{"id":43310,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/asset-purchase-agreement-siemens-pacesetter-inc-st-jude.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"asset-purchase-agreement-siemens-pacesetter-inc-st-jude","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/asset-purchase-agreement-siemens-pacesetter-inc-st-jude.html","title":{"rendered":"Asset Purchase Agreement &#8211; Siemens-Pacesetter Inc., St. Jude Medical Inc., and Siemens Medical Systems Inc."},"content":{"rendered":"<pre>                            ASSET PURCHASE AGREEMENT\n\n\n                 THIS ASSET  PURCHASE  AGREEMENT  is entered into as of June 26,\n1994, among  Siemens-Pacesetter,  Inc., a Delaware  corporation (the \"Company\"),\nSt. Jude Medical,  Inc., a Minnesota corporation (\"SJM\"), SJM Acquisition Corp.,\na  Delaware  corporation  and a wholly  owned  subsidiary  of SJM  (\"Acquisition\nSubsidiary\")  and  Siemens  Medical  Systems,   Inc.,  a  Delaware   corporation\n(\"Shareholder\").\n\n                  WHEREAS,  the Company and the  Subsidiaries are engaged in the\nBusiness (each as defined herein);\n\n                  WHEREAS,  Shareholder is the sole  shareholder of the Company;\nand\n\n                 WHEREAS, the Boards of Directors of SJM, Acquisition Subsidiary\nand the Company have each  determined that it is in their best interests and the\nbest interests of their respective  shareholders that the Sellers sell,  assign,\ntransfer,  convey and deliver to SJM or its  Affiliates  all of the Assets,  and\nthat SJM or its  Affiliates  purchase  and  acquire  the  same,  subject  to the\nassumption by SJM or its Affiliates of the Assumed  Liabilities  (each such term\nbeing used as defined herein),  all upon the terms and subject to the conditions\nset forth in this Agreement;\n\n                 The parties hereto agree as follows:\n\n\n                                   ARTICLE 1\n\n                               TRANSFER OF ASSETS\n\n\n                 1.1  Assets to Be Sold.  (a) On the terms  and  subject  to the\nconditions  of this  Agreement,  the Company  and the  Subsidiaries  shall,  and\nShareholder shall cause Siemens Electric Limited,  a company organized under the\nlaws of Canada (the  \"Shareholder  Affiliate\" and, together with the Company and\nthe  Subsidiaries,  the  \"Sellers\"),  on the  Closing  Date,  to  sell,  assign,\ntransfer,  convey and deliver to SJM, or to such Affiliate or Affiliates of SJM,\nas SJM may designate in writing to Shareholder (collectively, \"SJM Affiliates\"),\nand SJM shall purchase or shall cause one of the SJM Affiliates to purchase from\nthe Sellers on the Closing  Date,  all of the right,  title and  interest of the\nSellers  in the  assets,  properties,  rights  and  goodwill  of every  kind and\ndescription and wherever located, whether tangible or intangible, real, personal\nor mixed, owned by the Sellers which are used or held for use in the Business or\nPrior  Business,  other than the Excluded  Assets (the assets to be purchased by\nSJM or the SJM Affiliates  pursuant to this Section 1.1 being referred to as the\n\"Assets\"), including, without limitation, the following:\n\n\n                            (i) all furniture,  fixtures,  equipment,  machinery\n         and other tangible personal property,  used or held for use by a Seller\n         and used in the Business or otherwise  owned or held by a Seller on the\n         Closing Date for use in the Business;\n\n                            (ii)  all  vehicles  used  in  the  Business  on the\n         Closing Date;\n\n                            (iii) all  inventories  sold as part of the Business\n         and all  merchandise,  supplies or other personal  property used in the\n         Business;\n\n                            (iv) all third-party  accounts and notes  receivable\n         of the  Sellers  arising  from the  conduct  of the  Business  or Prior\n         Business before the Closing Date;\n\n                           (v) all  books of  account,  general,  financial  and\n         personnel records,  invoices,  shipping records, supplier lists, device\n         history   records,   manufacturing   records,   traceability   records,\n         regulatory documents,  records, reports and correspondence,  laboratory\n         notes, research records,  correspondence and other documents,  records,\n         data files and service  manuals and any rights  thereto  (and copies of\n         tax records) used in, or relating to, the Business on the Closing Date;\n\n                           (vi) all claims,  causes of action, choses in action,\n         rights of recovery and rights of set-off of any kind (including  rights\n         to insurance  proceeds and rights under and pursuant to all warranties,\n         representations and guarantees made by suppliers of products, materials\n         or equipment,  or components  thereof),  pertaining to, arising out of,\n         and enuring to the benefit, of any Seller and relating to the Business;\n\n                           (vii) all sales and promotional literature,  customer\n         lists and other sales-related materials owned, used, associated with or\n         employed by and used in the Business on the Closing Date;\n\n                           (viii) all rights of each Seller under all contracts,\n         licenses,  sublicenses,  agreements, leases, commitments, and sales and\n         purchase  orders,  and under all bids and offers  (to the  extent  such\n         offers are transferable) relating to the Business on the Closing Date;\n\n                           (ix) all patents,  trademarks,  service marks,  trade\n         names, copyrights, registrations and applications for registration with\n         respect to any of the  foregoing,  trade  secrets,  know-how  and other\n         intellectual  property  owned by any Seller and used in the Business on\n         the Closing Date;\n\n                            (x) all  goodwill of the Sellers with respect to the\n         Business on the Closing Date;\n\n                           (xi) all permits, licenses,  agreements,  waivers and\n         authorizations  held or used  by any  Seller  in  connection  with  the\n         Business, to the extent transferable;\n\n                           (xii)    all    product    approvals,     clearances,\n         registrations,  permits, consents, waivers, certificates,  listings and\n         exemptions submitted to or granted by a regulatory  authority,  foreign\n         or  domestic,  for the purpose of  allowing  the  manufacture,  sale or\n         distribution  of a product  of the  Business,  and all  other  permits,\n         orders, certificates, authorizations or approvals of any supranational,\n         national,  federal,  state,  provincial or local,  domestic or foreign,\n         governmental authority or regulatory agency held by a Seller in respect\n         of the Business;\n\n                           (xiii)  all  advances,   deposits,   loans,   prepaid\n         interest  and other  prepaid  expenses  of all  kinds of the  Business,\n         including but not limited to prepaid expenses;\n\n                           (xiv)  computer  software  and  firmware  used in the\n         Business,  including,  without limitation,  software used in connection\n         with production, inventory tracking and work in process testing;\n\n                           (xv) any and all  interests in real  property  leases\n         (including  leases  for  warehouse  space)  used or held for use in the\n         Business by each Seller and described in Schedule 4.19 attached hereto,\n         including,  without  limitation,  the  benefit  of  any  prepaid  rent,\n         security  deposits  and  options  to renew or  purchase  in  connection\n         therewith;\n\n                           (xvi)  all real  property  owned by each  Seller  and\n         SI-Pace, Inc., a California corporation (\"SI-Pace\") and used in respect\n         of the Business,  which is described in Schedule 4.19 attached  hereto,\n         together with (a) all privileges,  rights,  easements and appurtenances\n         belonging  to such  real  property,  (b) all  development  rights,  air\n         rights, mineral rights, water, water rights and water stock relating to\n         such real property, (c) all rights of Sellers and SI-Pace in and to any\n         streets,  alleys,  passages, other easements and other rights-of-way or\n         appurtenances  included in, adjacent to or used in connection with such\n         real property, before or after the vacation thereof, (d) all buildings,\n         systems,  facilities,  fixtures,  structures,  fences,  parking  areas,\n         machinery,  equipment,  apparatuses  and appliances  used in connection\n         with the operation, maintenance, use or occupancy of the real property,\n         such as heating and air  conditioning  systems and  facilities  used to\n         provide  any  utility  services,  refrigeration,  ventilation,  garbage\n         disposal,  recreation or other services on the real  property,  and (e)\n         all tangible  personal property owned by Sellers and used in connection\n         with the operation,  maintenance, use or occupancy of the real property\n         and located on the real property;\n\n                            (xvii) all right,  title and interest of the Sellers\n         in and to any stock, options, warrants,  debentures or other securities\n         of Angeion, Inc.;\n\n                            (xviii) all insurance contracts (other than worker's\n         compensation contracts) and other assets under the direction or control\n         of the Sellers  maintained  for the purpose of funding the  liabilities\n         assumed  by SJM or any SJM  Affiliate  that are  assumed  by SJM or any\n         designated SJM Affiliate pursuant to Section 7.1 or 7.3;\n\n                            (xix) all patents, trademarks,  service marks, trade\n         names, copyrights, registrations and applications for registration with\n         respect to any of the  foregoing,  trade  secrets,  know-how  and other\n         intellectual  property  owned by any  Seller  and  related to the Prior\n         Business;\n\n                            (xx)   copies  of  all   device   history   records,\n         traceability  records,  manufacturing  records,  regulatory  documents,\n         records, reports and correspondence,  laboratory notebooks and research\n         records relating to the Prior Business;\n\n                            (xxi)    all    product    approvals,    clearances,\n         registrations,  permits, consents, waivers, certificates,  listings and\n         exemptions submitted to or granted by a regulatory  authority,  foreign\n         or  domestic,  for the purpose of  allowing  the  manufacture,  sale or\n         distribution of a product of the Prior Business; and\n\n                            (xxii)  (A)  all  rights  of  the   Sellers  to  any\n         insurance  proceeds,  or claims  therefor,  covering all damages to the\n         Business as a result of the January  17,  1994  earthquake  (other than\n         proceeds for  reimbursement of expenses paid prior to the Closing Date)\n         and (B) the  reservation of any rights under any  applicable  insurance\n         policies relating to that earthquake.\n\n                 (b)  Notwithstanding  any  provision  of Section  2.1(a) to the\ncontrary,  the Assets shall exclude the following assets owned by one or more of\nthe Sellers (the \"Excluded Assets\"):\n\n                            (i) all cash,  cash  equivalents  and bank  accounts\n         owned by each Seller at the Closing  Date other than cash  representing\n         insurance proceeds transferred to SJM pursuant to Section 1.1(a)(xxii);\n\n                            (ii) all assets and  properties  of the  Shareholder\n         Affiliate  (other than copies of the portion of any customer  list used\n         in  the  Business),  whether  tangible  or  intangible,  that  are  not\n         predominantly used in the conduct of the Business;\n\n                            (iii) the shares of capital stock of each Subsidiary\n         and the corporate books and records of each Subsidiary;\n\n\n                                                         \n                            (iv) all rights of each Seller under this Agreement;\n         and\n\n                            (v) any forward foreign exchange contract.\n\n                 1.2 Assumption and Exclusion of  Liabilities.  (a) On the terms\nand subject to the conditions of this Agreement, on the Closing Date, SJM shall,\nor shall cause the appropriate  SJM Affiliate to, assume and shall pay,  perform\nand discharge when due all Liabilities of each Seller arising out of the conduct\nof the Business or relating to the Assets,  whether accrued or arising before or\nafter the Closing,  including,  without limitation, (x) all third-party accounts\npayable,  Liabilities  arising  in  connection  with  any  contracts,  licenses,\nsublicenses,  agreements,  leases,  commitments,  and sales and purchase  orders\nincluded  in the Assets and all  Liabilities  relating  to  employees,  employee\nbenefits  assumed by SJM or the appropriate  SJM Affiliate  pursuant to Sections\n7.1 and 7.3,  except  for the  Excluded  Liabilities,  and (y) all  Post-Closing\nProducts  Liability Losses and all Post-Closing  Litigation Losses (the \"Assumed\nLiabilities\").\n\n                 (b) The Sellers  shall  retain,  and shall be  responsible  for\npaying,  performing  and  discharging  when  due,  and  neither  SJM nor the SJM\nAffiliates  shall  assume  or  have  any   responsibility   for,  the  following\nLiabilities of the Sellers (the \"Excluded Liabilities\"):\n\n                            (i) all  Liabilities  (as  defined in Section  13.1)\n         relating to or arising out of the Excluded Assets;\n\n                            (ii)   Liabilities  for  contracts  or  Permits  not\n         assigned  because a consent or  approval  referred  to in  Section  6.1\n         cannot be  obtained,  except to the extent  that a Seller or any of its\n         Affiliates  provides SJM or an SJM Affiliate the rights and benefits of\n         any such contract or Permit;\n\n                            (iii)  Liabilities  relating to employees,  employee\n         benefits and Taxes  retained by the Sellers under Sections 7.1, 7.2 and\n         7.3;\n\n                            (iv)  Liabilities  to  third  parties  for  borrowed\n         monies;\n\n                            (v)   Liabilities   for   intercompany   Tax-sharing\n         arrangements   referred  to  in  Schedule  4.6(viii)  and  indebtedness\n         referred to in Section 6.3;\n\n                            (vi) Pre-Closing Products Liability Losses;\n\n                            (vii) Pre-Closing Litigation Losses;\n\n                            (viii) Liabilities arising from Retained Litigation;\n         and\n\n                            (ix)  Liabilities  arising from Known  Environmental\n         Conditions.\n\n                 (c)  Notwithstanding  anything to the  contrary in this Section\n1.2,  Liability  and  responsibility  for Taxes shall be as set forth in Section\n7.2.\n\n                 1.3 Transfer  Documentation and Possession.  The parties hereto\nagree that, in order to effect the transfer of the Assets and the  assumption of\nthe Assumed  Liabilities,  the parties shall deliver the documents  described in\nSections 3.2 and 3.3, and such other  conveyance  documents as are  necessary to\nconvey (and as appropriate, record and perfect) title to the Assets to SJM or an\nSJM Affiliate and for SJM or an SJM Affiliate to assume the Assumed Liabilities,\nsuch other  documents to be in form and substance  mutually  satisfactory to the\nSellers and SJM and as may be necessary under the laws of the jurisdiction where\nsuch Assets and Assumed  Liabilities  are  located to effect such  transfer  and\nassumption. Coincident with the Closing, the Sellers shall deliver possession of\nthe Assets to SJM or the appropriate SJM Affiliate.\n\n\n                                   ARTICLE 2\n\n                                 CONSIDERATION\n\n                  2.1  Consideration.  Subject to Section 2.2, the consideration\npaid for the Assets shall be $414,300,000 (the \"Cash Consideration\").\n\n                  2.2 Cash Consideration Adjustment.\n\n                  2.2.1 The Cash  Consideration  shall be subject to adjustment,\nif any,  after the Closing  Date (as defined in Article 3) as  specified in this\nSection 2.2.\n\n                  2.2.2 As soon as  practicable  (but in no event  later than 90\ncalendar days following the Closing Date), Shareholder shall prepare and deliver\nto SJM an audited balance sheet for the Business (the \"Closing  Balance Sheet\"),\nincluding the Company, the Subsidiaries and the Shareholder Affiliate, as of the\nClosing Date,  together  with a  supplementary  statement  adjusting the balance\nsheet to exclude certain assets and liabilities  which are not to be sold and to\ninclude  certain other assets and  liabilities  which are to be sold, all as set\nforth on  Schedule  2.2.2.  In the  preparation  of the Closing  Balance  Sheet,\nShareholder  shall  in good  faith  consider  all  reasonable  audit  procedures\nsuggested by SJM, and to the extent such suggested  procedures are acceptable to\nShareholder prepare the Closing Balance Sheet, in a manner consistent therewith.\nThe Deal  Balance  Sheet and the  Closing  Balance  Sheet  shall not include any\nliability  or reserve  with  respect to any future  liabilities  relating  to or\narising out of the  Settlement  Agreement.  The Closing  Balance  Sheet shall be\naccompanied by the report thereon of Price Waterhouse,  independent  accountants\nof Shareholder (\"Shareholder's  Accountants\"),  stating that the Closing Balance\nSheet fairly presents the financial position of the Business at the Closing Date\nin conformity with Schedule 2.2.2 and otherwise in accordance with United States\ngenerally  accepted  accounting  principles  (hereinafter  referred  to as \"U.S.\nGAAP\"),  which  Schedule  2.2.2  and  U.S.  GAAP  shall  be  applied  on a basis\nconsistent with the preparation of the Deal Balance Sheet (as defined in Section\n4.2). During the preparation of the Closing Balance Sheet by Shareholder and the\nperiod  of any  dispute  provided  for  in  Section  2.2.4,  SJM  shall  provide\nShareholder  and  Shareholder's  Accountants  reasonable  access  to the  books,\nrecords,  facilities and employees of the Business,  and SJM, the SJM Affiliates\nand  their   respective   successors,   if  any,  shall   cooperate  fully  with\nShareholder's  Accountants,  in each case to the extent  required by Shareholder\nand Shareholder's  Accountants in order to prepare the Closing Balance Sheet and\nto investigate the basis for any such dispute. SJM and its representatives shall\nbe given reasonable  access to the books,  records,  facilities and employees of\nShareholder and the Shareholder  Affiliate,  including all supporting  documents\nand auditor's work papers used in the  preparation of the Closing Balance Sheet,\nas necessary for it to review the Closing Balance Sheet.  SJM shall be permitted\nto observe the physical  count of inventory to be undertaken in  preparation  of\nthe Closing Balance Sheet.\n\n                 2.2.3 Subject to the  limitations  set forth in Section  2.2.4,\nwithin 30 Business Days after the date of receipt by SJM of the Closing  Balance\nSheet:\n\n                           (i) If the  amount  of Net  Book  Value  shown on the\n         Closing  Balance Sheet is less than  $117,453,000  by at least $800,000\n         (the \"Designated Amount\"), Shareholder shall immediately pay to SJM, as\n         an  adjustment  to the Cash  Consideration,  in  immediately  available\n         funds, an amount equal to such excess over the Designated Amount; and\n\n                           (ii) If the  amount  of Net Book  Value  shown on the\n         Closing  Balance  Sheet is greater  than  $117,453,000  by at least the\n         Designated  Amount,  SJM shall immediately pay, as an adjustment to the\n         Cash Consideration,  in immediately  available funds, to Shareholder an\n         amount equal to such excess over the Designated Amount.\n\n                  2.2.4 If not disputed by SJM in  accordance  with this Section\n2.2.4, the Closing Balance Sheet delivered by Shareholder to SJM shall be final,\nbinding  and  conclusive  on the  parties  hereto.  SJM may  dispute any amounts\nreflected on the Closing Balance Sheet to the extent that the net effect of such\ndisputed  amounts  in the  aggregate  would  be to  change  the Net  Book  Value\nreflected on the Closing Balance Sheet by more than the Designated  Amount,  but\nonly on the basis that the amounts  reflected on the Closing  Balance Sheet were\nnot arrived at in  accordance  with  Schedule  2.2.2 and otherwise in accordance\nwith U.S. GAAP, or that the adjustments set forth in Schedule 2.2.2 or U.S. GAAP\nwere not applied on a basis  consistent with the preparation of the Deal Balance\nSheet;  provided,  however,  that SJM shall notify Shareholder and Shareholder's\nAccountants in writing of each disputed  item,  specifying the amount thereof in\ndispute and setting  forth,  in detail,  the basis for such  dispute,  within 30\nBusiness Days of SJM's  receipt of the Closing  Balance  Sheet.  In the event of\nsuch a dispute,  each of  Shareholder  and SJM shall  negotiate in good faith to\nreconcile  their  differences.  If such dispute has not been resolved  within 10\nBusiness Days after the notice  referred to in the  preceding  sentence has been\ngiven, Ernst &amp; Young (\"SJM's  Accountants\") and Shareholder's  Accountants shall\nattempt to reconcile  their  differences,  and any  resolution by them as to any\ndisputed  amounts shall be final,  binding and conclusive on the parties hereto.\nIf any such resolution by SJM's Accountants and Shareholder's Accountants leaves\nin dispute  amounts the net effect of which in the aggregate  (together with any\namounts  originally  disputed  by SJM but no  longer in  dispute  (\"Non-Disputed\nAmounts\"))  would not be to change the Net Book Value  reflected  on the Closing\nBalance Sheet by at least the Designated  Amount,  all the amounts  remaining in\ndispute  shall  then be  deemed to have been  resolved  in favor of the  Closing\nBalance Sheet, and such resolution shall be final, binding and conclusive on the\nparties hereto. If SJM's Accountants and Shareholder's Accountants are unable to\nreach a  resolution,  leaving in dispute  amounts the net effect of which in the\naggregate  (together with Non-Disputed  Amounts) would change the Net Book Value\nreflected in the Closing Balance Sheet by at least the Designated Amount,  SJM's\nAccountants and  Shareholder's  Accountants  shall submit the items remaining in\ndispute that SJM shall be entitled to dispute by the terms of this Section 2.2.4\nfor resolution to Deloitte &amp; Touche or such other independent accounting firm of\ninternational  reputation as may be mutually  acceptable to Shareholder  and SJM\n(the \"Independent  Accounting  Firm\"),  which shall,  within 30 Business Days of\nsuch submission, determine and report to Shareholder and SJM upon such remaining\ndisputed items, and such report shall have the legal effect of an arbitral award\nand shall be final,  binding and conclusive on Shareholder and SJM. The fees and\ndisbursements of the Independent  Accounting Firm shall be allocated between SJM\nand  Shareholder  in the same  proportion  that  the  aggregate  amount  of such\nremaining  disputed items so submitted to the Independent  Accounting Firm which\nis  unsuccessfully  disputed  by each such party (as finally  determined  by the\nIndependent  Accounting  Firm)  bears  to the  total  amount  of such  remaining\ndisputed  items so  submitted.  No  adjustment  to any amount  payable by SJM or\nShareholder  pursuant  to Section  2.2.3  shall be made with  respect to amounts\ndisputed by SJM  pursuant to this  Section  2.2.4,  unless the net effect of the\namounts  successfully  disputed  by SJM  in the  aggregate  (together  with  the\nNon-Disputed  Amounts) is to change the Net Book Value  reflected on the Closing\nBalance Sheet by at least the Designated  Amount,  in which case such adjustment\nshall only be made in an amount equal to any excess over the Designated  Amount.\nAny amount that is payable under Section 2.2.3,  including,  without limitation,\nany portion thereof that is subject to dispute under this Section 2.2.4 shall be\npaid by Shareholder or SJM, as the case may be, in immediately  available funds,\nwithin five  Business Days  following  the  resolution of such dispute and in an\namount in accordance with such resolution.\n\n                 2.2.5   In   acting   under   this   Agreement,   Shareholder's\nAccountants,  SJM's  Accountants  and the  Independent  Accounting Firm shall be\nentitled to the privileges and immunities of arbitrators.\n\n                 2.2.6 Any  payment  required  to be made by SJM or  Shareholder\npursuant to Section  2.2.3 shall bear interest from the Closing Date through the\ndate of  payment  on the  basis of the  average  of the daily  rate of  interest\npublicly announced by Citibank,  N.A. in New York, New York from time to time as\nits base rate from the Closing Date to the date of such payment.\n\n                 2.2.7  Within  15  Business  Days of the date  hereof,  SJM and\nShareholder  shall agree on a form of Escrow Agreement (the \"Escrow  Agreement\")\nwith Citibank, N.A. (the \"Escrow Agent\"). On the Closing Date, SJM shall deposit\n$13,000,000 of the Cash Consideration (the \"Escrow Amount\") into an account (the\nEscrow  Account\")  managed by the  Escrow  Agent.  