a duly held meeting of stockholders or any adjournment thereof;\n\n          (c)  by either the Company or Parent, if there shall be any law\nor regulation that makes consummation of the Merger illegal or otherwise\nprohibited or if any judgment, injunction, order or decree enjoining Parent\nor the Company from consummating the Merger is entered and such judgment,\ninjunction, order or decree shall become final and nonappealable; provided\nthat the terminating party has fulfilled its obligations under Section 7.1;\n\n          (d)  by Parent, if the Board of Directors of the Company shall\nhave failed to recommend or withdrawn or modified or changed in a manner\nadverse to Parent its approval or recommendation of this Agreement or the\nMerger, whether or not permitted by the terms hereof, or shall have failed\nto call the Company Stockholder Meeting in accordance with Section 5.2, or\nshall have recommended a Superior Proposal (or the Board of Directors of\nthe Company shall resolve to do any of the foregoing);\n\n          (e)  by the Company, if the Board of Directors of Parent shall\nhave failed to recommend or shall have withdrawn or modified or changed in\na manner adverse to the Company its approval and recommendation of this\nagreement or the Common Stock Issuance, whether or not permitted by the\nterms hereof, or shall have failed to call the Parent Stockholder Meeting\nin accordance with Section 6.4 or shall have recommended a Superior\nProposal (or the Board of Directors of Parent resolves to do any of the\nforegoing); or\n\n          (f)  by either Parent or the Company, if there shall have been a\nbreach by the other of any of its representations, warranties, covenants or\nobligations contained in this Agreement, which breach would result in the\nfailure to satisfy one or more of the conditions set forth in Section\n8.2(a) (in the case of a breach by the Company) or Section 8.3(a) (in the\ncase of a breach by Parent), and in any such case such breach shall be\nincapable of being cured or, if capable of being cured, shall not have been\ncured within 30 days after written notice thereof shall have been received\nby the party alleged to be in breach.\n\n     The party desiring to terminate this Agreement pursuant to clause (b),\n(c), (d), (e) or (f) of this Section 9.1 shall give written notice of such\ntermination to the other party in accordance with Section 10.1, specifying\nthe provision hereof pursuant to which such termination is effected.\n\n     SECTION 9.2 Effect of Termination. If this Agreement is terminated\npursuant to Section 9.1, this Agreement shall become void and of no effect\nwith no liability on the part of any party hereto, except that (a) the\nagreements contained in this Section 9.2, in Section 10.4, Section 10.5, in\nthe Option Agreements and in the Confidentiality Agreement, and the\nrepresentations and warranties with respect to the Option Agreements shall\nsurvive the termination hereof and (b) no such termination shall relieve\nany party of any liability or damages resulting from any willful breach by\nthat party of this Agreement.\n\n\n                                 ARTICLE X\n                               MISCELLANEOUS\n\n     SECTION 10.1 Notices. All notices, requests and other communications\nto any party hereunder shall be in writing (including facsimile or similar\nwriting) and shall be given,\n\n     if to Parent or Merger Subsidiary, to:\n\n          AlliedSignal Inc.\n          101 Columbia Road\n          P.O. Box 3000\n          Morristown, NJ  07962-2496\n          Attention:  Peter M. Kreindler\n          Senior Vice President, General Counsel\n            and Secretary\n          Facsimile No.:  (973) 455-4217\n\n     with a copy to:\n\n          Fried, Frank, Harris, Shriver &amp; Jacobson\n          One New York Plaza\n          New York, NY  10004-1980\n          Attention:  Arthur Fleischer, Jr., Esq.\n                      Charles M. Nathan, Esq.\n          Facsimile No.:  (212) 859-4000\n\n     if to the Company, to:\n\n          Honeywell Inc.\n          Honeywell Plaza\n          Minneapolis, MN  55408\n          Attention:  Edward D. Grayson\n          Vice President and General Counsel\n          Facsimile No.:  (612) 951-3859\n\n     with a copy to:\n\n          Skadden, Arps, Slate, Meagher &amp; Flom LLP\n          919 Third Avenue\n          New York, N.Y.  10022-3897\n            Attention:  Peter Allan Atkins, Esq.\n                        David J. Friedman, Esq.