{"id":43132,"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-tyco-international-ltd-and-united.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-tyco-international-ltd-and-united","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-tyco-international-ltd-and-united.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Tyco International Ltd. and United States Surgical Corp."},"content":{"rendered":"<pre>                          AGREEMENT AND PLAN OF MERGER\n\n                                  BY AND AMONG\n\n                            TYCO INTERNATIONAL LTD.,\n\n                              T11 ACQUISITION CORP.\n\n                                       and\n\n                       UNITED STATES SURGICAL CORPORATION\n\n\n\n\n\n\n                            Dated as of May 25, 1998\n\n\n\n\n\n\n\n\n\n\n                                TABLE OF CONTENTS\n\n                                    ARTICLE I\n\n                                   THE MERGER................................  2\n        SECTION 1.01.  The Merger............................................  2\n        SECTION 1.02.  Effective Time.  .....................................  2\n        SECTION 1.03.  Effect of the Merger..................................  2\n        SECTION 1.04.  Certificate of Incorporation; By-Laws.................  2\n        SECTION 1.05.  Directors and Officers................................  3\n        SECTION 1.06.  Effect on Capital Stock...............................  3\n        SECTION 1.07.  Exchange of Certificates..............................  5\n        SECTION 1.08.  Stock Transfer Books..................................  7\n        SECTION 1.09.  No Further Ownership Rights in Company Common Stock...  7\n        SECTION 1.10.  Lost, Stolen or Destroyed Certificates................  7\n        SECTION 1.11.  Tax and Accounting Consequences.......................  7\n        SECTION 1.12.  Taking of Necessary Action; Further Action............  7\n        SECTION 1.13.  Material Adverse Effect...............................  8\n\n                                   ARTICLE II\n\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............  8\n        SECTION 2.01.  Organization and Qualification; Subsidiaries..........  8\n        SECTION 2.02.  Certificate of Incorporation and By-Laws..............  9\n        SECTION 2.03.  Capitalization........................................  9\n        SECTION 2.04.  Authority Relative to this Agreement.................. 10\n        SECTION 2.05.  No Conflict; Required Filings and Consents............ 10\n        SECTION 2.06.  Compliance; Permits................................... 11\n        SECTION 2.07.  SEC Filings; Financial Statements..................... 12\n        SECTION 2.08.  Absence of Certain Changes or Events.................. 13\n        SECTION 2.09.  No Undisclosed Liabilities............................ 13\n        SECTION 2.10.  Absence of Litigation................................. 13\n        SECTION 2.11.  Employee Benefit Plans; Employment Agreements......... 13\n        SECTION 2.12.  Labor Matters......................................... 16\n        SECTION 2.13.  Registration Statement; Proxy Statement\/Prospectus.... 17\n        SECTION 2.14.  Restrictions on Business Activities................... 17\n        SECTION 2.15.  Title to Property..................................... 18\n        SECTION 2.16.  Taxes................................................. 18\n        SECTION 2.17.  Environmental Matters................................. 19\n        SECTION 2.18.  Brokers............................................... 21\n        SECTION 2.19.  Intellectual Property................................. 21\n        SECTION 2.20.  Interested Party Transactions......................... 22\n        SECTION 2.21.  Insurance............................................. 23\n        SECTION 2.22.  Product Liability and Recalls......................... 23\n        SECTION 2.23.  Opinion of Financial Advisor.......................... 23\n        SECTION 2.24.  Pooling Matters....................................... 23\n\n\n                                       -i-\n\n\n\n\n        SECTION 2.25.  Tax Matters........................................... 23\n        SECTION 2.26  Accuracy of Information................................ 24\n\n                                   ARTICLE III\n\n                        REPRESENTATIONS AND WARRANTIES OF\n                              PARENT AND MERGER SUB.......................... 24\n        SECTION 3.01.  Organization and Qualification; Subsidiaries.......... 24\n        SECTION 3.02.  Articles of Organization and By-Laws.................. 24\n        SECTION 3.03.  Capitalization........................................ 25\n        SECTION 3.04.  Authority Relative to this Agreement.................. 25\n        SECTION 3.05.  No Conflict; Required Filings and Consents............ 26\n        SECTION 3.06.  Compliance; Permits................................... 27\n        SECTION 3.07.  SEC Filings; Financial Statements..................... 27\n        SECTION 3.08.  Absence of Certain Changes or Events.................. 28\n        SECTION 3.09.  No Undisclosed Liabilities............................ 28\n        SECTION 3.10.  Absence of Litigation................................. 28\n        SECTION 3.11.  Employee Benefit Plans; Employment Agreements......... 28\n        SECTION 3.12.  Labor Matters......................................... 31\n        SECTION 3.13.  Registration Statement;  Proxy Statement\/Prospectus... 31\n        SECTION 3.14.  Restrictions on Business Activities................... 32\n        SECTION 3.15.  Title to Property..................................... 32\n        SECTION 3.16.  Taxes................................................. 33\n        SECTION 3.17.  Environmental Matters................................. 34\n        SECTION 3.18.  Brokers............................................... 35\n        SECTION 3.19.  Intellectual Property................................. 35\n        SECTION 3.20.  Interested Party Transactions......................... 35\n        SECTION 3.21.  Insurance............................................. 35\n        SECTION 3.22.  Product Liability and Recalls......................... 36\n        SECTION 3.23.  Ownership of Merger Sub; No Prior Activities.......... 36\n        SECTION 3.24.  Pooling Matters....................................... 36\n        SECTION 3.25.  Tax Matters........................................... 36\n        SECTION 3.26.  DGCL Section 203...................................... 36\n        SECTION 3.27  Accuracy of Information................................ 37\n\n                                   ARTICLE IV\n\n                     CONDUCT OF BUSINESS PENDING THE MERGER.................. 37\n        SECTION 4.01.  Conduct of Business by the Company Pending the Merger. 37\n        SECTION 4.02.  No Solicitation....................................... 39\n        SECTION 4.03.  Conduct of Business by Parent Pending the Merger...... 40\n\n                                    ARTICLE V\n\n                              ADDITIONAL AGREEMENTS.......................... 41\n        SECTION 5.01.   Proxy Statement\/Prospectus; Registration Statement... 41\n\n\n                                            -ii-\n\n\n\n\n        SECTION 5.02.  Company Shareholders Meeting.......................... 42\n        SECTION 5.03.  Access to Information; Confidentiality................ 42\n        SECTION 5.04.  Consents; Approvals................................... 42\n        SECTION 5.05.  Agreements with Respect to Affiliates................. 42\n        SECTION 5.06.  Indemnification and Insurance......................... 43\n        SECTION 5.07.  Notification of Certain Matters....................... 44\n        SECTION 5.08.  Further Action\/Tax Treatment.......................... 45\n        SECTION 5.09.  Public Announcements.................................. 45\n        SECTION 5.10.  Listing of Parent Shares.............................. 45\n        SECTION 5.11.  Conveyance Taxes...................................... 45\n        SECTION 5.12.  Option Plans and Benefits, etc........................ 45\n        SECTION 5.13.  Accountant's Letters.................................. 46\n        SECTION 5.14.  Pooling Accounting Treatment.......................... 46\n        SECTION 5.15.  Connecticut Transfer Act.............................. 47\n        SECTION 5.16.  Director Appointment.................................. 47\n\n                                   ARTICLE VI\n\n                            CONDITIONS TO THE MERGER......................... 47\n        SECTION 6.01.  Conditions to Obligation of Each Party to \n                         Effect the Merger................................... 47\n        SECTION 6.02.  Additional Conditions to Obligations of \n                         Parent and Merger Sub............................... 49\n        SECTION 6.03.  Additional Conditions to Obligation of the Company.... 50\n\n                                   ARTICLE VII\n\n                                   TERMINATION............................... 50\n        SECTION 7.01.  Termination........................................... 50\n        SECTION 7.02.  Effect of Termination................................. 52\n        SECTION 7.03.  Fees and Expenses..................................... 53\n\n                                  ARTICLE VIII\n\n                               GENERAL PROVISIONS............................ 54\n        SECTION 8.01.  Effectiveness of Representations, Warranties and\n                         Agreements.......................................... 54\n        SECTION 8.02.  Notices............................................... 54\n        SECTION 8.03.  Certain Definitions................................... 56\n        SECTION 8.04.  Amendment............................................. 57\n        SECTION 8.05.  Waiver................................................ 57\n        SECTION 8.06.  Headings.............................................. 57\n        SECTION 8.07.  Severability.......................................... 57\n        SECTION 8.08.  Entire Agreement...................................... 57\n        SECTION 8.09.  Assignment; Merger Sub................................ 58\n        SECTION 8.10.  Parties in Interest................................... 58\n        SECTION 8.11.  Failure or Indulgence Not Waiver; Remedies Cumulative. 58\n        SECTION 8.12.  Governing Law; Jurisdiction........................... 58\n        SECTION 8.13.  Counterparts.......................................... 58\n        SECTION 8.14.  WAIVER OF JURY TRIAL.................................. 58\n\n\n                                      -iii-\n\n\n\n\n                          AGREEMENT AND PLAN OF MERGER\n\n\n               AGREEMENT  AND PLAN OF  MERGER,  dated as of May 25,  1998  (this\n\"Agreement\"),  among TYCO INTERNATIONAL LTD., a Bermuda company (\"Parent\"),  T11\nACQUISITION CORP., a Delaware corporation and a direct,  wholly owned subsidiary\nof Parent (\"Merger Sub\"),  and UNITED STATES  SURGICAL  CORPORATION,  a Delaware\ncorporation (the \"Company\").\n\n                                     W I T N E S S E T H:\n\n               WHEREAS,  the Boards of Directors  of Parent,  Merger Sub and the\nCompany have each  determined  that it is advisable and in the best interests of\ntheir respective  shareholders,  and consistent with and in furtherance of their\nrespective  business  strategies  and goals,  for Parent to cause  Merger Sub to\nmerge with and into the Company upon the terms and subject to the conditions set\nforth herein;\n\n               WHEREAS,  in  furtherance  of such  combination,  the  Boards  of\nDirectors of Parent,  Merger Sub and the Company  have each  approved the merger\n(the  \"Merger\") of Merger Sub with and into the Company in  accordance  with the\napplicable  provisions of the Delaware General Corporation Law (the \"DGCL\"), and\nupon the terms and subject to the conditions set forth herein;\n\n               WHEREAS,  Parent, Merger Sub and the Company intend, by approving\nresolutions  authorizing  this  Agreement,  to adopt this Agreement as a plan of\nreorganization within the meaning of Section 368 of the Internal Revenue Code of\n1986, as amended (the \"Code\"), and the regulations promulgated thereunder;\n\n               WHEREAS,  Parent,  Merger  Sub and the  Company  intend  that the\nMerger  be  accounted  for as a  pooling-of-interests  for  financial  reporting\npurposes; and\n\n               WHEREAS,  pursuant  to the  Merger,  each  outstanding  share  (a\n\"Share\") of the Company's  Common Stock,  par value $.10 per share (the \"Company\nCommon  Stock\"),  shall be  converted  into  the  right to  receive  the  Merger\nConsideration (as defined in Section 1.07(b)), upon the terms and subject to the\nconditions set forth herein;\n\n               NOW, THEREFORE,  in consideration of the foregoing and the mutual\ncovenants and  agreements  herein  contained,  and intending to be legally bound\nhereby, Parent, Merger Sub and the Company hereby agree as follows:\n\n\n                                      -1-\n\n\n\n\n                                    ARTICLE I\n\n                                   THE MERGER\n\n\n               SECTION 1.01.  The Merger.  (a) Effective  Time. At the Effective\nTime (as defined in Section 1.02 hereof),  and subject to and upon the terms and\nconditions of this  Agreement and the DGCL,  Merger Sub shall be merged with and\ninto the Company,  the separate  corporate  existence of Merger Sub shall cease,\nand the Company shall continue as the surviving corporation.  The Company as the\nsurviving  corporation after the Merger is hereinafter  sometimes referred to as\nthe \"Surviving Corporation.\"\n\n               (b) Closing. Unless this Agreement shall have been terminated and\nthe  transactions  herein  contemplated  shall have been  abandoned  pursuant to\nSection 7.01,  and subject to the  satisfaction  or waiver of the conditions set\nforth in Article VI, the  consummation  of the Merger (the  \"Closing\") will take\nplace as promptly as  practicable  (and in any event within two  business  days)\nafter  satisfaction  or waiver of the conditions set forth in Article VI, at the\noffices of Kramer,  Levin,  Naftalis &amp; Frankel,  919 Third Avenue, New York, New\nYork,  unless another date, time or place is agreed to in writing by the parties\nhereto.\n\n               SECTION 1.02.  Effective  Time. As promptly as practicable  after\nthe  satisfaction  or waiver of the  conditions  set forth in  Article  VI,  the\nparties  hereto  shall cause the Merger to be  consummated  as of the day of the\nClosing  by filing a  certificate  of merger  as  contemplated  by the DGCL (the\n\"Certificate of Merger\"), together with any required related certificates,  with\nthe  Secretary of State of the State of  Delaware,  in such form as required by,\nand executed in accordance  with the relevant  provisions of, the DGCL (the time\nof such filing being the \"Effective Time\").\n\n               SECTION 1.03.  Effect of the Merger.  At the Effective  Time, the\neffect of the Merger shall be as provided in this Agreement,  the Certificate of\nMerger  and  the  applicable  provisions  of  the  DGCL.  Without  limiting  the\ngenerality of the foregoing,  and subject thereto, at the Effective Time all the\nproperty,  rights,  privileges,  powers and franchises of the Company and Merger\nSub shall vest in the  Surviving  Corporation,  and all debts,  liabilities  and\nduties of the Company  and Merger Sub shall  become the debts,  liabilities  and\nduties of the Surviving Corporation.\n\n               SECTION  1.04.   Certificate  of  Incorporation;   By-Laws.   (a)\nCertificate of Incorporation. Unless otherwise determined by Parent prior to the\nEffective  Time, at the Effective Time the Certificate of  Incorporation  of the\nCompany,  as in effect  immediately  prior to the Effective  Time,  shall be the\nCertificate  of  Incorporation  of the Surviving  Corporation  until  thereafter\namended as provided by the DGCL and such Certificate of Incorporation; provided,\nhowever,  that  Article  FOURTH shall be amended and restated in its entirety to\nprovide that the capital  stock of the  Surviving  Corporation  shall consist of\n1,000 shares of common stock, par value $.01 per share.\n\n\n                                       -2-\n\n\n\n\n               (b) By-Laws. The By-Laws of the Company, as in effect immediately\nprior to the Effective Time,  shall be the By-Laws of the Surviving  Corporation\nuntil   thereafter   amended  as  provided  by  the  DGCL,  the  Certificate  of\nIncorporation of the Surviving Corporation and such By-Laws.\n\n               SECTION 1.05. Directors and Officers. The directors of Merger Sub\nimmediately  prior to the Effective  Time shall be the initial  directors of the\nSurviving Corporation, each to hold office in accordance with the Certificate of\nIncorporation and ByLaws of the Surviving  Corporation,  and the officers of the\nCompany immediately prior to the Effective Time shall be the initial officers of\nthe Surviving  Corporation,  in each case until their respective  successors are\nduly elected or appointed and qualified.\n\n               SECTION 1.06.  Effect on Capital Stock. At the Effective Time, by\nvirtue of the Merger and without  any action on the part of Parent,  Merger Sub,\nthe Company or the holders of any of the following securities:\n\n               (a) Conversion of Securities.  Each Share issued and  outstanding\nimmediately  prior to the Effective  Time  (excluding  any Shares to be canceled\npursuant to Section  1.06(b))  shall be converted,  subject to Section  1.06(f),\ninto the right to receive 0.7606 (the \"Exchange  Ratio\") validly  issued,  fully\npaid and  nonassessable  Parent Common  Shares,  par value $.20 (\"Parent  Common\nShares\").\n\n               (b) Cancellation.  Each Share held in the treasury of the Company\nand each Share  owned by Parent,  Merger  Sub or any direct or  indirect  wholly\nowned  subsidiary  of the Company or Parent  immediately  prior to the Effective\nTime  shall,  by virtue of the Merger and  without any action on the part of the\nholder thereof, cease to be outstanding, be canceled and retired without payment\nof any consideration therefor and cease to exist.\n\n               (c)  Assumption of  Outstanding  Stock  Options,  etc..  (1) Each\noption  outstanding at the Effective  Time to purchase  shares of Company Common\nStock (a \"Stock Option\") granted under (I) (i) the Company's 1990 Employee Stock\nOption Plan,  (ii) the  Company's  1993  Employee  Stock Option Plan,  (iii) the\nCompany's  1996  Employee  Stock  Option  Plan,  (iv)  the  Company's  1997  Key\nManagement  Equity  Investment  Plan,  (v) the PAS Stock Option Plans,  (vi) the\nCompany's 1997 Stock Option  Purchase  Agreement,  (vii) the Company's  Serviced\nBased Stock Option Plan, and (viii) the Company's Outside Directors Stock Option\nPlan,  or (II) any other stock plan or agreement  of the Company  (collectively,\nthe \"Company Stock Option Plans\"), which by its terms is not extinguished in the\nMerger,  shall be assumed by Parent and shall constitute an option (an \"Adjusted\nOption\") to acquire,  on the same terms and conditions  mutatis mutandis as were\napplicable  under such Stock  Option  prior to the  Effective  Time (but  taking\naccount of the  Merger),  the number of Parent  Common  Shares  (rounded  to the\nnearest whole Parent Common Share) as the holder of such Stock Option would have\nbeen entitled to receive  pursuant to the Merger had such holder  exercised such\nStock Option in full  immediately  prior to the  Effective  Time, at a price per\nshare  (rounded to the nearest whole cent) equal to (x) the  aggregate  exercise\nprice for Company  Common  Stock  otherwise  purchasable  pursuant to such Stock\nOption  divided by (y) the number of Parent  Common  Shares  deemed  purchasable\npursuant to such Adjusted Option. The \n\n\n                                       -3-\n\n\n\n\nother  terms of each such  Stock  Option,  and the plans  under  which they were\nissued,shall continue to apply in accordance with their terms, including, to the\nextent provided  therein,  the  acceleration of vesting of such Stock Options in\nconnection with the transactions contemplated hereby.\n\n               As soon as  practicable  after the Effective  Time,  Parent shall\ncause  to be  delivered  to  each  holder  of an  outstanding  Stock  Option  an\nappropriate notice setting forth such holder's rights pursuant thereto, and that\nsuch Stock Option shall continue in effect on the same terms and conditions.\n\n               Parent shall cause to be taken all corporate  action necessary to\nreserve for issuance a sufficient  number of Parent  Common  Shares for delivery\nupon exercise of Stock Options in accordance  with this Section  1.06(c)(1).  As\nsoon as practicable  following the Effective Time, Parent shall cause the Parent\nCommon  Shares  subject  to the  Adjusted  Options  to be  registered  under the\nSecurities  Act of  1933,  as  amended,  and the  SEC's  rules  thereunder  (the\n\"Securities  Act\")  pursuant  to a  registration  statement  on Form S-8 (or any\nsuccessor or other appropriate form), and shall use at least such efforts as are\napplied to Parent's other stock options  generally to cause the effectiveness of\nsuch registration  statement or registration  statements (and the current status\nof the  prospectus or  prospectuses  contained  therein) to be maintained for so\nlong as the Adjusted  Options remain  outstanding  (subject to  interruptions of\nsuch effectiveness or current status as may be reasonably  required from time to\ntime,  and are applicable to  registration  statements of Parent with respect to\nits  option  plans  generally,  because  of  developments  affecting  Parent  or\notherwise).\n\n               (2)  The   contingent   obligations  of  the  Company  (the  \"PAS\nObligations\")  to  issue  shares  of  Company  Common  Stock to  certain  former\nstockholders  of Progressive  Angioplasty  Systems,  Inc.  (\"PAS\"),  pursuant to\nSection 2.07 and Section 2.08 of the Agreement and Plan of Merger dated February\n4, 1997, by and among the Company,  a wholly owned subsidiary of the Company and\nPAS (as  amended by the First  Amendment  dated as of August 6,  1997,  the \"PAS\nAgreement\")  shall be assumed by Parent  from and after the  Effective  Time and\nshall  constitute  an  obligation  to issue,  on the same  terms and  conditions\nmutatis  mutandis  as were  applicable  under  the PAS  Agreement  prior  to the\nEffective Time, Parent Common Shares (rounded to the nearest whole Parent Common\nShare),  and Parent Common Shares shall be substituted  for Company Common Stock\nin the definition of the term \"Closing  Price\" for purposes of  determining  the\nnumber of Parent Common  Shares,  if any, that may be issued in accordance  with\nthe PAS Agreement as aforesaid.\n\n               As soon as reasonably  practicable  following the Effective Time,\nParent shall cause the Parent Common  Shares that may be issued  pursuant to the\nPAS  Obligations to be registered  under the Securities Act pursuant to a resale\nshelf registration  statement on Form S-3 (or any successor or other appropriate\nform) and shall use its commercially reasonable efforts,  subject to the receipt\nof information  from and as to the relevant  former PAS  stockholders,  to cause\nsuch  registration  statement to become  effective  as promptly  after filing as\npracticable. The provisions of Sections 6.01 and 6.02 of the PAS Agreement shall\napply to such registration statement mutatis mutandis.\n\n\n                                       -4-\n\n\n\n\n               (d) Capital Stock of Merger Sub. Each share of common stock, $.01\npar  value,  of Merger  Sub  issued  and  outstanding  immediately  prior to the\nEffective  Time shall be converted  into and exchanged  for one validly  issued,\nfully paid and  nonassessable  share of common  stock,  $0.01 par value,  of the\nSurviving Corporation.\n\n               (e)  Adjustments to Exchange  Ratio.  The Exchange Ratio shall be\nappropriately  adjusted to reflect fully the effect of any stock split,  reverse\nsplit,  stock  dividend  (including any dividend or  distribution  of securities\nconvertible into Parent Common Shares), reorganization,  recapitalization, split\nup, combination or exchange of shares or other like event with respect to Parent\nCommon Shares or Company Common Stock  occurring after the date hereof and prior\nto the Effective Time.\n\n               (f) Fractional Shares. No certificates or scrip representing less\nthan one Parent  Share  shall be issued  upon the  surrender  for  exchange of a\ncertificate  or  certificates  which  immediately  prior to the  Effective  Time\nrepresented  outstanding  Shares  (the  \"Certificates\").  In  lieu  of any  such\nfractional  share,  each holder of Shares who would otherwise have been entitled\nto a fraction  of a Parent  Common  Share upon  surrender  of  Certificates  for\nexchange shall be paid upon such surrender cash (without  interest) in an amount\nequal to such  fraction  multiplied  by the Closing  Price of the Parent  Common\nShares on the date of the  Effective  Time.  \"Closing  Price\" shall mean, on any\nday,  the last  reported  sale  price  of one  Parent  Common  Share on the NYSE\nComposite Transaction Tape.\n\n               SECTION 1.07.  Exchange of  Certificates.  (a) Exchange Agent. At\nthe  Effective  Time Parent shall cause to be  supplied,  to or for such bank or\ntrust  company as shall be  mutually  designated  by the Company and Parent (the\n\"Exchange  Agent\"),  in trust for the benefit of the  holders of Company  Common\nStock,  for exchange in accordance with this Section 1.07,  through the Exchange\nAgent,  certificates  evidencing the Parent Common Shares  issuable  pursuant to\nSection 1.06 in exchange for outstanding  Shares and the cash to be paid in lieu\nof fractional shares.\n\n               (b) Exchange Procedures.  As soon as reasonably practicable after\nthe Effective Time,  Parent will cause the Exchange Agent to mail to each holder\nof record of Certificates (i) a letter of transmittal  (which shall specify that\ndelivery shall be effected, and risk of loss and title to the Certificates shall\npass,  only upon proper  delivery of the  Certificates to the Exchange Agent and\nshall be in such form and have such other  provisions  as Parent may  reasonably\nspecify),  and (ii)  instructions to effect the surrender of the Certificates in\nexchange for the certificates evidencing Parent Common Shares. Upon surrender of\na Certificate  for  cancellation to the Exchange Agent together with such letter\nof  transmittal,  duly executed,  and such other  customary  documents as may be\nrequired pursuant to such instructions,  the holder of such Certificate shall be\nentitled to receive in exchange therefor (A) certificates evidencing that number\nof whole  Parent  Common  Shares  which such  holder has the right to receive in\naccordance with the Exchange Ratio in respect of the Shares  formerly  evidenced\nby such  Certificate,  (B) any  dividends or other  distributions  to which such\nholder is  entitled  pursuant  to  Section  1.07(c),  and (C) cash in respect of\nfractional  shares as provided in Section  1.06(f) (the Parent Common Shares and\ncash being,  collectively,  the \"Merger Consideration\"),  and the Certificate so\nsurrendered shall forthwith be canceled. In the event of a transfer of ownership\nof Shares which is not registered in the\n\n\n                                       -5-\n\n\n\n\ntransfer records of the Company as of the Effective Time,  Parent Common Shares,\ndividends,  distributions,  and cash in respect  of  fractional  shares,  may be\nissued  and paid in  accordance  with  this  Article  I to a  transferee  if the\nCertificate   evidencing  such  Shares  is  presented  to  the  Exchange  Agent,\naccompanied  by all  documents  required  to evidence  and effect such  transfer\npursuant  to this  Section  1.07(b) and by evidence  that any  applicable  stock\ntransfer  taxes  have  been  paid.   