Pursuant  to the terms of the\nEscrow   Agreement,   the  Escrow   Agent  shall   release  the  Escrow   Amount\nsimultaneously  with a  determination  of a payment  obligation by either SJM or\nShareholder,  as the case may be, to the other in satisfaction of some or all of\nthe  obligations due by one to the other under Section 2.2.3. If SJM is required\nto make a payment to Shareholder  under Section 2.2.3, some or all of the Escrow\nAmount  shall be  released  to  Shareholder  to the extent of the payment due to\nShareholder   under  Section  2.2.3  and  credited  against  such  payment.   If\nShareholder is required to make a payment to SJM under Section 2.2.3, all of the\nEscrow  Amount  shall be  released to SJM.  The fees and  expenses of the Escrow\nAgent shall be paid equally by SJM and  Shareholder.  Any interest earned on the\nEscrow  Amount while the Escrow  Amount is held in the Escrow  Account  shall be\ndistributed  to SJM and  Shareholder,  as the case may be,  on the same pro rata\nbasis as SJM or Shareholder  receives all or a portion of the Escrow Amount upon\nthe release thereof.\n\n                 2.3   Allocation  of  Purchase   Price.   (a)  As  promptly  as\npracticable  (but in no event later than 90 calendar days  following the Closing\nDate),  SJM shall  deliver  to  Shareholder  a proposed  allocation  of the Cash\nConsideration and the Assumed Liabilities among the Assets.\n\n                 (b)  SJM and  Shareholder  agree  to  negotiate  in good  faith\nregarding  the  allocation  referred to in  subsection  (a) above as promptly as\npracticable. If SJM and Shareholder are unable (despite good faith negotiations)\nto agree upon an  allocation  within 150 days after the  Closing  Date,  SJM and\nShareholder  shall  each be  individually  responsible  for  performing  its own\nallocation.\n\n\n                                   ARTICLE 3\n\n                                    CLOSING\n\n                 3.1 The Closing.  The closing of the transactions  contemplated\nhereby (the  \"Closing\")  shall take place at the offices of Shearman &amp; Sterling,\nNew  York,  New York,  at 10:00  a.m.  (New York City  time) on the later of (i)\nAugust 31, 1994 and (ii) the fifth Business Day after the satisfaction or waiver\nof the  conditions  in  Articles  8 and 9, or at such other time or place as the\nparties may agree (the  \"Closing  Date\").  All  matters at the Closing  shall be\nconsidered to take place  simultaneously,  and no delivery of any document shall\nbe deemed  completed  until all  transactions  and  delivery  of  documents  are\ncompleted.\n\n                  3.2 Deliveries of Shareholder and the Company. At the Closing,\nShareholder and the Company shall deliver or cause to be delivered to SJM or the\nappropriate SJM Affiliates the following:\n\n                  3.2.1 the Officers'  Certificates from an executive officer of\neach of Shareholder and the Company,  in substantially the form of Exhibit 3.2.1\nattached hereto;\n\n                  3.2.2 the opinions of counsel for Shareholder and the Company,\nin substantially the form of Exhibit 3.2.2 attached hereto;\n\n                 3.2.3 copies of resolutions of the Company's Board of Directors\nand of  Shareholder's  Board of  Directors,  each  certified  by the  respective\nSecretary (or other authorized  officer) thereof as having been duly and validly\nadopted and in full force and effect, authorizing execution and delivery of this\nAgreement and  performance  respectively  by the Company and  Shareholder of the\ntransactions contemplated hereby;\n\n                  3.2.4 an executed counterpart of the Medtronics Assignment and\nAssumption Agreement, in substantially the form of Exhibit 3.2.4 attached hereto\n(the \"Medtronics Assignment\");\n\n                  3.2.5   a   license   agreement   among   St.   Jude   Medical\nInternational,  Inc.,  SJM and  Siemens  AG,  in form and  substance  reasonably\nsatisfactory  to each  such  party,  whereby  Siemens  AG  grants to SJM and its\nAffiliates  a  non-exclusive  short-term  transition  license to continue use of\nthose certain  inventories of products and packaging and, for a certain  period,\nmolds for production,  bearing the trademark  \"SIEMENS\"  existing at the Closing\nDate;\n\n                  3.2.6  certificates  evidencing  securities  of Angeion,  Inc.\nowned by the Company;\n\n                  3.2.7 assignments necessary to assign the real property leases\nbeing transferred hereunder to SJM;\n\n                  3.2.8 the Bill of Sale and the Deeds;\n\n                  3.2.9  an  assignment  of  Proprietary   Rights  in  form  and\nsubstance reasonably satisfactory to each of SJM and Shareholder;\n\n                  3.2.10 an executed  counterpart  of the Canadian  Transitional\nServices  Agreement in substantially  the form of, and having  substantially the\nterms  contained  in,  Exhibit  3.2.10  (the  \"Canadian   Transitional  Services\nAgreement\"); and.\n\n                  3.2.11 an executed counterpart of the Escrow Agreement.\n\n                  3.3  Deliveries  of SJM. At the Closing,  SJM shall deliver to\nShareholder, on behalf of the Sellers, the following:\n\n                  3.3.1  the  Cash   Consideration   by  (x)  wire  transfer  in\nimmediately  available funds to a U.S. bank account designated by Shareholder to\nSJM in writing at least two  Business  Days prior to the Closing Date and (y) to\nthe Escrow Agent pursuant to Section 2.2.7.;\n\n                  3.3.2 the Officer's  Certificate from an executive  officer of\nSJM, in substantially the form of Exhibit 3.3.2 attached hereto;\n\n                  3.3.3 the  opinion of counsel for SJM,  in  substantially  the\nform of Exhibit 3.3.3 attached hereto;\n\n                  3.3.4 Certificates of Good Standing dated not more than thirty\n(30)  days  prior to the  Closing  Date,  with  respect  to SJM and  Acquisition\nSubsidiary  issued  by the  Secretaries  of State  of  Minnesota  and  Delaware,\nrespectively;\n\n                  3.3.5  copies  of   resolutions   of  SJM's  and   Acquisition\nSubsidiary's  Boards  of  Directors,  certified  by the  respective  Secretaries\nthereof as having  been duly and  validly  adopted and in full force and effect,\nauthorizing  execution  and delivery of this  Agreement and  performance  of the\ntransactions contemplated hereby;\n\n                  3.3.6 an executed counterpart of the Medtronics Assignment;\n\n                  3.3.7 an executed counterpart of the Assumption Agreement; and\n\n                  3.3.8 an executed  counterpart  of the  Canadian  Transitional\nServices Agreement; and\n\n                  3.3.9 an executed counterpart of the Escrow Agreement.\n\n                  3.4 Further Documents.\n\n                  3.4.1 SJM,  Shareholder  and the  Sellers  shall  execute  and\ndeliver,  or cause to be executed and delivered,  such other powers of attorney,\ninstruments,  documents  or  certificates  as the other  parties may  reasonably\nrequest to effect or evidence the consummation of the transactions  contemplated\nby this Agreement.\n\n\n                                   ARTICLE 4\n\n                 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER\n                                AND THE COMPANY\n\n                 Shareholder  and the Company  represent  and warrant to SJM and\nagree with SJM that:\n\n                 4.1 Authority; Organization,  Capitalization and Qualification;\nEffect of Agreement.\n\n                 4.1.1  Authority.  Each of Shareholder and the Company has full\ncorporate power and authority to execute and deliver this Agreement, perform its\nobligations  hereunder and to consummate the transactions  contemplated  hereby.\nThe execution and delivery of this Agreement, the performance by Shareholder and\nthe Company of their  obligations  under this Agreement and the  consummation by\nShareholder and the Company of the  transactions  contemplated  hereby have been\nduly authorized by all necessary corporate action on the part of Shareholder and\nthe Company,  and no other  corporate  proceedings on the part of Shareholder or\nthe Company are  necessary  to  authorize  the  execution  and  delivery of this\nAgreement and to consummate the transactions so contemplated. This Agreement has\nbeen duly executed and delivered by Shareholder  and the Company and constitutes\nthe  valid  and  binding  obligation  of  Shareholder  and  the  Company  and is\nenforceable  against  Shareholder  and the Company in accordance with its terms,\nexcept to the extent that such  enforceability (i) may be limited by bankruptcy,\ninsolvency,  reorganization,  moratorium  or  other  similar  laws  relating  to\ncreditors' rights generally, and (ii) is subject to general principles of equity\n(regardless  of whether such  enforceability  is  considered  in a proceeding in\nequity or at law).\n\n                 4.1.2  Organization and  Qualification of the Company.  Each of\nthe Company and the  Shareholder  Affiliate  is a  corporation  duly  organized,\nvalidly  existing and in good  standing  under the laws of the State of Delaware\nand Canada, respectively, and has full corporate power and authority to carry on\nits  business  as it is now  being  conducted.  Each  of  the  Company  and  the\nShareholder  Affiliate is duly qualified to do business as a foreign corporation\nin good standing in each jurisdiction  where the character of the property owned\nor  leased  by it or the  nature  of its  activities  makes  such  qualification\nnecessary,  except for those  jurisdictions where the failure to be so qualified\nwould not, individually or in the aggregate,  have a Material Adverse Effect (as\ndefined in Section 13.1).  Shareholder has heretofore delivered, or caused to be\ndelivered,  to SJM true and  complete  copies of the  Company's  certificate  of\nincorporation and bylaws.\n\n                 4.1.3 Subsidiaries.  Except as set forth in Schedule 4.1.3, the\nCompany has no subsidiaries,  does not own,  directly or indirectly,  any stock,\npartnership  interest,  joint venture  interest or other equity  interest in any\nother Person,  and does not have the power to vote, or to exercise a controlling\ninfluence  with  respect  to, any  securities  of any class of any  Person,  the\nholders of which class are entitled to vote for the  election of  directors  (or\npersons  serving  similar  functions) of such Person.  Schedule 4.1.3 lists each\nSubsidiary,  and with respect to each Subsidiary,  lists the number of shares of\nits authorized capital stock, the number and class of shares thereof duly issued\nand outstanding, the names of all stockholders and the number of shares of stock\nowned by each stockholder. For the purposes of Article 1 and the representations\nand warranties in this Article 4, \"Subsidiary\" shall mean BDL Holdings, Inc. and\nBio-Devices Laboratories, Inc.\n\n                 4.1.4 Title to Stock.  Shareholder holds all of the outstanding\ncapital stock of the Company free and clear of any Liens.\n\n                 4.1.5.  Officers  and  Directors.  Schedule  4.1.5  contains an\naccurate and complete  list of all of the current  directors and officers of the\nCompany.\n\n                 4.1.6  Consents.  Except as disclosed  in Schedule  4.1.6 or as\nwould not, individually or in the aggregate,  have a Material Adverse Effect, no\nconsent,  approval,  waiver or other  action by any Person  under any  contract,\nagreement,  indenture, lease, instrument or other document to which Shareholder,\nthe Company, the Shareholder  Affiliate or any Subsidiary is a party or by which\nany of them or their Assets is bound is required or necessary for the execution,\ndelivery and performance of this Agreement or the other  documents  contemplated\nhereby by Shareholder, the Shareholder Affiliate, any Subsidiary or the Company,\nas the case may be, or the consummation of the transactions  contemplated hereby\nor thereby.\n\n                 4.1.7 No Default.  Except as disclosed in Schedule  4.1.7,  the\nexecution,  delivery and performance by Shareholder,  the Shareholder Affiliate,\nany  Subsidiary  and  the  Company  of this  Agreement  or the  other  documents\ncontemplated   hereby  and  the   consummation  by  them  of  the   transactions\ncontemplated hereby and thereby do not and will not (a) except as would not have\nindividually,  or in the aggregate,  a Material  Adverse  Effect,  contravene or\nconstitute a default under or give rise to a right of termination,  cancellation\nor  acceleration  of any right or obligation of  Shareholder or to a loss of any\nbenefit to which the Company,  the  Shareholder  Affiliate or any  Subsidiary is\nentitled under (i) any provision of applicable  law or regulation  (assuming the\ngovernmental  consents referred to in Section 4.9 have been obtained);  (ii) the\ncertificate of incorporation or bylaws of Shareholder or the Company;  (iii) any\nCommitment (as defined in Section 4.6); or (iv) any judgment, injunction, order,\ndecree,  administrative  interpretation,  award or other instrument binding upon\nShareholder, the Company, any Subsidiary or the Shareholder Affiliate in respect\nof the  Business  or (b)  except  as  would  not  have  individually,  or in the\naggregate,  a Material  Adverse Effect,  result in the creation or imposition of\nany Lien on any Asset.\n\n                 4.2  Financial  Statements.  Shareholder  has  delivered to SJM\ncopies of the audited  balance  sheets of the Business as of September  30, 1993\n(together with a supplementary  statement adjusting such financial statements to\nexclude certain assets and liabilities,  including certain  reserves,  which are\nnot to be sold and assumed and to include certain assets and  liabilities  which\nare to be sold and  assumed,  all as set  forth on  Schedule  2.2.2  (the  \"Deal\nBalance Sheet\")), as well as an audited income statement and cash flow statement\nfor the Business for the fiscal year ended September 30, 1993, together with the\nrelated notes and schedules thereto (collectively,  the \"Financial Statements\").\nThe Financial  Statements are attached as Schedule 4.2. The Financial Statements\nhave been prepared from the books and records of the Business in accordance with\nU.S. GAAP applied on a consistent basis, subject to normal year-end adjustments,\nand fairly  present  the  financial  condition  of the  Business  as at the date\nthereof and results of its operations for the periods covered  thereby  (subject\nto the adjustments contained on the supplementary statement).  The supplementary\nstatement has been subjected to the auditing  procedures applied in the audit of\nthe  Financial  Statements  and is fairly  stated in all  material  respects  in\nrelation to the Financial  Statements.  Schedule  2.2.2.1 sets forth for each of\nthe Financial  Statements the  intercompany  eliminations  between the Financial\nStatements and each of the  corresponding  \"Non-U.S.  Financial  Statements\" (as\ndefined  in the  Non-U.S.  Asset  Purchase  Agreement)  (which the  Sellers  are\nassuming have been prepared in accordance  with U.S. GAAP) that are necessary to\nprepare in  accordance  with U.S.  GAAP combined  financial  statements  for the\nFinancial Statements and the Non-U.S. Financial Statements. Shareholder has also\ndelivered to SJM unaudited  profit and loss information for the Business for the\nperiod from October 1, 1993 through May 31, 1994, based on financial information\nnormally prepared by the Company for delivery to Shareholder.\n\n                 4.3  Absence  of Certain  Developments.  Except as set forth in\nSchedule 4.3,  since  September 30, 1993, the Business has been operated only in\nthe ordinary course, and neither the Company, any Subsidiary nor the Shareholder\nAffiliate in respect of the Business, alone or in the aggregate, has:\n\n                 4.3.1  mortgaged,  pledged or subjected to any Lien, any of its\nproperty or assets, tangible or intangible, other than in the ordinary course of\nbusiness,  Permitted  Liens  and  Liens  that  will be  released  at or prior to\nClosing;\n\n                 4.3.2  except  as  contemplated  by this  Agreement,  (i) sold,\nleased, assigned, transferred or otherwise disposed of any of its assets, except\nfor  inventory  sold in the ordinary  course of business,  or (ii)  cancelled or\ncompromised  any debt or claim,  or waived or released any right, in the case of\nboth (i) and (ii) above,  having a value of more than  $250,000 or an  aggregate\nvalue in excess of $750,000;\n\n                 4.3.3  except  as  contemplated  by this  Agreement,  made  any\nmaterial direct or indirect payments,  dividends,  sales or transfers of assets,\nother than normal compensation, or made or granted any bonus or any wage, salary\nincrease,  severance or severance arrangement to any director, manager, officer,\nsalesperson,  distributor,  agent,  employee  or group of  employees  or made or\ngranted any increase in any employee compensation or benefit plan or arrangement\n(except in accordance with past practice), or amended or terminated any existing\nemployee benefit plan or arrangement or adopted any new employee benefit plan or\narrangement;\n\n                 4.3.4 sold, assigned, transferred or licensed to any Person any\nrights under any patents,  trademarks,  service marks, trade names,  copyrights,\napplications  for  registration  with  respect  to any of the  foregoing,  trade\nsecrets or other  intellectual  property  owned by, or licensed to, the Company,\nany Subsidiary or the Shareholder Affiliate in respect of the Business;\n\n                 4.3.5  entered  into any  settlement  agreement  regarding  the\nbreach or infringement  (or alleged breach or infringement) of any United States\nor foreign intellectual property license, patent, copyright or trademark;\n\n                 4.3.6 made any capital  expenditures  in excess of an aggregate\nof $5,000,000;\n\n                 4.3.7 suffered any extraordinary losses or waived any rights of\nmaterial value,  whether or not in the ordinary course of business or consistent\nwith past practice;\n\n                 4.3.8  suffered any damage,  destruction  or loss of any assets\nowned by the  Company  or used in the  operation  of the  Business  which in the\naggregate have a replacement cost of more than $1,500,000 whether or not covered\nby insurance;\n\n                 4.3.9  modified,  amended  or  terminated  any  Commitment  (as\ndefined in Section 4.6) in a manner materially adverse to the Business;\n\n                 4.3.10    suffered any Material Adverse Effect;\n\n                 4.3.11  been the  subject  of any  action  taken by the  United\nStates  Food and Drug  Administration  (the  \"FDA\")  or any  foreign  regulatory\nauthority having  jurisdiction over similar matters,  excluding  observations of\ninspectors which have not resulted in any action,  claim or investigation by the\nFDA or other regulatory authority;\n\n                 4.3.12  declared,  set  aside  or paid  any  dividend  or other\ndistribution with respect to any shares of capital stock of the Company, or made\nany  repurchase,   redemption  or  other  acquisition  by  the  Company  of  any\noutstanding  shares of capital  stock or other  ownership  interests in or other\nsecurities of the Company, except as contemplated by Section 6.9;\n\n                 4.3.13 altered any material term of any outstanding security of\nthe Company;\n\n                 4.3.14  made  any  change  in  any  method  of   accounting  or\naccounting  practice or guideline by the Company,  the Shareholder  Affiliate in\nrespect of the Business or any  Subsidiary,  except for any such change required\nby U.S.  GAAP or similar  rules and except for changes to obtain  uniformity  of\naccounting policies and classifications;\n\n                 4.3.15 entered into any foreign exchange  hedging  contracts or\nany other financial derivative contracts;\n\n                 4.3.16  undertaken any (i) incurrence,  assumption or guarantee\nby the Company or any  Subsidiary of any  indebtedness  for borrowed money other\nthan in the ordinary course of business in amounts and on terms  consistent with\npast  practices,  (ii) issuance or sale of any  securities  convertible  into or\nexchangeable  for debt  securities  of the Company or any  Subsidiary,  or (iii)\nissuance or sale of options or other  rights to acquire  from the Company or any\nSubsidiary,  directly  or  indirectly,  debt  securities  of the  Company or any\nSubsidiary or any securities  convertible into or exchangeable for any such debt\nsecurities;\n\n                 4.3.17  failed  to  maintain  its  inventory  in a  normal  and\ncustomary  manner  materially  consistent with its prior  practice,  or made any\nmaterial  change in its  selling,  pricing or  advertising  practices  or credit\nterms, limits or durations inconsistent with its prior practice;\n\n                 4.3.18  discharged or satisfied  accounts payable other than in\nthe ordinary course of business consistent with past practice; or\n\n                 4.3.19  entered into any  agreement or made any  commitment  to\ntake any of the types of action described in subparagraphs  4.3.1 through 4.3.18\nabove.\n\n                 4.4 Title to Personal  Property and Assets.  The  Company,  the\nShareholder  Affiliate or a Subsidiary owns or has a valid leasehold interest in\nall tangible  personal property  necessary for the conduct of the Business,  and\nowns or has a valid  license or  sublicense  to use all computer  software  used\npredominantly in the Business,  free and clear of all Liens, except as set forth\nin  paragraph  (a) of  Schedule  4.4,  Permitted  Liens or as  reflected  on the\nFinancial Statements.  Except as set forth in paragraph (b) of Schedule 4.4, the\nequipment and fixed assets of the Business are in good  condition and repair and\nare usable in the ordinary course of business,  ordinary wear and tear excepted.\nShareholder,  the Shareholder  Affiliate and the Company have furnished to SJM a\nsummary of tangible personal property, owned or leased by, in the possession of,\nor used by the Company,  the Shareholder  Affiliate (but only to the extent used\nin the Business) or the  Subsidiaries.  The Assets  constitute all of the assets\nand properties  necessary for the conduct of the Business as currently conducted\nin all material respects.\n\n                 4.5 Patents,  Trademarks  and  Copyrights.  To the knowledge of\nShareholder,  the  Subsidiaries  and the Company,  (a) Schedule 4.5(a) lists all\npatents, trademarks,  service marks, trade names, copyrights,  registrations and\nand applications for registration  with respect to any of the foregoing owned by\nthe Company or any Subsidiary;  (b) Schedule 4.5(b) lists all license agreements\nunder which third party owned patents,  trademarks,  service marks, trade names,\ncopyrights,  registrations  and  applications  for  registration  of  any of the\nforegoing,  know-how,  technology  or other  intellectual  property  rights  are\nlicensed to the Company,  the Shareholder  Affiliate or any Subsidiary;  and (c)\nSchedule 4.5(c) lists all claims and disputes pending or threatened (in writing)\nwith third parties alleging that the Company,  the Shareholder  Affiliate or any\nSubsidiary,  on the one hand, or such third party, on the other hand,  infringes\non the other's  patents,  trademarks,  service marks,  trade names,  copyrights,\ntrade secrets or other intellectual  property rights. The Company has previously\nfurnished or made available to SJM all licenses  listed on Schedules  4.5(a) and\n4.5(b).  On or before the Closing,  the Company shall make  available to SJM all\npending patent applications filed by the Company, the Shareholder  Affiliate (in\nrespect  of  the  Business)  or  any  Subsidiary.   Schedule  4.5(d)  lists  all\noutstanding  orders,  judgments and decrees  restricting the use by the Company,\nthe Shareholder Affiliate or any Subsidiary of the patents, trademarks,  service\nmarks, trade names,  copyrights,  trade secrets or other  intellectual  property\nrights owned or licensed by any of them. All of the license agreements listed on\nSchedule  4.5(b)  will be in full  force and  effect on the  Closing  Date,  and\nneither the Company, the Shareholder  Affiliate nor any Subsidiary is in default\nunder any of them nor, to the knowledge of  Shareholder  or the Company,  (i) is\nany other party to any such license  agreement in default  thereunder,  nor (ii)\ndoes any  condition  exist  that,  with  notice or lapse of time or both,  would\nconstitute a default thereunder,  except in each case for such failures to be in\nfull force and effect,  defaults or conditions that would not have individually,\nor in the aggregate, a Material Adverse Effect. The right, title and interest of\nthe  Company,  the  Shareholder  Affiliate  and the  Subsidiaries  in and to the\nProprietary Rights and Proprietary Information are duly recorded (as applicable)\nand free and clear of all Liens and rights of third parties other than Permitted\nLiens and as otherwise  described in Schedule 4.5(e).  Each of the Company,  the\nShareholder  Affiliate  and  the  Subsidiaries  has  established  safeguards  to\nmaintain  the secrecy of its  Proprietary  Information  that it  considers to be\nreasonable.  To the knowledge of Shareholder  and the Company,  the  information\nwhich Shareholder,  the Shareholder Affiliate,  the Subsidiaries and the Company\nbelieve is Proprietary  Information has not been disclosed by the Company or any\nof its Affiliates to any other person, entity or governmental  agencies,  except\npursuant to confidentiality  agreements,  protective orders or law and except as\nwould not have individually,  or in the aggregate, a Material Adverse Effect. As\nused herein,  \"Proprietary  Information\" means all know-how and technology owned\nby the Company,  the Shareholder  Affiliate and the Subsidiaries and used in the\nBusiness (except in the case of the Shareholder Affiliate,  such term shall mean\nknow-how and technology used  predominantly  in the Business);  and \"Proprietary\nRights\" means all patents, trademarks, service marks, copyrights,  registrations\nand  applications  therefor  arising  out of,  and  owned  by the  Company,  the\nShareholder  Affiliate and the  Subsidiaries  as part of, the  Business.  