\n          Facsimile No.: (212) 735-2000\n\n     or such other address or facsimile number as such party may hereafter\nspecify for the purpose by notice to the other parties. Each such notice,\nrequest or other communication shall be effective (a) if given by\nfacsimile, when such facsimile is transmitted to the facsimile number\nspecified in this Section and the appropriate facsimile confirmation is\nreceived or (b) if given by any other means, when delivered at the address\nspecified in this Section.\n\n     SECTION 10.2 Non-Survival of Representations and Warranties. The\nrepresentations and warranties contained herein and in any certificate or\nother writing delivered pursuant hereto shall not survive the Effective\nTime.\n\n     SECTION 10.3 Amendments; No Waivers.\n\n          (a)  Any provision of this Agreement (including the Exhibits and\nSchedules hereto) may be amended or waived prior to the Effective Time at\nany time prior to or after the receipt of the Parent Stockholder Approval\nand\/or the Company Stockholder Approval, if, and only if, such amendment or\nwaiver is in writing and signed, in the case of an amendment, by the\nCompany, Parent and Merger Subsidiary, or in the case of a waiver, by the\nparty against whom the waiver is to be effective; provided that after the\nreceipt of any such approval, if any such amendment or waiver shall by law\nor in accordance with the rules and regulations of any relevant securities\nexchange requires further approval of stockholders, the effectiveness of\nsuch amendment or waiver shall be subject to the necessary stockholder\napproval.\n\n          (b)  No failure or delay by any party in exercising any right,\npower or privilege hereunder shall operate as a waiver thereof nor shall\nany single or partial exercise thereof preclude any other or further\nexercise thereof or the exercise of any other right, power or privilege.\nThe rights and remedies herein provided shall be cumulative and not\nexclusive of any rights or remedies provided by law.\n\n     SECTION 10.4 Expenses.\n\n          (a)  Except as otherwise specified in Sections 10.5 or 10.6, the\nOption Agreements or as otherwise agreed to in writing by the parties, all\ncosts and expenses incurred in connection with this Agreement and the\ntransactions contemplated by this Agreement shall be paid by the party\nincurring such cost or expense, except that (a) the filing fees in respect\nto filings made pursuant to the HSR Act, the EC Merger Regulation and all\nsimilar filings in other jurisdictions, (b) filing fees in connection with\nthe filing with the SEC of the Form S-4, the Parent Proxy Statement and the\nCompany Proxy Statement, (c) all printing, mailing and related expenses\nincurred in connection with printing and mailing of the Form S-4, the\nParent Proxy Statement and the Company Proxy Statement and (d) all other\nexpenses not directly attributable to any one of the parties, shall be\nshared equally by Parent and the Company.\n\n     SECTION 10.5   Company Termination Fee.\n\n          (a)  If:\n\n               (i)   Parent shall terminate this Agreement pursuant to\n     Section 9.1(d), unless at the time of such failure to recommend,\n     withdrawal or adverse modification or change, failure to call the\n     Company Stockholder Meeting or recommendation of a Superior Proposal,\n     any of the conditions set forth in Section 8.3(a) would not have been\n     satisfied as of such date and would not be reasonably capable of being\n     satisfied; or\n\n               (ii)  either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(ii) and prior to the Company\n     Stockholder Meeting any Person shall have made to the Company or to\n     the stockholders of the Company an Acquisition Proposal relating to\n     the Company; or\n\n               (iii) either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(i) and (x) prior to such\n     termination any Person shall have made to the Company or to the\n     stockholders of the Company an Acquisition Proposal relating to the\n     Company and (y) within nine months after such termination, the Company\n     enters into a definitive agreement with respect to any Acquisition\n     Proposal made prior to, as of or after such termination; or\n\n               (iv)  Parent shall terminate this Agreement pursuant to\n     Section 9.1(f) and prior to such termination any Person shall have\n     made to the Company or to the stockholders of the Company an\n     Acquisition Proposal relating to the Company;\n\nthen, (x) in the case of clause (i), the Company shall pay to Parent, not\nlater