Until  so  surrendered,   each  outstanding\nCertificate that, prior to the Effective Time, represented Shares of the Company\nCommon Stock will be deemed from and after the Effective Time, for all corporate\npurposes,  other than the payment of dividends, to evidence the ownership of the\nnumber of full Parent Common Shares,  and cash in respect of fractional  shares,\ninto which such shares of the Company Common Stock shall have been so converted.\n\n               (c)  Distributions   With  Respect  to  Unexchanged   Shares.  No\ndividends or other distributions  declared or made after the Effective Time with\nrespect to Parent  Common  Shares  with a record date after the  Effective  Time\nshall be paid to the holder of any unsurrendered Certificate with respect to the\nParent  Common  Shares  they are  entitled  to receive  until the holder of such\nCertificate  shall surrender such  Certificate in accordance with the provisions\nof Section 1.07(b).  Subject to applicable law, following  surrender of any such\nCertificate,  there  shall  be paid to the  record  holder  of the  certificates\nrepresenting  whole Parent Common Shares  issued in exchange  therefor,  without\ninterest,  at the time of such  surrender,  the  amount  of  dividends  or other\ndistributions  with a record date after the Effective Time theretofore paid with\nrespect to such whole Parent Common Shares.\n\n               (d) Transfers of Ownership.  If any certificate for Parent Common\nShares  is to be  issued in a name  other  than  that in which  the  Certificate\nsurrendered in exchange  therefor is  registered,  it will be a condition of the\nissuance thereof that the Certificate so surrendered  will be properly  endorsed\nand  otherwise in proper form for transfer and that the person  requesting  such\nexchange will have paid to Parent or any agent  designated by it any transfer or\nother taxes  required  by reason of the  issuance  of a  certificate  for Parent\nCommon  Shares  in any name  other  than  that of the  registered  holder of the\ncertificate  surrendered,  or established to the  satisfaction  of Parent or any\nagent designated by it that such tax has been paid or is not payable.\n\n               (e) No  Liability.  Neither  Parent,  Merger Sub nor the  Company\nshall  be  liable  to  any  holder  of  Company  Common  Stock  for  any  Merger\nConsideration  delivered  to  a  public  official  pursuant  to  any  applicable\nabandoned property, escheat or similar law.\n\n               (f)  Withholding  Rights.  Parent or the Exchange  Agent shall be\nentitled to deduct and withhold from the Merger Consideration  otherwise payable\npursuant to this Agreement to any holder of Company Common Stock such amounts as\nParent or the Exchange  Agent is required to deduct and withhold with respect to\nthe making of such payment under the Code,  or any provision of state,  local or\nforeign  tax law.  To the extent  that  amounts are so withheld by Parent or the\nExchange Agent,  such withheld amounts shall be treated for all purposes of this\nAgreement  as having  been paid to the  holder of the Shares in respect of which\nsuch deduction and withholding was made by Parent or the Exchange Agent.\n\n\n                                       -6-\n\n\n\n\n               (g) Undistributed  Certificates.  Any portion of the certificates\nevidencing  the  Parent  Common  Shares  and  the  cash  to be  paid  in lieu of\nfractional shares supplied to the Exchange Agent which remains  undistributed to\nthe holders of the  Certificates  for one year after the Effective Time shall be\ndelivered to Parent,  upon demand,  and any holders of the Certificates who have\nnot  theretofore  complied with this Section 1.07 shall  thereafter look only to\nParent for payment of their claim for Merger  Consideration,  any  dividends  or\ndistributions  with  respect  to  Parent  Common  Stock  and any cash in lieu of\nfractional shares of Parent Common Stock.\n\n               SECTION 1.08.  Stock Transfer  Books.  At the Effective Time, the\nstock  transfer  books of the  Company  shall be closed,  and there  shall be no\nfurther  registration of transfers of the Company Common Stock thereafter on the\nrecords of the Company.\n\n               SECTION  1.09.  No Further  Ownership  Rights in  Company  Common\nStock.  The Merger  Consideration  delivered  upon the surrender for exchange of\nShares in  accordance  with the terms hereof shall be deemed to have been issued\nin full satisfaction of all rights pertaining to such Shares, and there shall be\nno further registration of transfers on the records of the Surviving Corporation\nof Shares which were  outstanding  immediately  prior to the Effective Time. If,\nafter  the  Effective  Time,   Certificates   are  presented  to  the  Surviving\nCorporation for any reason,  they shall be canceled and exchanged as provided in\nthis Article I.\n\n               SECTION  1.10.  Lost,  Stolen or Destroyed  Certificates.  In the\nevent any Certificates  shall have been lost, stolen or destroyed,  the Exchange\nAgent shall issue in exchange for such lost,  stolen or destroyed  Certificates,\nupon the making of an affidavit of that fact by the holder thereof,  such Parent\nCommon Shares as may be required  pursuant to Section 1.06;  provided,  however,\nthat Parent may, in its discretion and as a condition  precedent to the issuance\nthereof,  require the owner of such lost,  stolen or destroyed  Certificates  to\ndeliver a bond in such sum as it may reasonably  direct as indemnity against any\nclaim that may be made against  Parent or the Exchange Agent with respect to the\nCertificates alleged to have been lost, stolen or destroyed.\n\n               SECTION 1.11. Tax and Accounting Consequences.  It is intended by\nthe parties hereto that the Merger shall (i) constitute a reorganization  within\nthe meaning of Section 368 of the Code and (ii) subject to applicable accounting\nstandards,  qualify for  accounting  treatment  as a pooling of  interests.  The\nparties hereto hereby adopt this Agreement as a \"plan of reorganization\"  within\nthe meaning of Sections  1.368-2(g) and 1.368-3(a) of the United States Treasury\nRegulations.\n\n               SECTION 1.12. Taking of Necessary Action; Further Action. Each of\nParent,  Merger Sub and the  Company  will take all such  reasonable  and lawful\naction as may be necessary or  appropriate in order to effectuate the Merger and\nthe other  transactions  contemplated  by this Agreement in accordance with this\nAgreement as promptly as possible. If, at any time after the Effective Time, any\nsuch further  action is necessary or desirable to carry out the purposes of this\nAgreement  and to vest the  Surviving  Corporation  with full  right,  title and\npossession to all assets, property, rights, privileges, powers and franchises of\nthe Company and Merger Sub, the officers and directors of the Company and Merger\nSub\n\n\n                                       -7-\n\n\n\n\nimmediately  prior to the  Effective  Time are fully  authorized  in the name of\ntheir  respective  corporations  or otherwise to take,  and will take,  all such\nlawful and necessary action.\n\n               SECTION 1.13.  Material  Adverse Effect.  When used in connection\nwith  the  Company  or  any  of  its  subsidiaries  or  Parent  or  any  of  its\nsubsidiaries,  as the case may be, the term \"Material  Adverse Effect\" means any\nchange,  effect or circumstance that is or is reasonably likely to be materially\nadverse  to  the  business,  assets  (including  intangible  assets),  financial\ncondition or results of operations of the Company and its subsidiaries or Parent\nand its  subsidiaries,  as the  case  may be,  in each  case  taken  as a whole;\nprovided,  however,  that the following shall be excluded from the definition of\n\"Material  Adverse Effect\" and from any  determination  as to whether a Material\nAdverse  Effect has  occurred  or may occur with  respect  to the  Company:  the\neffects of changes that are  applicable to (A) the  healthcare or medical device\nindustries generally,  (B) the United States economy generally or (C) the United\nStates securities markets generally.\n\n                                   ARTICLE II\n\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n\n               The Company  hereby  represents and warrants to Parent and Merger\nSub as follows:\n\n               SECTION 2.01. Organization and Qualification;  Subsidiaries. Each\nof the Company and its  subsidiaries is a corporation  duly  organized,  validly\nexisting  and in  good  standing  under  the  laws  of the  jurisdiction  of its\nincorporation and has the requisite  corporate power and authority  necessary to\nown, lease and operate the  properties it purports to own,  operate or lease and\nto carry on its business as it is now being conducted,  except where the failure\nto be so  organized,  existing  and in good  standing  or to have such  power or\nauthority  would not reasonably be expected to have a Material  Adverse  Effect.\nEach of the  Company and its  subsidiaries  is duly  qualified  or licensed as a\nforeign  corporation  to  do  business,   and  is  in  good  standing,  in  each\njurisdiction where the character of its properties owned,  leased or operated by\nit or the  nature  of its  activities  makes  such  qualification  or  licensing\nnecessary,  except for such failures to be so duly  qualified or licensed and in\ngood standing that could not  reasonably be expected to have a Material  Adverse\nEffect.  A  true  and  complete  list  of all  of  the  Company's  \"significant\"\nsubsidiaries,  as defined in  Regulation  S-X,  is included as an exhibit to the\nCompany's  1997 Annual Report on Form 10-K. The Company will furnish to Parent a\nlist of all  subsidiaries  of the  Company  together  with the  jurisdiction  of\nincorporation   of  each  such  subsidiary  and  the  percentage  of  each  such\nsubsidiary's   outstanding  capital  stock  owned  by  the  Company  or  another\nsubsidiary on a supplement to the Company Disclosure Schedule (as defined below)\nto be delivered to Parent not later than 14 days from the date of this Agreement\n(the \"Supplemental Company Disclosure Schedule\"). Except as set forth in Section\n2.01 of the written disclosure schedule  previously  delivered by the Company to\nParent  (the  \"Company  Disclosure  Schedule\")  or the  Company  SEC Reports (as\ndefined in Section 2.07 below),  the Company does not directly or indirectly own\nany  equity  or  similar  interest  in,  or any  interest  convertible  into  or\nexchangeable  or  exercisable  for,  any  equity or  similar  interest  in,  any\ncorporation,\n\n\n                                       -8-\n\n\n\n\npartnership, joint venture or other business association or entity, with respect\nto which  interest the Company has invested or is required to invest  $5,000,000\nor more, excluding securities in any publicly traded company held for investment\nby the Company and comprising less than five percent of the outstanding stock of\nsuch company.\n\n               SECTION  2.02.  Certificate  of  Incorporation  and By-Laws.  The\nCompany has  heretofore  made available to Parent a complete and correct copy of\nits  Certificate of  Incorporation  and By-Laws as amended to date, and has made\navailable to Parent the Certificate of Incorporation  and By-Laws (or equivalent\norganizational  documents) of each of its material subsidiaries (the \"Subsidiary\nDocuments\"). Such Certificate of Incorporation, By-Laws and Subsidiary Documents\nare in full force and effect. Neither the Company nor any of its subsidiaries is\nin violation of any of the  provisions of its  Certificate of  Incorporation  or\nsuch  By-Laws or  equivalent  organizational  documents,  except for  immaterial\nviolations of the documents which may exist.\n\n               SECTION 2.03. Capitalization. The authorized capital stock of the\nCompany  consists of  250,000,000  shares of Company  Common Stock and 5,000,000\nshares of Preferred  Stock,  par value $5.00 per share (the  \"Company  Preferred\nStock\").  As of April 30, 1998,  (i)  76,698,965  shares of Company Common Stock\nwere issued and  outstanding,  all of which are validly  issued,  fully paid and\nnonassessable, and an additional 7,003,014 shares were held in treasury, (ii) no\nshares of Company Preferred Stock were outstanding or held in treasury, (iii) no\nshares  of  Company  Common  Stock  or  Company  Preferred  Stock  were  held by\nsubsidiaries of the Company, (iv) 24,348,700 shares of Company Common Stock were\nreserved  for  existing  grants and  3,799,689  shares were  reserved for future\ngrants  pursuant to the Company  Stock  Option  Plans,  and (v) not in excess of\n294,928  shares of Company  Common  Stock were  reserved and are  available  for\nfuture issuance  pursuant to the USCC Employees 1979 Stock Purchase Plan and the\nCompany's  1994 Employee  Stock  Purchase Plan  (together,  the \"Stock  Purchase\nPlans\").  The Company may be  obligated  to issue  additional  shares of Company\nCommon  Stock  pursuant to the PAS  Obligations.  Except as set forth in Section\n2.03 of the Company Disclosure  Schedule,  no change in such  capitalization has\noccurred  between  April  30,  1998  and the date  hereof,  except  for  changes\nresulting  from the  exercise of Stock  Options and shares  purchased  under the\nStock Purchase Plans.  Except as set forth in Section 2.01, this Section 2.03 or\nSection  2.11 or in  Section  2.03 or  Section  2.11 of the  Company  Disclosure\nSchedule  or the Company SEC  Reports,  there are no options,  warrants or other\nrights, agreements,  arrangements or commitments of any character binding on the\nCompany or any of its  subsidiaries  relating to the issued or unissued  capital\nstock of the Company or any of its subsidiaries or obligating the Company or any\nof its  subsidiaries  to issue or sell any shares of capital  stock of, or other\nequity  interests  in,  the  Company or any of its  subsidiaries.  All shares of\nCompany  Common Stock  subject to issuance as  aforesaid,  upon  issuance on the\nterms and  conditions  specified in the  instruments  pursuant to which they are\nissuable,   shall  be  duly   authorized,   validly   issued,   fully  paid  and\nnonassessable.  Except as disclosed  in Section  2.03 of the Company  Disclosure\nSchedule or the Company SEC Reports,  there are no  obligations,  contingent  or\notherwise,  of the Company or any of its  subsidiaries to repurchase,  redeem or\notherwise acquire any shares of Company Common Stock or the capital stock of any\nsubsidiary or to provide funds to or make any investment (in the form of a loan,\ncapital  contribution  or otherwise) in any such  subsidiary or any other entity\nother than guarantees of bank obligations of subsidiaries\n\n\n                                       -9-\n\n\n\n\nentered into in the ordinary course of business. Except as set forth in Sections\n2.01 and 2.03 of the Company Disclosure Schedule,  all of the outstanding shares\nof  capital  stock  (other  than  directors'  qualifying  shares) of each of the\nCompany's  subsidiaries  is duly  authorized,  validly  issued,  fully  paid and\nnonassessable,  and all such shares (other than directors' qualifying shares and\na de minimis number of shares owned by employees of such subsidiaries) are owned\nby the Company or another  subsidiary free and clear of all security  interests,\nliens, claims, pledges, agreements,  limitations in the Company's voting rights,\ncharges or other encumbrances of any nature whatsoever.\n\n               SECTION 2.04.  Authority Relative to this Agreement.  The Company\nhas all  necessary  corporate  power and  authority  to execute and deliver this\nAgreement  and to  perform  its  obligations  hereunder  and to  consummate  the\ntransactions  contemplated  hereby. The execution and delivery of this Agreement\nby the  Company  and  the  consummation  by  the  Company  of  the  transactions\ncontemplated  hereby  have been duly and  validly  authorized  by all  necessary\ncorporate action  (including  pursuant to Section 203 of the DGCL), and no other\ncorporate proceedings on the part of the Company are necessary to authorize this\nAgreement or to consummate  the  transactions  so  contemplated  (other than the\napproval of the Merger and this  Agreement by the holders of at least a majority\nof the outstanding shares of Company Common Stock entitled to vote in accordance\nwith the DGCL and the Company's Certificate of Incorporation and By-Laws). As of\nthe date hereof, the Board of Directors of the Company has determined that it is\nadvisable and in the best interest of the Company's shareholders for the Company\nto enter into this  Agreement  and to  consummate  the Merger upon the terms and\nsubject to the  conditions of this  Agreement.  This Agreement has been duly and\nvalidly   executed  and   delivered  by  the  Company  and,   assuming  the  due\nauthorization,  execution and delivery by Parent and Merger Sub, as  applicable,\nconstitutes a legal, valid and binding obligation of the Company.\n\n               SECTION 2.05.  No Conflict;  Required  Filings and Consents.  (a)\nSection 2.05(a) of the Company  Disclosure  Schedule  includes a list of (i) all\nloan  agreements,  indentures,  mortgages,  pledges,  conditional  sale or title\nretention agreements,  security agreements,  equipment obligations,  guaranties,\nstandby letters of credit,  equipment leases or lease purchase agreements,  each\nin an amount  equal to or exceeding  $10,000,000  to which the Company or any of\nits  subsidiaries  is a  party  or by  which  any of  them is  bound;  (ii)  all\ncontracts,  agreements,  commitments or other  understandings or arrangements to\nwhich the Company or any of its  subsidiaries is a party or by which any of them\nor any of their  respective  properties  or assets  are bound or  affected,  but\nexcluding  contracts,   agreements,   commitments  or  other  understandings  or\narrangements  entered into in the ordinary course of business and involving,  in\nthe case of any such contact,  agreement,  commitment, or other understanding or\narrangement,  individual  payments  or  receipts  by the  Company  or any of its\nsubsidiaries of less than $5,000,000 over the term of such contract, commitment,\nagreement,  or other  understanding  or  arrangement;  and (iii) all  agreements\nwhich, as of the date hereof,  are required to be filed as \"material  contracts\"\nwith the Securities and Exchange Commission (\"SEC\") pursuant to the requirements\nof the  Securities  Exchange  Act of  1934,  as  amended,  and the  SEC's  rules\nthereunder  (the  \"Exchange  Act\") but have not been so filed with the SEC as of\nthe date hereof.\n\n\n                                      -10-\n\n\n\n\n               (b)  Except  as set  forth  in  Section  2.05(b)  of the  Company\nDisclosure Schedule, the execution and delivery of this Agreement by the Company\ndoes not,  and the  performance  of this  Agreement by the Company will not, (i)\nconflict  with or violate the  Certificate  of  Incorporation  or By-Laws of the\nCompany,  (ii)  conflict  with or  violate  any law,  rule,  regulation,  order,\njudgment or decree  applicable to the Company or any of its  subsidiaries  or by\nwhich its or any of their respective  properties is bound or affected,  or (iii)\nresult in any breach of or constitute a default (or an event that with notice or\nlapse of time or both would become a default), or impair the Company's or any of\nits  subsidiaries'  rights or alter the rights or obligations of any third party\nunder, or give to others any rights of termination,  amendment,  acceleration or\ncancellation  of, or result in the creation of a lien or  encumbrance  on any of\nthe properties or assets of the Company or any of its subsidiaries  pursuant to,\nany note,  bond,  mortgage,  indenture,  contract,  agreement,  lease,  license,\npermit,  franchise or other instrument or obligation to which the Company or any\nof  its  subsidiaries  is a  party  or by  which  the  Company  or  any  of  its\nsubsidiaries or its or any of their respective  properties is bound or affected,\nexcept,  in the  case  of  clauses  (ii)  or  (iii),  for  any  such  conflicts,\nviolations, breaches, defaults or other occurrences that would not reasonably be\nexpected, individually or in the aggregate, to have a Material Adverse Effect.\n\n               (c) The execution  and delivery of this  Agreement by the Company\ndoes not, and the performance of this Agreement by the Company will not, require\nany  consent,   approval,   authorization  or  permit  of,  or  filing  with  or\nnotification to, any governmental or regulatory  authority,  domestic or foreign\n(each, a \"Governmental Authority\"),  except (i) for applicable requirements,  if\nany, of the Securities  Act, the Exchange Act, state  securities laws (\"Blue Sky\nLaws\"),  the  pre-merger  notification  requirements  of  the  Hart-Scott-Rodino\nAntitrust  Improvements  Act of 1976, as amended,  and the rules and regulations\nthereunder  (the \"HSR Act\"),  filings and consents under any applicable  foreign\nlaws intended to prohibit,  restrict or regulate  actions  having the purpose or\neffect of  monopolization  or  restraint  of trade  (\"Foreign  Monopoly  Laws\"),\nfilings  and  consents  as may be required  under any  environmental,  health or\nsafety law or regulation pertaining to any notification,  disclosure or required\napproval  triggered  by the  Merger  or the  transactions  contemplated  by this\nAgreement,  and the  filing  and  recordation  of  appropriate  merger  or other\ndocuments  as  required  by the DGCL,  (ii)  where the  failure  to obtain  such\nconsents,  approvals,  authorizations  or  permits,  or to make such  filings or\nnotifications, would not prevent or materially delay consummation of the Merger,\nor  otherwise  prevent  or  delay  the  Company  from  performing  its  material\nobligations under this Agreement, or would not otherwise reasonably be expected,\nindividually or in the aggregate, to have a Material Adverse Effect, or (iii) as\nto which any necessary consents, approvals, authorizations,  permits, filings or\nnotifications have heretofore been obtained or filed, as the case may be, by the\nCompany.\n\n               SECTION  2.06.  Compliance;  Permits.  (a) Except as disclosed in\nSection 2.06(a) of the Company  Disclosure  Schedule or the Company SEC Reports,\nneither the  Company nor any of its  subsidiaries  is in  conflict  with,  or in\ndefault or  violation  of, (i) any law,  rule,  regulation,  order,  judgment or\ndecree  applicable to the Company or any of its  subsidiaries or by which its or\nany of their respective  properties is bound or affected or (ii) any note, bond,\nmortgage,  indenture,  contract, agreement, lease, license, permit, franchise or\nother  instrument or obligation to which the Company or any of its  subsidiaries\nis a party or by which the Company or any of its  subsidiaries  or its or any of\ntheir respective\n\n\n                                      -11-\n\n\n\n\nproperties  is bound or  affected,  except for any such  conflicts,  defaults or\nviolations  which  would not  reasonably  be  expected,  individually  or in the\naggregate, to have a Material Adverse Effect.\n\n               (b)  Except  as  disclosed  in  Section  2.06(b)  of the  Company\nDisclosure Schedule or the Company SEC Reports, the Company and its subsidiaries\nhold  all  permits,  licenses,  easements,  variances,   exemptions,   consents,\ncertificates,  orders and  approvals  from  governmental  authorities  which are\nmaterial to the  operation of the  business of the Company and its  subsidiaries\ntaken  as a whole  as it is now  being  conducted  (collectively,  the  \"Company\nPermits\")  except  where the  failure  to hold such  Company  Permits  would not\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse  Effect.  The Company and its  subsidiaries  are in compliance  with the\nterms of the Company Permits,  except as described in the Company SEC Reports or\nwhere the failure to so comply would not reasonably be expected, individually or\nin the aggregate, to have a Material Adverse Effect.\n\n               SECTION 2.07. SEC Filings;  Financial Statements. (a) The Company\nhas filed all forms,  reports  and  documents  required to be filed with the SEC\nsince  December 31, 1994 and has made available to Parent (i) its Annual Reports\non Form 10-K for the fiscal years ended December 31, 1995,  1996 and 1997,  (ii)\nits  Quarterly  Report on Form 10-Q for the  quarter  ended  March 31, 1998 (the\n\"March  31,  1998  10-Q\"),  and,  (iii) all  proxy  statements  relating  to the\nCompany's  meetings  of  shareholders  (whether  annual or  special)  held since\nDecember 31, 1994, (iv) all other reports or registration statements (other than\nReports on Form 10-Q not  referred  to in clause (ii) above filed by the Company\nwith the SEC since December 31, 1994, and (v) all amendments and  supplements to\nall such reports and  registration  statements filed by the Company with the SEC\n(collectively,  the \"Company SEC Reports\").  Except as disclosed in Section 2.07\nof the Company Disclosure Schedule, the Company SEC Reports (i) were prepared in\nall material  respects in accordance with the requirements of the Securities Act\nor the Exchange  Act, as the case may be, and (ii) did not at the time they were\nfiled  (or if  amended  or  superseded  by a  filing  prior  to the date of this\nAgreement,  then on the date of such filing)  contain any untrue  statement of a\nmaterial fact or omit to state a material fact required to be stated  therein or\nnecessary  in  order  to  make  the  statements  therein,  in the  light  of the\ncircumstances under which they were made, not misleading.  None of the Company's\nsubsidiaries is required to file any forms,  reports or other documents with the\nSEC.\n\n               (b) Each of the consolidated financial statements (including,  in\neach case, any related notes  thereto)  contained in the Company SEC Reports was\nprepared  in  accordance  with  United  States  generally  accepted   accounting\nprinciples  (\"GAAP\")  applied  on a  consistent  basis  throughout  the  periods\ninvolved  (except as may be indicated in the notes thereto or in the Company SEC\nReports),  and each fairly  presents in all material  respects the  consolidated\nfinancial  position  of the Company and its  subsidiaries  as at the  respective\ndates thereof and the consolidated  results of its operations and cash flows for\nthe periods  indicated,  except that the unaudited interim financial  statements\nwere or are subject to normal and recurring year-end  adjustments which were not\nor are not expected to be material in amount.\n\n\n                                      -12-\n\n\n\n\n               SECTION 2.08. Absence of Certain Changes or Events. Except as set\nforth in Section  2.08 of the  Company  Disclosure  Schedule  or the Company SEC\nReports,  between  December  31,  1997  and the date  hereof,  the  Company  has\nconducted its business in the ordinary  course and there has not  occurred:  (i)\nany  changes,  effects or  circumstances  constituting,  individually  or in the\naggregate,  a Material  Adverse  Effect;  (ii) any  amendments or changes in the\nCertificate  of  Incorporation  or By-laws of the Company;  (iii) any damage to,\ndestruction  or loss of any asset of the  Company  (whether  or not  covered  by\ninsurance) that would reasonably be expected,  individually or in the aggregate,\nto have a Material  Adverse  Effect;  (iv) any material change by the Company in\nits accounting methods,  principles or practices;  or (v) any sale of a material\namount of assets of the Company, except in the ordinary course of business.\n\n               SECTION 2.09. No Undisclosed Liabilities.  Except as set forth in\nSection  2.09 of the Company  Disclosure  Schedule  or the Company SEC  Reports,\nneither the Company nor any of its subsidiaries  has any liabilities  (absolute,\naccrued,  contingent  or  otherwise),  except  liabilities  (a) in the aggregate\nadequately  provided for in the Company's unaudited balance sheet (including any\nrelated notes thereto) as of March 31, 1998 included in the Company's  Quarterly\nReport of Form 10-Q for the  quarter  ended  March 31,  1998 (the \"1998  Balance\nSheet\"),  (b) incurred in the ordinary course of business and not required under\nGAAP to be  reflected on the 1998 Balance  Sheet,  (c) incurred  since March 31,\n1998 in the ordinary  course of business,  (d) incurred in connection  with this\nAgreement or the Merger or the other  transactions  contemplated  hereby, or (e)\nwhich would not reasonably be expected,  individually  or in the  aggregate,  to\nhave a Material Adverse Effect.