To the\nknowledge of the Company,  the  Subsidiaries and the Shareholder  Affiliate,  no\ninterference  actions  are  pending,  and no  notice  has  been  received  of an\nintention  to provoke  an  interference  action or to  otherwise  challenge  the\nvalidity  or  priority  of  inventorship  before  the United  States  Patent and\nTrademark  Office or other  similar  authorities  with  respect to any patent or\napplication therefor included in the Assets.\n\n                 4.6  Commitments.  Paragraph  (a) of Schedule  4.6 sets forth a\nlist of all of the following written contracts and other agreements to which the\nCompany  or any  Subsidiary,  or the  Shareholder  Affiliate  in  respect of the\nBusiness,  is a  party  or by  which  the  Company  or  any  Subsidiary,  or the\nShareholder Affiliate in respect of the Business or any Assets, bound or subject\n(collectively,  \"Commitments\"):  (i) customer  contracts and  agreements for the\nsale of materials or products  which by their terms exceed one year or which are\nin dollar amounts which equal or exceed $500,000 per annum; (ii) distributorship\nagreements  and  manufacturer's  representative  agreements  which  provide  for\npayments in excess of $500,000 per annum;  (iii) supply and vendor contracts for\nsole source  components  or which provide for payments in excess of $350,000 per\nannum;  (iv)  material  research and  development  agreements;  (v)  employment,\nconsulting,  independent contractor, severance, change in control, retention and\nindemnification  agreements,  arrangements  or  understandings,  and  any  other\nagreements, arrangements or understandings,  between the Company, any Subsidiary\nor the  Shareholder  Affiliate  in respect of the  Business,  and any current or\nformer stockholder,  officer,  director,  employee,  consultant,  agent or other\nrepresentative,  which  provide for  payments in excess of $100,000 per annum or\nwith  respect  to any such  contract  under  which  the total  liability  of the\nCompany, any Subsidiary or the Shareholder  Affiliate in respect of the Business\nequals or exceeds  $500,000;  (vi) contracts and other agreements with any labor\nunion or association representing any employee of the Company, any Subsidiary or\nthe  Shareholder  Affiliate  in respect of the  Business;  (vii)  joint  venture\nagreements;  (viii) contracts or other agreements under which the Company agrees\nto indemnify for or share Tax liability of any party;  (ix)  contracts and other\nagreements  relating  to the  borrowing  of  money;  (x)  any  equipment  leases\nrequiring  payment  of at least  $100,000  within  a given  year  which  are not\ncancelable  without  penalty  upon 90 days'  notice;  (xi)  agreements  settling\npending or threatened Litigation which require continuing  obligations after the\ndate hereof;  (xii) any  agreements  between the Company,  any Subsidiary or the\nShareholder  Affiliate (in respect of the Business) and any of their  Affiliates\n(other  than  individuals);  (xiii)  agreements  granting  rights or  options to\npurchase the securities or assets (other than  inventory in the ordinary  course\nof business) of other companies or entities;  (xiv)  agreements  which limit the\nBusiness from competing in any line of business or in any geographic  area other\nthan  distributorship  or  representation  agreements  which are exclusive as to\ngeographic  area;  or (xv) any other  contract  or other  agreement  (other than\ncontracts  and  agreements  of the type  specified in clauses (i) through  (xiv)\nabove)  that is material to the  Business,  whether or not made in the  ordinary\ncourse of business.  There have been delivered or made available to SJM true and\ncomplete  copies  of all  such  contracts  and  other  agreements  set  forth in\nparagraph  (a) of Schedule  4.6. All of such  Commitments  are in full force and\neffect, and none of the Company, any Subsidiary nor the Shareholder Affiliate is\nin default  under any of them,  nor,  to the  knowledge  of  Shareholder  or the\nCompany,  (i) is any other  party to any such  contract  or other  agreement  in\nmaterial default thereunder, nor (ii) does any condition exist that, with notice\nor lapse of time or both, would constitute a default thereunder. The Company has\nnot received any notification of any change in its  arrangements  with customers\nand suppliers  that would  individually,  or in the  aggregate,  have a Material\nAdverse Effect. Paragraph (b) of Schedule 4.6 indicates which of the Commitments\nrequires  the  consent of a third party to be  transferred  or to remain in full\nforce and effect following the consummation of the transactions  contemplated by\nthis Agreement.\n\n                 4.7  Litigation.  Except as set forth in Schedule 4.7, there is\nno  Litigation  pending  or,  to  Shareholder's  or  the  Company's   knowledge,\nthreatened   which  seeks  to  enjoin  or  obtain  damages  in  respect  of  the\nconsummation of the  transactions  contemplated  hereby.  Schedule 4.7 lists any\nLitigation and, to Shareholder's or the Company's  knowledge,  any investigation\nby a  governmental  entity,  in each  case  that (i)  involves  a  claim,  or to\nShareholder's  or the Company's  knowledge,  potential  claim, of liability,  in\nexcess of  $2,000,000,  against or affecting the Company,  any Subsidiary or the\nShareholder  Affiliate in respect of the Business or (ii)  enjoins,  or seeks to\nenjoin, the operation of a portion of the Business or seeks declaratory judgment\nif such injunction or judgment would, or if entered would, constitute a Material\nAdverse Effect.\n\n                 4.8  Compliance  with  Laws;  Permits.  Except  as set forth in\nparagraph  (a) of Schedule  4.8, the Company,  a Subsidiary  or the  Shareholder\nAffiliate  currently  holds all permits,  licenses,  clearances,  registrations,\nconsents, waivers, listings, exemptions, orders, certificates, authorizations or\napprovals of any international, federal, provincial, state or local, domestic or\nforeign,  governmental  authorities or regulatory agencies,  including,  without\nlimitation,  those  regulating  safety,  effectiveness  and market  clearance of\nmedical  devices  (the  \"Permits\"),  necessary to carry on the Business as it is\ncurrently  being  conducted,  except for such Permits the absence of which would\nnot, individually or in the aggregate, have a Material Adverse Effect. Except as\ndisclosed in paragraph (b) of Schedule 4.8, no approval or consent of any Person\nis needed in order  that any  Permit  shall  continue  in full  force and effect\nfollowing the  consummation of the  transactions  contemplated by this Agreement\nand to assign such  Permits to SJM or one of its  Affiliates,  except  where the\nfailure to obtain such approvals or consents would not have individually,  or in\nthe aggregate,  a Material Adverse Effect.  Except as set forth in paragraph (c)\nof Schedule 4.8, or as would not have a Material  Adverse  Effect,  the Company,\nthe Subsidiaries  and the Shareholder  Affiliate in respect of the Business have\ncomplied with all applicable laws,  regulations,  Permits and orders of foreign,\nfederal,  state and  local  governments  and all  agencies  thereof  (including,\nwithout  limitation,   the  FDA  or  any  foreign  regulatory  authority  having\njurisdiction  over  similar  matters)  that affect the Business and to which the\nCompany,  the  Subsidiaries  or the  Shareholder  Affiliate are subject,  and no\nclaims have been filed against the Company,  the Subsidiaries or the Shareholder\nAffiliate  in respect of the  Business  alleging a  violation  of any such laws,\nregulations or orders.  Except as set forth in paragraph (d) of Schedule 4.8, no\nnotice,  warning  or other  communication  from any  governmental  authority  in\nrespect of any failure or alleged  failure by the Company,  the  Subsidiaries or\nthe  Shareholder  Affiliate  in respect of the  Business to comply with any law,\nregulation or order has been received by the Company,  the  Subsidiaries  or the\nShareholder Affiliate.\n\n                 4.9 Governmental Consents.  Except for the filing under the HSR\nAct and otherwise as set forth in Schedules 4.8 and 4.9, the execution, delivery\nand performance by Shareholder,  the Shareholder Affiliate, the Subsidiaries and\nthe Company of this Agreement and the other  documents  contemplated  hereby and\nthe consummation by Shareholder, the Shareholder Affiliate, the Subsidiaries and\nthe Company of the transactions contemplated by this Agreement require no action\nby, or in respect of, or filing with, any governmental body, agency, official or\nauthority.\n\n                 4.10      Employee Benefit Plans.\n\n                 4.10.1  Schedule  4.10.1 sets forth a true and complete list of\neach material  Employee  Benefit Plan covering any Employee  (each as defined in\nSection  4.10.5).  With  respect  to each  Employee  Benefit  Plan set  forth on\nSchedule 4.10.1:\n\n                           (a) Each  Company  Employee  Benefit  Plan  (and each\n                 related trust,  insurance  contract,  or fund) complies in form\n                 and in operation in all material  respects with its terms,  and\n                 with all applicable  laws,  regulations,  ordinances,  codes or\n                 other legally binding rules and other  requirements of all tax,\n                 labor and other governmental  authorities  having  jurisdiction\n                 over the  Company,  and all  applicable  collective  bargaining\n                 agreements and works council rules,  including the requirements\n                 of ERISA, the Code, and other applicable laws.\n\n\n                           (b) All  employer  and  Employee  contributions  with\n                 respect to Employees  which are due and owing as of the Closing\n                 Date pursuant to Employee  Benefit  Plans and Employee  Benefit\n                 Plans of the  Shareholder  Affiliate  with respect to Employees\n                 have been or will be made in accordance with local law and past\n                 practice.  Any  liabilities for amounts accrued with respect to\n                 Employees under any Employee Benefit Plan set forth in Schedule\n                 4.10.1 as of the Closing Date have been appropriately reflected\n                 on the books and records of such Employee  Benefit Plan sponsor\n                 in  accordance  with local law,  past  practice  and  generally\n                 accepted accounting principles in the local jurisdiction.\n\n                           (c) The Company or  Shareholder  has delivered to SJM\n                 correct and complete  copies of all plan  documents and summary\n                 plan  descriptions,  all material  communications to Employees,\n                 all related trust agreements,  insurance  contracts,  and other\n                 funding   agreements  which  implement  each  Company  Employee\n                 Benefit Plan, and, where a plan document for a Company Employee\n                 Benefit  Plan does not exist,  a detailed  description  of such\n                 Company Employee Benefit Plan.\n\n                           (d) No Company  Employee Benefit Plan is either (i) a\n                 Multiemployer  Plan,  or (ii) except as  disclosed  on Schedule\n                 4.10.1, an Employee Welfare Benefit Plan (as defined in Section\n                 4.10.5) providing  medical,  health,  life insurance,  or other\n                 welfare-type   benefits  for  current  or  future   retired  or\n                 terminated Employees,  their spouses or their dependents (other\n                 than in accordance with Code Section 4980B).\n\n                           (e) Except as  disclosed on Schedule  4.10.1,  to the\n                 knowledge of the Company and its  Subsidiaries,  there has been\n                 no amendment to,  written  interpretation  of, or  announcement\n                 (whether or not written) relating to, or any change in employee\n                 participation or coverage under, any Employee Benefit Plan that\n                 is not  reflected  in the text of such  Employee  Benefit  Plan\n                 which would  materially  increase  the expense  (whether or not\n                 such expense is recognized under generally accepted  accounting\n                 principles) to the employer whose Employees are covered by such\n                 Employee  Benefit Plan,  other than as a function of the number\n                 of  plan  participants  or  as a  result  of a  change  in  the\n                 applicable law.\n\n                           (f) Except as  disclosed  on Schedule  4.10.1,  or as\n                 otherwise expressly provided with respect to a Company Employee\n                 Benefit Plan or as otherwise required by applicable law, to the\n                 knowledge  of the Company and its  Subsidiaries,  no  condition\n                 exists that would prevent the amendment or  termination  of any\n                 Company Employee Benefit Plan with respect to any Employee.\n\n                 4.10.2 With respect to each Company  Employee Benefit Plan that\nany of the Company or its  Subsidiaries,  or any member of the Controlled  Group\n(as defined in Section 4.10.5) which includes the Company and its  Subsidiaries,\nmaintains  or has  ever  maintained  for  Employees,  or to  which  any of  them\ncontributes,  has ever contributed,  or has ever been required to contribute for\nEmployees, except as set forth on Schedule 4.10.2:\n\n                           (a) neither SJM nor any SJM  Affiliate has any direct\n                 or  indirect  material  liability:  (i)  with  respect  to  any\n                 complete or partial  termination  of any such Company  Employee\n                 Benefit Plan (including any  Multiemployer  Plan (as defined in\n                 Section  4.10.5)) or any Company Employee Benefit Plan that has\n                 been the subject of a  Reportable  Event (as defined in Section\n                 13.1) as to which  notices  would be  required to be filed with\n                 the Pension Benefit Guaranty Corporation (\"PBGC\"), (ii) for any\n                 breach of  fiduciary  duty or any  failure  to act or comply in\n                 connection with the  administration or investment of the assets\n                 of any  such  Company  Employee  Benefit  Plan,  (iii)  for any\n                 transaction or holding of any asset under or in connection with\n                 any  Company   Employee  Benefit  Plan  that  would  result  in\n                 liability  under  Title I of  ERISA  or  liability  for any tax\n                 pursuant to Section 4975 of the Code, or any Canadian tax laws,\n                 (iv) to the PBGC  (other  than for PBGC  premium  payments)  or\n                 otherwise  under  Title  IV of ERISA  or  under  the Code  with\n                 respect to any such Company  Employee  Benefit Plan which is an\n                 Employee  Pension  Benefit  Plan,  (v)  arising  out  of  or in\n                 connection with any  Multiemployer  Plan (including  withdrawal\n                 liability),  or (vi) under any Company  Employee  Benefit  Plan\n                 which is an Employee  Welfare  Benefit Plan providing  medical,\n                 health,  life  insurance,  or other  welfare type  benefits for\n                 current  or  future  retired  or  terminated  employees,  their\n                 spouses or their dependents  (other than required by applicable\n                 U.S.  federal or state law or  Canadian  federal or  provincial\n                 law);\n\n                           (b) no  proceeding  by the PBGC to terminate any such\n                 Employee Benefit Plan has been instituted or threatened; and\n\n                           (c)  no   action,   suit,   proceeding,   hearing  or\n                 investigation   with  respect  to  the  administration  or  the\n                 investment of the assets of any such Company  Employee  Benefit\n                 Plan  (other  than  routine  claims  for  benefits)  that could\n                 reasonably be expected to result in a material liability to SJM\n                 or  an  SJM  Affiliate  pending  or  threatened,   and  neither\n                 Shareholder,  the  Company,  nor any members of the  Controlled\n                 Group that includes the Company, has any knowledge of any basis\n                 for  any   such   action,   suit,   proceeding,   hearing,   or\n                 investigation.\n\n                 4.10.3  Except as set forth on Schedule 4.10.3:\n\n                           (a) the consummation of the transactions contemplated\n                 by  this  Agreement  will  not  (i)  entitle  any  Employee  to\n                 severance pay, supplementary  unemployment  compensation or any\n                 similar  payment,  (ii)  accelerate  the  time  of  payment  or\n                 vesting,  or increase the amount of any compensation due to any\n                 such  Employee,  or (iii)  constitute  or involve a  prohibited\n                 transaction  that is not  otherwise  covered by a statutory  or\n                 administrative exemption; and\n\n                           (b) no collective  bargaining  agreement,  employment\n                 agreement or other  agreement  contains any \"change in control\"\n                 or  similar  provisions  which may be  triggered  by any of the\n                 transactions contemplated in this Agreement.\n\n                 4.10.4 Except as disclosed in Schedule 4.10.4,  there have been\nno statements by authorized  representatives of the Company or its Subsidiaries,\nShareholder or the Shareholder  Affiliate (in respect of the Business),  whether\noral or in writing,  regarding the Employee  Benefit Plans to be maintained  (or\nnot to be maintained)  by SJM or the designated SJM Affiliate  after the Closing\nDate,  which will  result in material  liability  to SJM or the  designated  SJM\nAffiliate, whether direct or indirect.\n\n                 4.10.5  For purposes of this Agreement:\n\n                           (a)  \"Company   Employee   Benefit  Plan\"  means  any\n                 Employee  Benefit  Plan that  exists  immediately  prior to the\n                 Closing   Date,   is  sponsored   solely  by  or  is  primarily\n                 administered  by the Company or its  Subsidiaries  and covering\n                 solely  Employees,  and any such Company  Employee Benefit Plan\n                 shall be identified as such on Schedule 4.10.1.\n\n                           (b)  \"Controlled  Group\" has the meaning set forth in\n                 Code Sec. 414.\n\n                           (c) \"Employee\"  means a current  employee,  including\n                 both  active   employees   (including  light  duty  employees),\n                 inactive employees  (including employees on a leave of absence,\n                 sick leave,  short term  disability  or  worker's  compensation\n                 disability  on  the  Closing   Date),   and  former   employees\n                 (including retirees and employees on long term disability),  of\n                 the Company or its  Subsidiaries  or any active employee of the\n                 Shareholder Affiliate who is 100% engaged in the Business.\n\n                           (d)  \"Employee  Benefit  Plan\"  means any  agreement,\n                 plan,  program,  fund, policy,  contract or arrangement (either\n                 written  or  unwritten)   providing   compensation,   benefits,\n                 pension, retirement, profit sharing, stock bonus, stock option,\n                 stock purchase, phantom or stock equivalent,  bonus, incentive,\n                 deferred  compensation,   hospitalization,   medical,   dental,\n                 vision, vacation,  insurance, sick pay, disability,  severance,\n                 or similar  employee  benefits  covering any Employee,  and the\n                 beneficiaries and dependents of the Employee, including without\n                 limitation, (i) any Employee Welfare Benefit Plan (the \"Welfare\n                 Plan\"), whether or not terminated, including but not limited to\n                 any severance  agreement or plan,  any material  fringe benefit\n                 plan  or  program,  any  medical  plan,  life  insurance  plan,\n                 short-term or long-term disability plan, dental plan, personnel\n                 policy,  vacation time,  holiday pay,  bonus  program,  service\n                 award, moving expense reimbursement program or sick leave; (ii)\n                 any deferred  compensation  or retirement  plan or  arrangement\n                 which is an  Employee  Pension  Benefit  Plan,  whether  or not\n                 terminated,  including  but not  limited to any excess  benefit\n                 plan,  top  hat  plan,  or  deferred   compensation  plan,  any\n                 Multiemployer  Plan,  defined  contribution  or defined benefit\n                 arrangements  which are  Employee  Pension  Benefit  Plans (the\n                 \"Pension  Plans\");  (iii)  any  other  plan,  program,  policy,\n                 contract or arrangement, including but not limited to any bonus\n                 or incentive  plan,  stock  options,  restricted  stock,  stock\n                 bonus,   deferred  bonus  plan,  salary  reduction   agreement,\n                 change-of-control  agreement,  retention agreement,  employment\n                 agreement, or consulting agreement with former Employees.\n\n                           (e) \"Employee  Pension  Benefit Plan\" has the meaning\n                 set forth in ERISA Sec. 3(2).\n\n                           (f) \"Employee  Welfare  Benefit Plan\" has the meaning\n                 set forth in ERISA Sec. 3(1).\n\n                           (g)  \"ERISA\"  means the  Employee  Retirement  Income\n                 Security Act of 1974, as amended.\n\n                           (h) \"Multiemployer Plan\" has the meaning set forth in\n                 ERISA Sec. 3(37).\n\n                 4.11  Employees.  Paragraph  (a) of Schedule  4.11 sets forth a\ntrue  and  complete  list  of  all  Employees  (other  than  former  employees),\nindicating  their  position  and base  salary  as of March 16,  1994.  Except as\ndescribed  in  paragraph  (b)  of  Schedule  4.11,  none  of  the  Employees  is\nrepresented  by a union or other labor  organization,  nor are they covered by a\ncollective  bargaining  agreement,  and no union  organizing  efforts  have been\nconducted  within the last three years, or to the knowledge of Shareholder,  the\nCompany  and its  Subsidiaries,  are now being  conducted  with  respect  to the\nEmployees.  The Company and its Subsidiaries are in material compliance with all\nU.S.  laws,  regulations,  ordinances,  codes or  other  legally  binding  rules\napplicable  to the Business  with respect to the  Employees and its own policies\nrespecting  employment  and  employment  practices,   terms  and  conditions  of\nemployment,  wages and hours, equal opportunity,  civil rights, labor relations,\noccupational  health and safety and payroll taxes with respect to the Employees,\nincluding, without limitation, the Immigration and Reform Control Act, Title VII\nof the Civil  Rights Act of 1964,  the Civil Rights Act of 1991,  the  Americans\nwith Disabilities Act, the Federal Age  Discrimination in Employment Act and any\nfederal,  state or local law.  None of the Company is in receipt of a complaint,\ndemand letter or charge issued by a U.S. or Canadian federal,  state, provincial\nor local agency which alleges a violation by the Company of any  applicable  law\nor  regulation  respecting  employment  and  employment  practices,   terms  and\nconditions of  employment,  wages and hours,  equal  opportunity,  civil rights,\nlabor relations, occupational health and safety or payroll taxes with respect to\nthe Employees. Neither the Company nor its Subsidiaries has engaged in any plant\nclosing, work force reduction or other action which has resulted or would result\nin material liability under the Workers  Adjustment and Retraining  Notification\nAct or any other  applicable  U.S. or Canadian law or regulation with respect to\nthe  Employees,  has been  issued any notice that any such action is to occur in\nthe future with respect to the Employees,  and are in material  compliance  with\nall applicable  requirements of the  Immigration  Reform and Control Act and the\nConsolidated  Omnibus  Budget  Reconciliation  Act of 1987 with  respect  to the\nEmployees.  Paragraph  (c) of Schedule  4.11 (which  shall be  delivered  to SJM\nwithin 20 days of the date hereof)  shall set forth a true and complete  list of\nall inactive  Employees and Employees  who are receiving  long-term  disability,\nincluding the expected  duration of their disability or leave and the nature and\namount of any  benefits  provided by or through the Company,  its  Subsidiaries,\nShareholder or the Shareholder  Affiliate  during such period.  Paragraph (d) of\nSchedule  4.11  sets  forth  a true  and  complete  list  of all of the  current\nindependent contractors of the Company and its Subsidiaries who in the past year\nreceived aggregate payments in excess of $100,000.\n\n                 4.12      Environmental Matters; OSHA.