than the date of termination of this Agreement, an amount equal to\n$350 million, (y) in the case of clause (iii), the Company shall pay to\nParent, not later than the date the Company enters into a definitive\nagreement with respect to any Acquisition Proposal, $350 million, and (z)\nin the case of clauses (ii) or (iv), (a) the Company shall pay to Parent,\nnot later than the date of termination of this Agreement, an amount equal\nto $200 million, and (b) if within nine months after the termination of\nthis Agreement, the Company enters into a definitive agreement in respect\nof an Acquisition Proposal, the Company shall pay to Parent, not later than\nthe date such agreement is entered into, an additional amount equal to $150\nmillion. Acceptance by Parent of the final payment to which Parent is\nentitled in connection with the events described in clauses (i), (ii),\n(iii) or (iv) (other than in the case of the events described in clause\n(iv), if the breach involved constitutes a willful breach), as applicable,\nreferred to in the foregoing sentence shall constitute conclusive evidence\nthat this Agreement has been validly terminated and upon acceptance of\npayment of such amount, the Company shall be fully released and discharged\nfrom any liability or obligation resulting from or under this Agreement\n(except for its obligations under the Company Option Agreement). For\npurposes of clause (ii) of this Section 10.5(a), the term \"Acquisition\nProposal\" shall have the meaning set forth in Section 7.10, except that all\nreferences to \"20%\" shall be replaced with \"40%,\" and for purposes of\nclauses (iii) and (iv) of this Section 10.5(a), such term shall have the\nmeaning set forth in Section 7.10, except that all references to \"20%\"\nshall be replaced with \"50%\".\n\n          (b)  If:\n\n               (i)   either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(ii) and no Acquisition Proposal\n     relating to the Company has been made to the Company or the\n     stockholders of the Company prior to the Company Stockholder Meeting;\n     or\n\n               (ii)  Parent shall terminate this Agreement pursuant to\n     Section 9.1(f) and no Acquisition Proposal relating to the Company has\n     been made prior thereto to the Company or the stockholders of the\n     Company,\n\nthen,  in any such  case,  the  Company  shall,  upon  request  of  Parent,\nreimburse Parent for all of its  out-of-pocket  expenses incurred by Parent\nin connection with this Agreement and the transactions contemplated hereof,\nincluding, without limitation, reasonable fees and expenses of accountants,\nattorneys  and  financial  advisors,   and  costs  and  expenses  otherwise\nallocated  to Parent  pursuant to Section  10.4,  up to an aggregate of $20\nmillion.\n\n          (c)  All payments and reimbursements made under this Section 10.5\nshall be made by wire transfer of immediately available funds to an account\nspecified by Parent.\n\n     SECTION 10.6   Parent Termination Fee.\n\n          (a)  If:\n\n               (i)   The Company shall terminate this Agreement pursuant to\n     Section 9.1(e), unless at the time of such failure to recommend,\n     withdrawal or adverse modification or change, failure to call the\n     Parent Stockholder Meeting or recommendation of a Superior Proposal,\n     any of the conditions set forth in Section 8.2(a) would not have been\n     satisfied as of such date and would not be reasonably capable of being\n     satisfied; or\n\n               (ii)  either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(iii), and prior to the Parent\n     Stockholder Meeting any Person shall have made to Parent or to the\n     stockholders of Parent an Acquisition Proposal relating to Parent; or\n\n               (iii) either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(i) and (x) prior to such\n     termination any Person shall have made to Parent or to the\n     stockholders of Parent an Acquisition Proposal relating to Parent and\n     (y) within nine months after such termination, Parent enters into a\n     definitive agreement with respect to any Acquisition Proposal made\n     prior to, as of or after such termination; or\n\n               (iv) the Company shall terminate this Agreement pursuant to\n     Section 9.1(f) and prior to such termination any Person shall have\n     made to Parent or to the stockholders of Parent an Acquisition\n     Proposal relating to Parent;\n\nthen, (x) in the case of clause (i), Parent shall pay to the Company not\nlater