\n\n               SECTION  2.10.  Absence  of  Litigation.  Except  as set forth in\nSection  2.10 of the Company  Disclosure  Schedule  or the Company SEC  Reports,\nthere are no claims, actions,  suits,  proceedings or investigations pending or,\nto the knowledge of the Company,  overtly  threatened against the Company or any\nof its  subsidiaries,  or any  properties or rights of the Company or any of its\nsubsidiaries,  before any court,  arbitrator or administrative,  governmental or\nregulatory  authority or body,  domestic or foreign,  that would  reasonably  be\nexpected to have a Material Adverse Effect.\n\n               SECTION 2.11. Employee Benefit Plans; Employment Agreements.  (a)\nSection 2.11(a) of the Company  Disclosure  Schedule lists all employee  pension\nbenefit  plans (as defined in Section  3(2) of the  Employee  Retirement  Income\nSecurity Act of 1974, as amended (\"ERISA\")),  all employee welfare benefit plans\n(as defined in Section 3(1) of ERISA), and all other bonus, stock option,  stock\npurchase, incentive, deferred compensation,  supplemental retirement,  severance\nand other similar  fringe or employee  benefit plans,  programs or  arrangements\n(including  those  which  contain  change  of  control   provisions),   and  any\nemployment,  executive  compensation or severance  agreements  (including  those\nwhich contain change of control provisions),  written or otherwise,  as amended,\nmodified or  supplemented,  for the  benefit  of, or relating  to, any former or\ncurrent   employee,   officer,   director  or   consultant   (or  any  of  their\nbeneficiaries)  of the Company or any other entity (whether or not incorporated)\nwhich is a member of a controlled  group including the Company or which is under\ncommon control with the Company within the meaning of Sections 414(b),  (c), (m)\nor (o) of the Code or Section  4001(a)  (14) or (b) of ERISA (a  \"Company  ERISA\nAffiliate\"), or any subsidiary of the Company, as well as each plan with\n\n\n                                      -13-\n\n\n\n\nrespect to which the Company or a Company ERISA  Affiliate could incur liability\nunder Title IV of ERISA or Section 412 of the Internal  Revenue Code of 1986, as\namended  (the \"Code\")  (together  for the  purposes of this  Section  2.11,  the\n\"Employee Plans\").  The Company has made available to Parent,  prior to the date\nof this  Agreement,  or the Company will make  available  not later than 14 days\nafter the date of this Agreement,  copies of (i) each such written Employee Plan\n(or a written  description  of any  Employee  Plan which is not written) and all\nrelated trust agreements,  insurance and other contracts  (including  policies),\nsummary   plan   descriptions,   summaries   of   material   modifications   and\ncommunications  distributed  to plan  participants,  (ii) the three most  recent\nannual reports on Form 5500 series, with accompanying schedules and attachments,\nfiled with respect to each Employee  Plan required to make such a filing,  (iii)\nthe most recent  actuarial  valuation for each Employee Plan subject to Title IV\nof ERISA,  (iv) the latest  reports which have been filed with the Department of\nLabor with respect to each  Employee  Plan  required to make such filing and (v)\nthe most recent  favorable  determination  letters issued for each Employee Plan\nand  related  trust  which is subject  to Parts 1, 2 and 4 of the  Subtitle B of\nTitle I of ERISA (and, if an application for such  determination  is pending,  a\ncopy of the  application for such  determination).  For purposes of this Section\n2.11,  the term  \"material,\"  when used with respect to (i) any  Employee  Plan,\nshall mean that the Company or a Company  ERISA  Affiliate  has  incurred or may\nincur obligations in an amount exceeding  $500,000 with respect to such Employee\nPlan, and (ii) any liability,  obligation, breach or non-compliance,  shall mean\nthat the  Company  or a  Company  ERISA  Affiliate  has  incurred  or may  incur\nobligations  in an amount  exceeding  $500,000,  with respect to any one such or\nseries of related liabilities,  obligations,  breaches, defaults,  violations or\ninstances of non-compliance.\n\n               (b)  Except  as set  forth  in  Section  2.11(b)  of the  Company\nDisclosure  Schedule or the Company SEC Reports,  (i) none of the Employee Plans\npromises or provides  retiree medical or other retiree  welfare  benefits to any\nperson, and none of the Employee Plans is a \"multiemployer plan\" as such term is\ndefined in Section  3(37) of ERISA;  (ii) no party in interest  or  disqualified\nperson (as defined in Section  3(14) of ERISA and Section  4975 of the Code) has\nat any time engaged in a  transaction  with  respect to any Employee  Plan which\ncould  subject  the  Company  or  any  Company  ERISA  Affiliate,   directly  or\nindirectly,  to a tax,  penalty  or  other  material  liability  for  prohibited\ntransactions  under ERISA or Section 4975 of the Code; (iii) no fiduciary of any\nEmployee Plan has breached any of the  responsibilities  or obligations  imposed\nupon  fiduciaries  under Title I of ERISA,  which  breach  would  reasonably  be\nexpected to result in any material liability to the Company or any Company ERISA\nAffiliate;  (iv)  all  Employee  Plans  have  been  established  and  maintained\nsubstantially  in accordance with their terms and have operated in compliance in\nall material  respects with the requirements  prescribed by any and all statutes\n(including ERISA and the Code),  orders,  or governmental  rules and regulations\ncurrently in effect with respect thereto (including all applicable  requirements\nfor  notification to participants or the Department of Labor,  Internal  Revenue\nService  (the \"IRS\") or Secretary  of the  Treasury),  and may by their terms be\namended and\/or terminated at any time subject to applicable law and the terms of\neach Employee Plan, and the Company and each of its subsidiaries  have performed\nall material  obligations required to be performed by them under, are not in any\nmaterial  respect in default under or violation of, and have no knowledge of any\ndefault or violation by any other party to, any of the Employee Plans;  (v) each\nEmployee Plan which is subject to Parts 1, 2 and 4 of Subtitle B of ERISA is the\nsubject of a favorable determination\n\n\n                                      -14-\n\n\n\n\nletter from the IRS, and nothing has occurred  which may  reasonably be expected\nto impair such  determination;  (vi) all contributions  required to be made with\nrespect to any Employee  Plan  pursuant to Section 412 of the Code, or the terms\nof the Employee Plan or any collective bargaining  agreement,  have been made on\nor before their due dates (including any extensions thereof); (vii) with respect\nto each Employee Plan, no \"reportable  event\" within the meaning of Section 4043\nof ERISA  (excluding any such event for which the 30 day notice  requirement has\nbeen  waived  under  the  regulations  to  Section  4043 of  ERISA) or any event\ndescribed in Section 4062, 4063 or 4041 of ERISA has occurred for which there is\nany material outstanding liability to the Company or any Company ERISA Affiliate\nnor would the consummation of the transaction contemplated hereby (including the\nexecution of this agreement)  constitute a reportable event for which the 30-day\nrequirement has not been waived;  and (viii) neither the Company nor any Company\nERISA  Affiliate  has  incurred  or  reasonably  expects  to incur any  material\nliability under Title IV of ERISA (other than liability for premium  payments to\nthe Pension Benefit  Guaranty  Corporation  (the \"PBGC\") arising in the ordinary\ncourse).\n\n               (c)  Section  2.11(c)  of  the  Supplemental  Company  Disclosure\nSchedule  will set  forth a true and  complete  list of each  current  or former\nemployee,  officer or  director of the  Company or any of its  subsidiaries  who\nholds (i) any option to purchase  Company  Common  Stock as of the date  hereof,\ntogether  with the  number of shares of  Company  Common  Stock  subject to such\noption, the option price of such option (to the extent determined as of the date\nhereof), whether such option is intended to qualify as an incentive stock option\nwithin the meaning of Section 422(b) of the Code (an \"ISO\"),  and the expiration\ndate  of such  option;  (ii)  any  shares  of  Company  Common  Stock  that  are\nrestricted;  and (iii) any other  right,  directly  or  indirectly,  to  receive\nCompany Common Stock, together with the number of shares of Company Common Stock\nsubject to such right.  Section 2.11(c) of the Company Disclosure  Schedule sets\nforth (x) the total  number of any such ISOs and any such  nonqualified  options\nand other such rights by exercise price and (y) the amount by which the value of\nthe Merger Consideration (using $42.50 as the value of the Merger Consideration)\nexceeds the option or exercise price of all such ISOs, non-qualified options and\nrights  (including  pursuant to the Company  Stock Option Plan) in the aggregate\n(such excess being the \"Aggregate Option Exercise Spread\").\n\n               (d) Section 2.11(d) of the Company Disclosure Schedule sets forth\na true and complete list of (i) all employment  agreements  with officers of the\nCompany or any of its subsidiaries; (ii) all agreements with consultants who are\nindividuals  obligating  the Company or any of its  subsidiaries  to make annual\ncash payments in an amount exceeding $250,000; (iii) all agreements with respect\nto the services of independent  contractors or leased  employees  whether or not\nthey participate in any of the Employee Plans;  (iv) all officers of the Company\nor any of its  subsidiaries who have executed a  non-competition  agreement with\nthe Company or any of its subsidiaries;  (v) all severance agreements,  programs\nand policies of the Company or any of its  subsidiaries  with or relating to its\nemployees,  in  each  case  with  outstanding  commitments  exceeding  $150,000,\nexcluding  programs and policies  required to be maintained by law; and (vi) all\nplans,  programs,  agreements  and other  arrangements  of Company which contain\nchange in control provisions.\n\n\n                                      -15-\n\n\n\n\n               (e)  Except  as set  forth  in  Section  2.11(e)  of the  Company\nDisclosure  Schedule,  no employee of the Company or any of its subsidiaries has\nparticipated  in any employee  pension benefit plans (as defined in Section 3(2)\nof ERISA) maintained by or on behalf of the Company. The PBGC has not instituted\nproceedings  to terminate any Employee Plan that is subject to Title IV of ERISA\n(each, a \"Defined Benefit Plan\").  The Defined Benefit Plans have no accumulated\nor waived funding deficiencies within the meaning of Section 412 of the Code nor\nhave any extensions of any amortization period within the meaning of Section 412\nof the Code or 302 of ERISA been applied for with respect  thereto.  The present\nvalue of the benefit  liabilities  (within the meaning of Section 4041 of ERISA)\nof the Defined Benefit Plans,  determined on a termination basis using actuarial\nassumptions  that  would  be used by the  PBGC  does  not  exceed  by more  than\n$1,000,000  the value of the  Defined  Benefit  Plans'  assets.  All  applicable\npremiums  required to be paid to the PBGC with  respect to the  Defined  Benefit\nPlans  have been  paid.  No facts or  circumstances  exist  with  respect to any\nDefined  Benefit  Plan  which  would  give  rise to a lien on the  assets of the\nCompany under Section 4068 of ERISA or otherwise.  All the assets of the Defined\nBenefit Plans are readily marketable securities or insurance contracts.\n\n               (f)  Except  as  provided  in  Schedule  2.11(f)  of the  Company\nDisclosure  Schedule or as contemplated  by this Agreement,  (i) the Company has\nnever maintained an employee stock ownership plan (within the meaning of Section\n4975(e)(7)  of the Code) or any other  Employee  Plan that  invests  in  Company\nstock;  (ii) since December 31, 1997, the Company has not proposed nor agreed to\nany  increase  in  benefits  under any  Employee  Plan (or the  creation  of new\nbenefits)  or change in employee  coverage  which would  increase the expense of\nmaintaining  any  Employee  Plan;  (iii) the  consummation  of the  transactions\ncontemplated  by this  Agreement will not result in an increase in the amount of\ncompensation  or benefits or accelerate  the vesting or timing of payment of any\nbenefits or compensation payable in respect of any employee; (iv) no person will\nbe entitled  to any  severance  benefits  under the terms of any  Employee  Plan\nsolely by reason of the  consummation of this  transaction  contemplated by this\nAgreement.\n\n                (g)  Each  Employee  Plan   covering   non-U.S.   employees  (an\n\"International  Plan\") has been  maintained in substantial  compliance  with its\nterms  and with  the  requirements  prescribed  by any and all  applicable  laws\n(including  any special  provisions  relating to registered  or qualified  plans\nwhere  such  International  Plan  was  intended  to so  qualify)  and  has  been\nmaintained in good standing with  applicable  regulatory  authorities.  The fair\nmarket value of the assets of each funded  International  Plan,  if any, (or the\nliability  of each  funded  International  Plan  funded  through  insurance)  is\nsufficient to procure or provide for the benefits accrued thereunder through the\nEffective  Time  according to the  actuarial  assumptions  and  valuations  most\nrecently used to determine employer contributions to the International Plan.\n\n               (h) The Company has  fiduciary  liability  insurance  of at least\n$1,500,000 in effect covering the  fiduciaries of the Employee Plans  (including\nthe Company) with respect to whom the Company may have liability.\n\n               SECTION 2.12. Labor Matters.  Except as set forth in Section 2.12\nof the Company Disclosure Schedule or the Company SEC Reports,  (i) there are no\ncontroversies\n\n\n                                      -16-\n\n\n\n\npending or, to the knowledge of the Company, threatened,  between the Company or\nany  of  its  subsidiaries  and  any  of  their  respective   employees,   which\ncontroversies have had, or would reasonably be expected,  individually or in the\naggregate,  to have a Material Adverse Effect;  (ii) neither the Company nor any\nof its subsidiaries is a party to any material collective  bargaining  agreement\nor other labor union contract  applicable to persons  employed by the Company or\nits  subsidiaries,  nor does the Company or any of its subsidiaries  know of any\nactivities or proceedings of any labor union to organize any such employees; and\n(iii) neither the Company nor any of its  subsidiaries  has any knowledge of any\nstrikes,  slowdowns,  work stoppages,  lockouts,  or threats thereof, by or with\nrespect to any employees of the Company or any of its  subsidiaries  which would\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect.\n\n               SECTION 2.13. Registration Statement; Proxy Statement\/Prospectus.\nSubject to the accuracy of the  representations  of Parent in Section 3.13,  the\ninformation supplied by the Company in writing specifically for inclusion in the\nRegistration  Statement  (as defined in Section  3.13) shall not at the time the\nRegistration  Statement  is  declared  effective  by the SEC  contain any untrue\nstatement of a material  fact or omit to state any material  fact required to be\nstated  therein or necessary  in order to make the  statements  therein,  in the\nlight of the  circumstances  under  which they were made,  not  misleading.  The\ninformation   supplied   by   the   Company   for   inclusion   in   the   proxy\nstatement\/prospectus to be sent to the shareholders of the Company in connection\nwith the meeting of the  shareholders of the Company to consider the Merger (the\n\"Company Shareholders Meeting\") (such proxy  statement\/prospectus  as amended or\nsupplemented  is  referred to herein as the \"Proxy  Statement\/Prospectus\")  will\nnot, on the date the Proxy  Statement\/Prospectus  (or any  amendment  thereof or\nsupplement  thereto)  is  first  mailed  to  shareholders  or at the time of the\nCompany  Shareholders  Meeting contain any statement  which, at such time and in\nlight of the circumstances  under which it shall be made, is false or misleading\nwith respect to any material  fact, or omit to state any material fact necessary\nin order to make the statements made therein not false or misleading; or omit to\nstate any  material  fact  necessary  to correct  any  statement  in any earlier\ncommunication  with  respect  to the  solicitation  of proxies  for the  Company\nShareholders Meeting which has become false or misleading.  If at any time prior\nto the Effective Time any event relating to the Company or any of its respective\naffiliates,  officers or directors  should be  discovered  by the Company  which\nshould  be  set  forth  in an  amendment  to  the  Registration  Statement  or a\nsupplement to the Proxy Statement\/Prospectus,  the Company shall promptly inform\nParent  and  Merger  Sub.  The Proxy  Statement\/Prospectus  shall  comply in all\nmaterial  respects with the requirements of the Securities Act, the Exchange Act\nand the rules and regulations  thereunder.  Notwithstanding  the foregoing,  the\nCompany  makes no  representation  or warranty  with respect to any  information\nsupplied by Parent or Merger Sub which is contained or incorporated by reference\nin,  or   furnished  in   connection   with  the   preparation   of,  the  Proxy\nStatement\/Prospectus.\n\n               SECTION 2.14.  Restrictions  on Business  Activities.  Except for\nthis  Agreement  or as set  forth  in  Section  2.14 of the  Company  Disclosure\nSchedule or the Company SEC  Reports,  to the best of the  Company's  knowledge,\nthere is no agreement,  judgment,  injunction,  order or decree binding upon the\nCompany or any of its subsidiaries  which has or would reasonably be expected to\nhave the effect of  prohibiting  or  impairing  the  conduct of  business by the\nCompany or any of its subsidiaries as currently conducted by the\n\n\n                                      -17-\n\n\n\n\nCompany or such  subsidiary,  except for any  prohibition or impairment as would\nnot reasonably be expected, individually or in the aggregate, to have a Material\nAdverse Effect.\n\n               SECTION 2.15.  Title to Property.  Except as set forth in Section\n2.15  of  the  Company  Disclosure  Schedule,   the  Company  and  each  of  its\nsubsidiaries  have good title to all of their real  properties and other assets,\nfree and clear of all liens,  charges and  encumbrances,  except liens for taxes\nnot yet due and payable and such liens or other  imperfections of title, if any,\nas do not materially detract from the value of or interfere with the present use\nof the  property  affected  thereby or which could not  reasonably  be expected,\nindividually or in the aggregate,  to have a Material Adverse Effect, and except\nfor liens which secure indebtedness reflected in the 1998 Balance Sheet; and, to\nthe knowledge of the Company, all leases pursuant to which the Company or any of\nits  subsidiaries  lease  from  others  material  amounts  of real  or  personal\nproperty,  are in good  standing,  valid and effective in accordance  with their\nrespective  terms, and there is not, to the knowledge of the Company,  under any\nof such  leases,  any  existing  material  default or event of default (or event\nwhich  with  notice  or lapse of time,  or both,  would  constitute  a  material\ndefault),   except  where  the  lack  of  such  good   standing,   validity  and\neffectiveness  or the  existence of such  default or event of default  could not\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect.\n\n               SECTION 2.16. Taxes. Except as would not reasonably be expected,\nindividually or in the aggregate, to have a Material Adverse Effect:\n\n                (a) The  Company  and each of its  subsidiaries  has  timely and\naccurately  filed, or caused to be timely and accurately filed, all material Tax\nReturns  (as  hereinafter  defined)  required  to be filed by it,  and has paid,\ncollected or withheld, or caused to be paid, collected or withheld, all material\namounts of Taxes (as  hereinafter  defined)  required to be paid,  collected  or\nwithheld,  other than such Taxes for which adequate reserves in the 1997 Balance\nSheet have been  established or which are being  contested in good faith.  There\nare no material claims or assessments  pending against the Company or any of its\nsubsidiaries  for any  alleged  deficiency  in any Tax,  there are no pending or\nthreatened audits or investigations  for or relating to any liability in respect\nof any Taxes,  and the Company has not been  notified in writing of any proposed\nTax claims or assessments  against the Company or any of its subsidiaries (other\nthan in each case, claims or assessments for which adequate reserves in the 1997\nBalance Sheet have been  established or which are being  contested in good faith\nor are  immaterial in amount).  Neither the Company nor any of its  subsidiaries\nhas executed any waivers or extensions of any applicable  statute of limitations\nto assess any material amount of Taxes. There are no outstanding requests by the\nCompany or any of its  subsidiaries  for any  extension  of time within which to\nfile any  material  Tax Return or within  which to pay any  material  amounts of\nTaxes shown to be due on any Tax Return.  To the best  knowledge of the Company,\nthere are no liens for material amounts of Taxes on the assets of the Company or\nany of its subsidiaries except for statutory liens for current Taxes not yet due\nand payable.\n\n               (b) For purposes of this Agreement, the term \"Tax\" shall mean any\nfederal,  state, local, foreign or provincial income, gross receipts,  property,\nsales, use, license,  excise,  franchise,  employment,  payroll,  alternative or\nadd-on minimum, ad valorem,\n\n\n                                      -18-\n\n\n\n\ntransfer or excise  tax, or any other tax,  custom,  duty,  governmental  fee or\nother like assessment or charge imposed by any Governmental Authority,  together\nwith any interest or penalty imposed thereon. The term \"Tax Return\" shall mean a\nreport,  return or other  information  (including any attached  schedules or any\namendments to such report,  return or other information) required to be supplied\nto or filed with a  governmental  entity with  respect to any Tax,  including an\ninformation return, claim for refund, amended return or declaration or estimated\nTax.\n\n               (c) Except as set forth in Section 2.16 of the Company Disclosure\nSchedule:  (i) Neither the Company nor any of its  subsidiaries  has ever been a\nmember of an affiliated  group within the meaning of Section 1504 of the Code or\nfiled or been included in a combined,  consolidated or unitary Tax Return, other\nthan of the Company and its  subsidiaries;  (ii) other than with  respect to the\nCompany and its subsidiaries, neither the Company nor any of its subsidiaries is\nliable for Taxes of any other  Person,  or is  currently  under any  contractual\nobligation  to indemnify  any person with respect to Taxes (except for customary\nagreements  to indemnify  lenders or security  holders in respect of taxes other\nthan  income  taxes),  or is a party to any tax sharing  agreement  or any other\nagreement  providing for payments by the Company or any of its subsidiaries with\nrespect to Taxes;  (iii)  neither the Company nor any of its  subsidiaries  is a\nparty to any joint venture,  partnership or other  arrangement or contract which\ncould be treated as a partnership for federal income tax purposes;  (iv) neither\nthe Company nor any of its  subsidiaries  has entered into any sale leaseback or\nany  leveraged  lease  transaction  that fails to satisfy  the  requirements  of\nRevenue Procedure 75-21 (or similar  provisions of foreign law); (v) neither the\nCompany nor any of its subsidiaries has agreed or is required,  as a result of a\nchange in method of  accounting or otherwise,  to include any  adjustment  under\nSection  481 of the Code (or any  corresponding  provision  of  state,  local or\nforeign  law)  in  taxable  income;  (vi)  neither  the  Company  nor any of its\nsubsidiaries  is a party to any  agreement,  contract,  arrangement or plan that\nwould  result  (taking  into  account  the  transactions  contemplated  by  this\nAgreement),  separately  or in the  aggregate,  in the  payment  of any  \"excess\nparachute  payments\"  within the meaning of Section 280G of the Code;  (vii) the\nprices for any property or services (or for the use of property) provided by the\nCompany or any of its  subsidiaries  to any other  subsidiary  or to the Company\nhave been  arm's  length  prices,  determined  using a method  permitted  by the\nTreasury  Regulations  under Section 482 of the Code; (viii) neither the Company\nnor any of its  subsidiaries  is liable  with  respect to any  indebtedness  the\ninterest of which is not deductible for applicable  federal,  foreign,  state or\nlocal income tax purposes;  (ix) neither the Company nor any of its subsidiaries\nis  a  \"consenting  corporation\"  under  Section  341(f)  of  the  Code  or  any\ncorresponding  provision  of state,  local or foreign  law;  and (x) none of the\nassets  owned by the  Company or any of its  subsidiaries  is  property  that is\nrequired  to be  treated  as owned  by any  other  person  pursuant  to  Section\n168(g)(8)  of the  Internal  Revenue  Code of 1954,  as  amended,  as in  effect\nimmediately  prior  to the  enactment  of the  Tax  Reform  Act of  1986,  or is\n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code.\n\n               SECTION 2.17.  Environmental  Matters. (a) Except as set forth in\nSection 2.17(a) to the Company Disclosure Schedule or in the Company SEC Reports\nor as would not reasonably be expected,  individually  or in the  aggregate,  to\nhave a Material Adverse Effect, the operations and properties of the Company and\nits  subsidiaries  are in material  compliance with the  Environmental  Laws (as\nhereinafter defined), which compliance\n\n\n                                      -19-\n\n\n\n\nincludes  the  possession  by the Company and its  subsidiaries  of all material\npermits and governmental  authorizations required under applicable Environmental\nLaws, and material compliance with the terms and conditions thereof.\n\n               (b)  Except  as set  forth  in  Section  2.17(b)  of the  Company\nDisclosure  Schedule or the Company  SEC Reports or as would not  reasonably  be\nexpected,  individually or in the aggregate,  to have a Material Adverse Effect,\nthere are no  Environmental  Claims (as hereinafter  defined),  including claims\nbased on \"arranger liability,\" pending or, to the best knowledge of the Company,\nthreatened  against the Company or any of its subsidiaries or against any person\nor entity whose liability for any Environmental  Claim the Company or any of its\nsubsidiaries  has retained or assumed  either  contractually  or by operation of\nlaw.\n\n               (c) There are no past or present actions, inactions,  activities,\ncircumstances, conditions, events or incidents, including the release, emission,\ndischarge,  presence or disposal of any  Material of  Environmental  Concern (as\nhereinafter  defined),  that  would  form the basis of any  Environmental  Claim\nagainst the Company or any of its  subsidiaries  or against any person or entity\nwhose  liability  for  any  Environmental  Claim  the  Company  or  any  of  its\nsubsidiaries  have retained or assumed either  contractually  or by operation of\nlaw, except for such Environmental Claims that would not reasonably be expected,\nindividually or in the aggregate, to have a Material Adverse Effect.