\n\n                 4.12.1 The following  terms used in this section are defined as\nfollows:\n\n                           (a)  \"Environmental  Laws\" is  defined as any and all\n         applicable  federal,  state  and  local  treaties,  laws,  regulations,\n         ordinances,  codes,  standards  or  criteria,  orders or decrees of any\n         court,   agency,   entity,   organization  or  authority,   or  of  any\n         jurisdiction where the Company or any Subsidiary is located or conducts\n         business  pertaining to the public health and safety,  workers,  health\n         and safety  and the  pollution  of or  protection  of the  environment,\n         including but not limited to those related to air, water,  noise, odor,\n         land, soil,  pesticide,  hazardous or toxic  substances and wastes,  in\n         effect at the Closing Date.\n\n                           (b)  \"Regulated  Substances\"  is  defined  as  toxic,\n         radioactive   or  hazardous   substances   or  wastes,   pollutants  or\n         contaminants,   including   but  not   limited   to:   asbestos;   urea\n         formaldehyde;  the group of organic compounds known as  polychlorinated\n         biphenyls; petroleum products including  gasoline, fuel oil, crude  oil\n         and the various  constituents  of such  products;  and any substance or\n         material  the  generation,  storage,  handling,  release,  disposal  or\n         cleanup of which is regulated by any Environmental Law.\n\n                           (c)  \"Property\"  is  defined  as all real  estate and\n         property  now  or  formerly  owned  or  leased  by the  Company  or any\n         Subsidiary,  including without limitation,  as of the Closing, the real\n         property to be transferred to the Company  pursuant to Section 6.8. For\n         purposes  of this  definition  only,  \"Property\"  includes  groundwater\n         underlying the surface.\n\n                 4.12.2 Schedule 4.12.2 lists all environmental conditions known\nto Shareholder, the Subsidiaries or the Company existing on or prior to the date\nhereof and arising or resulting from (i) the noncompliance by the Company or any\nSubsidiary  with  any  applicable  Environmental  Law or (ii) the  release  of a\nRegulated  Substance into the environment at or from the Property and, in either\ncase,  for which the Company or any  Subsidiary  would,  or would  reasonably be\nexpected  to, be  required  to expend in excess of $100,000 in order to clean up\nany such Regulated  Substance or in order to bring the Company or any Subsidiary\ninto  compliance  with  any  such   Environmental   Law   (collectively   \"Known\nEnvironmental  Conditions\").  Prior to the Closing,  Shareholder  or the Company\nmay,  from  time  to  time,  deliver  to  SJM a  revised  Schedule  4.12.2.  Any\nenvironmental  conditions  listed on any such revised  Schedule  4.12.2 shall be\ndeemed to be included in the definition of \"Known Environmental Conditions\".\n\n                 4.12.3 Except as disclosed on Schedule 4.12.3, to the knowledge\nof Shareholder, the Subsidiaries and the Company, the Business has been operated\nat all  times in  compliance  with any and all  applicable  Environmental  Laws,\nexcept as would not have a Material Adverse Effect.\n\n                 4.12.4 Except as disclosed on Schedule 4.12.4, to the knowledge\nof Shareholder,  the Subsidiaries  and the Company,  the Company or a Subsidiary\nhas all governmental licenses,  permits and other authorizations required by any\nand all  Environmental  Laws  necessary  to conduct and operate the  Business as\ncurrently conducted or operated, and none of the Company or any Subsidiary is in\nviolation of any terms or conditions of such licenses, permits or authorizations\nas of the Closing Date, except as would not have a Material Adverse Effect.\n\n                 4.12.5 Except as disclosed on Schedule 4.12.5, to the knowledge\nof  Shareholder,  the  Subsidiaries  and the  Company,  none of the Company or a\nSubsidiary is presently  disposing of any  Regulated  Substance on the Property,\nand  none  of the  Company  or a  Subsidiary  has in the  past  disposed  of any\nRegulated Substance on the Property.\n\n                 4.12.6 Except as disclosed on Schedule 4.12.6, to the knowledge\nof  Shareholder,  the  Subsidiaries  and the Company,  the Property has not been\nsubject to any release or threatened release of any Regulated Substance,  except\nas individually or in the aggregate would not have a Material Adverse Effect.\n\n                 4.12.7 Except as disclosed on Schedule 4.12.7, to the knowledge\nof Shareholder,  the  Subsidiaries  and the Company,  there are and have been no\nabove-ground or underground  storage tanks,  sumps or clarifiers  located on the\nProperty.\n\n                 4.12.8 To the knowledge of Shareholder,  the  Subsidiaries  and\nthe  Company,  the Business is not being  operated in material  violation of the\nOccupational  Safety  and  Health Act of 1970,  or the  regulations  promulgated\nthereunder or any similar laws or regulations of any other country.\n\n                 4.13      Company Products; Regulation.\n\n                 4.13.1 Except as disclosed in paragraph (a) of Schedule  4.13.1\nand except as would not have a Material Adverse Effect,  to the knowledge of the\nCompany  and  Shareholder,  since  January  1, 1992  there  have been no written\nnotices,  citations or decisions by any governmental or regulatory body that any\nproduct  produced,  manufactured,  marketed  or  distributed  at any time by the\nBusiness (the \"Products\") is defective or fails to meet any applicable standards\npromulgated  by any such  governmental  or regulatory  body. To the knowledge of\nShareholder and the Company,  the Business has complied in all material respects\nwith its  policies,  procedures  and  specifications  with  respect  to  design,\nmanufacture,  labelling, testing and inspection of Products. Except as disclosed\nin paragraph  (b) of Schedule  4.13.1,  since January 1, 1992 there have been no\nrecalls,  field  notifications  or seizures  ordered or, to the knowledge of the\nCompany or Shareholder,  threatened by any such  governmental or regulatory body\nwith respect to any of the Products.  Except as has been disclosed to SJM, since\nJanuary 1, 1992, the Company,  the  Shareholder  Affiliate and the  Subsidiaries\nhave not received,  and the Company and Shareholder do not have knowledge of any\nreasonable basis for, any warning letter, or Section 305 notices from the FDA.\n\n                 4.13.2 Except as would not have a Material Adverse Effect,  the\nCompany, the Shareholder Affiliate and the Subsidiaries are in possession of and\nwill,  upon SJM's request,  make available to SJM, all supportive  materials and\ndata  substantiating   representations   made  to  the  FDA  or  other  domestic\ngovernmental  regulatory  authority in its filings therewith,  including any and\nall testing data in the possession,  or under the control,  of the Company,  the\nShareholder  Affiliate  (but only to the  extent  used in the  Business)  or any\nSubsidiary,  whether or not  submitted  to the FDA or other  domestic or foreign\ngovernmental  regulatory  authority.  In addition,  the Company, the Shareholder\nAffiliate (but only to the extent used in the Business), has identified or will,\nupon SJM's  request,  identify to SJM, to the knowledge of  Shareholder  and the\nCompany, all international  locations where regulatory information and documents\nare kept, except where the failure to identify any such locations would not have\na Material  Adverse  Effect.  The Products  perform in all material  respects in\ncompliance with the representations and performance  specifications as contained\nin said filings.\n\n                 4.14      Tax Matters.\n\n                 4.14.1 United States  Person.  Each of the Sellers,  except the\nShareholder Affiliate, is a United States person within the meaning of the Code.\n\n                 4.14.2 Canadian Person. The Shareholder Affiliate is a Canadian\ncorporation and is a tax resident of Canada.\n\n                 4.14.3 Permanent Establishment or Business Activity.  Except as\nset forth in Schedule 4.14.3, (i) neither the Company nor any Subsidiary has, or\nhas had, either a permanent  establishment in any foreign country, as defined in\nany  applicable  tax treaty or  convention  between  the United  States and such\nforeign  country,  or business  activity  in any  country  other than the United\nStates that would  subject it to a Tax in such country that would not apply to a\nUnited States Person without a business  activity in such country;  and (ii) the\nShareholder Affiliate has no permanent  establishment in any foreign country, as\ndefined in any  applicable  tax  treaty or  convention  between  Canada and such\nforeign  country and has no business  activity in any country  other than Canada\nthat  would  subject  it to a Tax in such  country  that  would  not  apply to a\nCanadian corporation without business activity in such country.\n\n                 4.14.4 Security for Tax-Exempt Obligations.  None of the Assets\ndirectly  or  indirectly  secures  any debt the  interest on which is tax exempt\nunder Section 103(a) of the Code.\n\n                 4.14.5   Tax-Exempt  Use  Property.   None  of  the  Assets  is\n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code.\n\n                 4.14.6 U.S. Real Property. None of the Assets being sold by the\nShareholder  Affiliate  constitutes an interest in real property  located in the\nUnited States or property  that would  constitute an investment in United States\nproperty  (as  defined  in Section  956(b) of the Code) if held by a  controlled\nforeign corporation (as defined in Section 957 of the Code).\n\n                 4.15 Material Obligations.  Except as would not have a Material\nAdverse  Effect  individually  or in the  aggregate,  neither the  Company,  the\nShareholder  Affiliate  in respect of the Business  nor any  Subsidiary  has any\ndebts,  liabilities  or obligations of any nature  (whether  accrued,  absolute,\ncontingent, direct, indirect, perfected, inchoate, unliquidated or otherwise and\nwhether due or to become due)  arising out of  transactions  entered  into at or\nprior to the Closing,  or any  transaction,  series of  transactions,  action or\ninaction at or prior to the Closing, or any state of facts or condition existing\nat or prior to the Closing  (regardless  of when such liability or obligation is\nasserted)  including,  without  limitation,  any  Liabilities  arising  from  or\nrelating to the Prior Business,  except (a) to the extent specifically reflected\nand  accrued  for or  reserved  against  in the  Financial  Statements,  (b) for\nliabilities  set forth on Schedule 4.15 or (c) for  liabilities  and obligations\nwhich  have  arisen  after the date of the Deal  Balance  Sheet in the  ordinary\ncourse of business consistent with past practice.\n\n                4.16  Brokerage.  Other than the fee payable by  Shareholder  to\nGleacher  &amp; Co.,  its  investment  banker,  there  are no claims  for  brokerage\ncommissions,  finder's  fees or  similar  compensation  in  connection  with the\ntransactions  contemplated  by  this  Agreement  based  on  any  arrangement  or\nagreement made by Shareholder or the Company.\n\n                4.17 Affiliated Transactions.  Except as listed and described in\nparagraph  (a) of Schedule 4.6 or in Schedule  4.17 hereto,  neither the Company\nnor any Subsidiary is a party to any transaction or Commitment with any of their\nrespective  Affiliates,  and has no obligation or liability owing  thereunder in\nrespect of the Business in excess of $50,000 or which is not  cancelable  by the\nCompany or a Subsidiary on at least 60 days' notice without penalty.\n\n                4.18  Insurance.  Schedule 4.18  constitutes a true and complete\ndescription  of all of the  policies  in force and effect and a  description  of\ntheir respective  coverage and limits  presently  applicable to or including the\noperations and property of the Business. All such policies will terminate at the\nClosing.  Neither  Shareholder,  the Company nor the  Shareholder  Affiliate has\nreceived  any  notice of  cancellation  in  respect of  insurance  coverage  for\noperations, assets and properties relating to the Business. All premiums due and\npayable in respect of such insurance have been paid. There are no pending or, to\nShareholder's  or the Company's  knowledge,  threatened  terminations or premium\nincreases  with respect to any such policies and the Company,  the  Subsidiaries\nand the  Shareholder  Affiliate are in compliance  with all material  conditions\ncontained therein.\n\n                 4.19 Real Property.\n\n                 4.19.1  Title to Owned Real  Property  and  Interests as Tenant\nUnder  Leased  Real  Property.  One or more of the  Sellers or SI-Pace  Inc.,  a\nCalifornia corporation, hold:\n\n                (a) fee  simple  title to all of the  real  property  listed  in\n        Paragraph A of Schedule 4.19 attached hereto  (collectively,  the \"Owned\n        Real Property\"), and\n\n                (b) valid leasehold interests under each of the leases described\n        in  Paragraph  B  of  Schedule  4.19  (collectively,  the  \"Leased  Real\n        Property\")  attached hereto and all of such leases are in full force and\n        effect, \n\nin each case free and clear of all Liens except, in each case,\n\n                (i) liens for current  property  taxes  (including  supplemental\n        taxes)  and  assessments  for the  1994-95  fiscal  year not yet due and\n        payable,\n\n                (ii) as to the Owned Real Property  referred to in Paragraph A.1\n        of Schedule 4.19, the title  exceptions  referred to in Exception Nos. 2\n        through 31, inclusive,  appearing in that certain Preliminary Report No.\n        9410439-21 dated April 12, 1994 (a copy of which  preliminary  report is\n        attached  hereto as part of  Schedule  4.19),  issued by First  American\n        Title  Company  of Los  Angeles,  none of  which  title  exceptions  are\n        easements which could have a Material Adverse Effect on the operation of\n        the Business,\n\n                (iii) as to the Owned Real Property referred to in Paragraph A.2\n        of Schedule 4.19, the title  exceptions  referred to in Exception Nos. 2\n        through 10, and 13  appearing  in that  certain  Preliminary  Report No.\n        9410437-21 dated April 12, 1994 (a copy of which  preliminary  report is\n        attached  hereto as  Paragraph  A.3 of Schedule  4.19),  issued by First\n        American  Title Company of Los Angeles,  none of which title  exceptions\n        are  easements  which  could  have  a  Material  Adverse  Effect  on the\n        operation of the Business,\n\n                (iv) as to the Owned Real Property  referred to in Paragraph A.3\n        of Schedule 4.19, the title exceptions  referred to in Exception Nos. 3,\n        4 and 5 appearing in that certain  Preliminary  Report No. 9433648 dated\n        April 22, 1994 (a copy of which preliminary report is attached hereto as\n        part of Schedule  4.19),  issued by First  American Title Company of Los\n        Angeles, none of which title exceptions are easements which could have a\n        Material Adverse Effect on the operation of the Business,\n\n                (v) as to the  Leased  Real  Property,  minor  imperfections  of\n        title, if any,\n\n                (vi) zoning laws or other land use restrictions, and\n\n                (vii) Liens which are reflected on the Financial Statements.\n\n                4.19.2  Complete List and Description of all Owned Real Property\nand Leased Real  Property.  The Owned Real Property and the Leased Real Property\n(hereinafter   collectively   referred  to  as  the  \"Real  Property\")  together\nconstitute all real  properties used or occupied in connection with the Business\nor reflected on the  Financial  Statements.  The Owned Real  Property  listed in\nParagraph  A of Schedule  4.19 is all of the real  property in which the Sellers\nhave an ownership interest in respect of the Business.  The Leased Real Property\nlisted in Paragraph B of Schedule 4.19 is all of the real property leased by any\nof the Sellers as tenant and which is used or occupied for the Business.\n\n                4.19.3 Delivery of all Title Insurance Policies,  Surveys, Title\nReports,  Leases and Property Reports.  Copies of all title insurance  policies,\ntitle reports,  surveys,  leases,  architectural or engineering  reports,  soils\ntests and reports, seismic tests and reports and environmental tests and reports\nin the  possession  or control of the Sellers and which relate to the Owned Real\nProperty have been  delivered to SJM; and true,  correct and complete  copies of\nall the leases relating to the Leased Real Property have been delivered to SJM.\n\n                4.19.4  Condemnation.  To Sellers'  Knowledge,  Sellers have not\nreceived  written  notice  or any  other  notice of any  pending  or  threatened\ncondemnation proceeding or other similar proceeding by any public authority with\nrespect to any of the Owned Real Property.\n\n                4.19.5 Violation of Ordinances.  To Sellers' Knowledge,  Sellers\nhave not  received  any  written  notice  or any  other  notice  of any  claimed\nviolation  of  zoning,  building,  health,  or  similar  ordinances,   codes  or\nregulations.\n\n                4.19.6 Assessed Value. To Sellers' Knowledge,  no written notice\nor  any  other  notice  of any  increase  in the  assessed  valuation  or of any\ncontemplated special assessment has been received by Sellers with respect to the\nOwned Real Property.\n\n                4.19.7  Government   Licenses.   To  Sellers'   Knowledge,   all\nfacilities  situated  on the Owned Real  Property  have  received  all  material\napprovals of government authorities (including licenses and permits) required in\nconnection with the ownership or operation  thereof and, to Sellers'  knowledge,\nSellers have not received written notice or any other notice of any violation of\napplicable  laws,  rules and  regulations  with respect to the  operation of the\nsame.\n\n                4.19.8  Subleases.  There are no  leases,  subleases,  licenses,\nconcessions  or other  agreements,  written  or oral,  granting  to any party or\nparties  the right of use or  occupancy  of any  portion  of any  parcel of Real\nProperty, except for the subleases described in Paragraph C of Schedule 4.19.\n\n                4.19.9  Options.  There are no outstanding  options or rights of\nfirst  refusal to  purchase  any parcel of Owned Real  Property,  or any portion\nthereof or interest therein.\n\n                4.19.10 Possession. There are no parties (other than Sellers) in\npossession  of any parcel of Real  Property,  other than tenants under leases of\nthe Real  Property who are in possession  of space  pursuant to those  subleases\nlisted in Paragraph C of Schedule 4.19.\n\n                 4.19.11  Utilities.  To  Sellers'  Knowledge,   all  facilities\nlocated on each parcel of Owned Real  Property are supplied  with  utilities and\nother  services  necessary for the operation of such  facilities  including gas,\nelectricity,  water,  telephone,  sanitary  sewer and storm sewer,  all of which\nservices are adequate for the operation of such facility as presently  conducted\nfor the operation of the Business in all material respects.\n\n                4.19.12  Proceedings.  To Sellers'  Knowledge,  Sellers have not\nreceived  notice of any pending or  contemplated  condemnation,  assessments  or\nother  proceeding  or charge  affecting  the Real  Property  that  would  have a\nMaterial Adverse Effect on the operation of the Business.\n\n                4.19.13  Knowledge.  For purposes of this Section 4.19, the term\n\"Sellers' Knowledge\" shall have the meaning set forth in Section 13.1.\n\n                4.20 Inventory. The Company has previously disclosed to SJM by a\nletter dated June 22, 1994 the accounting  guidelines  used by the Company,  the\nShareholder  Affiliate (in respect of the Business)  and the  Subsidiaries  (and\nused in the  preparation  of the Deal Balance  Sheet) for valuing  Inventory (as\ndefined below), including,  without limitation, the guidelines used to determine\nwhether Inventory is obsolete or damaged, or will be slow-moving or defective.\n\n                4.21 Accounts and Notes  Receivable.  The Company has previously\ndisclosed to SJM by a letter dated June 22, 1994 the accounting  guidelines used\nby the Company the  Shareholder  Affiliate  (in respect of the Business) and the\nSubsidiaries (and used in the preparation of the Deal Balance Sheet) for valuing\naccounts receivable.\n\n\n                                   ARTICLE 5\n\n                     REPRESENTATIONS AND WARRANTIES OF SJM\n\n                SJM represents  and warrants to Shareholder  and the Company and\nagrees with Shareholder and the Company as follows:\n\n                 5.1       Corporate Power and Authority; Effect of Agreement.\n\n                 5.1.1 Each of SJM and  Acquisition  Subsidiary is a corporation\nduly  organized,  validly  existing  and in  good  standing  under  the  laws of\nMinnesota and Delaware, respectively, and has full corporate power and authority\nto carry on its  business  as it is now being  conducted.  All of the issued and\noutstanding capital stock of Acquisition Subsidiary is owned by SJM.\n\n                 5.1.2 Each of SJM and Acquisition Subsidiary has full corporate\npower  and  authority  to  execute  and  deliver  this  Agreement,  perform  its\nobligations  hereunder and to consummate the transactions  contemplated  hereby.\nThe  execution  and  delivery  of this  Agreement,  the  performance  by SJM and\nAcquisition  Subsidiary of its obligations hereunder and the consummation by SJM\nand Acquisition  Subsidiary of the  transactions  contemplated  hereby have been\nduly  authorized  by all  necessary  corporate  action  on the  part  of SJM and\nAcquisition Subsidiary, and no other corporate proceedings on the part of SJM or\nAcquisition  Subsidiary are necessary to authorize the execution and delivery of\nthis Agreement, or to consummate the transactions so contemplated.\n\n                 5.1.3 This  Agreement  has been duly  executed and delivered by\nSJM and  Acquisition  Subsidiary and  constitutes  the legal,  valid and binding\nobligation  of SJM and  Acquisition  Subsidiary,  enforceable  against each such\nparty  in   accordance   with  its  terms,   except  to  the  extent  that  such\nenforceability  (a) may be limited by  bankruptcy,  insolvency,  reorganization,\nmoratorium or other similar laws relating to creditors'  rights  generally,  and\n(b) is subject to  general  principles  of equity  (regardless  of whether  such\nenforceability is considered in a proceeding in equity or at law).\n\n                 5.1.4  The  execution,  delivery  and  performance  by SJM  and\nAcquisition  Subsidiary of this  Agreement or the other  documents  contemplated\nhereby and the consummation by them of the transactions  contemplated hereby and\nthereby do not and will not  contravene  or  constitute a default  under or give\nrise to a right of  termination,  cancellation  or  acceleration of any right or\nobligation of SJM or Acquisition Subsidiary or to a loss of any benefit to which\nSJM or  Acquisition  Subsidiary  is  entitled  under (i)  except as would not be\nmaterially adverse to the operations, results of operations, assets or financial\ncondition of SJM and the SJM  Affiliates,  taken as a whole,  or have a material\nadverse effect on the ability of SJM or Acquisition Subsidiary to consummate the\ntransactions  contemplated by this Agreement, any provision of applicable law or\nregulation  (assuming the governmental  consents referred to in Section 5.2 have\nbeen  obtained);  (ii)  the  articles  of  incorporation  or  bylaws  of SJM and\nAcquisition  Subsidiary;   (iii)  any  judgment,   injunction,   order,  decree,\nadministrative  interpretation,  award or other  instrument  binding upon SJM or\nAcquisition Subsidiary; or (iv) result in the creation or imposition of any Lien\non any  asset of SJM or  Acquisition  Subsidiary  which  would  have a  material\nadverse  effect on their ability to  consummate  the  transactions  contemplated\nhereby.\n\n                 5.2  Consents.  Except  for the  filing  under  the HSR Act and\notherwise as set forth in Schedule  5.2, no consent,  approval or  authorization\nof, or exemption by, or filing with, any governmental or regulatory authority or\nany other third party is required in connection with the execution,  delivery or\nperformance by SJM or Acquisition  Subsidiary of this Agreement or the taking by\nSJM  or  Acquisition   Subsidiary  of  any  other  action  contemplated  hereby,\nexcluding, however, consents, approvals, authorizations, exemptions and filings,\nif any, which any of Shareholder,  the Shareholder Affiliate,  any Subsidiary or\nthe Company is required to obtain or make.\n\n                 5.3  Availability  of Funds.  SJM has  available,  or will have\navailable on the Closing Date,  sufficient  funds to enable it to consummate the\ntransactions contemplated by this Agreement.\n\n                 5.4  Litigation.  There is no  Litigation  pending or, to SJM's\nknowledge, threatened, which seeks to enjoin or obtain damages in respect of the\nconsummation of the transactions contemplated hereby.\n\n                 5.5  Brokerage.  Other than the fee  payable by SJM to CS First\nBoston  Corporation,  its investment  banker,  there are no claims for brokerage\ncommissions,  finder's  fees or  similar  compensation  in  connection  with the\ntransactions  contemplated  by  this  Agreement  based  on  any  arrangement  or\nagreement by SJM.\n\n                 5.6  Certain  Ownership  Interests.  