than the date of termination of this Agreement an amount equal to\n$350 million, (y) in the case of clause (iii), Parent shall pay to the\nCompany, not later than the date Parent enters into a definitive agreement\nwith respect to any Acquisition Proposal, $350 million, and (z) in the case\nof clauses (ii) or (iv), (a) Parent shall pay to the Company, not later\nthan the date of termination of this Agreement, $200 million, and (b) if\nwithin nine months after the termination of this Agreement, Parent enters\ninto a definitive agreement in respect of an Acquisition Proposal, Parent\nshall pay to the Company, no later than the date such agreement is entered\ninto, an additional amount equal to $150 million. Acceptance by the Company\nof the final payment to which the Company is entitled in connection with\nthe events described in clauses (i), (ii), (iii) or (iv) (other than in the\ncase of the events described in clause (iv), if the breach involved\nconstitutes a willful breach), as applicable, referred to in the foregoing\nsentence shall constitute conclusive evidence that this Agreement has been\nvalidly terminated and upon acceptance of payment of such amount, Parent\nshall be fully released and discharged from any liability or obligation\nresulting from or under this Agreement (except for its obligations under\nParent Option Agreement). For purposes of clause (ii) of this Section\n10.6(a), the term \"Acquisition Proposal\" shall have the meaning set forth\nin Section 7.10, except that all references to \"20%\" shall be replaced with\n\"40%,\" and for purposes of clauses (iii) and (iv) of this Section 10.6(a),\nsuch term shall have the meaning set forth in Section 7.10, except that all\nreferences to \"20%\" shall be replaced with \"50%\".\n\n          (b)  If:\n\n               (i)   either the Company or Parent shall terminate this\n     Agreement pursuant to Section 9.1(b)(iii) and no Acquisition Proposal\n     relating to Parent has been made to Parent or the stockholders of\n     Parent prior to the Parent Stockholder Meeting; or\n\n               (ii) the Company shall terminate this Agreement pursuant to\n     Section 9.1(f) and no Acquisition Proposal relating to Parent has been\n     made prior thereto to Parent or the stockholders of Parent,\n\nthen, in any such case, Parent shall upon request of the Company, reimburse\nthe Company for all of its  out-of-pocket  expenses incurred by the Company\nin connection with this Agreement and the transaction  contemplated hereof,\nincluding, without limitation, reasonable fees and expenses of accountants,\nattorneys  and  financial  advisors,   and  costs  and  expenses  otherwise\nallocated to the Company  pursuant to Section  10.4,  up to an aggregate of\n$20 million.\n\n          (c)  All payments and reimbursements made under this Section 10.6\nshall be made by wire transfer of immediately available funds to an account\nspecified by the Company.\n\n     SECTION 10.7 Successors and Assigns. The provisions of this Agreement\nshall be binding upon and inure to the benefit of the parties hereto and\ntheir respective successors and assigns; provided that no party may assign,\ndelegate or otherwise transfer any of its rights or obligations under this\nAgreement without the consent of the other parties hereto except that\nMerger Subsidiary may transfer or assign, in whole or from time to time in\npart, to one or more of its affiliates, its rights under this Agreement,\nbut any such transfer or assignment will not relieve Merger Subsidiary of\nits obligations hereunder.\n\n     SECTION 10.8 Governing Law. This Agreement shall be construed in\naccordance with and governed by the law of the State of Delaware, without\nregard to principles of conflicts of law.\n\n     SECTION 10.9 Jurisdiction. Any suit, action or proceeding seeking to\nenforce any provision of, or based on any matter arising out of or in\nconnection with, this Agreement, the Option Agreements or the transactions\ncontemplated hereby or thereby may be brought in any federal or state court\nlocated in the State of Delaware, and each of the parties hereby consents\nto the jurisdiction of such courts (and of the appropriate appellate courts\ntherefrom) in any such suit, action or proceeding and irrevocably waives,\nto the fullest extent permitted by law, any objection which it may now or\nhereafter have to the laying of the venue of any such suit, action or\nproceeding in any such court or that any such suit, action or proceeding\nwhich is brought in any such court has been brought in an inconvenient\nforum. Process in any such suit, action or proceeding may be served on any\nparty anywhere in the world, whether within or without the jurisdiction of\nany such court. Without limiting the foregoing, each party agrees that\nservice of process on such party as provided in Section 10.1 shall be\ndeemed effective service of process on such party.