\n\n               (d) Except as would not reasonably be expected,  individually  or\nin the aggregate,  to have a Material Adverse Effect,  (i) no off-site locations\nwhere the Company or any of its  subsidiaries  has stored,  disposed or arranged\nfor the disposal of Materials  of  Environmental  Concern has been listed on the\nNational  Priority List,  CERCLIS,  state Superfund site list or state analog to\nCERCLIS, and the Company and its subsidiaries have not been notified that either\nof them is a potentially  responsible party at any such location; (ii) there are\nno underground  storage tanks located on property owned or leased by the Company\nor any of its  subsidiaries;  (iii)  there is no  asbestos  containing  material\ncontained in or forming part of any building,  building component,  structure or\noffice  space  owned,   leased  or  operated  by  the  Company  or  any  of  its\nsubsidiaries;  and  (iv)  there  are no  polychlorinated  biphenyls  (PCB's)  or\nPCB-containing  items  contained  in or forming part of any  building,  building\ncomponent, structure or office space owned, leased or operated by the Company or\nany of its subsidiaries.\n\n               (e) For purposes of this Agreement:\n\n               (i)  \"Environmental  Claim\"  means any  claim,  action,  cause of\naction,  investigation  or  written  notice by any  person  or  entity  alleging\npotential  liability  (including  potential  liability for investigatory  costs,\ncleanup costs,  governmental response costs, natural resources damages, property\ndamages,  personal injuries, or penalties) arising out of, based on or resulting\nfrom  the  presence,  or  release  into  the  environment,  of any  Material  of\nEnvironmental  Concern at any location,  whether or not owned or operated by the\nCompany or any of its subsidiaries.\n\n               (ii)  \"Environmental  Laws\" means all Federal,  state,  local and\nforeign laws, regulations, codes, ordinances, any guidance or directive relating\nto pollution or protection of\n\n\n                                      -20-\n\n\n\n\nhuman health and the environment  (including ambient air, surface water,  ground\nwater,  land surface or  sub-surface  strata),  including  laws and  regulations\nrelating to emissions,  discharges, releases or threatened releases of Materials\nof Environmental Concern, or otherwise relating to the manufacture,  processing,\ndistribution,  use,  treatment,  storage,  disposal,  transport  or  handling of\nMaterials of Environmental Concern,  including, but not limited to CERCLA, RCRA,\nTSCA,  OSHA,  the Clean  Air Act,  the  Clean  Water  Act,  each as  amended  or\nsupplemented, and any applicable transfer statutes or laws.\n\n               (iii)  \"Materials  of  Environmental  Concern\"  means  chemicals,\npollutants,   contaminants,   hazardous  materials,   hazardous  substances  and\nhazardous  wastes,  medical  waste,  toxic  substances,  petroleum and petroleum\nproducts,  asbestos-containing  materials,  poly chlorinated biphenyls,  and any\nother chemicals, pollutants or substances regulated under any Environmental Law.\n\n               SECTION 2.18.  Brokers.  No broker,  finder or investment  banker\n(other than Chase Securities Inc. (\"Chase\"),  the fees and expenses of whom will\nbe paid by the Company) is entitled to any  brokerage,  finder's or other fee or\ncommission in connection  with the  transactions  contemplated by this Agreement\nbased upon arrangements made by or on behalf of the Company.\n\n               SECTION 2.19. Intellectual Property. (a) As used herein, the term\n\"Intellectual  Property Assets\" shall mean all worldwide  intellectual  property\nrights, including, without limitation,  patents,  trademarks,  service marks and\ncopyrights,  and registrations and applications therefor, trade names, know-how,\ntrade  secrets,  computer  software  programs or  applications  and  proprietary\ninformation.  As used herein,  \"Company Intellectual Property Assets\" shall mean\nthe  Intellectual  Property  Assets  used or owned by the  Company or any of its\nsubsidiaries.\n\n        (b) The Company and\/or each of its subsidiaries  owns, or is licensed or\notherwise possesses legally enforceable rights to use all Intellectual  Property\nAssets that are used in the  business of the  Company  and its  subsidiaries  as\ncurrently conducted, without conflict with the rights of others, except as would\nnot reasonably be expected, individually or in the aggregate, to have a Material\nAdverse Effect.\n\n        (c) Except as disclosed in Section 2.19(c) of the  Supplemental  Company\nDisclosure  Schedule or as would not reasonably be expected,  individually or in\nthe aggregate,  to have a Material Adverse Effect, no claims with respect to the\nCompany Intellectual  Property Assets, or the Intellectual  Property Assets of a\nthird  party (the  \"Third  Party  Intellectual  Property  Assets\") to the extent\narising  out of any  use,  reproduction  or  distribution  of such  Third  Party\nIntellectual   Property  Assets  by  or  through  the  Company  or  any  of  its\nsubsidiaries,  are currently  pending or, to the  knowledge of the Company,  are\nthreatened by any person.\n\n        (d) Except as  disclosed  in Section  2.19(d) of the Company  Disclosure\nSchedule  or as would not  reasonably  be  expected  to have a Material  Adverse\nEffect,  neither  the  Company  nor any of its  subsidiaries  knows of any valid\ngrounds  for any bona  fide  claim to the  effect  that the  manufacture,  sale,\nlicensing or use of any product now used, sold or licensed or\n\n\n                                      -21-\n\n\n\n\nproposed  for use,  sale,  license  by the  Company  or any of its  subsidiaries\ninfringes on any Third Party Intellectual Property Assets.\n\n        (e) Section 2.19(e) of the Supplemental Company Disclosure Schedule will\nset forth a list of (i) all patents and patent applications owned by the Company\nand\/or each of its subsidiaries  worldwide;  (ii) all trademark and service mark\nregistrations  and all  trademark  and service mark  applications  and all trade\nnames owned by the Company and\/or each of its subsidiaries worldwide;  (iii) all\ncopyright  registrations and copyright  applications owned by the Company and\/or\neach of its subsidiaries  worldwide;  and (iv) all licenses owned by the Company\nand\/or  each  of its  subsidiaries  in  which  the  Company  and\/or  each of its\nsubsidiaries  is (A) a licensor with respect to any of the patents,  trademarks,\nservice  marks,  trade  names or  copyrights  listed in the  Company  Disclosure\nSchedule;  or (B) a  licensee  of  any  other  person's  patents,  trade  names,\ntrademarks,  service marks or copyrights  material to the Company except for any\nlicenses of software programs that are publicly available. To its knowledge, the\nCompany has  heretofore  made  available  to Parent a list of all such  patents,\npatent  applications,  trademark and service mark  registrations,  trademark and\nservice mark  applications,  trade  names,  copyright  registrations,  copyright\napplications and licenses.  The Company and\/or each of its subsidiaries has made\nall necessary  filings and  recordations to protect and maintain its interest in\nthe patents,  patent  applications,  trademark  and service mark  registrations,\ntrademark and service mark applications,  trade names,  copyright  registrations\nand  copyright  applications  and licenses  set forth in the Company  Disclosure\nSchedule,  except  where  the  failure  to so  protect  or  maintain  would  not\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect.\n\n        (f) Except as set forth in Section  2.19(f)  of the  Company  Disclosure\nSchedule  or the Company SEC  Reports or as would not  reasonably  be  expected,\nindividually or in the aggregate,  to have a Material  Adverse Effect:  (i) each\npatent,  patent  application,   trademark  or  service  mark  registration,  and\ntrademark or service mark  application  and copyright  registration or copyright\napplication  of the  Company  and\/or  each  of its  subsidiaries  is  valid  and\nsubsisting  and (ii) each  license of Company  Intellectual  Property  Assets is\nvalid, subsisting and enforceable.\n\n        (g) Except as set forth in Section  2.19(g)  of the  Company  Disclosure\nSchedule,  to the Company's  knowledge:  there is no material  unauthorized use,\ninfringement or misappropriation of any of the Company's  Intellectual  Property\nAssets by any third party, including any employee, former employee,  independent\ncontractor or consultant of the Company or any of its subsidiaries.\n\n        (h) Except as set forth on Schedule  2.19(h) on the  Company  Disclosure\nSchedule,  the  disclosure  under the  heading  \"IMPACT OF THE YEAR 2000  ISSUE\"\ncontained in the Company's  Annual Report on Form 10-K for the fiscal year ended\nDecember 31, 1997 is accurate and correct in all material respects.\n\n               SECTION 2.20. Interested Party Transactions.  Except as set forth\nin Section 2.20 of the Company Disclosure Schedule or the Company SEC Reports or\nfor events as to which the amounts  involved do not,  in the  aggregate,  exceed\n$300,000,  since the date of the Company's  proxy statement dated March 30, 1998\n(the \"1998 Company Proxy Statement\"),\n\n\n                                      -22-\n\n\n\n\nno event  has  occurred  that  would be  required  to be  reported  as a Certain\nRelationship  or Related  Transaction,  pursuant to Item 404 of  Regulation  S-K\npromulgated by the SEC.\n\n               SECTION 2.21.  Insurance.  Except as disclosed in Section 2.21 of\nthe Company  Disclosure  Schedule or the Company SEC Reports,  all material fire\nand casualty,  general liability,  business interruption,  product liability and\nsprinkler and water damage insurance  policies  maintained by the Company or any\nof its  subsidiaries  are with reputable  insurance  carriers,  provide full and\nadequate  coverage for all normal risks  incident to the business of the Company\nand its  subsidiaries  and their  respective  properties  and  assets and are in\ncharacter and amount  appropriate  for the businesses  conducted by the Company,\nexcept as would not reasonably be expected to have a Material Adverse Effect.\n\n               SECTION  2.22.  Product  Liability  and  Recalls.  (a)  Except as\ndisclosed in Section 2.22(a) of the Company  Disclosure  Schedule or the Company\nSEC  Reports,  the  Company  is not aware of any claim,  pending or  threatened,\nagainst the Company or any of its  subsidiaries for injury to person or property\nof  employees  or any  third  parties  suffered  as a result  of the sale of any\nproduct or performance of any service by the Company or any of its subsidiaries,\nincluding  claims  arising out of the defective or unsafe nature of its products\nor  services,  which  would  reasonably  be  expected,  individually  or in  the\naggregate, to have a Material Adverse Effect.\n\n               (b)  Except  as  disclosed  in  Section  2.22(b)  of the  Company\nDisclosure  Schedule or the Company SEC Reports,  there is no pending or, to the\nknowledge of the Company,  overtly  threatened  recall or  investigation  of any\nproduct sold by the Company,  which recall or investigation  would reasonably be\nexpected, individually or in the aggregate, to have a Material Adverse Effect.\n\n               SECTION 2.23. Opinion of Financial Advisor.  The Company has been\nadvised by its financial advisor,  Chase, to the effect that in its opinion,  as\nof the date hereof, the Exchange Ratio is fair from a financial point of view to\nthe holders of Shares.\n\n               SECTION 2.24.  Pooling  Matters.  To the Company's  knowledge and\nbased upon  consultation  with its  independent  accountants,  the  Company  has\nprovided to Parent and its independent  accountants  all information  concerning\nactions  taken or agreed to be taken by the Company or any of its  affiliates on\nor before  the date of this  Agreement  that would  reasonably  be  expected  to\nadversely  affect the ability of Parent to account for the business  combination\nto be effected by the Merger as a pooling of  interests,  and the Company has no\nknowledge that such business combination cannot be accounted for in that manner.\nFor purposes of this Section  2.24,  \"to the Company's  knowledge\"  means to the\nactual  knowledge  of  the  Company's  Chairman  and  Chief  Executive  Officer,\nPresident and Chief Operating Officer or Chief Financial Officer.\n\n               SECTION 2.25. Tax Matters.  The  representations,  statements and\ncovenants  set forth in  paragraph 2 through 18 of Exhibit A hereto are true and\ncorrect in all material respects.\n\n\n                                      -23-\n\n\n\n\n               SECTION 2.26 Accuracy of  Information.  The Company  acknowledges\nthat none of Parent,  its  subsidiaries  or any of their  respective  directors,\nofficers, employees,  affiliates,  agents, advisors or representatives makes any\nrepresentation  or warranty,  either  express or implied,  as to the accuracy or\ncompleteness of any of the information provided or made available to the Company\nor its agents or representatives including, without limitation, any estimations,\nprojections  or other  statement  regarding  future  performance,  except to the\nextent set forth in this Agreement (including the Parent Disclosure Schedule).\n\n                                   ARTICLE III\n\n             REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB\n\n\n\n               Parent and Merger Sub hereby,  jointly and  severally,  represent\nand warrant to the Company as follows:\n\n               SECTION 3.01. Organization and Qualification;  Subsidiaries. Each\nof Parent and its  subsidiaries  is a  corporation  duly  organized  and validly\nexisting under the laws of the  jurisdiction  of its  incorporation  and has the\nrequisite  corporate power and authority necessary to own, lease and operate the\nproperties it purports to own,  operate or lease and to carry on its business as\nit is now being  conducted,  except  where the  failure to be so  organized  and\nexisting or to have such power or authority  would not reasonably be expected to\nhave a Material  Adverse  Effect.  Each of Parent and its  subsidiaries  is duly\nqualified or licensed as a foreign  corporation  to do business,  and is in good\nstanding,  in each  jurisdiction  where the character of its  properties  owned,\nleased  or  operated  by  it  or  the  nature  of  its  activities   makes  such\nqualification  or licensing  necessary,  except for such  failures to be so duly\nqualified or licensed and in good standing that could not reasonably be expected\nto have a Material  Adverse Effect.  A true and complete list of all of Parent's\nsubsidiaries, together with the jurisdiction of incorporation of each subsidiary\nand the  percentage  of each  subsidiary's  outstanding  capital  stock owned by\nParent or  another  subsidiary,  is set  forth in  Section  3.01 of the  written\ndisclosure schedule  previously  delivered by Parent to the Company (the \"Parent\nDisclosure  Schedule\").  Except  as set  forth  in  Section  3.01 of the  Parent\nDisclosure  Schedule  or the  Parent SEC  Reports  (as  defined in Section  3.07\nbelow),  Parent  does not  directly  or  indirectly  own any  equity or  similar\ninterest in, or any interest  convertible  into or  exchangeable  or exercisable\nfor, any equity or similar  interest  in, any  corporation,  partnership,  joint\nventure or other business  association  or entity,  with respect to which Parent\nhas invested or is required to invest $3,000,000 or more,  excluding  securities\nin any publicly traded company held for investment by Parent and comprising less\nthan five percent of the outstanding capital stock of such company.\n\n               SECTION 3.02.  Articles of Organization  and By-Laws.  Parent has\nheretofore  made  available  to the Company a complete  and correct  copy of its\nMemorandum of Association  and Bye-Laws,  as amended to date. Such Memorandum of\nAssociation and Bye-Laws are in full force and effect. Neither Parent nor Merger\nSub is in violation of any of the  provisions of its  Memorandum of  Association\n(or Certificate of Incorporation) or by-laws.\n\n\n                                      -24-\n\n\n\n\n               SECTION 3.03. Capitalization. (a) The authorized capital stock of\nParent consists of 1,503,750,000 Parent Common Shares and 125,000,000 Preference\nShares,  $1.00 par value per share (\"Parent Preferred Shares\").  (i) As of April\n23, 1998, (I) 583,096,885 Parent Common Shares were issued and outstanding,  all\nof which are  validly  issued,  fully  paid and  non-assessable,  (II) no Parent\nPreferred Shares were outstanding and (III) no more than 5,000,000 Parent Common\nShares and no Parent Preferred Shares were held by subsidiaries of Parent;  (ii)\nas of March 31, 1998,  warrants to purchase  185,933  Parent  Common Shares were\noutstanding; and (iii) as of September 30, 1997, approximately 44 million Parent\nCommon Shares were  reserved for issuance upon exercise of stock options  issued\nunder the Tyco  International  Ltd. Long Term Incentive Plan. No material change\nin such capitalization has occurred between such dates and the date hereof other\nthan as a result of the exercise of options or warrants  outstanding  as of such\ndates.  Except as set forth in Section 3.03 of the Parent Disclosure Schedule or\nthe  Parent  SEC  Reports,  there  are no  options,  warrants  or other  rights,\nagreements arrangements or commitments of any character binding on Parent or any\nof its  subsidiaries  relating to the issued or unissued capital stock of Parent\nor any of its  subsidiaries or obligating  Parent or any of its  subsidiaries to\nissue or sell any  shares of capital  stock of, or other  equity  interests  in,\nParent or any of its  subsidiaries.  Except as set forth in Section  3.03 of the\nParent Disclosure Schedule or the Parent SEC Reports,  there are no obligations,\ncontingent or otherwise,  of Parent or any of its  subsidiaries  to  repurchase,\nredeem or otherwise acquire any Parent Common Shares or the capital stock of any\nsubsidiary or to provide funds to or make any investment (in the form of a loan,\ncapital  contribution or otherwise) in any such subsidiary other than guarantees\nof bank  obligations  of  subsidiaries  entered into in the  ordinary  course of\nbusiness.  Except as set forth in Section 3.01 or 3.03 of the Parent  Disclosure\nSchedule,  all of the outstanding shares of capital stock (other than directors'\nqualifying shares) of each of Parent's subsidiaries is duly authorized,  validly\nissued,  fully paid and nonassessable and all such shares (other than directors'\nqualifying  shares) are owned by Parent or another  subsidiary free and clear of\nall security  interests,  liens,  claims,  pledges,  agreements,  limitations in\nParent's voting rights, charges or other encumbrances of any nature whatsoever.\n\n               (b) The Parent Common Shares to be issued  pursuant to the Merger\nwill be duly authorized,  validly issued, fully paid and nonassessable and shall\nbe listed, upon official notice of issuance, for trading on the NYSE.\n\n               SECTION  3.04.  Authority  Relative  to this  Agreement.  Each of\nParent and Merger Sub has all necessary corporate power and authority to execute\nand deliver  this  Agreement  and to perform its  obligations  hereunder  and to\nconsummate the transactions  contemplated  hereby. The execution and delivery of\nthis  Agreement  by Parent  and Merger  Sub and the  consummation  by Parent and\nMerger Sub of the  transactions  contemplated  hereby have been duly and validly\nauthorized  by all necessary  corporate  action on the part of Parent and Merger\nSub, and no other corporate  proceedings on the part of Parent or Merger Sub are\nnecessary  to  authorize  this  Agreement  or  to  consummate  the  transactions\ncontemplated  hereby. The Board of Directors of Parent has determined that it is\nadvisable and in the best interest of Parent's  shareholders for Parent to enter\ninto this  Agreement and to consummate  the Merger upon the terms and subject to\nthe  conditions  of this  Agreement.  This  Agreement  has been duly and validly\nexecuted and delivered by Parent and Merger Sub\n\n\n                                      -25-\n\n\n\n\nand,  assuming  the due  authorization,  execution  and delivery by the Company,\nconstitutes a legal, valid and binding obligation of Parent and Merger Sub.\n\n               SECTION 3.05.  No Conflict;  Required  Filings and Consents.  (a)\nSection  3.05(a) of the Parent  Disclosure  Schedule  includes a list of (i) all\nloan  agreements,  indentures,  mortgages,  pledges,  conditional  sale or title\nretention agreements,  security agreements,  equipment obligations,  guaranties,\nstandby  letters of credit,  equipment  leases or lease  purchase  agreements to\nwhich  Parent or any of its  subsidiaries  is a party or by which any of them is\nbound, each in an amount exceeding $25,000,000, but excluding any such agreement\nbetween  Parent  and  its  wholly-owned  subsidiaries  or  between  two or  more\nwholly-owned subsidiaries of Parent; (ii) all contracts, agreements, commitments\nor  other  understandings  or  arrangements  to  which  Parent  or  any  of  its\nsubsidiaries  is a party  or by  which  any of them or any of  their  respective\nproperties or assets are bound or affected, but excluding contracts, agreements,\ncommitments or other understandings or arrangements entered into in the ordinary\ncourse of business and involving,  in each case,  payments or receipts by Parent\nor any of its subsidiaries of less than $20,000,000 in any single instance;  and\n(iii) all agreements which, as of the date hereof, are required to be filed with\nthe SEC pursuant to the requirements of the Exchange Act as \"material contracts\"\nbut have not been so filed with the SEC as of the date hereof.\n\n               (b)  Except  as set  forth  in  Section  3.05(b)  of  the  Parent\nDisclosure Schedule,  the execution and delivery of this Agreement by Parent and\nMerger Sub do not, and the  performance  of this  Agreement by Parent and Merger\nSub will not, (i) conflict  with or violate the  Memorandum of  Association  (or\nCertificate of  Incorporation) or by-laws of Parent or Merger Sub, (ii) conflict\nwith or violate any law, rule, regulation,  order, judgment or decree applicable\nto  Parent  or any of its  subsidiaries  or by  which  its or  their  respective\nproperties are bound or affected, or (iii) result in any breach of or constitute\na default (or an event which with notice or lapse of time or both would become a\ndefault) under, or impair Parent's or any of its  subsidiaries'  rights or alter\nthe rights or obligations of any third party under, or give to others any rights\nof termination,  amendment,  acceleration  or cancellation  of, or result in the\ncreation of a lien or  encumbrance  on any of the properties or assets of Parent\nor any of its  subsidiaries  pursuant to, any note, bond,  mortgage,  indenture,\ncontract,  agreement,  lease, license,  permit, franchise or other instrument or\nobligation  to which  Parent or any of its  subsidiaries  is a party or by which\nParent or any of its subsidiaries or its or any of their  respective  properties\nare bound or affected,  except,  in the case of clauses  (ii) or (iii),  for any\nsuch conflicts,  violations,  breaches, defaults or other occurrences that would\nnot reasonably be expected, individually or in the aggregate, to have a Material\nAdverse Effect.\n\n               (c) The  execution  and delivery of this  Agreement by Parent and\nMerger Sub does not, and the  performance of this Agreement by Parent and Merger\nSub will not,  require any  consent,  approval,  authorization  or permit of, or\nfiling  with or  notification  to, any  Governmental  Authority,  except (i) for\napplicable  requirements,  if any, of the Securities  Act, the Exchange Act, the\nBlue Sky Laws, the pre-merger notification  requirements of the HSR Act, Foreign\nMonopoly  Laws, and the filing and  recordation  of appropriate  merger or other\ndocuments  as  required  by the DGCL,  (ii)  where the  failure  to obtain  such\nconsents,  approvals,  authorizations  or  permits,  or to make such  filings or\nnotifications, would not prevent or materially delay consummation of the Merger,\nor otherwise prevent Parent or\n\n\n                                      -26-\n\n\n\n\nMerger Sub from performing  their  respective  material  obligations  under this\nAgreement,  and would not otherwise be reasonably  expected,  individually or in\nthe  aggregate,  to have a  Material  Adverse  Effect  or (iii) as to which  any\nnecessary consents, approvals, authorizations, permits, filings or notifications\nhave heretofore been obtained or filed, as the case may be, by Parent.\n\n               SECTION  3.06.  Compliance;  Permits.  (a) Except as disclosed in\nSection  3.06(a) of the Parent  Disclosure  Schedule or the Parent SEC  Reports,\nneither Parent nor any of its subsidiaries is in conflict with, or in default or\nviolation  of,  (i)  any  law,  rule,  regulation,  order,  judgment  or  decree\napplicable to Parent or any of its  subsidiaries or by which its or any of their\nrespective  properties  is bound or affected or (ii) any note,  bond,  mortgage,\nindenture,  contract,  agreement,  lease,  license,  permit,  franchise or other\ninstrument or obligation to which Parent or any of its  subsidiaries  is a party\nor by which Parent or any of its  subsidiaries or its or any of their respective\nproperties  is bound or  affected,  except for any such  conflicts,  defaults or\nviolations  which  would not  reasonably  be  expected,  individually  or in the\naggregate, to have a Material Adverse Effect.\n\n               (b)  Except  as  disclosed  in  Section  3.06(b)  of  the  Parent\nDisclosure Schedule or the Parent SEC Reports,  Parent and its subsidiaries hold\nall permits, licenses, easements, variances, exemptions, consents, certificates,\norders and approvals  from  governmental  authorities  which are material to the\noperation of the business of the Parent and its subsidiaries taken as a whole as\nit is now being conducted  (collectively,  the \"Parent Permits\" except where the\nfailure  to  hold  such  Parent   Permits  would  not  reasonably  be  expected,\nindividually or in the aggregate, to have a Material Adverse Effect). Parent and\nits subsidiaries  are in compliance with the terms of Parent Permits,  except as\ndescribed  in the Parent SEC Reports or where the failure to so comply would not\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect.\n\n               SECTION 3.07. SEC Filings;  Financial Statements.  (a) Parent has\nfiled all forms,  reports and documents  required to be filed with the SEC since\nDecember  31, 1994,  and has  heretofore  delivered to the Company,  in the form\nfiled  with the SEC,  (i) its Annual  Reports on Form 10-K for the fiscal  years\nended December 31, 1995 and 1996 and its Transition  Report on Form 10-K for the\nnine month period ended September 30, 1997,  (ii) its Quarterly  Reports on Form\n10-Q for the quarterly  periods  ending  December 31, 1997,  and March 31, 1998,\n(iii) all  proxy  statements  relating  to  Parent's  meetings  of  shareholders\n(whether annual or special) held since December 31, 1996, (iv) all other reports\nor registration  statements  (other than Reports on Form 10-Q not referred to in\nclause (ii) above) filed by Parent with the SEC since December 31, 1994, and (v)\nall amendments and supplements to all such reports and  registration  statements\nfiled by Parent  with the SEC  (collectively,  the \"Parent  SEC  Reports\").  The\nParent SEC Reports (i) were prepared in all material respects in accordance with\nthe  requirements of the Securities Act or the Exchange Act, as the case may be,\nand (ii) did not at the time they were filed (or if amended or  superseded  by a\nfiling  prior to the date of this  Agreement,  then on the date of such  filing)\ncontain any untrue statement of a material fact or omit to state a material fact\nrequired  to be stated  therein  or  necessary  in order to make the  statements\ntherein,  in the light of the  circumstances  under  which they were  made,  not\nmisleading. None of Parent's subsidiaries is required to file any forms, reports\nor other documents with the SEC.