SJM  is  not  directly  or\nindirectly  \"significantly  funded\"  (as  that  phrase  is  defined  in  Section\n12(B)(c)(i)  of the Settlement  Agreement and Section  9.02(c)(i) of the License\nAgreement),  nor is there,  directly or  indirectly  \"significant  voting common\nstock or other voting  equity  ownership\"  (as that phrase is defined in Section\n12(B)(c)(i) of the Settlement  Agreement) in SJM, by the Japanese  government or\ninvestors of Japanese  nationality;  and (ii) it is not  directly or  indirectly\n\"significantly  funded\" (as that term is defined in Section  12(B)(c)(ii) of the\nSettlement  Agreement and Section 9.02(c)(ii) of the License Agreement),  nor is\nthere,  directly or indirectly  \"significant voting common stock or other voting\nequity  ownership\"  (as that  phrase is defined in Section  12(B)(c)(ii)  of the\nSettlement  Agreement  and 9.02 (c)(ii) of the License  Agreement)  in SJM, by a\nnational government other than Japan.\n\n\n                                   ARTICLE 6\n\n                                   COVENANTS\n\n                 6.1  Cooperation.  Each  of the  parties  hereto  will  use its\nreasonable  best  efforts  to  cause  the   consummation  of  the   transactions\ncontemplated  hereby in  accordance  with the terms and  conditions  hereof  and\napplicable  law. Each of the parties hereto will use its reasonable best efforts\nto obtain all  governmental  consents and approvals  necessary to consummate the\ntransactions  contemplated  by this Agreement and to cause the Closing to occur.\nEach of  Shareholder,  the Company and the  Shareholder  Affiliate shall use its\nreasonable  best  efforts to obtain the consent or approval of third  Persons to\nthe transactions  contemplated hereby with respect to the Commitments identified\non Schedule 4.6 and the Permits, if any, identified on paragraph (b) of Schedule\n4.8 as  requiring  such consent or approval.  The Company,  Shareholder  and SJM\nagree  that,  in the event any  consent or  approval  of any such  third  Person\nnecessary or  desirable to preserve for the Business any right or benefit  under\nany such Commitment or Permit is not obtained prior to the Closing (and provided\nthat  SJM  waives  any  resulting  failure  of a  condition  under  Article  8),\nShareholder  will,  subsequent  to the Closing,  cooperate  with SJM and any SJM\nAffiliate  in  attempting  to  obtain  such  consent  or  approval  as  promptly\nthereafter  as  practicable.  If such  consent or approval  cannot be  obtained,\nShareholder  shall use its reasonable best efforts,  and cause the other Sellers\nto use their reasonable best efforts,  to provide SJM and any SJM Affiliate with\nthe rights and  benefits of the  affected  Commitment  or Permit for the term of\nsuch Commitment or Permit and, if and to the extent that  Shareholder or another\nSeller  provides the rights and benefits under any such  Commitment or Permit or\nany other contract for which consent or approval  cannot be obtained,  SJM shall\nassume the obligations and burdens thereunder to such extent. After the Closing,\nShareholder and the other Sellers shall cooperate with SJM in the preparation of\nany  financial  statements  required  to be  filed by SJM  with  respect  to the\nBusiness pursuant to U.S. federal securities laws.\n\n                 6.2  Conduct  of  Business.  From the  date  hereof  until  the\nClosing,  the Company and the Shareholder  Affiliate shall cause the Business to\nbe conducted in the  ordinary  course  consistent  with past  practice.  Without\nlimiting  the  generality  of the  foregoing,  from the date  hereof  until  the\nClosing:\n\n                 6.2.1 Each of  Shareholder  and the  Company  will use and will\ncause the  Shareholder  Affiliate  and the  Subsidiaries  to use all  reasonable\nefforts to:\n\n                 (a)       preserve the Business as a whole intact;\n\n                 (b)  keep  available  the  services  of the  present  officers,\n        employees  and agents of the Business  such that the  Business  will not\n        suffer a Material Adverse Effect;\n\n                 (c)  preserve  the  relationships  with  suppliers,  customers,\n        distributors,   licensors  and  licensees  and  others  having  business\n        dealings  with it such  that the  Business  will not  suffer a  Material\n        Adverse Effect;\n\n                 (d)  collect  the  receivables  of  the  Business  in a  manner\n        consistent with past practice;\n\n                 (e)  maintain  the  assets,  properties  and  interests  of the\n        Business in customary  repair,  order and  condition or, with respect to\n        the  casualty,  loss or damage of any  assets of the  Business  that are\n        covered by insurance,  transfer,  at the Closing, to SJM the proceeds of\n        any  insurance  recovery  with respect  thereto  (provided  that SJM has\n        waived any failure of a  condition  under  Article 8 resulting  from the\n        casualty, loss or damage);\n\n                 (f) continue to  compensate  the employees of the Business in a\n        manner consistent with past practice;\n\n                 (g)  maintain the books,  accounts and records  relating to the\n        Business in accordance  with past practice as used in the preparation of\n        the Financial Statements described in Section 4.2 hereof; and\n\n                 (h) promptly  inform SJM in writing of any  material  variances\n        from the representations and warranties contained in Article 4 hereof.\n\n                 6.2.2 Prior to the Closing,  without the prior written  consent\nof SJM or unless otherwise contemplated or permitted by this Agreement,  neither\nthe Company,  the  Shareholder  Affiliate  (in respect of the  Business) nor the\nSubsidiaries will:\n\n                 (a) take any action described in Section 4.3 of this Agreement;\n\n                 (b) except for the Shareholder Affiliate, amend its certificate\n        of incorporation or bylaws;\n\n                 (c) except for the Shareholder Affiliate,  merge or consolidate\n        with any person,  acquire any stock or other  ownership  interest in any\n        Person or  substantially  all of the assets of any business as an entity\n        or liquidate,  dissolve or otherwise  reorganize or seek protection from\n        creditors;\n\n                 (d) except as set forth in Schedule 6.2.2, enter into any other\n        agreements, commitments or contracts (including without limitation joint\n        venture agreements or material license agreements) which are material to\n        the Business,  except agreements,  commitments or contracts entered into\n        in the  ordinary  course  for the  purchase,  sale or  lease of goods or\n        services, consistent with past practice; or\n\n                 (e) make any  investment of a capital nature either by purchase\n        of stock or securities,  contributions to capital, property transfers or\n        otherwise,  or by the  purchase  of any  property or assets of any other\n        individual, firm or corporation.\n\n                 6.3 Intercompany  Indebtedness.  Prior to the Closing Date, all\nintercompany  indebtedness,  liabilities and obligations  owed by Shareholder or\nany  Affiliate of  Shareholder  (other than the Company,  any  Subsidiary or any\nother  Affiliate of Shareholder  (in respect of the Cardiac  Stimulation  Device\nbusiness  conducted by such  Affiliate)) on the one hand,  and the Company,  the\nShareholder  Affiliate  (in respect of the Business) or any  Subsidiary,  on the\nother hand, shall be netted,  and if the Company,  the Shareholder  Affiliate or\nany  Subsidiary  still has amounts  owing,  such amounts  shall be dividended to\ntheir respective shareholders and if Shareholder or any such Affiliate still has\namounts owing, such amounts shall be forgiven.\n\n                 6.4 Access.\n\n                 6.4.1  Shareholder  and the Company  shall  provide,  and shall\ncause each of the  Subsidiaries and the Shareholder  Affiliate to provide,  SJM,\nits counsel, financial advisors,  auditors and other authorized representatives,\nwith such  information  as SJM from time to time  reasonably  may  request  with\nrespect to the Company,  the Assets,  the  Shareholder  Affiliate (but only with\nrespect to the Business) and the Subsidiaries, and shall permit, and shall cause\neach of the other  Sellers to  permit,  SJM and its  representatives  reasonable\naccess,  during  regular  business  hours  and upon  reasonable  notice,  to the\noffices, properties, books and records of the Company, the Shareholder Affiliate\n(but only with respect to the Business), and the Subsidiaries,  as SJM from time\nto time  reasonably may request,  and will instruct the  employees,  counsel and\nfinancial  advisors  of  Shareholder,  the  Company,  the  Subsidiaries  and the\nShareholder  Affiliate  to cooperate  with the  investigation  of the  Business;\nprovided that no  investigation  shall affect any warranties or  representations\ngiven by  Shareholder  or the  Company  to SJM in this  Agreement  and  provided\nfurther,  however,  that any such  investigation  shall be  conducted  in such a\nmanner so as not to interfere  with the  operations  of the Business  consistent\nwith past  practice.  This will include,  without  limitation,  access  promptly\nfollowing  execution  of this  Agreement to  information,  books,  records,  and\npersonnel regarding product pricing, supplier costs, specifications for products\nin development  and U.S.  patent  applications.  In addition,  to the extent not\npreviously delivered or made available to SJM, Shareholder and the Company shall\ncause to be  delivered  or made  available  to SJM all  internal  or third party\nenvironmental  and health and safety  studies  and reports  with  respect to the\nBusiness,  including  without  limitation,  the audit  report  of  Stat-a-matrix\nsupporting  the  certificate  of compliance  submitted to the FDA as well as any\nother audit reports from Stat-a-matrix and correspondence  between Stat-a-matrix\nand the Company,  in each case after January 1, 1992. If, in the course of SJM's\ninvestigation of the Business,  SJM learns of any fact or circumstance  that may\nmake any of Shareholder's or the Company's representations or warranties in this\nAgreement untrue in any material respect,  SJM shall promptly inform Shareholder\nof such fact or circumstance.\n\n                 6.4.2 In order to facilitate  the resolution of any claims made\nby or against or incurred by Shareholder  or Shareholder  Affiliate with respect\nto third  parties prior to or after the Closing,  upon  reasonable  notice,  SJM\nshall and shall  cause its  Affiliates  to,  after the  Closing:  (i) afford the\nofficers,  employees and authorized  agents and  representatives  of Shareholder\nreasonable  access,  during regular business hours, to the offices,  properties,\nbooks and records of Acquisition  Subsidiary (and any successor thereto) and its\nAffiliates relating to the Business, (ii) furnish to the officers, employees and\nauthorized agents and  representatives of Shareholder such additional  financial\nand other  information  regarding the Business as  Shareholder  may from time to\ntime reasonably  request and (iii) make available to Shareholder,  the employees\nof Acquisition  Subsidiary (and any successor  thereto) and its Affiliates whose\nassistance,  testimony  or  presence  is  necessary  to  assist  Shareholder  in\nevaluating any such claims and in defending such claims,  including the presence\nof such persons as witnesses in hearings or trials for such purposes;  provided,\nhowever,  that such  investigation  shall not  unreasonably  interfere  with the\nbusinesses  or  operations  of  SJM,  Acquisition  Subsidiary  or any  of  their\nAffiliates;  provided  further,  however,  that  neither  SJM  nor  any  of  its\nAffiliates shall be obligated to disclose any information which it holds under a\nlegally  binding  obligation  of  confidentiality  or which is  protected by any\nprivilege.\n\n                 6.4.3 In order to facilitate  the resolution of any claims made\nby or against or incurred by SJM or any of its Affiliates  with respect to third\nparties  after  the  Closing,  upon  reasonable  notice,   Shareholder  and  the\nShareholder  Affiliate in respect of the Business shall, after the Closing:  (i)\nafford the officers,  employees and authorized agents and representatives of SJM\nreasonable  access,  during regular business hours, to the offices,  properties,\nbooks and records of the Seller with  respect to the  Business,  (ii) furnish to\nthe officers,  employees and authorized agents and  representatives  of SJM such\nadditional financial and other information regarding the Business for the period\nprior to the Closing as SJM may from time to time  reasonably  request and (iii)\nmake available to SJM, the employees of the Sellers whose assistance,  testimony\nor  presence is  necessary  to assist SJM in  evaluating  any such claims and in\ndefending  such claims,  including  the presence of such persons as witnesses in\nhearings or trials for such purposes; provided, however, that such investigation\nshall not unreasonably  interfere with the business or operations of Shareholder\nor its Affiliates;  provided further,  however, that neither Shareholder nor any\nof its Affiliates shall be obligated to disclose any information which they hold\nunder a legally binding  obligation of  confidentiality or which is protected by\nany privilege.\n\n                 6.5  Non-Disclosure  Agreement.  The  terms  of  the  Bilateral\nNon-Disclosure Agreement (the \"Non-Disclosure  Agreement\"),  dated as of October\n27,  1993,  between the Company and SJM are hereby  incorporated  by  reference,\nexcept that Section 10 thereof shall be deemed  amended to provide that New York\nlaw shall govern the  Non-Disclosure  Agreement  and that any disputes  relating\nthereto shall be brought  before a federal court sitting in New York,  New York.\nEach of the parties hereto agrees to be bound by the terms of the Non-Disclosure\nAgreement which is incorporated herein by reference. The NonDisclosure Agreement\nshall remain in full force and effect until the Closing.\n\n                 6.6  Antitrust,   Competition  Law  Filings.   As  promptly  as\npracticable after the execution of this Agreement,  each party to this Agreement\nshall file or cause its Affiliates to file any reports or notifications that may\nbe  required  to be  filed  under  the  HSR  Act  and  such  other  competition,\ninvestment,  foreign exchange,  tax or other laws of such other jurisdictions as\nmay be necessary to effect the transactions contemplated by this Agreement.\n\n                 6.7 Non-Foreign  Person Affidavit.  Shareholder and the Sellers\n(other than the  Shareholder  Affiliate)  shall  furnish to SJM at or before the\nClosing a non-foreign person affidavit, as provided for in Section 1445(b)(2) of\nthe Code.\n\n                 6.8 Transfer of Real Property.  Sellers shall take such actions\nas are  necessary  to  transfer,  or  cause to be  transferred,  to SJM (or such\nAffiliates  of SJM that SJM shall  designate)  on the Closing  Date,  all of the\nOwned Real  Property  and the Leased Real  Property,  subject  only to the title\nexceptions referred to in Section 4.19.1 above.\n\n                 6.9 Certain Dividends.  From the date hereof until the Closing,\neach of the Company and the  Subsidiaries may declare and pay dividends to their\nrespective shareholders to reflect estimated pre-Tax earnings of the Company and\nthe Subsidiaries for the period from September 30, 1993 to the Closing Date.\n\n                 6.10 Certain  Actions Prior to the Closing  Date.  Prior to the\nClosing Date,  Shareholder  shall cause the Company to transfer,  whether in the\nform of a dividend or otherwise, those assets listed on Schedule 6.10 out of the\nCompany.  Shareholder  shall not transfer to the Company or the Subsidiaries any\nmaterial assets, except as provided in Section 6.8.\n\n                 6.11 Claims History. Without limiting the generality of Section\n6.4, Shareholder,  the Shareholder Affiliate and the Company shall promptly make\navailable and furnish  access to SJM a products  claims  history with respect to\nthe Company,  the Shareholder  Affiliate (but only with respect to the Business)\nand the Subsidiaries.\n\n                 6.12 FDA  Recertification.  Without  limiting the generality of\nSection 6.4, Shareholder and the Company shall promptly furnish to SJM copies of\nwritten  communications with the FDA in respect of the Business made or received\nby the  Company  pursuant  to or in  connection  with the terms of that  certain\nConsent  Decree of  Permanent  Injunction  (captioned  U.S. v.  Siemens  Medical\nSystems, Inc. and dated March 23, 1994) (the \"Consent Decree\") including without\nlimitation  certificates  of  compliance  made to the FDA by or on behalf of the\nCompany  or the  Subsidiaries,  and the  responses,  if any,  by the FDA of such\ncertificates.  Shareholder  and  the  Company  shall  promptly  furnish  or make\navailable  such  other  information  as SJM  may  reasonably  request  regarding\ncompliance by the Company and the Subsidiaries  with the applicable terms of the\nConsent Decree.\n\n                 6.13 Grant of License.  SJM and the SJM Affiliates hereby grant\nto Siemens  Aktiengesellschaft  (\"Siemens  AG\"),  effective  at the  Closing,  a\nworldwide,  irrevocable,  non-exclusive,  perpetual, royalty free, paid up right\nand license to use the patents,  copyrights,  trade secrets, designs,  drawings,\nsoftware,  know-how,  technology and other intellectual property and proprietary\nmatters owned or used by the Company or any of its  Subsidiaries  or assigned or\ntransferred to SJM or one of its  Affiliates,  to make,  have made,  sell,  have\nsold, use, lease,  license, or otherwise dispose of products intended for use in\nor as  products,  other than Cardiac  Stimulation  Devices  (including,  without\nlimitation,  the right and license to make,  have made,  sell,  have sold,  use,\nlease,  license or otherwise  dispose of Cardiac  Stimulation  Devices or parts,\ncomponents,  modules,  subsystems  or  subassemblies  thereof,  in or as  parts,\ncomponents,  modules,  subsystems or subassemblies of or for,  products intended\nfor use other than as Cardiac Stimulation Devices),  and to render services with\nrespect  to any such  products  used or  intended  for use or uses other than as\nCardiac Stimulation  Devices. The rights and licenses granted under this Section\n6.13 may be freely sublicensed,  assigned,  transferred or disposed of, in whole\nor in part,  without the prior written  consent of SJM, any of its Affiliates or\nany of the  successors  in  interest  of any  of  the  foregoing;  any  license,\nassignment,  transfer or other  disposition by SJM, any of its  Affiliates,  the\nCompany, any of its Subsidiaries and any of the successors in interest of any of\nthe  foregoing  shall be subject to such rights and licenses  granted to Siemens\nAG.\n\n                 6.14 Other  Financial  Statements.  On or before the earlier of\n(i) the date which is 30 days from the date  hereof and (ii) the  Closing  Date,\nthe Company and  Shareholder  shall deliver to SJM an audited  balance sheet for\nthe Business as of September  30, 1992, as well as an audited  income  statement\nand cash flow  statement  for the fiscal year then ended,  together with related\nnotes and schedules thereto, prepared from the books and records of the Business\nin  accordance  with U.S. GAAP on a consistent  basis.  Upon the delivery by the\nCompany and  Shareholder to SJM of the Closing  Balance  Sheet,  the Company and\nShareholder  shall also deliver to SJM an audited income statement and cash flow\nstatement for the Business for the period  beginning  October 1, 1993 and ending\non the Closing Date,  together with related notes and schedules thereto.  Within\n30  calendar  days  after  the  end of  June,  1994,  and  each  calendar  month\nthereafter,  Shareholder  and the Company shall deliver to SJM unaudited  profit\nand loss  information for the Business based on financial  information  normally\nprepared by the Company for delivery to Shareholder.  To the extent necessary to\npermit  SJM to comply  with the  rules and  regulations  of the  Securities  and\nExchange  Commission,  Shareholder  shall provide to SJM  financial  information\nprepared in accordance with U.S. GAAP consisting of an unaudited interim balance\nsheet,  dated as of the last day of, and an income  statement  and  statement of\ncash flow, for the period  beginning  January 1, 1994 and ending on the last day\nof, such calendar quarter as required by the applicable rules and regulations of\nthe Securities and Exchange Commission. If the last day of such calendar quarter\nis after the Closing Date,  Shareholder  shall  cooperate in the  preparation of\nsuch interim unaudited financial statements.\n\n\n                                   ARTICLE 7\n\n                              ADDITIONAL COVENANTS\n\n                 7.1       Liability for Employee Benefit Plans.\n\n                 7.1.1  In  General.  SJM  or an  Affiliate  of SJM  shall  make\navailable to those  Employees  listed on Schedule 4.11,  Employee  Benefit Plans\nthat  are no less  favorable  to such  Employees,  taken  as a  whole,  than the\nEmployee Benefits Plans made available to similarly  situated  employees of SJM.\nSJM shall,  or shall cause an SJM Affiliate to, provide each Employee  listed on\nSchedule  4.11 who becomes an employee of SJM or an SJM  Affiliate  with service\ncredit as of the Closing Date for their years of service with  Shareholder,  the\nCompany,  or any  Affiliate  of either the Company or  Shareholder  prior to the\nClosing  Date for  purposes  of  eligibility  to  participate,  eligibility  for\nbenefits,  calculation of benefits (other than the accrual of benefits under any\nEmployee  Pension  Benefit Plan as defined in Section  4.10.5) and vesting under\nthe Employee  Benefit Plans made  available to such Employee as provided in this\nSection  7.1.1.  SJM agrees to waive any  pre-existing  conditions  (other  than\npre-existing   conditions  recognized  by  the  Company  Employee  Benefit  Plan\nimmediately  prior to the Closing  Date) and credit the Employee for the current\nplan year with any amounts  paid toward the  deductibles  and the  out-of-pocket\nlimits under such Employee  Benefit Plans.  SJM agrees to accept the transfer of\naccount balances in the Company's  health care and dependent care  reimbursement\nPlans and to allow  Employees  to  continue  deductions  and  submitting  claims\nthrough  year-end to the extent  permitted by law. As of the Closing  Date,  SJM\nshall offer employment to each Employee (other than a former employee).\n\n                 7.1.2 Liability for Company  Employee Benefit Plans. (a) On the\nClosing Date,  subject to the provisions in Section 7.1.4 and except as provided\nin Sections  7.1.2(c)  and 7.3,  SJM shall  assume,  or cause a  designated  SJM\nAffiliate to assume,  each Company  Employee  Benefit Plans, and all liabilities\nrelating to such Company  Employee Benefit Plan,  whether arising before,  on or\nafter the Closing Date except for any  liabilities  under the  Employee  Benefit\nPlans for Employees in Canada  arising  prior to the Closing  Date.  SJM, or the\ndesignated SJM Affiliate referred to in the immediately preceding sentence, also\nshall assume on the Closing Date all liabilities of Shareholder,  the Company or\nany  of  their  respective   Subsidiaries  to  Employees  for  wages,  incentive\ncompensation,  vacations, perquisites, worker's compensation benefits, statutory\nbenefits and entitlements,  including,  without  limitation,  all obligations to\nEmployees  under  applicable  federal or local law,  including  pursuant  to the\nWorker Adjustment and Retraining Notification Act and any COBRA Obligations.\n\n                 (b) The Company or its  third-party  administrator,  trustee or\ninsurance  carrier  shall assign to SJM any  insurance  policies or other assets\nsegregated  for purposes of funding  benefits  pursuant to the Company  Employee\nBenefit Plans, the Executive  Arrangements and any liabilities  assumed pursuant\nto Section 7.1.2(a).\n\n                 (c)       With respect to the Siemens-Pacesetter 401(k)  Profit\n Sharing Plan and Trust (the \"Company 401(k) Plan\"):\n\n                 As of the Closing  Date,  SJM or the  designated  SJM Affiliate\n         shall adopt, as sole sponsoring employer,  the Company 401(k) Plan and,\n         as  of  such  adoption,   shall  assume  all  of  the  liabilities  and\n         obligations  of the  Company  401(k)  Plan and of  Shareholder  and the\n         Company  (except  for any  breach of any duty or  obligation  occurring\n         prior to the Closing Date) with respect to the Company 401(k) Plan  and\n         Shareholder  and the Company shall be relieved of all  liabilities  and\n         obligations to the Plan's participants and their beneficiaries  arising\n         under  the  Plan,  except  for any  breach  of any  duty or  obligation\n         occurring  prior to the  Closing  Date.  As of the  Closing  Date,  the\n         Company  shall  cease to be a  sponsoring  employer,  administrator  or\n         fiduciary  with respect to the Company  401(k) Plan and shall  transfer\n         direction  and control with respect to the Company  401(k) Plan and its\n         related trust and assets to SJM or its designated SJM Affiliate.\n\n                 7.1.3 Nothing herein  expressed or implied is intended or shall\nbe construed to confer upon or give to any person,  firm or  corporation,  other\nthan the parties hereto and their respective  permitted  successors and assigns,\nany rights or remedies under or by reason of this Agreement.