\n\n     SECTION 10.10 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY\nIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL\nPROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS\nCONTEMPLATED HEREBY.\n\n     SECTION 10.11 Counterparts; Effectiveness. This Agreement may be\nsigned in any number of counterparts, each of which shall be an original,\nwith the same effect as if the signatures thereto and hereto were upon the\nsame instrument. This Agreement shall become effective when each party\nhereto shall have received counterparts hereof signed by all of the other\nparties hereto.\n\n     SECTION 10.12 Entire Agreement. This Agreement (including the Exhibits\nand Schedules), the Option Agreements and the Confidentiality Agreement\nconstitute the entire agreement between the parties with respect to the\nsubject matter of this Agreement and supersede all prior agreements and\nunderstandings, both oral and written, between the parties with respect to\nthe subject matter hereof and thereof. Except as provided in Section\n6.3(c), no provision of this Agreement or any other agreement contemplated\nhereby is intended to confer on any Person other than the parties hereto\nany rights or remedies.\n\n     SECTION 10.13 Captions. The captions herein are included for\nconvenience of reference only and shall be ignored in the construction or\ninterpretation hereof.\n\n     SECTION 10.14 Severability. If any term, provision, covenant or\nrestriction of this Agreement is held by a court of competent jurisdiction\nor other authority to be invalid, void or unenforceable, the remainder of\nthe terms, provisions, covenants and restrictions of this Agreement shall\nremain in full force and effect and shall in no way be affected, impaired\nor invalidated so long as the economic or legal substance of the\ntransactions contemplated hereby is not affected in any manner materially\nadverse to any party. Upon such a determination, the parties shall\nnegotiate in good faith to modify this Agreement so as to effect the\noriginal intent of the parties as closely as possible in an acceptable\nmanner in order that the transactions contemplated hereby be consummated as\noriginally contemplated to the fullest extent possible.\n\n\n\n\n\n\n     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to\nbe duly executed by their respective authorized officers as of the day and\nyear first above written.\n\n\n                                    ALLIEDSIGNAL INC.\n\n                                    By: \/s\/ Lawrence A. Bossidy\n                                        -----------------------\n                                        Name:  Lawrence A. Bossidy\n                                        Title: Chairman and Chief Executive\n                                               Officer\n\n                                    HONEYWELL INC.\n\n                                    By: \/s\/ Michael R. Bonsignore\n                                        -------------------------\n                                        Name:  Michael R. Bonsignore\n                                        Title: Chairman and Chief Executive\n                                               Officer\n\n                                    BLOSSOM ACQUISITION CORP.\n\n                                    By: \/s\/ Peter M. Kreindler\n                                        ----------------------\n                                        Name:  Peter M. Kreindler\n                                        Title: Senior Vice President and\n                                               Secretary\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7791],"corporate_contracts_industries":[9473],"corporate_contracts_types":[9622,9626],"class_list":["post-43071","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-honeywell-international-inc","corporate_contracts_industries-aerospace__aircraft","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\/43071","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=43071"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43071"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43071"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}