\n\n\n                                      -27-\n\n\n\n\n               (b) Each of the consolidated financial statements (including,  in\neach case,  any related notes  thereto)  contained in the Parent SEC Reports has\nbeen prepared in accordance with GAAP applied on a consistent  basis  throughout\nthe periods  involved (except as may be indicated in the notes thereto or in the\nParent SEC  Reports)  and each fairly  presents  in all  material  respects  the\nconsolidated  financial  position  of  Parent  and  its  subsidiaries  as at the\nrespective dates thereof and the consolidated results of its operations and cash\nflows for the periods  indicated,  except that the unaudited  interim  financial\nstatements  were or are  subject to normal and  recurring  year-end  adjustments\nwhich were not or are not expected to be material in amount.\n\n               SECTION 3.08. Absence of Certain Changes or Events. Except as set\nforth in  Section  3.08 of the  Parent  Disclosure  Schedule  or the  Parent SEC\nReports, between December 31, 1997 and the date hereof, Parent has conducted its\nbusiness in the  ordinary  course and there has not  occurred:  (i) any changes,\neffects or changed circumstances constituting, individually or in the aggregate,\na Material  Adverse Effect;  (ii) any amendments or changes in the Memorandum of\nAssociation or Bye-Laws of Parent;  (iii) any damage to,  destruction or loss of\nany assets of the  Parent  (whether  or not  covered  by  insurance)  that would\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect; (iv) any material change by Parent in its accounting methods; or\n(v) any sale of a material  amount of assets of Parent,  except in the  ordinary\ncourse of business.\n\n               SECTION 3.09. No Undisclosed Liabilities.  Except as is disclosed\nin Section  3.09 of the Parent  Disclosure  Schedule and the Parent SEC Reports,\nneither the Parent nor any of its  subsidiaries  has any liabilities  (absolute,\naccrued,  contingent  or  otherwise),  except  liabilities  (a) in the aggregate\nadequately  provided for in the Parent's  unaudited balance sheet (including any\nrelated  notes  thereto)  as of March 31, 1998  included  in Parent's  Quarterly\nReport on Form 10-Q for the three months ended March 31, 1998 (the \"1998 Balance\nSheet\"),  (b) incurred in the ordinary course of business and not required under\nGAAP to be  reflected on the 1998 Balance  Sheet,  (c) incurred  since March 31,\n1998 in the ordinary  course of business,  (d) incurred in connection  with this\nAgreement,  or the Merger or the other transactions  contemplated hereby, or (e)\nwhich would not reasonably be expected,  individually  or in the  aggregate,  to\nhave a Material Adverse Effect.\n\n               SECTION  3.10.  Absence  of  Litigation.  Except  as set forth in\nSection 3.10 of the Parent Disclosure  Schedule,  there are no claims,  actions,\nsuits, proceedings or investigations pending or, to the knowledge of the Parent,\nthreatened  against the Parent or any of its subsidiaries,  or any properties or\nrights of the Parent or any of its subsidiaries, before any court, arbitrator or\nadministrative,  governmental  or  regulatory  authority  or body,  domestic  or\nforeign, that would reasonably be expected to have a Material Adverse Effect.\n\n               SECTION 3.11. Employee Benefit Plans; Employment Agreements.  (a)\nSection  3.11(a) of the Parent  Disclosure  Schedule lists all employee  pension\nbenefit  plans (as  defined in  Section  3(2) of ERISA),  all  employee  welfare\nbenefit plans (as defined in Section 3(1) of ERISA),  and all other bonus, stock\noption,  stock  purchase,   incentive,   deferred   compensation,   supplemental\nretirement,  severance  and other  similar  fringe or  employee  benefit  plans,\nprograms  or  arrangements,  and  any  employment,   executive  compensation  or\nseverance agreements, written or otherwise, as amended, modified or\n\n\n                                      -28-\n\n\n\n\nsupplemented,  for the  benefit  of, or  relating  to,  any  former  or  current\nemployee,  officer,  director or consultant (or any of their  beneficiaries)  of\nParent  or any  entity  (whether  or not  incorporated)  which is a member  of a\ncontrolled  group including  Parent or which is under common control with Parent\nwithin the meaning of Sections  414(b),  (c),  (m) or (o) of the Code or Section\n4001(a) (14) or (b) of ERISA  (\"Parent ERISA  Affiliate\"),  or any subsidiary of\nParent,  as well as each plan with  respect  to which  Parent or a Parent  ERISA\nAffiliate  could incur  liability  under Title IV of ERISA or Section 412 of the\nCode  (together  for the purposes of this Section 3.11,  the \"Employee  Plans\").\nPrior to the date of this  Agreement,  Parent has made  available to the Company\ncopies of (i) each such written  Employee Plan (or a written  description of any\nEmployee Plan which is not written) and all related trust agreements,  insurance\nand other contracts (including policies),  summary plan descriptions,  summaries\nof material  modifications and communications  distributed to plan participants,\n(ii) the three most recent annual reports on Form 5500 series, with accompanying\nschedules and attachments,  filed with respect to each Employee Plan required to\nmake such a filing,  (iii) the most recent actuarial valuation for each Employee\nPlan subject to Title IV of ERISA, (iv) the latest reports which have been filed\nwith the Department of Labor with respect to each Employee Plan required to make\nsuch filing and (v) the most recent favorable  determination  letters issued for\neach Employee Plan and related trust which is subject to Parts 1, 2 and 4 of the\nSubtitle B of Title I of ERISA (and, if an application for such determination is\npending, a copy of the application for such determination). For purposes of this\nSection 3.11,  the term  \"material,\"  when used with respect to (i) any Employee\nPlan,  shall mean that Parent or a Parent  ERISA  Affiliate  has incurred or may\nincur  obligations  in an  amount  exceeding  $5,000,000  with  respect  to such\nEmployee  Plan, and (ii) any liability,  obligation,  breach or  non-compliance,\nshall mean that Parent or a Parent  ERISA  Affiliate  has  incurred or may incur\nobligations in an amount exceeding  $3,000,000,  with respect to any one such or\nseries of related liabilities,  obligations,  breaches, defaults,  violations or\ninstances of non-compliance.\n\n               (b)  Except  as set  forth  in  Section  3.11(b)  of  the  Parent\nDisclosure  Schedule or the Parent SEC Reports,  (i) none of the Employee  Plans\npromises or provides  retiree medical or other retiree  welfare  benefits to any\nperson, and none of the Employee Plans is a \"multiemployer plan\" as such term is\ndefined in Section  3(37) of ERISA;  (ii) no party in interest  or  disqualified\nperson (as defined in Section  3(14) of ERISA and Section  4975 of the Code) has\nat any time engaged in a  transaction  with  respect to any Employee  Plan which\ncould subject Parent or any Parent ERISA Affiliate, directly or indirectly, to a\ntax, penalty or other material liability for prohibited transactions under ERISA\nor  Section  4975 of the  Code;  (iii) no  fiduciary  of any  Employee  Plan has\nbreached any of the  responsibilities  or obligations  imposed upon  fiduciaries\nunder Title I of ERISA,  which breach would  reasonably be expected to result in\nany  material  liability  to  Parent or any  Parent  ERISA  Affiliate;  (iv) all\nEmployee Plans have been established and maintained  substantially in accordance\nwith their terms and have operated in  compliance in all material  respects with\nthe  requirements  prescribed by any and all statutes  (including  ERISA and the\nCode),  orders, or governmental  rules and regulations  currently in effect with\nrespect  thereto  (including all applicable  requirements  for  notification  to\nparticipants or the Department of Labor, IRS or Secretary of the Treasury),  and\nmay by  their  terms  be  amended  and\/or  terminated  at any  time  subject  to\napplicable  law and the terms of each Employee  Plan, and Parent and each of its\nsubsidiaries have performed all material obligations required to be performed by\nthem under, are not in\n\n\n                                      -29-\n\n\n\n\nany material  respect in default under or violation of, and have no knowledge of\nany default or violation by any other party to, any of the Employee  Plans;  (v)\neach  Employee  Plan which is subject to Parts 1, 2 and 4 of Subtitle B of ERISA\nis the subject of a favorable determination letter from the IRS, and nothing has\noccurred which may reasonably be expected to impair such determination; (vi) all\ncontributions  required to be made with respect to any Employee Plan pursuant to\nSection 412 of the Code,  or the terms of the  Employee  Plan or any  collective\nbargaining agreement, have been made on or before their due dates (including any\nextensions  thereof);  (vii) with respect to each Employee  Plan, no \"reportable\nevent\" within the meaning of Section 4043 of ERISA (excluding any such event for\nwhich the 30 day notice  requirement  has been waived under the  regulations  to\nSection 4043 of ERISA) or any event  described in Section 4062,  4063 or 4041 of\nERISA has  occurred  for which there is any  material  outstanding  liability to\nParent  or  any  Parent  ERISA  Affiliate  nor  would  the  consummation  of the\ntransaction  contemplated  hereby  (including  the execution of this  agreement)\nconstitute  a  reportable  event for which the 30-day  requirement  has not been\nwaived; and (viii) neither Parent nor any Parent ERISA Affiliate has incurred or\nreasonably  expects  to incur any  material  liability  under  Title IV of ERISA\n(other than  liability for premium  payments to the PBGC arising in the ordinary\ncourse).\n\n               (c) Section 3.11(c) of the Parent Disclosure  Schedule sets forth\na true and  complete  list of the  aggregate  number of (i)  options to purchase\nParent Common  Shares as of the date hereof,  together with the number of shares\nof Parent  Common  Shares  subject to such  options,  the option  prices of such\noptions (to the extent  determined as of the date hereof),  whether such options\nare intended to qualify as ISOs, and the expiration  date of such options;  (ii)\nany shares of Parent  Common  Shares  that are  restricted;  and (iii) any other\nrights,  directly or indirectly,  to receive Parent Common Shares, together with\nthe number of Parent Common Shares subject to such rights,  held by each current\nor former employee, officer or director of Parent or any of its subsidiaries.\n\n               (d) Section 3.11(d) of the Parent Disclosure  Schedule sets forth\na true and  complete  list of (i) all  employment  agreements  with  officers of\nParent or any of its subsidiaries;  (ii) all agreements with consultants who are\nindividuals  obligating  Parent or any of its  subsidiaries  to make annual cash\npayments in an amount exceeding $1,500,000; (iii) all agreements with respect to\nthe services of independent  contractors or leased employees whether or not they\nparticipate  in  any of  the  Employee  Plans  obligating  Parent  or any of its\nsubsidiaries  to make annual cash  payments in an amount  exceeding  $1,500,000;\n(iv) all  officers  of Parent or any of its  subsidiaries  who have  executed  a\nnon-competition  agreement  with  Parent  or any of its  subsidiaries;  (v)  all\nseverance agreements, programs and policies of Parent or any of its subsidiaries\nwith or relating to its  employees,  in each case with  outstanding  commitments\nexceeding $1,500,000,  excluding programs and policies required to be maintained\nby law;  and (vi) all plans,  programs,  agreements  and other  arrangements  of\nCompany which contain change in control provisions.\n\n               (e)  Except  as set  forth  in  Section  3.11(e)  of  the  Parent\nDisclosure  Schedule,  no  employee  of  Parent or any of its  subsidiaries  has\nparticipated  in any employee  pension benefit plans (as defined in Section 3(2)\nof ERISA)  maintained  by or on behalf of  Parent.  The PBGC has not  instituted\nproceedings  to terminate any Employee Plan that is subject to Title IV of ERISA\n(each, a \"Defined Benefit Plan\"). The Defined Benefit Plans\n\n\n                                      -30-\n\n\n\n\nhave no accumulated or waived funding deficiencies within the meaning of Section\n412 of the Code nor have any  extensions of any  amortization  period within the\nmeaning of Section 412 of the Code or 302 of ERISA been applied for with respect\nthereto.  The present  value of the benefit  liabilities  (within the meaning of\nSection 4041 of ERISA) of the Defined Benefit Plans, determined on a termination\nbasis using actuarial assumptions that would be used by the PBGC does not exceed\nby more than  $10,000,000  the value of the Defined  Benefit Plans' assets.  All\napplicable  premiums required to be paid to the PBGC with respect to the Defined\nBenefit  Plans have been paid. No facts or  circumstances  exist with respect to\nany Defined Benefit Plan which would give rise to a lien on the assets of Parent\nunder Section 4068 of ERISA or otherwise.  All the assets of the Defined Benefit\nPlans are readily marketable securities or insurance contracts.\n\n               (f)  Except  as  provided  in  Schedule  3.11(f)  of  the  Parent\nDisclosure  Schedule,  Parent has never  maintained an employee stock  ownership\nplan  (within  the  meaning  of  Section  4975(e)(7)  of the  Code) or any other\nEmployee Plan that invests in Parent stock.\n\n                (g)  Each  Employee  Plan   covering   non-U.S.   employees  (an\n\"International  Plan\") has been  maintained in substantial  compliance  with its\nterms  and with  the  requirements  prescribed  by any and all  applicable  laws\n(including  any special  provisions  relating to registered  or qualified  plans\nwhere  such  International  Plan  was  intended  to so  qualify)  and  has  been\nmaintained in good standing with applicable regulatory authorities.  The benefit\nliabilities  of the  International  Plans  are  adequately  provided  for on the\nconsolidated financial statements of Parent.\n\n               (h)  Parent  has  fiduciary   liability  insurance  of  at  least\n$15,000,000 in effect covering the fiduciaries of the Employee Plans  (including\nParent) with respect to whom Parent may have liability.\n\n               SECTION 3.12. Labor Matters.  Except as set forth in Section 3.12\nof the Parent  Disclosure  Schedule or the Parent SEC Reports,  (i) there are no\ncontroversies pending or, to the knowledge of Parent or any of its subsidiaries,\nthreatened,  between  Parent  or any  of  its  subsidiaries  and  any  of  their\nrespective employees,  which controversies have or would reasonably be expected,\nindividually  or in the  aggregate,  to have a  Material  Adverse  Effect;  (ii)\nneither Parent nor any of its subsidiaries is a party to any material collective\nbargaining  agreement  or other  labor  union  contract  applicable  to  persons\nemployed  by  Parent  or  its  subsidiaries,  nor  does  Parent  or  any  of its\nsubsidiaries  know of any  activities  or  proceedings  of any  labor  union  to\norganize  any  such  employees;   and  (iii)  neither  Parent  nor  any  of  its\nsubsidiaries  has any  knowledge  of any  strikes,  slowdowns,  work  stoppages,\nlockouts,  or threats thereof,  by or with respect to any employees of Parent or\nany of its subsidiaries  which would reasonably be expected,  individually or in\nthe aggregate, to have a Material Adverse Effect.\n\n               SECTION 3.13. Registration Statement; Proxy Statement\/Prospectus.\nSubject to the accuracy of the  representations  of the Company in Section 2.13,\nthe registration statement (the \"Registration  Statement\") pursuant to which the\nParent Common Shares to be issued in the Merger will be registered  with the SEC\nshall not, at the time the\n\n\n                                      -31-\n\n\n\n\nRegistration  Statement  (including any  amendments or  supplements  thereto) is\ndeclared  effective by the SEC,  contain any untrue statement of a material fact\nor omit to state any material  fact  necessary  in order to make the  statements\nincluded therein,  in light of the circumstances under which they were made, not\nmisleading.  The  information  supplied  by Parent in writing  specifically  for\ninclusion  in the Proxy  Statement\/Prospectus  will  not,  on the date the Proxy\nStatement\/Prospectus  is  first  mailed  to  shareholders  or at the time of the\nCompany Shareholders  Meeting,  contain any statement which, at such time and in\nlight of the circumstances  under which it shall be made, is false or misleading\nwith respect to any material  fact, or omit to state any material fact necessary\nin order to make the  statements  therein  not false or  misleading;  or omit to\nstate any  material  fact  necessary  to correct  any  statement  in any earlier\ncommunication  with  respect  to the  solicitation  of proxies  for the  Company\nShareholders Meeting which has become false or misleading.  If at any time prior\nto the Effective Time any event  relating to Parent,  Merger Sub or any of their\nrespective  affiliates,  officers or directors should be discovered by Parent or\nMerger  Sub  which  should  be set  forth in an  amendment  to the  Registration\nStatement or a supplement  to the Proxy  Statement\/Prospectus,  Parent or Merger\nSub will  promptly  inform the Company.  The  Registration  Statement  and Proxy\nStatement\/Prospectus shall comply in all material respects with the requirements\nof  the  Securities  Act,  the  Exchange  Act  and  the  rules  and  regulations\nthereunder.  Notwithstanding  the  foregoing,  Parent  and  Merger  Sub  make no\nrepresentation  or  warranty  with  respect to any  information  supplied by the\nCompany  which is contained  or  incorporated  by reference  in, or furnished in\nconnection  with the  preparation  of, the  Registration  Statement or the Proxy\nStatement\/Prospectus.\n\n               SECTION 3.14.  Restrictions  on Business  Activities.  Except for\nthis  Agreement,  to the best of  Parent's  knowledge,  there  is no  agreement,\njudgment,  injunction,  order  or  decree  binding  upon  Parent  or  any of its\nsubsidiaries  which has or would  reasonably  be  expected to have the effect of\nprohibiting or materially  impairing the conduct of business by Parent or any of\nits subsidiaries as currently conducted by Parent or such Subsidiary, except for\nany prohibition or impairment as would not reasonably be expected,  individually\nor in the aggregate, to have a Material Adverse Effect.\n\n               SECTION  3.15.  Title  to  Property.   Parent  and  each  of  its\nsubsidiaries  have good title to all of their real  properties and other assets,\nfree and clear of all liens,  charges and  encumbrances,  except liens for taxes\nnot yet due and payable and such liens or other  imperfections of title, if any,\nas do not materially detract from the value of or interfere with the present use\nof the  property  affected  thereby or which could not  reasonably  be expected,\nindividually or in the aggregate,  to have a Material Adverse Effect, and except\nfor liens which secure indebtedness reflected in the 1998 Balance Sheet; and, to\nParent's  knowledge,  all  leases  pursuant  to  which  Parent  or  any  of  its\nsubsidiaries  lease from other material amounts of real or personal property are\nin good standing, valid and effective in accordance with their respective terms,\nand there is not, to the  knowledge  of Parent,  under any of such  leases,  any\nexisting  material  default or event of default  (or event  which with notice or\nlapse of time, or both,  would  constitute a material  default) except where the\nlack of such good standing, validity and effectiveness, or the existence of such\ndefault or event of default would not reasonably be expected, individually or in\nthe aggregate, to have a Material Adverse Effect.\n\n\n                                      -32-\n\n\n\n\n               SECTION 3.16. Taxes.  Except as would not reasonably be expected,\nindividually or in the aggregate, to have a Material Adverse Effect:\n\n               (a) Parent and each of its subsidiaries has timely and accurately\nfiled, or caused to be timely and accurately filed, all material Tax Returns (as\nhereinafter  defined)  required  to be filed by it, and has paid,  collected  or\nwithheld,  or caused to be paid, collected or withheld,  all material amounts of\nTaxes (as hereinafter defined) required to be paid, collected or withheld, other\nthan such Taxes for which adequate  reserves in the September 1997 Balance Sheet\nhave been  established or which are being contested in good faith.  There are no\nmaterial claims or assessments pending against Parent or any of its subsidiaries\nfor any alleged deficiency in any Tax, there are no pending or threatened audits\nor investigations  for or relating to any liability in respect of any Taxes, and\nParent  has  not  been  notified  in  writing  of any  proposed  Tax  claims  or\nassessments  against Parent or any of its subsidiaries (other than in each case,\nclaims or assessments for which adequate  reserves in the September 1997 Balance\nSheet have been  established  or which are being  contested in good faith or are\nimmaterial in amount).  Neither Parent nor any of its  subsidiaries has executed\nany waivers or extensions of any applicable statute of limitations to assess any\nmaterial amount of Taxes. There are no outstanding  requests by Parent or any of\nits subsidiaries for any extension of time within which to file any material Tax\nReturn or within which to pay any  material  amounts of Taxes shown to be due on\nany Tax Return. To the best knowledge of Parent, there are no liens for material\namounts of Taxes on the assets of Parent or any of its  subsidiaries  except for\nstatutory liens for current Taxes not yet due and payable.\n\n               (b) Except as set forth in Section 3.16 of the Parent  Disclosure\nSchedule:  (i) Neither Parent nor any of its subsidiaries has ever been a member\nof an  affiliated  group within the meaning of Section 1504 of the Code or filed\nor been included in a combined,  consolidated or unitary Tax Return,  other than\nof Parent and its  subsidiaries;  (ii) other than with respect to Parent and its\nsubsidiaries,  neither Parent nor any of its subsidiaries is liable for Taxes of\nany other Person, or is currently under any contractual  obligation to indemnify\nany person with respect to Taxes (except for  customary  agreements to indemnify\nlenders or security holders in respect of taxes other than income taxes),  or is\na party to any tax  sharing  agreement  or any  other  agreement  providing  for\npayments  by Parent or any of its  subsidiaries  with  respect  to Taxes;  (iii)\nneither  Parent  nor any of its  subsidiaries  is a party to any joint  venture,\npartnership  or other  arrangement  or  contract  which  could be  treated  as a\npartnership for federal income tax purposes;  (iv) neither Parent nor any of its\nsubsidiaries  has  entered  into  any  sale  leaseback  or any  leveraged  lease\ntransaction  that fails to satisfy the  requirements of Revenue  Procedure 75-21\n(or  similar  provisions  of foreign  law);  (v)  neither  Parent nor any of its\nsubsidiaries  has  agreed or is  required,  as a result of a change in method of\naccounting or otherwise, to include any adjustment under Section 481 of the Code\n(or any  corresponding  provision  of state,  local or  foreign  law) in taxable\nincome;  (vi)  the  prices  for  any  property  or  services  (or for the use of\nproperty)  provided by Parent or any of its subsidiaries to any other subsidiary\nor to Parent have been arm's length prices,  determined using a method permitted\nby the Treasury  Regulations under Section 482 of the Code; (vii) neither Parent\nnor any of its  subsidiaries  is liable  with  respect to any  indebtedness  the\ninterest of which is not deductible for applicable  federal,  foreign,  state or\nlocal income tax purposes;  (viii) neither Parent nor any of its subsidiaries is\na \"consenting corporation\" under Section 341(f) of the Code or any corresponding\nprovision of state, local or foreign law; and (ix)\n\n\n                                      -33-\n\n\n\n\nnone of the assets owned by Parent or any of its  subsidiaries  is property that\nis  required  to be treated  as owned by any other  person  pursuant  to Section\n168(g)(8)  of the  Internal  Revenue  Code of 1954,  as  amended,  as in  effect\nimmediately  prior  to the  enactment  of the  Tax  Reform  Act of  1986,  or is\n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code.\n\n               SECTION 3.17.  Environmental  Matters. (a) Except as set forth in\nSection 3.17(a) to the Parent  Disclosure  Schedule or the Parent SEC Reports or\nas would not reasonably be expected, individually or in the aggregate, to have a\nMaterial  Adverse  Effect,  the  operations  and  properties  of Parent  and its\nsubsidiaries  are in material  compliance  with the  Environmental  Laws,  which\ncompliance  includes  the  possession  by  Parent  and its  subsidiaries  of all\nmaterial  permits and  governmental  authorizations  required  under  applicable\nEnvironmental  Laws,  and  material  compliance  with the terms  and  conditions\nthereof.\n\n               (b)  Except  as set  forth  in  Section  3.17(b)  of  the  Parent\nDisclosure  Schedule  or the Parent SEC  Reports or as would not  reasonably  be\nexpected,  individually or in the aggregate,  to have a Material Adverse Effect,\nthere  are  no  Environmental  Claims,   including  claims  based  on  \"arranger\nliability,\"  pending or, to the best  knowledge  of Parent,  threatened  against\nParent  or any of its  subsidiaries  or  against  any  person  or  entity  whose\nliability  for any  Environmental  Claim Parent or any of its  subsidiaries  has\nretained or assumed either contractually or by operation of law.\n\n               (c) There are no past or present actions, inactions,  activities,\ncircumstances, conditions, events or incidents, including the release, emission,\ndischarge,  presence or disposal of any Material of Environmental  Concern, that\nwould form the basis of any  Environmental  Claim  against  Parent or any of its\nsubsidiaries   or  against  any  person  or  entity  whose   liability  for  any\nEnvironmental  Claim Parent or any of its subsidiaries  have retained or assumed\neither  contractually  or by  operation  of law,  except for such  Environmental\nClaims that would not reasonably be expected,  individually or in the aggregate,\nto have a Material Adverse Effect.\n\n               (d)  Except  as set  forth  in  Section  3.17(d)  of  the  Parent\nDisclosure  Schedule or as would not reasonably be expected,  individually or in\nthe aggregate,  to have a Material  Adverse  Effect:  (i) no off-site  locations\nwhere Parent or any of its subsidiaries has stored, disposed or arranged for the\ndisposal of Materials of  Environmental  Concern has been listed on the National\nPriority List,  CERCLIS,  state  Superfund site list or state analog to CERCLIS,\nand Parent and its subsidiaries  have not been notified that either of them is a\npotentially   responsible  party  at  any  such  location;  (ii)  there  are  no\nunderground  storage tanks located on property  owned or leased by Parent or any\nof its subsidiaries; (iii) there is no asbestos containing material contained in\nor forming part of any building,  building component,  structure or office space\nowned,  leased or operated by Parent or any of its subsidiaries;  and (iv) there\nare no polychlorinated biphenyls (PCB's) or PCB-containing items contained in or\nforming  part of any  building,  building  component,  structure or office space\nowned, leased or operated by Parent or any of its subsidiaries.\n\n\n                                      -34-\n\n\n\n\n               SECTION 3.18.  Brokers.  No broker,  finder or investment  banker\n(other  than  Merrill,  Lynch,  Pierce,  Fenner &amp; Smith  Incorporated  (\"Merrill\nLynch\"),  the fees and  expenses  of whom will be paid by Parent) is entitled to\nany  brokerage,  finder's  or other fee or  commission  in  connection  with the\ntransactions  contemplated by this Agreement based upon  arrangements made by or\non behalf of the Company.\n\n               SECTION 3.19.  Intellectual  Property.  (a) Parent and\/or each of\nits subsidiaries owns, or is licensed or otherwise possesses legally enforceable\nrights  to use all  Parent  Intellectual  Property  Assets  that are used in the\nbusiness of Parent and its subsidiaries as currently  conducted without conflict\nwith  the  rights  of  others  except  as  would  not  reasonably  be  expected,\nindividually or in the aggregate,  to have a Material  Adverse  Effect.  