\n\n                 7.1.4 Shareholder,  the Company, the Shareholder  Affiliate and\nthe Controlled Group that includes Shareholder,  shall indemnify,  save and hold\nharmless  SJM,  and  the  SJM  Affiliates  designated  in  Section  2.1  and the\nControlled  Group of which SJM is a member  from and against any and all Losses:\n(a) arising  under any Employee  Pension  Benefit  Plan or any Employee  Welfare\nBenefit Plan  maintained or  contributed  to by the Company,  Shareholder or the\nShareholder  Affiliate  or any  member  of the  Controlled  Group of  which  the\nCompany, its Subsidiaries or the Shareholder Affiliate is a member, other than a\nCompany  Employee  Benefit  Plan  and  obligations  assumed  by SJM  and the SJM\nAffiliates  pursuant to Section  7.1.2 above,  regardless  of whether the Losses\nrelate to conditions or events arising out of transactions which occur prior to,\non or after the Closing  Date;  (b) arising out of the  liabilities  retained by\nShareholder,  the Company or  Shareholder  Affiliate  under  Sections  7.1.2(a),\n7.1.2(c) and 7.3; (c)  attributable to Employees who do not become  employees of\nSJM or the  designated  Affiliate  of SJM on the  Closing  Date.  Subject to the\npreceding  sentence,  SJM and the SJM Affiliates shall indemnify,  save and hold\nharmless  Shareholder  and the  Shareholder  Affiliate  for  any and all  Losses\nrelated to the Company Employee Benefit Plans and obligations assumed by SJM and\nthe SJM Affiliates  pursuant to Section 7.1.2 above,  regardless of whether such\nLosses  relate to conditions or events  arising out of  transactions  that occur\nprior to, on or following the Closing  Date.  The  provisions of Sections  10.4,\n10.6 and 10.7 shall apply,  but the  provisions of Section 10.5 shall not apply,\nto the indemnification provided under this Section 7.1.4.\n\n                 7.2       Tax Matters.  The following provisions shall govern \nthe  allocation  of responsibility as between SJM and Shareholder  for certain \nTax matters following the Closing Date:\n\n                 7.2.1 Responsibility for Taxes. Except as otherwise provided in\nSections  7.2.2  and  7.2.3,  Shareholder  shall be solely  responsible  for all\nLiabilities for any and all Taxes of Shareholder,  the Sellers, their respective\nAffiliates,  any group of  Persons  or member of a group of  Persons  with which\nShareholder,  any Seller and\/or their  respective  Affiliates filed or files Tax\nReturns  on a  combined  basis  and\/or  any  Affiliated  Group or  member  of an\nAffiliated  Group of which  Shareholder,  any  Seller  and\/or  their  respective\nAffiliates is, was or becomes a member. Except as otherwise provided in Sections\n7.2.2 and 7.2.3, SJM shall be solely responsible for all Liabilities for any and\nall Taxes of SJM, its  Affiliates,  any group of Persons or member of a group of\nPersons  with which SJM and\/or its  Affiliates  files Tax  Returns on a combined\nbasis, and\/or any Affiliated Group or member of an Affiliated Group of which SJM\nand\/or its Affiliates is, was, or becomes a member,  except for  Liabilities for\nTaxes imposed on Shareholder, the Sellers and\/or their respective Affiliates for\nwhich SJM or an SJM  Affiliate  becomes  liable  by  virtue  of its  status as a\nsuccessor to the Assets and\/or the Business.\n\n                 7.2.2 Sales and Other Tax.  SJM will pay,  and shall  indemnify\nand hold the Company,  Shareholder and their Affiliates  harmless against, up to\n$4,000,000  of (a)  transfer,  documentary,  recording,  notarial,  sales,  use,\nregistration,  stamp and other similar taxes, fees and expenses (including,  but\nnot limited to, all applicable  stock  transfer  taxes and real estate  transfer\ntaxes, however computed,  including a tax based on the excess of sale price over\noriginal cost) and including any penalties,  interest and additions to such tax)\nand  (b)  all  expenses  incurred  in the  transfer  of  intellectual  property,\nincluding,   without   limitation,   the  cost  of  all  patent  and   trademark\nregistrations contemplated hereby, in each case incurred in connection with this\nAgreement and the transactions  contemplated  hereby and each of Shareholder and\nSJM will be  responsible  for the payment of, and shall  indemnify  and hold the\nother party  harmless  against 50% of all such  amounts in excess of  $4,000,000\nincurred in connection  with this  Agreement and the  transactions  contemplated\nhereby;  provided,  however, that SJM will be solely responsible for the payment\nof the Canadian Goods and Services Tax; and provided further that, if allowed by\nCanadian  law,  SJM will be  permitted  to  satisfy  its  obligation  to pay the\nCanadian  Goods and  Services  Tax by  assigning  its claim for a refund of such\ntaxes to the Shareholder  Affiliate.  To the extent  permitted under  applicable\nlaw,  SJM shall  satisfy  its  obligation  under  this  Section  7.2.2 by paying\ndirectly to the relevant tax authority (i) first, those taxes and expenses which\nare  imposed by  applicable  law solely on SJM or its  Affiliates  and which SJM\nacknowledges  at the time of the  Closing  are due and owing,  and (ii)  second,\nthose  taxes and  expenses  which are  imposed  by  applicable  law  jointly  on\nShareholder  or  its  Affiliates  and  SJM  or  its  Affiliates  and  which  SJM\nacknowledges at the time of the Closing are due and owing.\n\n                 7.2.3  Property  Taxes.  In the case of any taxable period that\nincludes (but does not end on) the Closing Date (a \"Straddle Period\"):\n\n                 (a) Real,  personal  and  intangible  property  Taxes and other\nsimilar taxes (\"Property  Taxes\") that are imposed by virtue of the ownership of\nassets  (as  opposed to taxes that are  imposed as a result of the  transfer  of\nassets)  with  respect  to the Assets  for a  Straddle  Period  shall be divided\nbetween the Tax years (or  portions  thereof)  ending on or prior to the Closing\nDate (the  \"Pre-Closing  Tax Period\") and a Post-Closing  Tax period that begins\nthe day following the Closing Date (a \"Post-Closing Tax Period\"), and the amount\nof Taxes allocated to the  Pre-Closing Tax Period or a Post-Closing  Tax Period,\nas the case may be, shall be equal to the amount of such Property  Taxes accrued\n(i.e., based upon the date of assessment of such Property Taxes and not upon the\ndate of payment  thereof unless the Tax is related to a definite period of time,\nin which case it will be treated as accruing  ratably  over that period) for the\nentire Straddle Period  multiplied by a fraction,  the numerator of which is the\nnumber of days during the Straddle Period that are in the Pre-Closing Tax Period\nor a Post-Closing  Tax Period,  as the case may be, and the denominator of which\nis the number of days in the Straddle Period.\n\n                 (b)  Shareholder  shall  satisfy its  obligation  in respect of\nTaxes for the Straddle  Period by paying to SJM the excess of (i) such  Straddle\nPeriod Taxes for the  Pre-Closing  Tax Period over (ii) the sum of such Straddle\nPeriod Taxes paid by  Shareholder,  the Seller or their  respective  Affiliates.\nShareholder  shall pay, or cause its Affiliate to pay,  such excess,  if any, to\nSJM within  thirty  (30) days after the date of the Tax Return  relating to such\nStraddle  Period Taxes is required to be filed (or, if later,  is actually filed\nbut no earlier than the later of the date SJM pays its share of Straddle  Period\nTaxes or, if SJM or an  Affiliate  is  responsible  for filing the Tax Return in\nquestion,  thirty  (30) days after  Shareholder  has  received a copy of the Tax\nReturn with respect to which the Straddle Period Taxes are owing). If the sum of\nsuch Straddle Period Taxes paid by Shareholder,  the Sellers or their respective\nAffiliates exceeds the Straddle Period Taxes for the Pre-Closing Tax Period, SJM\nshall pay,  or cause its  Affiliate  to pay, to  Shareholder  the amount of such\nexcess,  if any,  within  thirty  (30)  days  after  the date of the Tax  Return\nrelating to such Straddle Period Taxes is required to be filed (or, if later, is\nactually  filed but no earlier than the later of the date  Shareholder  pays its\nshare of Straddle Period Taxes or, if Shareholder or an Affiliate is responsible\nfor filing the Tax Return in question, thirty (30) days after SJM has received a\ncopy of the Tax Return  with  respect  to which the  Straddle  Period  Taxes are\nowing).  Payments to be made pursuant to this paragraph by  Shareholder,  SJM or\ntheir  affiliates  with  respect to any Straddle  Period shall be  appropriately\nadjusted to reflect any final  determination  (which shall include the execution\nof a Form 870-AD or successor form) with respect to Straddle Period Taxes.\n\n                 7.2.4 Retention of Records.  Each of SJM and Shareholder  shall\nretain (or cause to be retained) all books, records and other data pertaining to\nTax matters for all open  periods or  portions  thereof  ending on or before the\nClosing Date other than books,  records and data pertaining to Taxes based on or\nmeasured by income,  which  neither party shall have an obligation to retain for\nthe benefit of the other. In particular,  SJM and  Shareholder  shall retain (or\ncause to be retained) all non-income-tax related Tax Returns, schedules and work\npapers,  and all  material  records and other  documents  relating  thereto with\nrespect to the  operations of the Sellers  prior to the Closing Date,  until the\nexpiration of the statute of limitations  (and, to the extent notified by SJM or\nShareholder,  any extension thereof) of the respective Tax periods and shall not\ndestroy  any such  documents  thereafter  without  providing  thirty  (30) days'\nwritten notice to Shareholder, or to SJM, as the case may be.\n\n                 7.2.5 Notice; Cooperation.  Nothing in this Section 7.2.5 shall\nrequire  any party to provide  notices or  cooperation  with  respect to matters\npertaining  to Taxes that are based on or  measured  by income.  Each of SJM and\nShareholder  shall promptly  provide  written notice to the other upon receiving\n(or upon an Affiliate  receiving) notice from a taxing authority that additional\nnon-income Tax liabilities may exist or that any non-income-tax related books or\nrecords  have  been  requested  by any  taxing  authority.  SJM and  Shareholder\ncovenant and agree that subsequent to the Closing,  upon  reasonable  notice and\nduring normal business hours,  they and their Affiliates will (i) give the other\nparty and its  representatives  information,  books and records  relevant to the\nSellers  to the  extent  necessary  to enable  the other  party to  prepare  its\nnon-income  tax  related  Returns,  and  (ii)  provide  the  other  party or its\nAffiliates  with  such  information,  books and  records  as may  reasonably  be\nrequested in connection  with any  non-income-tax  related Tax Return,  inquiry,\nelection,  audit or other  examination by any taxing  authority,  or judicial or\nadministrative  proceeding  relating to liability for Taxes. SJM and Shareholder\nalso shall make  available to each other,  as reasonably  requested,  and at the\nexpense of the  requesting  party,  knowledgeable  employees  or advisors of the\nparty or its  Affiliates of which the request is made and personnel  responsible\nfor  preparing  and  maintaining  information,  books,  records and documents in\nconnection  with  non-income-tax  related  Tax  filings,   audits,  disputes  or\nlitigation.  If Shareholder,  SJM or any of their Affiliates pay any Taxes that,\npursuant to this Agreement,  are to be borne by another party,  such other party\nshall promptly reimburse such paying party for the Taxes paid.\n\n                 7.2.6  Refunds.  Except as  otherwise  provided in this Section\n7.2.6,  any  refunds  or  credits  of Taxes  of  Shareholder,  Sellers  or their\nAffiliates  relating to taxable  periods  ending on or before the  Closing  Date\nshall be for the account of Shareholder;  provided, however, that any refunds or\ncredits of Taxes which are accrued on the Closing  Balance Sheet or which result\nfrom  a  payment  of any  Taxes  by SJM or  any  Affiliate  either  directly  or\nindirectly, shall belong to SJM. Any refunds or credits of Taxes relating to any\nStraddle Period shall be equitably apportioned between Shareholder,  Sellers and\ntheir Affiliates and SJM and its Affiliates consistently with Section 7.2.3. Any\namounts  payable to  Shareholder  pursuant to this Section 7.2.6 shall be net of\nany Tax cost or benefit to SJM or its Affiliates  attributable to the receipt of\nsuch  refund  and\/or the  payment by SJM of such  amounts  to  Shareholder.  Any\namounts  payable to SJM pursuant to this  Section  7.2.6 shall be net of any Tax\ncost or benefit to Shareholder,  Sellers or their Affiliates attributable to the\nreceipt of such refund and\/or the payment by Shareholder of such amounts to SJM.\nIf any party receives any refunds or credits that,  pursuant to this  Agreement,\nare the property of another  party,  such party shall promptly pay the amount of\nsuch refunds or credits to the other party.\n\n                 7.2.7 Certain Contest Rights. (a) Promptly after the receipt by\nSJM or Shareholder or their respective Affiliates (the \"Prospective Indemnitee\")\nof a written notice of any demand,  claim or circumstance which, after the lapse\nof time,  would or might give rise to a claim or the commencement (or threatened\ncommencement) of any action,  proceeding or investigation  with respect to which\nindemnity may be sought under this Section 7.2 (an  \"Asserted  Tax  Liability\"),\nthe Prospective Indemnitee shall give notice thereof (the \"Tax Claim Notice\") to\nthe other  party (the  \"Prospective  Indemnitor\").  The Tax Claim  Notice  shall\ncontain factual information (to the extent known to the Prospective  Indemnitee)\ndescribing  the Asserted Tax  Liability in  reasonable  detail and shall include\ncopies of any notice or other document  received from any Taxing  authority with\nrespect to any such Asserted Tax Liability.  If the Prospective Indemnitee fails\nto give the  Prospective  Indemnitor  notice of an  Asserted  Tax  Liability  as\nrequired by this Section 7.2.3,  and if such failure to give notice results in a\ndetriment  to  the  Prospective  Indemnitor,   then  any  amount  to  which  the\nProspective Indemnitor is otherwise required to pay pursuant to Section 7.2 with\nrespect to the  Asserted  Tax  Liability  shall be reduced by the amount of such\ndetriment.\n\n                 (b) The  Prospective  Indemnitor  may elect to direct,  through\ncounsel of its own choosing and at its own expense,  the  compromise or contest,\neither  administratively or in the courts, of any Asserted Tax Liability. If the\nProspective  Indemnitor  elects to direct  the  compromise  or  contest  of such\nAsserted  Tax  Liability,  it shall within 30 calendar  days (or sooner,  if the\nnature of the  Asserted  Tax  Liability  so  requires)  notify  the  Prospective\nIndemnitee  of its  intent  to do  so,  and  the  Prospective  Indemnitee  shall\ncooperate  and shall  cause its  Affiliates  to  cooperate,  at the  Prospective\nIndemnitor's  expense,  in the  compromise  or  contest  of  such  Asserted  Tax\nLiability.  The  Prospective  Indemnitor  may not  enter  into on  behalf of the\nProspective  Indemnitee or its Affiliates a settlement agreement with respect to\nany  Asserted  Tax  Liability  without  the written  consent of the  Prospective\nIndemnitee;  provided,  however,  that, if the  Prospective  Indemnitee does not\ngrant such consent to the Prospective  Indemnitor with respect to the settlement\nof an  Asserted  Tax  Liability,  the  Prospective  Indemnitor  may  satisfy its\nindemnity  obligation  under this  Section 7.2 with  respect to the Asserted Tax\nLiability by paying to the Prospective Indemnitee (or its Affiliates) the amount\nwhich the  Prospective  Indemnitor  (or its  Affiliate)  would have paid if such\nconsent had been granted and the Asserted Tax Liability settled pursuant to such\nsettlement  agreement.  If the Prospective  Indemnitor  elects not to direct the\ncompromise  or  contest  of the  Asserted  Tax  Liability,  fails to notify  the\nProspective  Indemnitee  of its election,  contests its  obligation to indemnify\nunder this Section 7.2 or if the Prospective Indemnitee refuses to grant consent\nto the Prospective  Indemnitor to enter into a settlement agreement with respect\nto an Asserted Tax Liability,  the Prospective  Indemnitee or its Affiliates may\npay,  compromise or contest such  Asserted Tax  Liability,  and the  Prospective\nIndemnitor shall cooperate (including granting any necessary powers of attorney)\nin such contest.  The  Prospective  Indemnitee's  settlement or compromise of an\nAsserted Tax Liability under the conditions set forth in the preceding  sentence\nshall not affect the Prospective  Indemnitor's  indemnity obligation pursuant to\nSection 7.2;  provided,  however,  that the  Prospective  Indemnitor will not be\nobligated to indemnify the  Prospective  Indemnitee (or its  Affiliates) for any\namounts  in excess of the  amount  the  Prospective  Indemnitor  would have paid\npursuant to a settlement  agreement if the Prospective  Indemnitee had given its\nwritten  consent to the  Prospective  Indemnitor with respect to such settlement\nagreement.  In any event, the Prospective Indemnitor (or its Affiliates) and the\nProspective Indemnitee (or its Affiliates) may participate,  at its own expense,\nin the contest of such Asserted Tax  Liability.  If the  Prospective  Indemnitor\nchooses to direct the compromise or contest of any Asserted Tax  Liability,  the\nProspective  Indemnitee shall promptly empower and shall cause its Affiliates to\npromptly  empower (by power of attorney and such other  documentation  as may be\nappropriate)  such  representative  of  the  Prospective  Indemnitee  as it  may\ndesignate to represent  the  Prospective  Indemnitor  or its  Affiliates  in any\naudit, claim for refund or administrative or judicial proceeding insofar as such\naudit,  claim for refund or  proceeding  involves an Asserted Tax  Liability for\nwhich the Prospective Indemnitor would be liable under Section 7.2.\n\n                 7.2.8 Indemnification. Shareholder agrees to indemnify and hold\nSJM,  Acquisition  Subsidiary and their respective  Affiliates harmless from and\nagainst   any  and  all  Taxes   resulting   from  any  breach  of  any  of  the\nrepresentations, warranties, covenants or other agreements of the Shareholder or\nits  Affiliates  contained in this Section 7.2. SJM agrees to indemnify and hold\nShareholder,  the  Sellers and their  respective  Affiliates  harmless  from and\nagainst   any  and  all  Taxes   resulting   from  any  breach  of  any  of  the\nrepresentations,  warranties,  covenants  or  other  agreements  of  SJM  or its\nAffiliates  contained in this Section 7.2. In addition to Taxes,  this indemnity\nobligation extends to (i) the reasonable costs incurred by the indemnified party\nin collecting  under this  indemnity  agreement and (ii) legal fees, but only if\nthe Prospective  Indemnitor fails to acknowledge its indemnity  obligation under\nthis Section 7.2 within 30 days after notification by the Prospective Indemnitee\nof the Asserted Tax Liability.\n\n                 7.3  Liability for Executive Arrangements.\n\n                 7.3.1  SJM  shall  on the  Closing  Date  assume  any  and  all\nliability  directly  or  indirectly   related  to  the  Supplemental   Executive\nRetirement  Plan (\"SERP\"),  Employment  Agreements,  Split Dollar Life Insurance\nAgreement, Executive Life Insurance Agreements and Executive Savings Plan listed\non Schedule 7.3 (together,  the \"Executive  Arrangements\")  and SJM shall assume\nall liabilities and perform all obligations of the Company and Shareholder under\nthe Executive  Arrangements;  provided,  however,  that Shareholder shall remain\nliable and shall pay directly to such  executive the excess,  if any, of (i) the\nEnhanced Benefit, over (ii) the Alternative Benefit payable under Section 5.2 of\nthe SERP and, if any interest  payable under  Section 5.2 or additional  amounts\npayable pursuant to Section 5.3 of the SERP are due, the portion of the interest\nand additional amount that is attributable solely to such excess. On or prior to\nthe Closing  Date,  Shareholder  shall  inform SJM of whether  the  transactions\ncontemplated  by this  Agreement  constitute  a Target Sale of the  Company,  as\ndefined in the SERP. SJM shall provide  Shareholder with prior written notice of\nany claim  under  the SERP that  would  give  rise to a  Shareholder  obligation\nhereunder and shall provide  Shareholder  with an opportunity to review,  at its\nown expense, the calculation of benefits under the SERP.\n\n                 7.4 Non-Competition.\n\n                 7.4.1 During the period from the date of this  Agreement to and\nincluding the fourth  anniversary of the date hereof (or, if not enforceable for\nsuch period in any country,  for such shorter  period as shall be enforceable in\nsuch country),  Shareholder shall not, nor shall it permit any of its Affiliates\nto, directly or indirectly,  engage in the development,  marketing,  production,\nsale or distribution  anywhere in the world of Competitive  Products (as defined\nbelow).\n\n                 7.4.2 As used in Section 7.4.1 hereof,  the phrase \"directly or\nindirectly,  engage  in\"  includes  any  direct or  indirect  ownership,  profit\nparticipation  or other interest by Shareholder  or its  Affiliates,  whether as\nowner,  stockholder,  partner, joint venturer,  beneficiary or otherwise, in any\nPerson;  provided,  however,  that the  foregoing  provisions  shall not prevent\nShareholder  or any of its  Affiliates  from (a)  investing in  businesses  that\ncompete with the  Competitive  Products  where such  investments  are incidental\ninvestments in public companies and constitute,  in the aggregate,  less than 5%\nof the outstanding securities or voting interest of each of such companies,  (b)\nacquiring  businesses  an  incidental  portion  (such portion being deemed to be\nincidental  if the assets,  revenues or income  relating to the  business  which\ncompetes with the Competitive  Products is less than 5% of the assets,  revenues\nor income,  respectively,  of the  business  being  acquired) of the business of\nwhich competes with the Competitive  Products  (unless the excess over 5% of the\ncompeting  portion of such business is divested  within six months from the date\nof  such  acquisition)  or (c)  investing  in  investment  funds  or  investment\npartnerships  which in turn invest in companies or entities which may be engaged\nin the  production,  sale or  distribution  of  Competitive  Products so long as\nneither  Shareholder  nor  any of its  Affiliates  exercise  control  over  such\ninvestment decisions.\n\n                 7.4.3 As used in this Section 7.4, (i)  \"Competitive  Products\"\nmeans  \"Cardiac  Stimulation  Devices\"  (as  defined in Section  13.1) and other\ndevices  performing  the same  purpose or function  as, or that are  competitive\nwith, Cardiac Stimulation  Devices,  and shall include products intended for use\nin or as  products  that are Cardiac  Stimulation  Devices  (including,  without\nlimitation, parts, components,  modules, subsystems or subassemblies thereof, or\nparts,  components,  modules,  subsystems or subassemblies of and for,  products\nintended for use as or products that are Cardiac Stimulation  Devices) except to\nthe extent that they are intended  for use in or as products  other than Cardiac\nStimulation  Devices and (ii) \"Affiliate\" does not include any Person once it is\nno longer an Affiliate of Siemens AG.\n\n                 7.5  Non-Solicitation.  For thirty-six  months from the Closing\nDate, neither  Shareholder nor the Shareholder  Affiliate,  on the one hand, nor\nSJM nor any of its Affiliates,  on the other hand, shall specifically solicit to\nhire any current  employees of the other party without the prior written consent\nof such latter party,  provided that nothing  herein shall  restrict or preclude\nthe rights of either party to make generalized  searches for employees by use of\nadvertisements in the media (including  without  limitation,  trade media) or by\nengaging search firms to engage in searches which are not targeted or focused on\nthe employees of the other party.\n\n                 7.6 Siemens  Name.  Immediately  after the  Closing,  except as\notherwise  permitted under the License  Agreement  referred to in Section 3.2.5,\nSJM will take all action  necessary to cease the use of the name  \"Siemens\"  (or\nany variant  thereof) and related  trademarks,  corporate names, and trade names\nincorporating  the name  \"Siemens\",  and any \"Siemens\" logos and trade dress, in\neach case in connection  with the conduct of the Business.  On the Closing Date,\nShareholder shall take all necessary action to change the name of the Company to\nexclude the word \"Pace-Setter\".\n\n                 7.7  Confidentiality.  Except  as  otherwise  provided  in this\nAgreement,  after the Closing, the Sellers and their Affiliates shall not use or\ndisclose to third  Persons any  information  disclosed  to and  transferred  and\nassigned,  licensed or  otherwise  made  available to SJM or its  Affiliates  in\nconnection  with  the  Business  and  transfer  of  Assets  hereunder.   Without\nlimitation,  this  obligation  of  confidentiality  shall  apply to  information\nrelated to the Products,  business plans, strategies,  technologies,  and future\nbusiness relationships of the Business. This obligation of confidentiality shall\nnot apply to the  extent  any such  information  (a) is or  becomes  part of the\npublic  domain  through no fault of the Sellers  (but only after and only to the\nextent that it is published or otherwise becomes part of the public domain); (b)\nafter the Closing,  comes into the possession of the Sellers from a third Person\nwho was  not,  to the  Sellers'  knowledge,  under a  continuing  obligation  of\nconfidence to the disclosing  party; or (c) is disclosed by the Sellers pursuant\nto any  judicial  compulsion,  provided  that SJM is  notified  at the time such\njudicial  action is initiated.  