As used\nherein,  \"Parent  Intellectual  Property  Assets\"  shall  mean the  Intellectual\nProperty Assets used or owned by the Parent or any of its subsidiaries.\n\n               (b)  Except  as  disclosed  in  Section  3.19(b)  of  the  Parent\nDisclosure  Schedule or as would not reasonably be expected,  individually or in\nthe aggregate,  to have a Material Adverse Effect, no claims with respect to the\nParent Intellectual Property Assets, or Third Party Intellectual Property Assets\nto the extent arising out of any use, reproduction or distribution of such Third\nParty  Intellectual  Property  Assets  by  or  through  Parent  or  any  of  its\nsubsidiaries,  are  currently  pending  or,  to the  knowledge  of  Parent,  are\nthreatened by any person.\n\n               (c)  Except  as set  forth  in  Section  3.19(c)  of  the  Parent\nDisclosure  Schedule  or the Parent SEC  Reports or as could not  reasonably  be\nexpected,  individually or in the aggregate,  to have a Material  Adverse Effect\neach patent,  patent  application,  trademark or service mark registration,  and\ntrademark or service mark  application  and copyright  registration or copyright\napplication of Parent and\/or each of its subsidiaries is valid and subsisting.\n\n               (d)  Except  as set  forth  in  Section  3.19(d)  of  the  Parent\nDisclosure Schedule,  to Parent's knowledge:  there is no material  unauthorized\nuse,  infringement or misappropriation of any of Parent's  Intellectual Property\nAssets by any third party, including any employee, former employee,  independent\ncontractor or consultant of Parent or any of its subsidiaries.\n\n               SECTION 3.20. Interested Party Transactions.  Except as set forth\nin Section  3.20 of the Parent  Disclosure  Schedule or the Parent SEC  Reports,\nsince the date of Parent's proxy statement dated February 20, 1998, no event has\noccurred  that would be required to be  reported  as a Certain  Relationship  or\nRelated  Transaction,  pursuant to Item 404 of Regulation S-K promulgated by the\nSEC.\n\n               SECTION 3.21.  Insurance.  Except as disclosed in Section 3.21 of\nthe Parent Disclosure Schedule or the Parent SEC Reports,  all material fire and\ncasualty,  general  liability,  business  interruption,  product  liability  and\nsprinkler and water damage insurance policies maintained by Parent or any of its\nsubsidiaries are with reputable  insurance  carriers,  provide full and adequate\ncoverage  for all  normal  risks  incident  to the  business  of Parent  and its\nsubsidiaries and their respective properties and assets and are in character and\namount\n\n\n                                      -35-\n\n\n\n\nappropriate  for the  businesses  conducted  by  Parent,  except  as  would  not\nreasonably be expected to have a Material Adverse Effect.\n\n               SECTION  3.22.  Product  Liability  and  Recalls.  (a)  Except as\ndisclosed in Section 3.22(a) of the Parent Disclosure Schedule or the Parent SEC\nReports, Parent is not aware of any claim, pending or threatened, against Parent\nor any of its  subsidiaries for injury to person or property of employees or any\nthird parties  suffered as a result of the sale of any product or performance of\nany service by Parent or any of its  subsidiaries,  including claims arising out\nof the  defective  or unsafe  nature of its  products or  services,  which would\nreasonably be expected,  individually  or in the  aggregate,  to have a Material\nAdverse Effect.\n\n               (b)  Except  as  disclosed  in  Section  3.22(b)  of  the  Parent\nDisclosure  Schedule or the Parent SEC  Reports,  there is no pending or, to the\nknowledge of Parent, overtly threatened,  recall or investigation of any product\nsold by Parent,  which recall or  investigation  would  reasonably  be expected,\nindividually or in the aggregate, to have a Material Adverse Effect.\n\n               SECTION 3.23.  Ownership of Merger Sub; No Prior Activities.  (a)\nMerger Sub is a direct,  wholly-owned subsidiary of Parent and was formed solely\nfor the purpose of engaging in the transactions contemplated by this Agreement.\n\n               (b) As of the date  hereof  and the  Effective  Time,  except for\nobligations  or liabilities  incurred in connection  with its  incorporation  or\norganization and the transactions  contemplated by this Agreement and except for\nthis Agreement and any other  agreements or  arrangements  contemplated  by this\nAgreement,  Merger  Sub  has  not  and  will  not  have  incurred,  directly  or\nindirectly,  through any subsidiary or affiliate, any obligations or liabilities\nor engaged in any business  activities of any type or kind whatsoever or entered\ninto any agreements or arrangements with any person.\n\n               SECTION 3.24.  Pooling Matters.  To Parent's  knowledge and based\nupon consultation with its independent  accountants,  Parent has provided to the\nCompany and its independent accountants all information concerning actions taken\nor agreed to be taken by Parent or any of its  affiliates  on or before the date\nof this  Agreement  that would  reasonably  be expected to adversely  affect the\nability of Parent to account for the business  combination to be effected by the\nMerger as a pooling of interests, and Parent has no knowledge that such business\ncombination cannot be accounted for in that manner. For purposes of this Section\n3.26, \"to Parent's  knowledge\"  means to the actual  knowledge of Parent's Chief\nExecutive Officer or Chief Financial Officer.\n\n               SECTION 3.25. Tax Matters. The representations,  statements,  and\ncovenants  set forth in  paragraph 2 through 25 of Exhibit B hereto are true and\ncorrect in all material respects.\n\n               SECTION  3.26.  DGCL  Section  203.  Other than by reason of this\nAgreement or the transactions  contemplated hereby, Parent is not an \"interested\nstockholder\" of the Company, as that term is defined in Section 203 of the DGCL.\n\n\n                                      -36-\n\n\n\n\n               SECTION 3.27 Accuracy of  Information.  Each of Parent and Merger\nSub  acknowledges  that none of the Company,  its  subsidiaries  or any of their\nrespective  directors,  officers,  employees,  affiliates,  agents,  advisors or\nrepresentatives makes any representation or warranty, either express or implied,\nas to the accuracy or completeness  of any of the  information  provided or made\navailable to Parent,  Merger Sub or their agents or  representatives  including,\nwithout  limitation,  including any estimations,  projections or other statement\nregarding future  performance,  except to the extent set forth in this Agreement\n(including  the  Company  Disclosure  Schedule  and  the  Supplemental   Company\nDisclosure Schedule).\n\n\n                                   ARTICLE IV\n\n                     CONDUCT OF BUSINESS PENDING THE MERGER\n\n\n               SECTION  4.01.  Conduct of Business  by the  Company  Pending the\nMerger.  During the period from the date of this Agreement and continuing  until\nthe earlier of the  termination  of this  Agreement or the Effective  Time,  the\nCompany  covenants  and agrees  that,  unless  Parent shall  otherwise  agree in\nwriting,  and  except as set forth in  Section  4.01 of the  Company  Disclosure\nSchedule,  the Company shall conduct its business and shall cause the businesses\nof  its  subsidiaries  to  be  conducted  only  in,  and  the  Company  and  its\nsubsidiaries  shall  not take any  action  except  in,  the  ordinary  course of\nbusiness and in a manner  consistent  with past practice;  and the Company shall\nuse reasonable commercial efforts to preserve  substantially intact the business\norganization of the Company and its subsidiaries, to keep available the services\nof the  present  officers,  employees  and  consultants  of the  Company and its\nsubsidiaries  and to preserve the present  relationships  of the Company and its\nsubsidiaries with customers,  suppliers and other persons with which the Company\nor  any  of its  subsidiaries  has  significant  business  relations.  By way of\namplification  and not  limitation,  except as  contemplated  by this Agreement,\nneither the Company nor any of its  subsidiaries  shall,  during the period from\nthe date of this Agreement and continuing  until the earlier of the  termination\nof this Agreement or the Effective Time, and except as set forth in Section 4.01\nof the Company Disclosure Schedule, directly or indirectly do, or propose to do,\nany of the following without the prior written consent of Parent:\n\n                (a) amend or  otherwise  change  the  Company's  Certificate  of\n        Incorporation or By-Laws;\n\n                (b) issue,  sell, pledge,  dispose of or encumber,  or authorize\n        the issuance, sale, pledge, disposition or encumbrance of, any shares of\n        capital  stock  of any  class,  or any  options,  warrants,  convertible\n        securities  or other rights of any kind to acquire any shares of capital\n        stock, or any other ownership interest  (including,  without limitation,\n        any  phantom  interest)  in the  Company,  any of  its  subsidiaries  or\n        affiliates  (except for the  issuance of shares of Company  Common Stock\n        issuable pursuant to Stock Options under the Company Stock Option Plans,\n        which options are outstanding on the date hereof);\n\n\n                                      -37-\n\n\n\n\n                (c) sell,  pledge,  dispose  of or  encumber  any  assets of the\n        Company or any of its  subsidiaries  (except  for (i) sales of assets in\n        the  ordinary  course of business and in a manner  consistent  with past\n        practice,  (ii) dispositions of obsolete or worthless assets,  and (iii)\n        sales  of  immaterial   assets  not  in  excess  of  $2,000,000  in  the\n        aggregate);\n\n                (d) (i)  declare,  set aside,  make or pay any dividend or other\n        distribution  (whether in cash,  stock or  property  or any  combination\n        thereof)  in respect of any of its capital  stock,  except that a wholly\n        owned  subsidiary  of the  Company may declare and pay a dividend to its\n        parent,  and except that the Company may declare and pay quarterly  cash\n        dividends of $0.04 per share consistent with past practice,  (ii) split,\n        combine or reclassify  any of its capital stock or issue or authorize or\n        propose the issuance of any other  securities  in respect of, in lieu of\n        or in  substitution  for shares of its capital stock, or (iii) amend the\n        terms or change the period of exercisability  of, purchase,  repurchase,\n        redeem or  otherwise  acquire,  or permit any  subsidiary  to  purchase,\n        repurchase,  redeem or otherwise  acquire,  any of its securities or any\n        securities of its subsidiaries, including, without limitation, shares of\n        Company  Common  Stock or any  option,  warrant  or right,  directly  or\n        indirectly,  to acquire shares of Company Common Stock, or propose to do\n        any of the foregoing;\n\n                (e) (i) acquire (by merger,  consolidation,  or  acquisition  of\n        stock  or  assets)  any  corporation,   partnership  or  other  business\n        organization  or  division  thereof  other than those  listed on Section\n        4.01(e) of the Company Disclosure Schedule;  (ii) incur any indebtedness\n        for borrowed  money,  except for  borrowings and  reborrowing  under the\n        Company's  existing credit  facilities or other borrowings not in excess\n        of $5,000,000  in the aggregate or issue any debt  securities or assume,\n        guarantee   (other  than  guarantees  of  bank  debt  of  the  Company's\n        subsidiaries entered into in the ordinary course of business) or endorse\n        or otherwise as an accommodation become responsible for, the obligations\n        of any person,  or make any loans or  advances,  except in the  ordinary\n        course of business consistent with past practice; or (iii) authorize any\n        capital  expenditures  or  purchases  of fixed  assets which are, in the\n        aggregate,  in excess of 110% of the amount thereof  provided for in the\n        Company's  current  business plan, a copy of which has  heretofore  been\n        furnished  to  Parent;  or (iv)  enter  into  or  materially  amend  any\n        contract,  agreement,  commitment  or  arrangement  to effect any of the\n        matters prohibited by this Section 4.01(e);\n\n                (f) increase the  compensation  payable or to become  payable to\n        its officers or  employees,  except for  increases in salary or wages of\n        employees of the Company or its  subsidiaries  in  accordance  with past\n        practices,  or grant any  severance or  termination  pay (except to make\n        payments  required  to be made under  obligations  existing  on the date\n        hereof in accordance  with the terms of such  obligations)  to, or enter\n        into or modify  any  employment  or  severance  agreement,  in excess of\n        $100,000 with, any director, officer or other employee of the Company or\n        any of its subsidiaries,  or establish,  adopt,  enter into or amend any\n        collective  bargaining  agreement,  Employee Plan (within the meaning of\n        Section 2.11 of this Agreement),  trust, fund, policy or arrangement for\n        the benefit of any current or former directors, officers or employees or\n        any of their beneficiaries, except, in each case, as may be\n\n\n                                      -38-\n\n\n\n\n        required  by law or as would not  result in a material  increase  in the\n        cost of maintaining such collective bargaining agreement, Employee Plan,\n        trust, fund, policy or arrangement.\n\n                (g) take any action to change accounting  policies or procedures\n        (including,  without  limitation,  procedures  with  respect  to revenue\n        recognition,  payments of accounts  payable and  collection  of accounts\n        receivable)  except as required by a change in GAAP occurring  after the\n        date hereof;\n\n                (h)  make any  material  tax  election  inconsistent  with  past\n        practice or settle or compromise any material federal,  state,  local or\n        foreign  tax  liability,  except to the  extent  the  amount of any such\n        settlement has been reserved for in the financial  statements  contained\n        in the Company SEC Reports filed prior to the date of this  Agreement or\n        other settlements not in excess of $2,000,000 in the aggregate;\n\n                (i)  pay,  discharge  or  satisfy  any  claims,  liabilities  or\n        obligations (absolute,  accrued,  asserted or unasserted,  contingent or\n        otherwise)  in excess of  $5,000,000  in the  aggregate,  other than the\n        payment,  discharge or  satisfaction  in the ordinary course of business\n        and consistent  with past practice of liabilities  reflected or reserved\n        against in the financial statements contained in the Company SEC Reports\n        filed prior to the date of this  Agreement  or incurred in the  ordinary\n        course of business and consistent with past practice; or\n\n                (j) take,  or agree in writing or otherwise to take,  any of the\n        actions described in Sections 4.01(a) through (i) above.\n\n               SECTION  4.02.  No  Solicitation.  (a)  The  Company  shall  not,\ndirectly or indirectly, through any officer, director, employee,  representative\nor agent of the Company or any of its  subsidiaries,  solicit or  encourage  the\ninitiation  of  any  inquiries  or  proposals  regarding  any  merger,  sale  of\nsubstantial   assets,  sale  of  shares  of  capital  stock  (including  without\nlimitation  by way of a tender  offer) or  similar  transactions  involving  the\nCompany or any  subsidiaries  of the Company (any of the foregoing  inquiries or\nproposals  being  referred  to herein  as an  \"Acquisition  Proposal\").  Nothing\ncontained in this Agreement  shall prevent the Board of Directors of the Company\nfrom  (i)   considering,   negotiating,   approving  and   recommending  to  the\nshareholders  of the Company a bona fide  Acquisition  Proposal not solicited in\nviolation of this  Agreement,  (ii) taking and disclosing to its  shareholders a\nposition  with  respect to any tender or  exchange  offer  commenced  by a third\nparty, or amending or withdrawing such position,  as contemplated by Rules 14d-9\nand  14e-2  under  the  Exchange  Act,   (iii)  making  any  disclosure  to  its\nshareholders  or (iv)  furnishing  information to a third party which has made a\nbona fide Acquisition  Proposal,  provided that such third party has executed an\nagreement with confidentiality provisions substantially similar to those then in\neffect between the Company and Parent; provided that, as to each of clauses (i),\n(ii),  (iii)  and  (iv),  the  Board  of  Directors  of the  Company  reasonably\ndetermines in good faith (after due consultation with independent counsel, which\nmay be Skadden, Arps, Slate, Meagher &amp; Flom LLP (\"Skadden, Arps\")) that it is or\nis reasonably likely to be required to do so in order to discharge  properly its\nfiduciary duties.\n\n\n                                      -39-\n\n\n\n\n               (b) The Company shall immediately  notify Parent after receipt of\nany Acquisition Proposal, or any modification of or amendment to any Acquisition\nProposal,  or any request for nonpublic  information  relating to the Company or\nany of its subsidiaries in connection with an Acquisition Proposal or for access\nto the  properties,  books or records of the  Company or any  subsidiary  by any\nperson or entity  that  informs  the Board of  Directors  of the Company or such\nsubsidiary that it is considering making, or has made, an Acquisition  Proposal.\nSuch notice to Parent shall be made orally and in writing, and, unless the Board\nof  Directors  of the Company  reasonably  determines  in good faith  (after due\nconsultation with independent  counsel) that it is or is reasonably likely to be\ninconsistent  with its  fiduciary  duties,  shall  indicate  the identity of the\nperson  making the  Acquisition  Proposal or  intending  to make an  Acquisition\nProposal or requesting non-public information or access to the books and records\nof  Parent,  the  terms of any such  Acquisition  Proposal  or  modification  or\namendment to an  Acquisition  Proposal,  and whether the Company is providing or\nintends to provide the person  making the  Acquisition  Proposal  with access to\ninformation concerning the Company as provided in Section 4.02(c).\n\n               (c) Anything to the contrary in this Section or elsewhere in this\nAgreement  notwithstanding,  the Board of Directors of the Company shall not (i)\nwithdraw or modify,  or propose to withdraw  or modify,  in a manner  adverse to\nParent, the approval or recommendation by such Board of Directors of the matters\nset forth in Section 5.02,  (ii) approve or recommend,  or propose to approve or\nrecommend, any Acquisition Proposal or (iii) cause the Company to enter into any\nagreement  with respect to any  Acquisition  Proposal,  except (x) to the extent\nthat such Board of  Directors  reasonably  determines  in good faith  (after due\nconsultation with independent  counsel) that it is or is reasonably likely to be\nrequired  to cause the Company to act as  provided  in this  Section  4.02(d) in\norder for the Board of Directors to discharge  properly its fiduciary duties and\n(y) with respect to the approval or recommendation  of any Acquisition  Proposal\nor entering into any agreement with respect to any Acquisition  Proposal,  after\nthe third  business  day  following  Parent's  receipt of written  notice of the\ninformation with respect to such Acquisition Proposal,  and, if applicable,  the\nsecond business day after Parent's  receipt of written notice of the information\nwith respect to all material  amendments or modifications  thereto, in each case\nas contemplated by Section 4.02(b) above.\n\n               (d)  The  Company  shall   immediately  cease  and  cause  to  be\nterminated any existing discussions or negotiations with any persons (other than\nParent  and  Merger  Sub)  conducted  heretofore  with  respect  to  any  of the\nforegoing.  The  Company  agrees  not  to  release  any  third  party  from  the\nconfidentiality provisions of any confidentiality agreement to which the Company\nis a party.\n\n               (e) The Company  shall ensure that the  officers,  directors  and\nemployees of the Company and its subsidiaries and any investment banker or other\nadvisor or representative  retained by the Company are aware of the restrictions\ndescribed in this Section 4.02.\n\n               SECTION 4.03.  Conduct of Business by Parent  Pending the Merger.\nDuring the  period  from the date of this  Agreement  and  continuing  until the\nearlier of the  termination  of this  Agreement or the  Effective  Time,  Parent\ncovenants  and  agrees  that,  except  as set  forth in  Section  4.03 of Parent\nDisclosure Schedule or unless the Company shall otherwise\n\n\n                                      -40-\n\n\n\nagree in writing, Parent shall conduct its business, and cause the businesses of\nits  subsidiaries  to be  conducted,  in the  ordinary  course of  business  and\nconsistent  with  past  practice,  other  than  actions  taken by  Parent or its\nsubsidiaries  in  contemplation  of  the  Merger,  and  shall  not  directly  or\nindirectly do, or propose to do, any of the following  without the prior written\nconsent of the Company:\n\n                (a) amend or otherwise change Parent's Memorandum of Association\n        or Bye-Laws;\n\n                (b)  acquire or agree to  acquire,  by merging or  consolidating\n        with, by purchasing an equity interest in or a portion of the assets of,\n        or by any other manner,  any business or any  corporation,  partnership,\n        association  or other  business  organization  or division  thereof,  or\n        otherwise  acquire or agree to acquire  any assets of any other  person,\n        which,  in  any  such  case,  would  materially  delay  or  prevent  the\n        consummation  of the Merger and the other  transactions  contemplated by\n        this Agreement;\n\n                (c)  declare,  set  aside,  make or pay any  dividend  or  other\n        distribution  (whether in cash,  stock or  property  or any  combination\n        thereof)  in respect of any of its capital  stock,  except that a wholly\n        owned subsidiary of Parent may declare and pay a dividend to its parent,\n        and except that Parent may declare and pay quarterly  cash  dividends of\n        $0.025 per share consistent with past practice; or\n\n                (d) take or agree in  writing  or  otherwise  to take any action\n        which  would make any of the  representations  or  warranties  of Parent\n        contained in this  Agreement  untrue or incorrect or prevent Parent from\n        performing or cause Parent not to perform its covenants hereunder.\n\n\n                                    ARTICLE V\n\n                              ADDITIONAL AGREEMENTS\n\n\n               SECTION 5.01. Proxy Statement\/Prospectus; Registration Statement.\nAs promptly as practicable  after the execution of this  Agreement,  the Company\nshall  prepare and file with the SEC  preliminary  proxy  materials  which shall\nconstitute  the Proxy  Statement\/Prospectus.  As promptly as  practicable  after\ncomments  are  received  from the SEC  thereon and after the  furnishing  by the\nCompany and Parent of all  information  required to be  contained  therein,  the\nCompany  and Parent  shall file with the SEC a combined  proxy and  Registration\nStatement on Form S-4 (or on such other form as shall be  appropriate)  relating\nto the adoption of this Agreement and approval of the transactions  contemplated\nhereby by the shareholders of the Company pursuant to this Agreement,  and shall\nuse all  reasonable  efforts  to cause  the  Registration  Statement  to  become\neffective as soon  thereafter  as  practicable.  The Proxy  Statement\/Prospectus\nshall  include the  recommendation  of the Board of  Directors of the Company in\nfavor of the Merger,  subject to the Company's  rights pursuant to last sentence\nof Section 5.02.\n\n\n                                      -41-\n\n\n\n\n               SECTION 5.02.  Company  Shareholders  Meeting.  The Company shall\ncall the Company Shareholders Meeting as promptly as practicable for the purpose\nof  voting  upon the  approval  of the  Merger,  and the  Company  shall use its\nreasonable  best  efforts to hold the  Company  Shareholders  Meeting as soon as\npracticable  after  the  date  on  which  the  Registration   Statement  becomes\neffective.  Subject  to its  rights  pursuant  to the last  sentence  of Section\n4.02(a),  the Company  shall solicit from its  shareholders  proxies in favor of\napproval of the Merger and this Agreement,  and shall take all other  reasonable\naction  necessary or advisable to secure the vote or consent of  shareholders in\nfavor of such approval.\n\n               SECTION  5.03.  Access  to  Information;   Confidentiality.  Upon\nreasonable  notice and  subject to  restrictions  contained  in  confidentiality\nagreements  to which  such  party is subject  (from  which such party  shall use\nreasonable efforts to be released), the Company and Parent shall each (and shall\ncause  each  of  their  subsidiaries  to)  afford  to the  officers,  employees,\naccountants,  counsel and other representatives of the other, reasonable access,\nduring the period prior to the  Effective  Time, to all its  properties,  books,\ncontracts,  commitments  and records and,  during such  period,  the Company and\nParent  each shall  (and shall  cause  each of their  subsidiaries  to)  furnish\npromptly to the other all  information  concerning its business,  properties and\npersonnel  as such  other  party may  reasonably  request,  and each  shall make\navailable  to  the  other  the  appropriate  individuals  (including  attorneys,\naccountants  and other  professionals)  for discussion of the other's  business,\nproperties and personnel as either Parent or the Company may reasonably request.\nEach party shall keep such information confidential in accordance with the terms\nof the  confidentiality  letter,  dated  April  9,  1998  (the  \"Confidentiality\nLetter\"), between Parent and the Company.\n\n               SECTION 5.04. Consents;  Approvals.  The Company and Parent shall\neach use  their  reasonable  best  efforts  to  obtain  all  consents,  waivers,\napprovals,  authorizations or orders (including,  without limitation, all United\nStates and foreign  governmental and regulatory rulings and approvals),  and the\nCompany and Parent shall make all filings (including,  without  limitation,  all\nfilings with United  States and foreign  governmental  or  regulatory  agencies)\nrequired in connection  with the  authorization,  execution and delivery of this\nAgreement  by the  Company  and  Parent  and  the  consummation  by  them of the\ntransactions  contemplated  hereby.  The  Company and Parent  shall  furnish all\ninformation  required to be included in the Proxy  Statement\/Prospectus  and the\nRegistration  Statement,  or for any  application  or  other  filing  to be made\npursuant  to  the  rules  and  regulations  of  any  United  States  or  foreign\ngovernmental  body in  connection  with the  transactions  contemplated  by this\nAgreement.\n\n               SECTION  5.05.  Agreements  with Respect to  Affiliates.  (a) The\nCompany shall deliver to Parent,  prior to the date the  Registration  Statement\nbecomes  effective under the Securities  Act, a letter (the \" Company  Affiliate\nLetter\")   identifying  all  persons  who  are,  at  the  time  of  the  Company\nShareholders Meeting, anticipated to be \"affiliates\" of the Company for purposes\nof Rule 145 under the Securities Act (\"Rule 145\"),  or the rules and regulations\nof the SEC  relating to pooling of  interests  accounting  treatment  for merger\ntransactions  (the \"Pooling  Rules\").  