Disclosures  relating to the Products,  business\nplans,  strategies and future business relationships of SJM or the Company shall\nnot be deemed to be in the public  domain or in the  possession of the receiving\nparty  merely   because  they  are  embraced  (but  not  disclosed)  by  general\ndisclosures in the public domain or in the possession of the receiving party.\n\n                 7.8  Bulk  Sales  Laws.  The  Company  shall  comply  with  the\nprovisions  of the \"bulk sales\" law of the State of  California,  and  otherwise\neach of the parties  waives  compliance by the other parties with the provisions\nof the \"bulk  sales\" laws of any  jurisdiction  which may be  applicable  to the\ntransactions contemplated by this Agreement.\n\n                 7.9  Guarantee.  SJM  hereby  unconditionally   guarantees  the\nobligations of the SJM Affiliates and Acquisition Subsidiary hereunder.\n\n                 7.10 Real Estate Inspections.  Commencing from the date of this\nAsset Purchase  Agreement and continuing  through the date of Closing,  SJM, its\nagents,  contractors and  subcontractors  shall have the right to enter upon the\nOwned Real Property,  at reasonable times (during ordinary  business hours) upon\nnot less than 48 hours' prior notice to the Company,  to make such  inspections,\nsurveys and tests of the Real Property and the improvements  situated thereon as\nSJM may require.\n\n                 7.11 Real Estate Related Reports.  Promptly after the execution\nof this Asset  Purchase  Agreement,  Seller shall deliver to SJM, or cause to be\ndelivered to SJM,  copies of all  insurance  claims and reports  relating to the\nOwned Real  Property  which have been  submitted  to insurance  companies  since\nJanuary 1, 1994,  insuring all or portions of the Real Property and all letters,\ncorrespondence  and\/or  reports  prepared by or at the request of such insurance\ncompanies  that have been  delivered  to any of  Sellers  or which  Sellers  are\nentitled to obtain from such insurance companies.\n\n                 7.12  Reimbursement  for  Certain  Damages.  Shareholder  shall\nreimburse  Acquisition  Subsidiary for the  out-of-pocket  costs incurred by the\nBusiness  after the Closing Date to repair the damage to the floor in the \"clean\nroom\" at the Company's Valley View Court Facility as a result of the January 17,\n1994 earthquake, including costs of employees who are idled for a period of time\nas a result of the repair of such damage,  to the extent that such costs are not\ncovered by insurance  proceeds.  After the Closing  Date,  SJM shall,  and shall\ncause Acquisition Subsidiary to, use its reasonable best efforts to mitigate the\nLosses  incurred by the Business as a result of such damage that are not covered\nby  insurance.  After the Closing  Date,  SJM shall pay to the  Shareholder  its\nallocable  portion of any insurance  proceeds  received by SJM or its Affiliates\nunder Section 1.1(a)(xxii) for expenses paid by the Company prior to the Closing\nDate to repair any damage  resulting from such  earthquake  prior to the Closing\nDate to the extent that SJM or its Affiliates  receive insurance  proceeds after\nthe Closing Date for such expenses.\n\n                                   ARTICLE 8\n\n                        CONDITIONS TO SJM'S OBLIGATIONS\n\nThe  obligations  of SJM to consummate  the  transactions  contemplated  by this\nAgreement shall be subject to the satisfaction (or waiver by SJM in writing), on\nor prior to the Closing Date, of all of the following conditions:\n\n                 8.1  Representations,  Warranties  and Covenants of Shareholder\nand the Company.  The Sellers shall each have in all material respects performed\nand complied with all of their  agreements and covenants  contained herein to be\nperformed  at or  prior  to  the  Closing  Date,  and  the  representations  and\nwarranties of Shareholder and the Company  contained herein shall be true on and\nas of the Closing Date in all material respects.\n\n                 8.2 Prohibition. No statute, rule or regulation or order of any\ncourt or administrative  agency shall be in effect which prohibits  consummation\nof the transactions contemplated hereby.\n\n                 8.3  Deliveries.  Shareholder  and the Company  shall each have\nmade or caused to be made  delivery to SJM of the items set forth in Section 3.2\nhereof.\n\n                 8.4 No Material Adverse Effect. No occurrences or events which,\nindividually  or in the  aggregate,  have a Material  Adverse  Effect shall have\noccurred following the date of this Agreement and be continuing.\n\n                 8.5 HSR Compliance. The waiting period specified by the HSR Act\nshall have expired or shall have been terminated.\n\n                 8.6 Other  Governmental  Approvals.  All governmental  filings,\nauthorizations  and approvals which are identified on Schedules 4.9 and 5.2 that\nare required for the consummation of the transactions  contemplated hereby or to\npermit  SJM  and  its  Affiliates,   after   consummation  of  the  transactions\ncontemplated  hereby, to carry on the Business in the manner now conducted,  and\nany of the consents and approvals  identified on Schedule 4.6 or Schedule 4.8(b)\nthe absence of which would have  individually,  or in the aggregate,  a Material\nAdverse Effect, will have been made or obtained.\n\n                 8.7  Non-U.S.  Asset  Purchase  Agreement.  The  closing of the\npurchase and sale under the Non-U.S.  Asset  Purchase  Agreement  (as defined in\nSection 13.1) shall have occurred.\n\n\n                                   ARTICLE 9\n\n                          CONDITIONS TO SHAREHOLDER'S\n                         AND THE COMPANY'S OBLIGATIONS\n\nThe  obligations of the Company and  Shareholder to consummate the  transactions\ncontemplated by this Agreement shall be subject to the  satisfaction  (or waiver\nby the Company and Shareholder in writing),  on or prior to the Closing Date, of\nall of the following conditions:\n\n                 9.1  Representations,  Warranties and Covenants of SJM. SJM and\nAcquisition  Subsidiary each shall have in all material  respects  performed and\ncomplied  with all of their  agreements  and  covenants  contained  herein to be\nperformed at or prior to the Closing Date,  and all of the  representations  and\nwarranties of SJM and Acquisition  Subsidiary  contained herein shall be true on\nand as of the Closing Date in all material respects.\n\n                 9.2 No Prohibition.  No statute, rule or regulation or order of\nany  court  or  administrative   agency  shall  be  in  effect  which  prohibits\nconsummation of the transactions contemplated hereby.\n\n                 9.3  Deliveries.  SJM  shall  have  made or  caused  to be made\ndelivery to the Company  and  Shareholder  of the items set forth in Section 3.3\nhereof.\n\n                 9.4 HSR Compliance. The waiting period specified by the HSR Act\nshall have expired or shall have been terminated.\n\n                 9.5 Other  Governmental  Approvals.  All governmental  filings,\nauthorizations  and approvals which are identified on Schedules 4.9 and 5.2 that\nare required for the consummation of the transactions  contemplated  hereby will\nhave been made or obtained.\n\n                 9.6  Non-U.S.  Asset  Purchase  Agreement.  The  closing of the\npurchase  and sale  under the  Non-U.S.  Asset  Purchase  Agreement  shall  have\noccurred.\n\n\n                                   ARTICLE 10\n\n                      INDEMNIFICATION AND RELATED MATTERS\n\n                 10.1 Survival.  Subject to the limitations and other provisions\nof this Agreement,  the  representations  and warranties of SJM, the Company and\nShareholder  contained herein shall survive the Closing and shall remain in full\nforce and effect,  regardless of any investigation  made by or on behalf of SJM,\nthe Company or  Shareholder,  as the case may be, for a period of one year after\nthe Closing Date; provided, however, that (A) the representations and warranties\nin Sections 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.3.1,  4.3.12,  4.3.13, 4.14 and\n4.17 shall  survive for a period of two years after the  Closing  Date,  (B) the\nrepresentations  and  warranties in Sections  4.2,  4.3.17 and 4.3.18 shall only\nsurvive  until  the  adjustment  to the Cash  Consideration  has  been  resolved\npursuant to Section 2.2, and (C) the  representations and warranties in Sections\n4.7 and 4.18 shall not survive the Closing.\n\n                 10.2  Indemnification by Shareholder.  Subject to the terms and\nconditions  of this Article 10,  Shareholder  agrees to indemnify  and hold SJM,\nAcquisition Subsidiary and their respective Affiliates, including, in each case,\nany of their  respective  directors,  officers,  employees and  representatives,\nharmless from and against:\n\n                 10.2.1 Any and all Losses  resulting  from any breach of any of\nthe representations and warranties (as of the Closing Date),  covenants or other\nagreements of the Company or Shareholder contained in this Agreement (other than\nSections  7.1 and 7.2,  it being  understood  that the sole  remedy  for  breach\nthereof shall be pursuant to Sections 7.1 and 7.2, as the case may be); and\n\n                 10.2.2    Losses resulting from Excluded Liabilities.\n\n                 10.3   Indemnification   by  SJM.  Subject  to  the  terms  and\nconditions of this Article 10, SJM agrees to indemnify and hold  Shareholder and\nits  Affiliates,  including,  in  each  case,  any of its  or  their  respective\ndirectors, officers, employees and representatives, harmless from and against:\n\n                 10.3.1  Any and all  Losses  resulting  from any  breach of any\nrepresentations and warranties (as of the Closing Date), covenants or agreements\nof SJM  contained in this  Agreement  (other than Sections 7.1 and 7.2, it being\nunderstood that the sole remedy for breach thereof shall be pursuant to Sections\n7.1 and 7.2, as the case may be); and\n\n                 10.3.2    Losses resulting from Assumed Liabilities.\n\n                 10.4   Determination  of  Damages  and  Related   Matters.   In\ncalculating  any  amounts  payable  to SJM,  Acquisition  Subsidiary  and  their\nrespective  Affiliates pursuant to Section 10.2 or payable to Shareholder or its\nrespective Affiliates pursuant to Section 10.3, such amounts shall be limited to\nthe amount of any Losses that remain after  deducting  therefrom  any  insurance\nproceeds or any indemnity,  contribution or similar payment recoverable from the\nindemnified  Person from any third party with  respect  thereto.  Any  indemnity\npayment made pursuant to this Section 10 shall be decreased by the amount of the\nindemnified Person's Tax benefit (as defined below), and increased by the amount\nof the  indemnified  Person's  Tax cost (as  defined  below).  The amount of the\nindemnified  Person's Tax benefit  shall be equal to the amount of the deduction\n(or the present value of any increased depreciation or amortization  deductions)\nresulting from the indemnified Loss,  multiplied by the highest marginal federal\nincome tax rate imposed on the indemnified Person. The amount of the indemnified\nPerson's  Tax cost shall be equal to the  amount of the  income (or the  present\nvalue of any decreased  depreciation or amortization  deductions) resulting from\nthe receipt of the indemnity payment, multiplied by the highest marginal federal\ntax rate imposed on the indemnified  person.  For purposes of this Section 10.4,\npresent  values  will be  computed  using  the  Applicable  Federal  Rate as the\ndiscount  rate.  To the extent  permitted  by law,  the  parties  will treat all\nindemnity  payments as  adjustments to the purchase  price and  liabilities  for\nindemnified Losses as having been in existence at the time of the Acquisition.\n\n                 10.5   Limitation   on   Indemnification    Liabilities.    The\nindemnification  obligations  of  Shareholder  contained  in Section 10.2 hereof\nshall not be effective  until the  aggregate  dollar  amount of all Losses which\nwould  otherwise be  indemnifiable  under Section 10.2 exceeds  $8,000,000  (the\n\"Threshold  Amount\"),  and then only to the extent such aggregate amount exceeds\nthe Threshold  Amount.  The  indemnification  obligations of  Shareholder  under\nSection 10.2 shall be effective  only until the dollar amount paid in respect of\nthe Losses indemnified  against under such Section aggregates to an amount equal\nto $120,000,000  (the \"Liability  Cap\").  The Threshold Amount and the Liability\nCap  contained in this Section 10.5 shall not apply to any  obligations  arising\nunder Sections 2.2.4 and 2.3 regarding  fees and expenses,  Section 6.1,  6.4.2,\n6.5, 6.6,  6.14,  Article 7 or Article 12 or to any Losses arising from Excluded\nLiabilities.\n\n                 10.6  Notice  of  Indemnification.   In  the  event  any  legal\nproceeding  shall be  threatened  or  instituted or any claim or demand shall be\nasserted  by any person in respect of which  payment  may be sought by one party\nhereto from the other party under the  provisions of this  Agreement,  the party\nseeking  indemnification  (the \"Indemnitee\") shall promptly cause written notice\nof the assertion of any such claim of which it has knowledge which is covered by\nthis  indemnity  to be  forwarded  to the other party (the  \"Indemnitor\")  which\nnotice,  in the case of a claim  arising  under  Section 7.1, 7.2, 10.2 or 10.3,\nmust be  received  by the  Indemnitor  before  the  expiration  of the  relevant\nsurvival  period set forth in Section  10.1 or if no such  period is  specified,\nuntil the  applicable  period  under the  statute of  limitations  therefor  has\nexpired.  Any  notice  of a  claim  by  reason  of any  of the  representations,\nwarranties,  covenants or  agreements  contained in this  Agreement  shall state\nspecifically the representation, warranty, covenant or agreement with respect to\nwhich  the claim is made,  the facts  giving  rise to an  alleged  basis for the\nclaim, and the amount of the liability asserted against the Indemnitor by reason\nof the claim.\n\n                 10.7  Indemnification  Procedure for Third-Party Claims. In the\nevent that an Indemnitee  receives  written  notice of the  commencement  of any\naction  or  proceeding,  the  assertion  of any  claim  by a third  party or the\nimposition  of any  penalty  or  assessment  for which  indemnity  may be sought\npursuant to this Article 10 (a \"Third Party Claim\"), and such Indemnitee intends\nto seek  indemnity  pursuant to this Article 10, the  Indemnitee  shall promptly\nprovide the Indemnitor with notice of such action, proceeding, claim, penalty or\nassessment,  and the Indemnitor  shall, upon receipt of such notice, be entitled\nto participate in or, at the Indemnitor's option, assume the defense,  appeal or\nsettlement of such action, proceeding, claim, penalty or assessment with respect\nto which such  indemnity has been invoked with counsel of its own choosing,  and\nthe Indemnitee will cooperate fully with the Indemnitor in connection therewith.\nIn the  event  that the  Indemnitor  fails to  assume  the  defense,  appeal  or\nsettlement of such action,  proceeding,  claim,  penalty or assessment within 30\ndays after receipt of notice thereof from the Indemnitee,  the Indemnitee  shall\nhave the right to  undertake  the  appeal  of such  action,  proceeding,  claim,\npenalty or assessment at the Indemnitor's expense,  subject to the rights of the\nIndemnitor in the immediately  succeeding  sentence.  If the Indemnitee  assumes\nsuch defense and proposes to settle or compromise  any such action,  proceeding,\nclaim,  penalty or  assessment  then the  Indemnitee  shall give written  notice\nthereof and the Indemnitor shall have the right to participate in the settlement\nor assume or reassume the defense of such action, proceeding,  claim, penalty or\nassessment.\n\n\n                                   ARTICLE 11\n\n                          TERMINATION PRIOR TO CLOSING\n\n                 11.1 Termination.  This Agreement may be terminated at any time\nprior to the Closing:\n\n                 11.1.1    by the mutual written consent of the parties; or\n\n                 11.1.2 by either Shareholder and the Company,  on the one hand,\nor SJM and Acquisition Subsidiary, on the other hand, if there has been a breach\nof a material representation or breach of a material covenant on the part of the\nother party in the  representations,  warranties and covenants contained herein,\nunless such breach is cured  within 30 days of receipt of notice of such breach;\nor\n\n                 11.1.3 by either Shareholder and the Company,  on the one hand,\nor SJM and  Acquisition  Subsidiary,  on the other hand,  if the Closing has not\noccurred  by  October  31,  1994;  provided  that no party  may  terminate  this\nAgreement  pursuant to this clause if such party's failure to fulfill any of its\nobligations  under this  Agreement  shall have been the reason  that the Closing\nDate shall not have occurred on or before said date;  and provided  further that\nsuch date shall be extended  until  December  31,  1994,  if the Closing did not\noccur by such date because of the failure of SJM,  Shareholder or the Company to\nreceive one of the governmental approvals or authorizations contemplated by this\nAgreement because of the failure of any applicable waiting period to expire; or\n\n                 11.1.4 by either Shareholder and the Company,  on the one hand,\nor SJM and Acquisition Subsidiary,  on the other hand, if there shall be any law\nor regulation  that makes  consummation of the Acquisition or any other material\ncomponent  of  the  transactions   contemplated   hereby  illegal  or  otherwise\nprohibited or if any judgment,  injunction,  order or decree  enjoining SJM, the\nCompany or Shareholder from consummating the transactions contemplated hereby is\nentered and such  judgment,  injunction,  order or decree shall become final and\nnonappealable.\n\n                 11.2 Effect of  Termination.  If this  Agreement is  terminated\npursuant to Section 11.1, this Agreement shall become void and of no effect with\nno  liability  on the  part of any  party  hereto,  except  (i) as set  forth in\nSections 6.5 and 12.6 and (ii) that nothing  shall  relieve any party hereto for\nliability for any breach of this Agreement.\n\n\n                                   ARTICLE 12\n\n                                 MISCELLANEOUS\n\n                 12.1 Entire Agreement.  This Agreement  (including the exhibits\nhereto,  the  Schedules  and the  documents  referred  to  herein  and the other\ndocuments  executed  by the parties on the date  hereof) and the  Non-Disclosure\nAgreement  contain the entire  understanding of the parties hereto in respect of\nthe subject  matter  contained  herein and  supersede all prior  agreements  and\nunderstandings  between the parties with respect to such subject  matter.  There\nare  no  restrictions,  promises,  representations,  warranties,  covenants,  or\nundertakings,  other than those  expressly  set forth or  referred  to herein or\ntherein.  Notwithstanding anything to the contrary contained herein, the parties\nhereto agree that the Company and  Shareholder  shall not be deemed to have made\nherein any  representations  and  warranties  with respect to the  \"Business\" or\n\"Assets\" (as such terms are defined in the NonU.S. Asset Purchase Agreement).\n\n                 12.2  Amendment;  Waiver.  No  waiver  and no  modification  or\namendment  of  any  provision  of  this  Agreement  shall  be  effective  unless\nspecifically made in writing and duly signed by the parties to be bound thereby.\nWaiver  by a party  of any  breach  of or  failure  to  comply  with  any of the\nprovisions  of this  Agreement by any other party shall not be construed  as, or\nconstitute,  a  continuing  waiver  of, or a waiver of any other  breach  of, or\nfailure to comply with, any other provision of this Agreement.\n\n                 12.3  Assignment.  This  Agreement  and  all of the  provisions\nhereof shall be binding upon and inure to the benefit of the parties  hereto and\ntheir respective  successors and permitted  assigns,  but neither this Agreement\nnor any of the rights,  interests or obligations  hereunder shall be assigned by\nany of the  parties  hereto  without  the  prior  written  consent  of the other\nparties;  provided,  however, that SJM may assign this Agreement and its rights,\ninterests and  obligations in whole or in part hereunder to one or more directly\nor  indirectly  wholly  owned   subsidiaries  of  SJM  without  the  consent  of\nShareholder or the Company;  provided,  however,  that such assignment shall not\nrelieve SJM of any of its obligations hereunder.\n\n                 12.4 Headings;  Usage. The paragraph  headings contained herein\nare for the purposes of convenience only and are not intended to define or limit\nthe contents of said  paragraphs.  The meanings of any terms defined  herein are\nequally applicable to both the singular and plural forms of the terms defined.\n\n                 12.5 Cooperation. Each party hereto shall cooperate, shall take\nfurther  action and shall  execute and deliver such further  documents as may be\nreasonably requested by the other party in order to carry out the provisions and\npurposes of this Agreement.\n\n                 12.6 Expenses.  Except as provided in Section 7.2.2,  SJM shall\nbear its and  Acquisition  Subsidiary's,  and  Shareholder  shall bear its,  the\nCompany's,  the Shareholder Affiliate's and the Subsidiaries' costs and expenses\nin connection with the negotiation, preparation, performance and consummation of\nthe  transactions  contemplated  by this  Agreement,  including all taxes of any\ntype,  the fees and  disbursements  of all attorneys,  accountants,  appraisers,\ninvestment  bankers and advisors  retained by or representing them in connection\nwith the preparation and performance of this Agreement.\n\n                 12.7  Governing  Law. This  Agreement  shall be governed by and\nconstrued in  accordance  with the laws of the State of New York  applicable  to\ncontracts made and to be performed therein.\n\n                 12.8  Disputes.  (a) Any dispute  between  SJM and  Shareholder\narising  out of or in  connection  with this  Agreement  (or any  agreements  or\ndocuments  delivered  by the  parties  hereto  pursuant  to the  terms  of  this\nAgreement)  or any  alleged  breach  hereof  may, at the option of either SJM or\nShareholder,  be submitted  for  discussion  and possible  resolution  by senior\nofficers  of SJM and  Shareholder,  as  designated  by  their  respective  chief\nexecutive officers.\n\n                  (b) Except as  provided  in Article 2, all  disputes  arising,\nrelating  to or arising  in  connection  with this  Agreement,  including  those\npertaining to the validity, interpretation,  construction or breach hereof or of\nany legal obligation owed or claimed to be owed by any party hereto to any other\nparty hereto or its Affiliates,  that is not otherwise  amicably settled between\nthe  parties  shall  exclusively  be  resolved  by  arbitration  between SJM and\nShareholder  pursuant  to the  Commercial  Arbitration  Rules  of  the  American\nArbitration  Association (the \"Rules\"),  with the arbitration to be conducted in\nthe English language and taking place in New York, New York.\n\n                 (c)  The   arbitral   tribunal   shall  be  composed  of  three\narbitrators appointed in accordance with the Rules. The Chairman of the arbitral\ntribunal shall be nominated by the two  arbitrators  nominated  respectively  by\nShareholder and SJM, and if they fail to agree upon such Chairman within 30 days\nafter the second arbitrator has been appointed, such Chairman shall be appointed\nby the American Arbitration  Association.  No arbitrator shall be or have been a\npresent or past employee,  officer, director, legal counsel, consultant or agent\nof either party or its Affiliates.  All arbitrators shall be of legal education,\nunless the parties agree otherwise at the time.  Unless prohibited or restricted\nby applicable law, each party agrees to provide to the arbitrators and the other\nparty,  subject to a strict  confidentiality  agreement,  such documents,  other\nevidence,  witness  testimony as may  reasonably be requested by the other party\nand as are relevant to the issues being arbitrated. The arbitrators may restrict\nor terminate  discovery  requests which they conclude are  unreasonable,  unduly\nburdensome or not relevant to the issues being arbitrated.  Such discovery shall\noccur during a reasonable time period.  The arbitrators shall not have the power\nto act as \"amiable  compositeurs\"  with respect to any dispute submitted to such\narbitration,  but rather shall make their decision based on their  understanding\nand  interpretation of the applicable law and facts. SJM expressly  acknowledges\nand agrees  that  Siemens AG has not in any way  agreed to or  consented  to the\njurisdiction of the federal,  state or local courts of the United States for any\npurpose whatsoever and shall not be so treated hereunder,  and SJM hereby waives\nall rights to claim that  Siemens AG is subject to such  jurisdiction.  