The Company shall use its reasonable best\nefforts  to  cause  each  person  who is  identified  as an  \"affiliate\"  in the\nAffiliate Letter to deliver to Parent, no less than 35 days prior to the date of\nthe Company Shareholders Meeting a written\n\n\n                                      -42-\n\n\n\n\nagreement  (an  \"Affiliate   Agreement\")  in  connection  with  restrictions  on\naffiliates under Rule 145 and pooling of interests accounting treatment, in form\nmutually agreeable to the Company and Parent.\n\n               (b) Parent shall  deliver to the  Company,  prior to the date the\nRegistration Statement becomes effective under the Securities Act, a letter (the\n\"Parent Affiliate  Letter\")  identifying all persons who are, at the time of the\nClosing,  anticipated to be  \"affiliates\"  of Parent for purposes of the Pooling\nRules.  Parent shall use its reasonable best efforts to cause each person who is\nidentified  as an  \"affiliate\"  in the  Parent  Affiliate  Letter to  deliver to\nParent, no less than 35 days prior to the date of Closing a written agreement in\nconnection with restrictions on affiliates under pooling of interests accounting\ntreatment, in form mutually agreeable to the Company and Parent.\n\n               SECTION 5.06.  Indemnification and Insurance. (a) The By-Laws and\nCertificate  of  Incorporation  of the Surviving  Corporation  shall contain the\nprovisions  with  respect  to  indemnification  set  forth  in the  By-Laws  and\nCertificate  of  Incorporation  of the Company,  which  provisions  shall not be\namended,  repealed  or  otherwise  modified  for a period of six years  from the\nEffective Time in any manner that would adversely  affect the rights  thereunder\nas of  the  Effective  Time  of  individuals  who  at the  Effective  Time  were\ndirectors,   officers,   employees  or  agents  of  the  Company,   unless  such\nmodification is required after the Effective Time by law.\n\n               (b)  The  Surviving  Corporation  shall,  to the  fullest  extent\npermitted under applicable law or under the Surviving Corporation's  Certificate\nof  Incorporation  or By-Laws,  indemnify  and hold  harmless,  each present and\nformer  director,  officer or employee of the Company or any of its subsidiaries\n(collectively,   the  \"Indemnified  Parties\")  against  any  costs  or  expenses\n(including  attorneys'  fees),   judgments,   fines,  losses,  claims,  damages,\nliabilities and amounts paid in settlement in connection with any claim, action,\nsuit, proceeding or investigation,  whether civil,  criminal,  administrative or\ninvestigative, (x) arising out of or pertaining to the transactions contemplated\nby this  Agreement  or (y)  otherwise  with  respect  to any  acts or  omissions\noccurring at or prior to the  Effective  Time, to the same extent as provided in\nthe Company's Certificate of Incorporation or By-Laws or any applicable contract\nor agreement  as in effect on the date hereof,  in each case for a period of six\nyears  after the date  hereof.  In the event of any such  claim,  action,  suit,\nproceeding  or  investigation  (whether  arising  before or after the  Effective\nTime), (i) any counsel retained by the Indemnified  Parties for any period after\nthe  Effective   Time  shall  be  reasonably   satisfactory   to  the  Surviving\nCorporation,  (ii) after the Effective Time, the Surviving Corporation shall pay\nthe  reasonable  fees and expenses of such counsel,  promptly  after  statements\ntherefor  are  received,  (iii) any written  determination  made by such counsel\nshall,  in the first  instance  and subject to any contrary  determination  by a\ncourt of competent  jurisdiction,  be presumptively  binding on the parties with\nrespect to whether an Indemnified Party's conduct complies with the standards of\napplicable law, the Company's  Certificate of Incorporation  or By-Laws,  or any\nsuch applicable contract or agreement,  and (iv) the Surviving  Corporation will\ncooperate  in the  defense  of any  such  matter;  provided,  however,  that the\nSurviving  Corporation  shall not be liable for any settlement  effected without\nits written  consent (which  consent shall not be  unreasonably  withheld);  and\nprovided,   further,   that,   in  the  event  that  any  claim  or  claims  for\nindemnification are asserted or made within\n\n\n                                      -43-\n\n\n\n\nsuch six-year period, all rights to indemnification in respect of any such claim\nor claims shall continue until the  disposition of any and all such claims.  The\nIndemnified Parties as a group may retain only one law firm to represent them in\neach applicable  jurisdiction with respect to any single action unless there is,\nunder  applicable   standards  of  professional   conduct,  a  conflict  on  any\nsignificant issue between the positions of any two or more Indemnified  Parties,\nin which  case each  Indemnified  Person  with  respect  to whom such a conflict\nexists  (or  group of such  Indemnified  Persons  who  among  them  have no such\nconflict) may retain one separate law firm in each applicable jurisdiction.\n\n               (c) The  Surviving  Corporation  shall  honor and  fulfill in all\nrespects the obligations of the Company pursuant to  indemnification  agreements\nand employment  agreements  (the employee  parties under such  agreements  being\nreferred  to as the  \"Officer  Employees\")  with  the  Company's  directors  and\nofficers existing at or before the Effective Time.\n\n               (d) In  addition,  Parent will  provide,  or cause the  Surviving\nCorporation  to  provide,  for a period  of not less  than six  years  after the\nEffective  Time, the Company's  current  directors and officers an insurance and\nindemnification  policy that provides  coverage for events occurring at or prior\nto the Effective Time (the \"D&amp;O  Insurance\")  that is no less favorable than the\nexisting  policy  or,  if  substantially   equivalent   insurance   coverage  is\nunavailable, the best available coverage; provided, however, that Parent and the\nSurviving Corporation shall not be required to pay an annual premium for the D&amp;O\nInsurance in excess of 200% of the annual premium  currently paid by the Company\nfor such  insurance,  but in such case shall  purchase as much such  coverage as\npossible for such amount.\n\n               (e)  From  and   after   the   Effective   Time,   Parent   shall\nunconditionally  guarantee  the timely  payment  of all funds  owing by, and the\ntimely performance of all other obligations of, the Surviving  Corporation under\nthis Section.\n\n               (f) This Section shall survive the  consummation of the Merger at\nthe  Effective  Time,  is  intended  to  benefit  the  Company,   the  Surviving\nCorporation and the Indemnified Parties,  shall be binding on all successors and\nassigns of the Surviving Corporation and shall be enforceable by the Indemnified\nParties.\n\n               SECTION 5.07.  Notification of Certain Matters. The Company shall\ngive  prompt  notice to Parent,  and  Parent  shall  give  prompt  notice to the\nCompany,  of (i) the occurrence or  nonoccurrence of any event the occurrence or\nnonoccurrence of which would be likely to cause any  representation  or warranty\ncontained in this Agreement to be materially  untrue or inaccurate,  or (ii) any\nfailure of the Company,  Parent or Merger Sub, as the case may be, materially to\ncomply with or satisfy any covenant,  condition or agreement to be complied with\nor satisfied by it hereunder; provided, however, that the delivery of any notice\npursuant  to this  Section  shall not limit or  otherwise  affect  the  remedies\navailable  hereunder to the party  receiving such notice;  and provided  further\nthat  failure to give such  notice  shall not be treated as a breach of covenant\nfor the purposes of Sections  6.02(b) or 6.03(b) unless the failure to give such\nnotice results in material prejudice to the other party.\n\n\n                                      -44-\n\n\n\n\n               SECTION 5.08.  Further Action\/Tax  Treatment.  Upon the terms and\nsubject to the  conditions  hereof,  each of the  parties  hereto  shall use all\nreasonable  efforts to take,  or cause to be taken,  all  actions  and to do, or\ncause to be done, all other things necessary,  proper or advisable to consummate\nand make effective as promptly as practicable the  transactions  contemplated by\nthis Agreement, to obtain in a timely manner all necessary waivers, consents and\napprovals and to effect all necessary  registrations and filings,  and otherwise\nto satisfy or cause to be satisfied all conditions  precedent to its obligations\nunder this Agreement. The foregoing covenant shall not include any obligation by\nParent to agree to divest, abandon,  license or take similar action with respect\nto any assets  (tangible or intangible)  of Parent or the Company,  except as to\nany line of business of the Company and its  subsidiaries  which accounts for no\nmore than 10% of the total revenues of the Company and its subsidiaries taken as\na whole,  or any line of business of Parent which  accounts for no more than 10%\nof the total revenues of Parent's  Disposable and Specialty Products Group. Each\nof Parent,  Merger Sub and the Company shall use its reasonable  best efforts to\ncause the Merger to qualify, and will not (both before and after consummation of\nthe Merger) take any actions, or fail to take any action, which could reasonably\nbe expected to prevent the Merger from qualifying as a reorganization  under the\nprovisions  of Section 368 of the Code that is not subject to Section  367(a)(1)\nof the Code pursuant to Treasury Regulation Section  1.367(a)-(3)(c) (other than\nwith  respect  to  Company  shareholders  who  are or  will  be  \"5%  transferee\nshareholders\"    within   the   meaning   of   Treasury    Regulation    Section\n1.367(a)-3(c)(5)(ii)). Parent shall report the Merger for income tax purposes as\na reorganization within the meaning of Section 368 of the Code.\n\n               SECTION 5.09. Public Announcements.  Parent and the Company shall\nconsult  with each other  before  issuing any press  release with respect to the\nMerger or this  Agreement and shall not issue any such press release or make any\nsuch public statement without the prior consent of the other party,  which shall\nnot be unreasonably withheld;  provided,  however, that a party may, without the\nprior  consent of the other party,  issue such press release or make such public\nstatement  as may upon the advice of counsel be required by law or the rules and\nregulations of the NYSE, if it has used all  reasonable  efforts to consult with\nthe other party.\n\n               SECTION 5.10. Listing of Parent Shares. Parent shall use its best\nefforts  to cause the Parent  Common  Shares to be issued in the Merger and upon\nexercise of the Adjusted Options to be listed, upon official notice of issuance,\non the NYSE prior to the Effective Time.\n\n               SECTION  5.11.  Conveyance  Taxes.  Parent and the Company  shall\ncooperate   in  the   preparation,   execution   and  filing  of  all   returns,\nquestionnaires,  applications,  or other  documents  regarding any real property\ntransfer or gains,  sales, use, transfer,  value added, stock transfer and stamp\ntaxes,  any transfer,  recording,  registration  and other fees, and any similar\ntaxes which become  payable in  connection  with the  transactions  contemplated\nhereby that are  required or  permitted  to be filed on or before the  Effective\nTime and the Company shall be responsible  for the payment of all such taxes and\nfees.\n\n               SECTION 5.12.  Option Plans and  Benefits,  etc. (a) Prior to the\nEffective  Time,  the Parties to this  Agreement  shall take all such actions as\nshall be necessary to\n\n\n                                      -45-\n\n\n\n\neffectuate the provisions of Section 1.06(c). The Company shall take such action\nas is  necessary to cause the ending date of the then  current  offering  period\nunder the Company Stock  Purchase Plans to be prior to the Effective Time and to\nterminate such plans as of the Effective Time.\n\n               (b) The Company shall use its best efforts to obtain prior to the\nEffective Time an  acknowledgment  from each former PAS  stockholder  who may be\nentitled  to  receive  shares  of  Company  Common  Stock  pursuant  to the  PAS\nObligations,  that from and after the Effective  Time Tyco Common Shares will be\nissued in lieu of shares of Company  Common Stock  issuable  pursuant to the PAS\nObligations, as provided in Section 1.06(c)(2) of this Agreement.\n\n               (c)  Parent and Sub agree  that,  effective  as of the  Effective\nTime,   Parent  shall,  or  shall  cause  the  Surviving   Corporation  and  its\nsubsidiaries and successors to, provide those persons who,  immediately prior to\nthe Effective Time, were employees of the Company or its subsidiaries (\"Retained\nEmployees\")  with  employee  welfare and  retirement  plans and  programs  which\nprovide  benefits  that are, in the  aggregate,  substantially  similar to those\nprovided to such Retained Employees  immediately prior to the date hereof.  With\nrespect to such benefits,  (i) service accrued by such Retained Employees during\nemployment  with the Company and its  subsidiaries  prior to the Effective  Time\nshall be recognized for all purposes,  except to the extent necessary to prevent\nduplication of benefits, (ii) any and all pre-existing condition limitations (to\nthe extent such limitations did not apply to a pre-existing  condition under the\napplicable Employee Plan (as defined in Section 2.11(a)) and eligibility waiting\nperiods  under any  group  health  plan  shall be waived  with  respect  to such\nRetained Employees and their eligible  dependents,  and (iii) Retained Employees\nshall be given  credit for amounts  paid under an Employee  Plan during the same\nperiod for  purposes  of applying  deductibles,  co-payments  and  out-of-pocket\nmaximums as though such amounts had been paid in  accordance  with the terms and\nconditions  of the employee  welfare plans  maintained by Parent,  the Surviving\nCorporation or their subsidiaries.\n\n               SECTION 5.13.  Accountant's  Letters. Upon reasonable notice from\nthe other,  the Company  shall use its best efforts to cause  Deloitte &amp; Touche,\nLLP to deliver to Parent, and Parent shall use its best efforts to cause Coopers\n&amp; Lybrand to deliver  to the  Company,  a letter  covering  such  matters as are\nreasonably  requested by Parent or the  Company,  as the case may be, and as are\ncustomarily addressed in accountant's \"comfort\" letters.\n\n               SECTION 5.14.  Pooling Accounting  Treatment.  (a) Parent and the\nCompany  each  agrees to use its best  efforts not to take any action that would\nreasonably be expected to adversely  affect the ability of Parent to account for\nthe business combination to be effected by the Merger as a pooling of interests,\nand  Parent and the  Company  each  agrees to use its best  efforts to take such\naction as may be reasonably required to negate the impact of any past actions by\nParent,  the Company or their  respective  affiliates  which would reasonably be\nexpected  to  adversely  impact  the  ability of Parent to treat the Merger as a\npooling  of  interests.  The  taking  by  Parent or the  Company  of any  action\nprohibited by the previous sentence,  or the failure of Parent or the Company to\nuse its best efforts to take any\n\n\n                                      -46-\n\n\n\n\naction  required  by the  previous  sentence,  if the  Merger  is not able to be\naccounted  for as a pooling of  interests  because of such  action or failure to\ntake action,  shall  constitute a breach of this Agreement by such party for the\npurposes of Section 7.01(i).\n\n               (b)  Parent  shall use its best  efforts  to obtain an opinion of\nCooper &amp; Lybrand, independent public accountants, to the effect that the Merger,\nto the best of their  knowledge  after due  inquiry  qualifies  for  pooling  of\ninterest  accounting  treatment if consummated in accordance with this Agreement\nand the  Company  shall use its best  efforts to obtain an opinion of Deloitte &amp; Touche, independent certified public accountants, to the effect that the Merger,\nto the best of their  knowledge,  after due  inquiry,  qualifies  for pooling of\ninterests accounting treatment if consummated in accordance with this Agreement.\n\n               SECTION 5.15.  Connecticut Transfer Act. The Company shall comply\nwith all applicable  provisions and  requirements  set forth in the  Connecticut\nTransfer  Act,  Conn.  Gen.  Stat.  ss.22a-134  et. seq., as amended by Pub. Act\n95-183,  in respect of the Merger,  required  to be  complied  with prior to the\nEffective Time, including, without limitation,  making all required filings with\nthe Connecticut  Department of Environmental  Protection and all  investigations\nrequired to be made in respect thereof.\n\n               SECTION 5.16. Director Appointment. In the event that there shall\nbe a vacancy in the Board of Directors of Parent  occurring  after the Effective\nTime and prior to the next annual  general  meeting of  shareholders  of Parent,\nParent  shall  take  all  necessary  action,  subject  to  applicable  fiduciary\nobligations  of Parent's  Board of Directors,  to appoint Leon C. Hirsch to fill\nsuch vacancy.  In the event that no such vacancy shall occur,  Parent shall take\nall necessary action,  subject to applicable  fiduciary  obligations of Parent's\nBoard of Directors,  to nominate Mr. Hirsch for election as a director of Parent\nat the next annual general meeting of shareholders of Parent occurring after the\nEffective Time.\n\n\n                                   ARTICLE VI\n\n                            CONDITIONS TO THE MERGER\n\n\n               SECTION  6.01.  Conditions  to Obligation of Each Party to Effect\nthe Merger. The respective  obligations of each party to effect the Merger shall\nbe  subject  to the  satisfaction  at or  prior  to the  Effective  Time  of the\nfollowing conditions:\n\n               (a) Effectiveness of the Registration Statement. The Registration\n        Statement  shall  have  been  declared  effective  by the SEC  under the\n        Securities  Act.  No stop  order  suspending  the  effectiveness  of the\n        Registration  Statement  shall  have  been  issued  by  the  SEC  and no\n        proceedings for that purpose and no similar proceeding in respect of the\n        Proxy  Statement\/Prospectus  shall have been  initiated or threatened by\n        the SEC;\n\n               (b)  Shareholder  Approval.  This  Agreement and the Merger shall\n        have been  approved by the  requisite  vote of the  shareholders  of the\n        Company;\n\n\n                                      -47-\n\n\n\n\n               (c) Antitrust. All waiting periods applicable to the consummation\n        of the Merger under the HSR Act shall have  expired or been  terminated,\n        and all clearances  and approvals  required to be obtained in respect of\n        the Merger prior to the Effective  Time under any Foreign  Monopoly Laws\n        shall have been obtained.\n\n               (d) Governmental  Actions.  There shall not have been instituted,\n        pending or threatened any action or proceeding (or any  investigation or\n        other inquiry that might result in such an action or  proceeding) by any\n        governmental  authority or administrative agency before any governmental\n        authority,  administrative  agency or court of  competent  jurisdiction,\n        domestic or foreign,  nor shall there be in effect any judgment,  decree\n        or order of any governmental  authority,  administrative agency or court\n        of competent  jurisdiction,  or any other legal restraint (i) preventing\n        or seeking to prevent  consummation of the Merger,  (ii)  prohibiting or\n        seeking  to  prohibit  or  limiting  or seeking  to limit,  Parent  from\n        exercising  all  material  rights  and  privileges   pertaining  to  its\n        ownership of the Surviving  Corporation or the ownership or operation by\n        Parent or any of its  subsidiaries  of all or a material  portion of the\n        business  or  assets  of  the  Surviving   Corporation  or  any  of  its\n        subsidiaries,  or (iii) compelling or seeking to compel Parent or any of\n        its  subsidiaries  to dispose of or hold  separate  all or any  material\n        portion of the  business or assets of Parent or any of its  subsidiaries\n        (including the Surviving Corporation and its subsidiaries),  as a result\n        of the  Merger  or the  transactions  contemplated  by  this  Agreement;\n        provided  that for  purposes of this  Section  6.01(d)  (but not for any\n        other purpose of this Agreement or otherwise), a line of business of the\n        Surviving  Corporation and its  subsidiaries  which accounts for no more\n        than 10% of the total  revenues  of the  Surviving  Corporation  and its\n        subsidiaries  taken as a whole (in the case of (ii) above), or a line of\n        business  of  Parent  which  accounts  for no more than 10% of the total\n        revenues of Parent's  Disposable  and Specialty  Products  Group (in the\n        case of (iii) above) shall not be deemed material;\n\n               (e) Illegality.  No statute,  rule,  regulation or order shall be\n        enacted,  entered,  enforced or deemed  applicable  to the Merger  which\n        makes the consummation of the Merger illegal;\n\n               (f) Tax  Opinions.  The  Company  shall  have  received a written\n        opinion  of  Skadden,  Arps,  and Parent  shall have  received a written\n        opinion of Kramer,  Levin,  Naftalis  &amp; Frankel,  in form and  substance\n        reasonably  satisfactory  to each of them,  to the  effect  that (i) the\n        Merger will  constitute a  reorganization  within the meaning of Section\n        368 of the Code and (ii) the transfer of Company Common Stock by Company\n        shareholders,  other than  Company  shareholders  who are or will be \"5%\n        transferee  shareholders\"  within  the  meaning of  Treasury  Regulation\n        Section 1.367(a)-3(c)(5)(ii), pursuant to the Merger will qualify for an\n        exception under Treasury  Regulation Section 1.367(a)-3 and accordingly,\n        Parent will be treated as a corporation for United States federal income\n        tax purposes.  Each party agrees to make all reasonable  representations\n        and covenants in connection with the rendering of such opinions; and\n\n               (g) Opinion of Accountant.  Parent shall have received an opinion\n        of Coopers &amp; Lybrand,  independent certified public accountants,  to the\n        effect that the\n\n\n                                      -48-\n\n\n\n\n        Merger, to the best of their knowledge after due inquiry,  qualifies for\n        pooling of interests  accounting  treatment if consummated in accordance\n        with  this  Agreement.  Such  opinion  shall  be in form  and  substance\n        reasonably satisfactory to Parent and the Company.\n\n               SECTION 6.02.  Additional Conditions to Obligations of Parent and\nMerger Sub.  The  obligations  of Parent and Merger Sub to effect the Merger are\nalso subject to the following conditions:\n\n               (a)  Representations  and  Warranties.  The  representations  and\n        warranties of the Company  contained in this Agreement shall be true and\n        correct in all respects on and as of the Effective Time,  except for (i)\n        changes contemplated by this Agreement,  (ii) those  representations and\n        warranties  which  address  matters only as of a particular  date (which\n        shall  have been true and  correct  as of such  date,  subject to clause\n        (iii)),  or (iii)  where the  failure to be true and  correct  would not\n        reasonably  be expected,  individually  or in the  aggregate,  to have a\n        Material  Adverse  Effect,  with the same force and effect as if made on\n        and as of the  Effective  Time,  and  Parent  and  Merger Sub shall have\n        received a certificate of the Company to such effect signed by the Chief\n        Executive Officer or Chief Financial Officer of the Company;\n\n               (b) Agreements and Covenants. The Company shall have performed or\n        complied in all material  respects  with all  agreements  and  covenants\n        required by this  Agreement to be performed or complied with by it on or\n        prior to the  Effective  Time,  and  Parent  and  Merger  Sub shall have\n        received a  certificate  to such  effect  signed by the Chief  Executive\n        Officer or Chief Financial Officer of the Company;\n\n               (c) Consents Obtained. All material consents, waivers, approvals,\n        authorizations  or  orders  required  to be  obtained,  and all  filings\n        required to be made, by the Company for the authorization, execution and\n        delivery  of  this  Agreement  and  the   consummation   by  it  of  the\n        transactions  contemplated  hereby shall have been  obtained and made by\n        the Company, except where the failure to receive such consents, waivers,\n        approvals,  authorizations  or orders would not  reasonably be expected,\n        individually or in the aggregate,  to have a Material  Adverse Effect on\n        the Company or Parent;\n\n               (d)  Affiliate  Agreements.  Parent shall have received from each\n        person who is identified in the Affiliate  Letter as an  \"affiliate\"  of\n        the Company, an Affiliate Agreement,  and such Affiliate Agreement shall\n        be in full force and effect; and\n\n               (e) Capitalization. The capitalization of the Company on the date\n        of this  Agreement and as of the Effective  Time (in terms of the sum of\n        the  number of shares of  Company  Common  Stock  outstanding,  plus the\n        number of shares  reserved for existing  grants  pursuant to the Company\n        Stock Option  Plans) shall not exceed by more than the sum of the number\n        of shares  reserved and available for issuance  under the Stock Purchase\n        Plans as of the date  hereof  (but in no event  more than the  number of\n        shares set forth in Section 2.03(v)), plus the number of shares, if any,\n        issued  pursuant  to the PAS  Obligations  after the date  hereof,  plus\n        50,000 shares the\n\n\n                                      -49-\n\n\n\n\n        capitalization  with  respect  to such  outstanding  shares  and  shares\n        reserved  for  Company  Stock  Option  Plans set forth in  Section  2.03\n        (including  Section 2.03 of the Company  Disclosure  Schedule),  and the\n        Aggregate Option Exercise Spread as of the date of this Agreement and as\n        of the  Effective  Time  shall not  exceed by more than  $5,000,000  the\n        amount set forth in Section 2.11(c) of the Company Disclosure Schedule.\n\n               SECTION 6.03. Additional Conditions to Obligation of the Company.\nThe  obligation  of the  Company  to effect  the  Merger is also  subject to the\nfollowing conditions:\n\n               (a)  Representations  and  Warranties.  The  representations  and\n        warranties of Parent and Merger Sub contained in this Agreement shall be\n        true and correct in all respects on and as of the Effective Time, except\n        for  (i)   changes   contemplated   by  this   Agreement,   (ii)   those\n        representations  and  warranties  which  address  matters  only  as of a\n        particular date (which shall have been true and correct as of such date,\n        subject  to clause  (iii)),  or (iii)  where the  failure to be true and\n        correct  could not  reasonably  be expected  to have a Material  Adverse\n        Effect,  with  the same  force  and  effect  as if made on and as of the\n        Effective  Time,  and the Company shall have  received a certificate  to\n        such  effect  signed by the  President  or Chief  Financial  Officer  of\n        Parent;\n\n               (b) Agreements  and  Covenants.  Parent and Merger Sub shall have\n        performed or complied in all material  respects with all  agreements and\n        covenants required by this Agreement to be performed or complied with by\n        them on or prior to the  Effective  Time,  and the  Company  shall  have\n        received a certificate  of Parent to such effect signed by the President\n        or Chief Financial Officer of Parent;\n\n               (c) Consents Obtained. All material consents, waivers, approvals,\n        authorizations  or  orders  required  to be  obtained,  and all  filings\n        required  to be made,  by Parent or  Merger  Sub for the  authorization,\n        execution and delivery of this Agreement and the consummation by them of\n        the transactions  contemplated  hereby shall have been obtained and made\n        by Parent or Merger  Sub,  except  where the  failure  to  receive  such\n        consents,  etc.  could not  reasonably  be  expected  to have a Material\n        Adverse Effect on the Company or Parent; and\n\n               (d) Listing.  The Parent Common Shares issuable in the Merger and\n        upon exercise of the Adjustment  Options shall have been  authorized for\n        listing on the NYSE upon official notice of issuance.\n\n                                   ARTICLE VII\n\n                                   TERMINATION\n\n\n               SECTION 7.01.  Termination.  This  Agreement may be terminated at\nany time prior to the Effective Time,  notwithstanding  approval  thereof by the\nshareholders of the Company or Parent:\n\n\n                                      -50-\n\n\n\n\n                (a) by mutual written  consent duly  authorized by the Boards of\n        Directors of Parent and the Company; or\n\n                (b) by either Parent or the Company if the Merger shall not have\n        been  consummated  by December  31, 1998 (other than for the reasons set\n        forth in clause (d) below); or\n\n                (c) by either  Parent  or the  Company  if a court of  competent\n        jurisdiction or  governmental,  regulatory or  administrative  agency or\n        commission  shall have issued a  nonappealable  final  order,  decree or\n        ruling  or taken any  other  action  having  the  effect of  permanently\n        restraining, enjoining or otherwise prohibiting the Merger; or\n\n                (d) by either Parent or the Company,  if the  requisite  vote of\n        the shareholders of the Company shall not have been obtained by December\n        31, 1998, or if the  shareholders of the Company shall not have approved\n        the Merger and this Agreement at the Company Shareholders Meeting; or\n\n                (e) by  Parent,  if (i) the Board of  Directors  of the  Company\n        shall withdraw,  modify or change its approval or recommendation of this\n        Agreement  or the  Merger in a manner  adverse  to Parent or shall  have\n        resolved to do so; (ii) the Board of Directors of the Company shall have\n        approved  or  recommended  to  the   shareholders   of  the  Company  an\n        Alternative  Transaction  (as  hereinafter  defined);  or (iii) a tender\n        offer or  exchange  offer for 25% or more of the  outstanding  shares of\n        Company Common Stock is commenced  (other than by Parent or an affiliate\n        of  Parent)  and the  Board of  Directors  of the  Company  approves  or\n        recommends that the  shareholders of the Company tender their shares in,\n        such tender or exchange offer; or\n\n                (f) by the  Company,  if the Board of  Directors  of the Company\n        shall withdraw,  modify or change its approval or recommendation of this\n        Agreement  or the Merger in a manner  adverse to Parent or Merger Sub or\n        shall  have  resolved  to do so,  in each  case in  compliance  with the\n        provisions of Section 4.02; or\n\n                (g) by Parent or the Company,  if any representation or warranty\n        of the  Company,  or Parent and Merger Sub,  respectively,  set forth in\n        this Agreement  shall be untrue when made,  such that the conditions set\n        forth in Sections  6.02(a) or 6.03(a),  as the case may be, would not be\n        satisfied (a \"Terminating  Misrepresentation\");  provided, that, if such\n        Terminating  Misrepresentation  is curable prior to December 31, 1998 by\n        the Company or Parent,  as the case may be,  through the exercise of its\n        reasonable best efforts and for so long as the Company or Parent, as the\n        case may be, continues to exercise such reasonable best efforts, neither\n        Parent nor the Company, respectively, may terminate this Agreement under\n        this Section 7.01(g); or\n\n                (h) by Parent, if any  representation or warranty of the Company\n        shall have become  untrue such that the  condition  set forth in Section\n        6.02(a) would not be satisfied (a \"Company Terminating  Change\"),  or by\n        the Company,  if any representation or warranty of Parent and Merger Sub\n        shall have become  untrue such that the  condition  set forth in Section\n        6.03(a) would not be satisfied (a \"Parent\n\n\n                                      -51-\n\n\n\n\n        Terminating  Change\" and together with a Company  Terminating  Change, a\n        \"Terminating  Change\"),  in  either  case  other  than  by  reason  of a\n        Terminating Breach (as hereinafter  defined);  provided that if any such\n        Terminating  Change is curable prior to December 31, 1998 by the Company\n        or Parent,  as the case may be,  through the exercise of its  reasonable\n        best efforts,  and for so long as the Company or Parent, as the case may\n        be,  continues to exercise such reasonable best efforts,  neither Parent\n        nor the Company,  respectively,  may terminate this Agreement under this\n        Section 7.01(h); or\n\n                (i) by Parent or the  Company,  upon a breach of any covenant or\n        agreement on the part of the Company or Parent, respectively,  set forth\n        in this  Agreement,  such  that the  conditions  set  forth in  Sections\n        6.02(b)  or  6.03(b),  as the case may be,  would  not be  satisfied  (a\n        \"Terminating  Breach\");  provided,  that, if such Terminating  Breach is\n        curable prior to December 31, 1998 by the Company or Parent, as the case\n        may be, through the exercise of its  reasonable  best efforts and for so\n        long as the Company or Parent, as the case may be, continues to exercise\n        such   reasonable   best  efforts,   neither  Parent  nor  the  Company,\n        respectively,  may terminate this Agreement under this Section  7.01(i);\n        or\n\n                (j) by Parent if any  representation  or warranty of the Company\n        shall be untrue  when made or shall  have  become  untrue  such that the\n        condition  set forth in Section  6.02(e)  would not be satisfied  (other\n        than by reason of a Terminating Breach).\n\n               As used  herein,  \"Alternative  Transaction\"  means  any of (i) a\ntransaction pursuant to which any person (or group of persons) other than Parent\nor its affiliates (a \"Third  Party\")  acquires or would acquire more than 25% of\nthe outstanding shares of any class of equity securities of the Company, whether\nfrom the Company or pursuant to a tender offer or exchange  offer or  otherwise,\n(ii) a merger or other business  combination  involving the Company  pursuant to\nwhich  any  Third  Party  acquires  more  than  25%  of the  outstanding  equity\nsecurities  of the  Company  or the entity  surviving  such  merger or  business\ncombination,  or (iii) any other  transaction  pursuant to which any Third Party\nacquires or would  acquire  control of assets  (including  for this  purpose the\noutstanding  equity  securities of subsidiaries  of the Company,  and the entity\nsurviving  any  merger or  business  combination  including  any of them) of the\nCompany, or any of its subsidiaries having a fair market value (as determined by\nthe Board of  Directors  of the Company in good faith) equal to more than 25% of\nthe fair market  value of all the assets of the  Company  and its  subsidiaries,\ntaken as a whole, immediately prior to such transaction; provided, however, that\nthe term Alternative Transaction shall not include any acquisition of securities\nby a broker  dealer in  connection  with a bona  fide  public  offering  of such\nsecurities.\n\n               SECTION  7.02.  Effect  of  Termination.  In  the  event  of  the\ntermination of this  Agreement  pursuant to Section 7.01,  this Agreement  shall\nforthwith  become void and there shall be no  liability on the part of any party\nhereto or any of its affiliates,  directors, officers or shareholders (i) except\nthat the  Company  or Parent or Merger  Sub may have  liability  as set forth in\nSection  7.03 and Section  8.01  hereof,  and (ii) except as provided in Section\n7.03,  nothing  herein  shall  relieve  the  Company,  Parent or Merger Sub from\nliability\n\n\n                                      -52-\n\n\n\n\nfor any  willful  material  breach  hereof  (it being  understood  that the mere\nexistence of a Material Adverse Effect,  by itself,  shall not constitute such a\nwillful material breach).\n\n               SECTION 7.03. Fees and Expenses.  (a) Except as set forth in this\nSection 7.03, all fees and expenses  incurred in connection  with this Agreement\nand the  transactions  contemplated  hereby shall be paid by the party incurring\nsuch expenses, whether or not the Merger is consummated; provided, however, that\nParent and the  Company  shall share  equally  all SEC filing fees and  printing\nexpenses  incurred  in  connection  with the  printing  and  filing of the Proxy\nStatement\/Prospectus  (including any preliminary  materials related thereto) and\nthe Registration Statement (including financial statements and exhibits) and any\namendments or supplements thereto.\n\n               (b) The  Company  shall  pay  Parent a fee of $125  million  (the\n\"Fee\"), plus Parent's actual,  documented and reasonable  out-of-pocket expenses\nrelating to the transactions  contemplated by this Agreement  (including but not\nlimited to,  fees and  expenses of counsel  and  accountants  and  out-of-pocket\nexpenses  (but not fees) of financial  advisors)  (\"Expenses\",  as applicable to\nParent or  Company),  but in no event  more than $5  million,  upon the first to\noccur of any of the following events:\n\n                      (i) the  termination  of this  Agreement  by Parent or the\n               Company pursuant to Section 7.01(d) as a result of the failure to\n               receive the  requisite  vote for  approval of the Merger and this\n               Agreement by the shareholders of the Company by December 31, 1998\n               or of the failure of the  shareholders  of the Company to approve\n               the  Merger  and  this  Agreement  at  the  Company  Shareholders\n               Meeting;  provided,  however, that the Fee and Expenses shall not\n               be payable  under this  clause  (i) if the  Company  Shareholders\n               Meeting is held and the holders of the requisite number of shares\n               of Company Common Stock do not vote to approve the Merger and the\n               Agreement,   unless  an  Acquisition   Proposal  is  subsequently\n               consummated,  which Acquisition  Proposal was publicly  announced\n               within  one  year of the date the  Company  Shareholders  Meeting\n               (including any adjournment thereof); or\n\n                      (ii) the  termination of this Agreement by Parent pursuant\n               to Section 7.01(e); or\n\n                      (iii) the  termination  of this  Agreement  by the Company\n               pursuant to Section 7.01(f); or\n\n                      (iv) the  termination of this Agreement by Parent pursuant\n               to Section 7.01(i), provided that the Terminating Breach referred\n               to therein is willful.\n\n               (c) Upon a termination  of this  Agreement by Parent  pursuant to\nSection  7.01(g) or  7.01(j),  the Company  shall pay to Parent the  Expenses of\nParent relating to the  transactions  contemplated by this Agreement,  but in no\nevent  more than $5  million.  Upon  termination  of this  Agreement  by Company\npursuant to Section 7.01(g), Parent shall pay to the Company the Expenses of the\nCompany relating to the transactions  contemplated by this Agreement,  but in no\nevent more than $5 million.\n\n\n                                      -53-\n\n\n\n\n               (d) The Fee and\/or Expenses  payable  pursuant to Section 7.03(b)\nor Section  7.03(c)  shall be paid  within one  business  day after a demand for\npayment  following the first to occur of any of the events  described in Section\n7.03(b) or Section  7.03(c);  provided  that,  in no event  shall the Company or\nParent,  as the case may be, be required to pay such Fee and\/or  Expenses to the\nother party,  if,  immediately  prior to the termination of this Agreement,  the\nparty entitled to receive such Fee and\/or Expenses was in material breach of its\nobligations under this Agreement.\n\n\n                                  ARTICLE VIII\n\n                               GENERAL PROVISIONS\n\n\n               SECTION 8.01.  Effectiveness of  Representations,  Warranties and\nAgreements.  (a)  Except  as  otherwise  provided  in  this  Section  8.01,  the\nrepresentations,  warranties  and  agreements  of each party hereto shall remain\noperative and in full force and effect regardless of any  investigation  made by\nor on behalf of any other party hereto, any person controlling any such party or\nany of their  officers or directors,  whether prior to or after the execution of\nthis Agreement. The representations, warranties and agreements in this Agreement\nshall  terminate at the Effective Time or upon the termination of this Agreement\npursuant to Section  7.01, as the case may be,  except that the  agreements  set\nforth in Article I and  Sections  5.06 and 5.08 and any other  agreement in this\nAgreement which contemplates  performance after the Effective Time shall survive\nthe  Effective  Time  indefinitely  and those set forth in  Section  7.03  shall\nsurvive  termination  indefinitely.  The  Confidentiality  Letter shall  survive\ntermination of this Agreement.\n\n               (b) Any disclosure made with reference to one or more Sections of\nthe Company  Disclosure  Schedule  or the Parent  Disclosure  Schedule  shall be\ndeemed  disclosed  with respect to each other  section  therein as to which such\ndisclosure  is relevant  provided that such  relevance is  reasonably  apparent.\nDisclosure  of any  matter in the  Company  Disclosure  Schedule  or the  Parent\nDisclosure  Schedule  shall  not be  deemed an  admission  that  such  matter is\nmaterial.\n\n               SECTION 8.02. Notices. All notices and other communications given\nor made  pursuant  hereto  shall be in writing  and shall be deemed to have been\nduly given or made if and when delivered  personally or by overnight  courier to\nthe parties at the following addresses or sent by electronic transmission,  with\nconfirmation received, to the telecopy numbers specified below (or at such other\naddress or telecopy number for a party as shall be specified by like notice):\n\n               (a)    If to Parent or Merger Sub:\n\n                      Tyco International Ltd.\n                      The Gibbons Building\n                      10 Queen Street, Suite 301\n                      Hamilton, Bermuda HM11\n\n\n                                      -54-\n\n\n\n\n                      Telecopier No.:  (441) 295-9647\n                      Telephone No.:  (441) 292-8674\n                      Attention:  Secretary\n\n               With a copy to:\n\n                      Tyco International (US) Inc.\n                      One Tyco Park\n                      Exeter, NH  03833\n                      Telecopier No.:  (603) 778-7330\n                      Telephone No.:  (603) 778-9700\n                      Attention:  General Counsel, Tyco International (US) Inc.\n\n               and\n\n                      Kramer, Levin, Naftalis &amp; Frankel\n                      919 Third Avenue\n                      New York, NY  10022\n                      Telecopier No.:  (212) 715-8000\n                      Telephone No.:  (212) 715-9100\n                      Attention:  Joshua M. Berman, Esq.\n\n               (b) If to the Company:\n\n                      United States Surgical Corporation\n                      150 Glover Avenue\n                      Norwalk, Connecticut 06856\n                      Telecopier No.: (203) 846-5988\n                      Telephone No.: (203) 845-1000\n                      Attention:  General Counsel\n\n\n                                      -55-\n\n\n\n\n               With a copy to:\n\n                      Skadden, Arps, Slate, Meagher &amp; Flom\n                      919 Third Avenue\n                      New York, NY  10022\n                      Telecopier No.:  (212) 735-3000\n                      Telephone No.:  (212) 735-2000\n                      Attention: Paul T. Schnell, Esq.\n\n               SECTION  8.03.   Certain   Definitions.   For  purposes  of  this\nAgreement, the term:\n\n               (a)  \"affiliates\"  means a person that  directly  or  indirectly,\n        through one or more  intermediaries,  controls,  is controlled by, or is\n        under common control with, the first mentioned person;\n\n               (b)  \"beneficial  owner\"  with  respect  to any shares of Company\n        Common  Stock  means a person  who shall be deemed to be the  beneficial\n        owner of such shares (i) which such person or any of its  affiliates  or\n        associates  (as such term is defined in Rule 12b-2 of the Exchange  Act)\n        has,  directly or  indirectly,  (A) the right to acquire  (whether  such\n        right is  exercisable  immediately  or  subject  only to the  passage of\n        time),  pursuant to any agreement,  arrangement or understanding or upon\n        the  exercise of  consideration  rights,  exchange  rights,  warrants or\n        options,  or  otherwise,  or (B)  the  right  to  vote  pursuant  to any\n        agreement,  arrangement or understanding, or (ii) which are beneficially\n        owned,  directly  or  indirectly,  by any other  persons  with whom such\n        person  or  any of its  affiliates  or  associates  has  any  agreement,\n        arrangement  or  understanding  for the purpose of  acquiring,  holding,\n        voting or disposing of any shares;\n\n               (c) \"business  day\" means any day other than a day on which banks\n        in New York are required or authorized to be closed;\n\n               (d) \"control\"  (including  the terms  \"controlled  by\" and \"under\n        common control with\") means the possession, directly or indirectly or as\n        trustee or  executor,  of the power to direct or cause the  direction of\n        the management or policies of a person, whether through the ownership of\n        stock,  as trustee or  executor,  by contract or credit  arrangement  or\n        otherwise;\n\n               (e)  \"person\"  means  an  individual,  corporation,  partnership,\n        association,  trust, unincorporated organization,  other entity or group\n        (as defined in Section 13(d)(3) of the Exchange Act); and\n\n               (f) \"subsidiary\" or \"subsidiaries\" of the Company,  the Surviving\n        Corporation,   Parent  or  any  other  person  means  any   corporation,\n        partnership,  joint  venture or other legal entity of which the Company,\n        the Surviving Corporation,  Parent or such other person, as the case may\n        be  (either  alone or through or  together  with any other  subsidiary),\n        owns, directly or indirectly, more than 50% of the stock\n\n\n                                      -56-\n\n\n\n\n        or other equity interests the holders of which are generally entitled to\n        vote for the election of the board of directors or other  governing body\n        of such corporation or other legal entity.\n\n               SECTION  8.04.  Amendment.  This  Agreement may be amended by the\nparties  hereto by action  taken by or on behalf of their  respective  Boards of\nDirectors at any time prior to the  Effective  Time;  provided,  however,  that,\nafter  approval  of the Merger and this  Agreement  by the  shareholders  of the\nCompany, no amendment may be made which by law requires further approval by such\nshareholders  without such further  approval.  This Agreement may not be amended\nexcept by an instrument in writing signed by the parties hereto.\n\n               SECTION 8.05.  Waiver.  At any time prior to the Effective  Time,\nany party  hereto may with respect to any other party hereto (a) extend the time\nfor the  performance  of any of the  obligations  or other  acts,  (b) waive any\ninaccuracies in the  representations  and warranties  contained herein or in any\ndocument  delivered  pursuant  hereto,  or (c) waive  compliance with any of the\nagreements or conditions contained herein. Any such extension or waiver shall be\nvalid if set forth in an instrument in writing signed by the party or parties to\nbe bound thereby.\n\n               SECTION 8.06. Headings.  The headings contained in this Agreement\nare for  reference  purposes only and shall not affect in any way the meaning or\ninterpretation of this Agreement.\n\n               SECTION 8.07. Severability. (a) If any term or other provision of\nthis Agreement is invalid, illegal or incapable of being enforced by any rule of\nlaw, or public  policy,  all other  conditions  and provisions of this Agreement\nshall  nevertheless  remain in full force and effect so long as the  economic or\nlegal substance of the transactions  contemplated  hereby is not affected in any\nmanner  adverse to any  party.  Upon such  determination  that any term or other\nprovision is invalid, illegal or incapable of being enforced, the parties hereto\nshall  negotiate  in good  faith to modify  this  Agreement  so as to effect the\noriginal intent of the parties as closely as possible in an acceptable manner to\nthe end that  transactions  contemplated  hereby  are  fulfilled  to the  extent\npossible.\n\n               (b) The Company and Parent agree that the Fee provided in Section\n7.03(b) is fair and reasonable in the  circumstances,  considering  not only the\nMerger  Consideration but also the outstanding  funded  indebtedness  (including\ncapital  leases) of the Company and its  subsidiaries.  If a court of  competent\njurisdiction shall nonetheless, by a final,  non-appealable judgment,  determine\nthat the amount of the Fee exceeds the maximum amount permitted by law, then the\namount of the Fee shall be reduced to the maximum amount permitted by law in the\ncircumstances, as determined by such court of competent jurisdiction.\n\n               SECTION 8.08.  Entire Agreement.  This Agreement  constitutes the\nentire  agreement and supersedes all prior  agreements and  undertakings  (other\nthan the Confidentiality  Letters), both written and oral, among the parties, or\nany of them,  with respect to the subject matter hereof and, except as otherwise\nexpressly provided herein.\n\n\n                                      -57-\n\n\n\n\n               SECTION 8.09. Assignment; Merger Sub. This Agreement shall not be\nassigned by operation of law or otherwise,  except that all or any of the rights\nof Merger Sub hereunder may be assigned to any direct,  wholly-owned  subsidiary\nof Parent provided that no such assignment  shall relieve the assigning party of\nits obligations  hereunder.  Parent guarantees the full and punctual performance\nby  Merger  Sub of all the  obligations  hereunder  of  Merger  Sub or any  such\nassignees.\n\n               SECTION  8.10.  Parties  in  Interest.  This  Agreement  shall be\nbinding upon and inure solely to the benefit of each party  hereto,  and nothing\nin this Agreement,  express or implied,  is intended to or shall confer upon any\nother person any right,  benefit or remedy of any nature  whatsoever under or by\nreason of this Agreement,  including, without limitation, by way of subrogation,\nother  than  Section  5.06  (which  is  intended  to be for the  benefit  of the\nIndemnified   Parties  and  Officer  Employees  and  may  be  enforced  by  such\nIndemnified Parties and Officer Employees).\n\n               SECTION  8.11.   Failure  or  Indulgence  Not  Waiver;   Remedies\nCumulative.  No failure or delay on the part of any party hereto in the exercise\nof any right  hereunder  shall  impair such right or be construed to be a waiver\nof, or acquiescence in, any breach of any representation,  warranty or agreement\nherein,  nor shall any single or  partial  exercise  of any such right  preclude\nother or further exercise thereof or of any other right. All rights and remedies\nexisting  under this  Agreement  are  cumulative  to, and not  exclusive of, any\nrights or remedies otherwise available.\n\n               SECTION 8.12.  Governing  Law;  Jurisdiction.  (a) This Agreement\nshall be governed by, and construed in accordance with, the internal laws of the\nState of New York applicable to contracts  executed and fully  performed  within\nthe State of New York.\n\n               (b)  Each of the  parties  hereto  submits  to the  non-exclusive\njurisdiction  of the federal  courts of the United States located in the City of\nNew York,  Borough  of  Manhattan  with  respect to any claim or cause of action\narising out of this Agreement or the transactions contemplated hereby.\n\n               SECTION 8.13. Counterparts. This Agreement may be executed in one\nor  more  counterparts,   and  by  the  different  parties  hereto  in  separate\ncounterparts,  each of which when executed shall be deemed to be an original but\nall of which taken together shall constitute one and the same agreement.\n\n               SECTION 8.14.  WAIVER OF JURY TRIAL.  EACH OF PARENT,  MERGER SUB\nAND THE COMPANY HEREBY  IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT PERMITTED BY\nLAW,  ALL RIGHTS TO TRIAL BY JURY IN ANY  ACTION,  PROCEEDING,  OR  COUNTERCLAIM\n(WHETHER BASED UPON CONTRACT,  TORT OR OTHERWISE)  ARISING OUT OF OR RELATING TO\nTHIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.\n\n                     [This space intentionally left blank.]\n\n\n                                      -58-\n\n\n\n\n\n\n               IN  WITNESS  WHEREOF,  Parent,  Merger Sub and the  Company  have\ncaused this Agreement to be executed as of the date first written above by their\nrespective officers thereunto duly authorized.\n\n\n                                    TYCO INTERNATIONAL LTD.\n\n\n                                    By   \/s\/ Mark H. Swartz\n                                         ------------------\n                                           Name:  Mark H. Swartz\n                                           Title:  Executive Vice President \n                                                   and Chief Financial Officer\n\n\n\n                                    T11 ACQUISITION CORP.\n\n\n                                    By     \/s\/ Mark H. Swartz\n                                           ------------------\n                                           Name:  Mark H. Swartz\n                                           Title:  Vice President\n\n\n                                    UNITED STATES SURGICAL CORPORATION\n\n\n                                    By   \/s\/ Leon C. Hirsch\n                                         ------------------\n                                           Name:  Leon C. Hirsch\n                                           Title:  President and Chief Executive\n                                                   Officer\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9133],"corporate_contracts_industries":[9452],"corporate_contracts_types":[9622,9626],"class_list":["post-43132","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-tyco-international-ltd","corporate_contracts_industries-manufacturing__conglomerates","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\/43132","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=43132"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43132"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43132"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}