The fees\nand  disbursements of the arbitrators  shall be allocated  between the disputing\nparty  and the  other  party  to the  dispute  in the same  proportion  that the\ndisputed items so submitted to the arbitrators that are unsuccessfully  disputed\nby each (as finally  determined by the arbitrators) bears to the total amount of\nall disputed items so submitted. Notwithstanding any provision of this Agreement\nto the  contrary,  (i) any party shall be entitled to seek a judicial  order for\ninterim  relief to the extent  necessary to safeguard  the property  that is the\nsubject matter of an arbitration  proceeding  hereunder,  and (ii) judgment upon\nthe award rendered in any arbitration proceeding hereunder may be entered in any\ncourt having jurisdiction or application may be made to such court in a judicial\nacceptance  of the award and an order by  enforcement,  as the case may be.  The\nparties  hereto agree that the  arbitrators  appointed  pursuant to this Section\n12.8 shall have the power to grant  equitable  relief,  including  temporary and\npermanent injunctive relief and specific performance.\n\n                 12.9 Severability.  Whenever  possible,  each provision of this\nAgreement  will be interpreted in such manner as to be effective and valid under\nthe  applicable  law,  but if any  provision  of  this  Agreement  is held to be\nprohibited  by  or  invalid  under   applicable  law,  such  provision  will  be\nineffective  only to the  extent  of such  prohibition  or  invalidity,  without\ninvalidating the remainder of such provision or the remaining provisions of this\nAgreement.\n\n                 12.10     Counterparts.  This Agreement may be executed in one \nor more counterparts, all of which taken together will constitute one and the\nsame instrument.\n\n                 12.11 Interpretation.  This Agreement has been fully negotiated\nby the parties through their legal counsel.  Accordingly,  in interpreting  this\nAgreement,  the rule of the interpretation requiring that documents be construed\nagainst the draftsman shall be inapplicable.\n\n                 12.12 Notices.  All notices,  requests and other communications\nto any party hereunder shall be in writing and shall be given or made (and shall\nbe deemed to have been duly given or made upon  receipt)  by delivery in person,\nby courier  service,  by cable,  by  facsimile  transmission,  by telegram or by\nregistered or certified mail (postage prepaid,  return receipt requested) to the\nrespective  parties at the  following  addresses (or at such other address for a\nparty as shall be specified in a notice  given in  accordance  with this Section\n12.12):\n\n                              if to Shareholder\n                              or the Company, to:\n\n                                                  Siemens Medical Systems, Inc.\n                                                  186 Wood Avenue South\n                                                  Iselin, NJ 08830\n                                                  Facsimile No.: (908) 321-3441\n                                                  Attention: Robert V. Dumke and\n                                                             David Machlowitz\n\n                           with a copy to:\n\n                                                    Siemens Corporation\n                                                    1301 Avenue of the Americas\n                                                    New York, NY  10019-6022\n                                                    Facsimile No.: (212)258-4945\n                                                    Attention:  E. Robert Lupone\n\n                           and\n\n                                                    Shearman &amp; Sterling\n                                                    599 Lexington Avenue\n                                                    New York, NY  10022\n                                                    Facsimile No.: (212)848-7179\n                                                    Attention:  Peter D. Lyons\n\n                 if to SJM to:\n\n                                         St. Jude Medical, Inc.\n                                         One Lillehei Plaza\n                                         St. Paul, Minnesota  55117\n                                         Attention: Ronald Matricaria, President\n                                                    and Chief Executive Officer\n                                         Attention: Diane M. Johnson,\n                                                    Vice President and \n                                                     General Counsel\n\n\n\n                           with a copy to:        \n\n                                                    Lindquist &amp; Vennum\n                                                    4200 IDS Center\n                                                    80 South Eighth Street\n                                                    Minneapolis, MN  55402\n                                                    Attention:  Joel H. Green\n\n                 12.13 Publicity.  Upon execution of this Agreement, the parties\nshall  jointly  issue a press  release,  as agreed upon by them.  Neither  party\nshall,  without the prior written  consent of the other,  issue any statement or\ncommunication to the public or to the press regarding this Agreement,  or any of\nthe terms,  conditions or other facts with respect to the  Agreement,  except as\nrequired by law or the rules of any recognized stock exchange.\n\n                 12.14  No  Third  Party  Beneficiary.  The  provisions  of this\nAgreement are for the sole benefit of the parties to this  Agreement and are not\nfor the benefit of any third party.\n\n\n                                   ARTICLE 13\n\n                                  DEFINITIONS\n\n                 13.1 Definitions. For purposes of this Agreement, the following\nterms have the meaning set forth below:\n\n                 \"Affiliate\" means as to any Person controlling,  controlled by,\nor under common control with,  such Person,  any officer,  director or executive\nemployee of such Person, and any Employee Benefit Plan maintained by such Person\n(including, without limitation, related trusts and the fiduciaries thereof).\n\n                 \"Affiliated  Group\"  means an  affiliated  group as  defined in\nSection 1504 of the Code (or any  analogous  combined,  consolidated  or unitary\ngroup defined under state, local or foreign income tax law) of which the Company\nis or has been a member.\n\n                 \"Assets\" shall have the meaning given to it in Section 1.1(a).\n\n                 \"Assumption  Agreement\"  means the  Assumption  Agreement to be\nexecuted by SJM and the Sellers on the Closing Date substantially in the form of\nExhibit 3.3.7\n\n                 \"Assumed  Liabilities\"  shall have the  meaning  given to it in\nSection 1.2(a).\n\n                 \"Bill of Sale\"  means  the  Bill of Sale and  Assignment  to be\nexecuted by the Sellers on the Closing Date substantially in the form of Exhibit\n3.2.8A.\n\n                 \"Business\"  means  the  research,  development,  manufacturing,\nmarketing,   assembly,   sales,  maintenance  and  service  of  Current  Cardiac\nStimulation  Devices by the Company and the  Subsidiaries  and shall exclude all\nPrior Business.\n\n                 \"Business  Day\" means any day that is not a Saturday,  a Sunday\nor a day on which banks are  required or  permitted to be closed in the State of\nNew York. For purposes of Section 2.2 and 3.1, \"Business Day\" also means any day\nthat is not a  Saturday,  a Sunday or a day on which  banks are  required  to be\nclosed in the Kingdom of Sweden.\n\n                 \"Cardiac  Stimulation  Devices\" means devices for  electrically\nstimulating  or  shocking  the  heart and  internal  (but not  external)  holter\nmonitors which, in each case, are suitable for use by human patients, including,\nwithout   limitation:    cardiac   pacemakers,    antitachycardia    pacemakers,\ncardioverters  and  defibrillators,   including  combinations  thereof,  whether\nimplantable or not; pulse  generators  and other waveform  generators  specially\ndesigned  for,  and used with,  such  devices;  leads,  electrodes  and  sensors\nspecially  designed for, and used with,  such devices;  mechanisms  designed for\ncoupling such generators in a stimulating,  shocking or sensing  relationship to\nthe heart;  data dispensing,  processing and gathering systems designed for such\ndevices, including programmers,  pacing system analyzers,  defibrillation system\nanalyzers,  testers, encoders,  decoders,  transmitters,  receivers and computer\nsoftware-controlled  systems (including the software) specially designed for use\nwith or as part of such devices.\n\n                 \"Cash  Consideration\"  shall  have the  meaning  given to it in\nSection 2.1.\n\n                 \"Closing\" shall have the meaning given to it in Section 3.1.\n\n                 \"Closing  Balance  Sheet\" shall have the meaning given to it in\nSection 2.2.2.\n\n                 \"Closing  Date\" shall have the  meaning  given to it in Section\n3.1.\n\n                 \"COBRA  Obligation\"  means  the  obligation  imposed  upon  any\nCompany Employee Benefit Plan to meet the requirements of Section 4980(B) of the\nCode,  Part  6 of  Title  1 of  ERISA  or any  applicable  state  law  requiring\ncontinuation coverage.\n\n                 \"Code\" means the Internal Revenue Code of 1986, as amended.\n\n                 \"Commitments\" shall have the meaning given to it in Section4.6.\n\n                 \"Company Employee Benefit Plan\" shall have the meaning given it\nin Section 4.10.5.\n\n                 \"Company  401(k)  Plan\" has the meaning  given to it in Section\n7.1.2(c).\n\n                 \"Competitive  Products\"  shall have the meaning  given to it in\nSection 7.4.3.\n\n                 \"Controlled  Group\"  shall  have  the  meaning  given  to it in\nSection 4.10.5.\n\n                 \"Current Cardiac Stimulation Devices\" means Cardiac Stimulation\nDevices as are under research or development, or manufactured or marketed by the\nCompany, the Shareholder Affiliate and the Subsidiaries at the Closing Date.\n\n                 \"Deal Balance Sheet\" shall have the meaning given to it in \nSection 4.2.\n\n                 \"Deeds\"  means the deeds to be  executed  by the Company on the\nClosing  Date  substantially  in the form of  Exhibit  3.2.8B in order to convey\ntitle to SJM or an SJM Affiliate of each parcel of Owned Real Property.\n\n                 \"Designated  Amount\"  shall  have  the  meaning  given to it in\nSection 2.2.3.\n\n                 \"Employee\"  shall  have  the  meaning  given  to it in  Section\n4.10.5.\n\n                 \"Employee  Benefit  Plan\" shall have the meaning given to it in\nSection 4.10.5.\n\n                 \"Employee  Pension Benefit Plan\" has the meaning given to it in\nSection 4.10.5.\n\n                 \"Employee Welfare Benefit Plan\" shall have the meaning given to\nit in Section 4.10.5.\n\n                 \"Environmental  Laws\"  shall  have the  meaning  given to it in\nSection 4.12.1(a).\n\n                 \"ERISA\" has the meaning given to it in Section 4.10.5.\n\n                 \"Escrow  Agent\"  shall have the meaning  given to it in Section\n2.2.7.\n\n                 \"Escrow  Agreement\"  shall  have  the  meaning  given  to it is\nSection 2.2.7.\n\n                 \"Excluded Assets\" shall have the meaning given to it in Section\n1.1(b).\n\n                 \"Excluded  Liabilities\"  shall have the meaning  given to it in\nSection 1.2(b).\n\n\n                 \"Executive Arrangements\" has the meaning given to it in Section\n7.3.1.\n\n                 \"FDA\" shall have the meaning given to it in Section 4.3.11.\n\n                 \"Financial  Statements\"  shall have the meaning  given to it in\nSection 4.2.\n\n                 \"HSR Act\" means the  Hart-Scott-Rodino  Antitrust  Improvements\nAct of 1976, as amended, and the rules and regulations promulgated thereunder.\n\n                 \"knowledge\"  means, with respect to the Company,  the knowledge\nof the following  persons:  G. Jaensch,  M. Novack,  R. Sandler,  P. Palmer,  J.\nAldrich,  and D. Morley and, with respect to any other company, the knowledge of\nthe executive officers of such company.\n\n                 \"Known Environmental Condition\" shall have the meaning given to\nit in Section 4.12.2.\n\n                 \"Liabilities\"   means  any  and  all  debts,   liabilities  and\nobligations,  whether  accrued or fixed,  absolute or  contingent  or matured or\nunmatured.\n\n                 \"License  Agreement\" means the License Agreement,  dated August\n26, 1992, between Siemens AG and Medtronics, Inc.\n\n                 \"Lien\"  means  any  mortgage,   claim,  lien,  pledge,  charge,\nsecurity  interest,  option,  preemptive right,  assessment,  security interest,\nrestriction on transfer or encumbrance of any kind.\n\n                 \"Litigation\" means any claim, action, suit or proceeding in any\ncourt or before any arbitrator or governmental body, agency or official.\n\n                 \"Losses\" means any and all  Liabilities,  obligations,  duties,\ndemands, claims, actions, causes of action, assessments, losses, costs, damages,\ndeficiencies, taxes, fines or expenses, including, without limitation, interest,\npenalties,  reasonable  attorneys'  fees and all amounts paid in  investigation,\ndefense or  settlement  of any of the  foregoing;  provided,  however,  that the\nforegoing shall not include consequential damages.\n\n                 \"Material  Adverse  Effect\"  means any change in, or effect on,\nthe  Business as currently  conducted  that is, or is  reasonably  likely to be,\nmaterially adverse to the operations, results of operations, assets or financial\ncondition of the Business,  taken as a whole, except for such changes or effects\nthat are the result of changes in general  economic  conditions  or changes that\ngenerally affect the industry in which the Business is operated.\n\n                 \"Medtronics  Assignment\"  shall have the meaning given to it in\nSection 3.2.7.\n\n                 \"Multiemployer  Plan\"  shall  have the  meaning  given to it in\nSection 4.10.5.\n\n                 \"Net  Book  Value\"  means  the  assets  minus  the  liabilities\nreflected on the applicable balance sheet, as adjusted.\n\n                 \"Non-Disclosure  Agreement\"  shall have the meaning given to it\nin Section 6.5.\n\n                 \"Non-U.S.  Asset Purchase  Agreement\"  means the Asset Purchase\nAgreement  dated as of June 26,  1994 among St.  Jude  Medical  Inc.,  St.  Jude\nMedical International, Inc. and Siemens-Elema AB.\n\n                 \"PBGC\" shall have the meaning given to it in Section 4.10.2(a).\n\n                 \"Permits\" shall have the meaning given to it in Section 4.8.\n\n                 \"Permitted  Liens\" mean (i) Liens for inchoate  mechanics'  and\nmaterialmen's  liens for  construction  in progress and workmen's,  repairmen's,\nwarehousemen's  and  carriers'  liens  arising  in the  ordinary  course  of the\nBusiness which in the aggregate  have a value of less than $100,000,  (ii) Liens\nfor Taxes not yet payable and for Taxes being contested in good faith, and (iii)\nLiens and  imperfections  of title the  existence of which would not  materially\naffect  the use of the  property  subject  to such  lien,  consistent  with past\npractice.\n\n                 \"Person\"   means   any   individual,    sole    proprietorship,\npartnership,  joint venture, trust, unincorporated  association,  corporation or\nother such entity or government  (whether  domestic,  foreign,  Federal,  state,\ncounty, city or otherwise,  including,  without limitation, any instrumentality,\ndivision, agency or department thereof).\n\n                 \"Post-Closing  Litigation  Losses\"  means all Losses  resulting\nfrom any Litigation against the Company or the Business that are not Pre-Closing\nLitigation Losses.\n\n                 \"Post-Closing  Products  Liability  Losses\"  means  any  Losses\nresulting from any product liability claims for Products  implanted or otherwise\nused with a patient on,  before or after the Closing  Date arising from a death,\ninjury,  explant  or other  similar  occurrence  happening  or  alleged  to have\nhappened after the Closing Date.\n\n                 \"Pre-Closing Litigation Losses\" means any Losses resulting from\nany Litigation  pending or threatened against the Company or the Business on the\nClosing Date.\n\n                 \"Pre-Closing   Products  Liability  Losses\"  means  any  Losses\nresulting from any product liability claims for Products  implanted or otherwise\nused with a patient on or before the Closing Date arising from a death,  injury,\nexplant or other similar occurrence  happening or alleged to have happened on or\nbefore the Closing Date.\n\n                 \"Pre-Closing  Tax Period\" shall have the meaning given to it in\nSection 7.2.3.\n\n                 \"Prior Business\" means the research, development,  manufacture,\nmarketing,  assembly,  sales,  maintenance  and  service of Cardiac  Stimulation\nDevices by each of the Company and the Subsidiaries or the Shareholder Affiliate\nwhich has taken place and has been discontinued by the Company, the Subsidiaries\nor the Shareholder Affiliate prior to the date hereof.\n\n                 \"Products\" shall have the meaning given to it in Section \n4.13.1.\n\n                 \"Property\"  shall  have  the  meaning  given  to it in  Section\n4.12.1(c).\n\n                 \"Property  Taxes\" shall have the meaning given to it in Section\n7.2.3.\n\n                 \"Regulated  Substances\"  shall have the meaning  given to it in\nSection 4.12.1(b).\n\n                 \"Reportable  Event\" shall have the meaning given to it in ERISA\nSection 4043.\n\n                 \"Retained Litigation\" means the Wilson class action suit.\n\n                 \"Rules\" shall have the meaning given to it in Section 12.8.\n\n                 \"Sellers\" has the meaning given to it in Section 1.1.\n\n                 \"Settlement  Agreement\"  means the Settlement  Agreement  dated\nSeptember 9, 1992 between Siemens AG and Medtronics, Inc.\n\n                 \"Shareholder  Affiliate\"  shall have the meaning given to it in\nSection 1.1(a).\n\n                 \"Siemens AG\" has the meaning given to it in Section 6.13.\n\n                 \"SJM's  Accountants\"  shall  have  the  meaning  given to it in\nSection 2.2.4.\n\n                 \"SJM Affiliates\"  shall have the meaning given to it in Section\n1.1(a).\n\n                 \"Straddle Period\" shall have the meaning given to it in Section\n7.2.3.\n\n                 \"Subsidiary\"  means any  corporation  of which  the  securities\nhaving a  majority  of the  ordinary  voting  power  in  electing  the  board of\ndirectors are, at the time as of which any determination is being made, owned by\nthe Company either directly or through one or more Subsidiaries.\n\n                 \"Tax\" or \"Taxes\"  means with respect to any person any federal,\nstate,  county,  local or foreign  income,  gross  receipts,  profits,  capital,\nfranchise,  estimated,  alternative minimum, add-on minimum,  estimated,  sales,\nuse, occupancy, transfer, registration, value added, ad valorem, excise, natural\nresources, severance, stamp, occupation, premium, windfall profit, environmental\n(including taxes under Section 59A of the Code), customs,  duties,  levies, real\nproperty,  personal  property,  capital stock,  mercantile,  social security (or\nsimilar),  unemployment,  disability,  payroll, license, employment, employee or\nother withholding,  or other tax,  governmental fee or like assessment or charge\nof any kind whatsoever, including any interest, penalties or additions to tax or\nadditional  amounts in respect of the  foregoing,  whether  disputed  or not and\nwhether  computed on a separate,  consolidated,  unitary,  combined or any other\nbasis;  the foregoing shall include any transferee or secondary  liability for a\nTax and any  liability  assumed by agreement or arising as a result of being (or\nceasing to be) a member of any Affiliated  Group (or being included (or required\nto be  included)  in any Tax  Return  relating  thereto)  or as a result  of any\nspin-off, distribution or other reorganization related to the disposition of any\nassets  or  business  of the  Company  or any other  member  of the  Shareholder\nConsolidated Group.\n\n                 \"Tax Returns\" means  returns,  amendments,  statements,  forms,\ninformation,  elections,  declarations,  reports, claims for refund, information\nreturns or other  documents  (including  any  related or  supporting  schedules,\nstatements or information)  filed or required to be filed in connection with the\ndetermination,  assessment  or  collection  of any  Taxes  of any  party  or the\nadministration of any laws, regulations or administrative  requirements relating\nto any Taxes.\n\n                 \"U.S. GAAP\" shall have the meaning given to it in Section \n2.2.2.\n\n                 IN WITNESS  WHEREOF,  the  parties  hereto have  executed  this\nAgreement as of the date first written above.\n\n                                                    ST. JUDE MEDICAL, INC.\n\n                                 By  \/s\/ Ronald A. Matricaria \n                                         Ronald A. Matricaria \n                                     Its: President and Chief Executive Officer\n\n                                 SJM ACQUISITION CORP.\n\n                                 By  \/s\/ Ronald A. Matricaria \n                                     Ronald A Matricaria \n                                     Its: President and Chairman\n\n                                 SIEMENS-PACESETTER, INC.\n\n                                 By  \/s\/ Guenter Jaensch\n                                     Guenter Jaensch\n                                     Its: Chairman and Chief Executive Officer\n\n                                 By \/s\/ Michael E. Novack\n                                    Michael E. Novack\n                                    Its:  Executive Vice President and Chief\n                                          Financial Officer\n\n                                 SIEMENS MEDICAL SYSTEMS, INC.\n\n                                 By  \/s\/ Robert V. Dumke\n                                     Robert V. Dumke\n                                     Its:  President and Chief Executive Officer\n\n                                 By \/s\/ David Machlawitz\n                                    David Machlawitz\n                                    Its: Secretary\n\n\n                            ASSET PURCHASE AGREEMENT\n\n                                     AMONG\n\n                            ST. JUDE MEDICAL, INC.,\n\n                             SJM ACQUISITION CORP.,\n\n                            SIEMENS-PACESETTER, INC.\n\n                                      AND\n\n                         SIEMENS MEDICAL SYSTEMS, INC.\n\n                                  dated as of\n\n                                 June 26, 1994\n\n\n\n\n\n\n\n\n\n                               TABLE OF CONTENTS\n\n\n\n                                   ARTICLE 1\n\n                               TRANSFER OF ASSETS\n\n\n1.1 Assets to Be Sold                         1\n1.2 Assumption and Exclusion of Liabilities   5\n1.3 Transfer Documentation and Possession     6\n\n\n                                   ARTICLE 2\n\n                                 CONSIDERATION\n\n2.1 Consideration                   6\n2.2 Cash Consideration Adjustment   6\n2.3 Allocation of Purchase Price    9\n\n\n                                   ARTICLE 3\n\n                                    CLOSING\n\n3.1 The Closing                                 10\n3.2 Deliveries of Shareholder and the Company   10\n3.3 Deliveries of SJM                           11\n3.4 Further Documents                           12\n\n\n                                   ARTICLE 4\n\n                 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER\n                                AND THE COMPANY\n\n4.1 Authority; Organization, Capitalization \n    and Qualification; Effect of Agreement  12\n4.2 Financial Statements                    14\n4.3 Absence of Certain Developments         14\n4.4 Title to Personal Property and Assets   17\n4.5 Patents, Trademarks and Copyrights      17\n4.6 Commitments                             18\n4.7 Litigation                              19\n4.8 Compliance with Laws; Permits           19\n4.9 Governmental Consents                   20\n4.10 Employee Benefit Plans                 20\n4.11 Employees                              24\n4.12 Environmental Matters; OSHA            25\n4.13 Company Products; Regulation           27\n4.14 Tax Matters                            28\n4.15 Material Obligations                   28\n4.16 Brokerage                              29\n4.17 Affiliated Transactions                29\n4.18 Insurance                              29\n4.19 Real Property                          29\n4.20 Inventory                              32\n4.21 Accounts and Notes Receivable          32\n\n\n                                   ARTICLE 5\n\n                     REPRESENTATIONS AND WARRANTIES OF SJM\n\n5.1 Corporate Power and Authority; Effect of Agreement   32\n5.2 Consents                                             33\n5.3 Availability of Funds                                34\n5.4 Litigation                                           34\n5.5 Brokerage                                            34\n5.6 Certain Ownership Interests                          34\n\n\n                                   ARTICLE 6\n\n                                   COVENANTS\n\n6.1 Cooperation                                  34\n6.2 Conduct of Business                          35\n6.3 Intercompany Indebtedness                    36\n6.4 Access                                       36\n6.5 Non-Disclosure Agreement                     38\n6.6 Antitrust, Competition Law Filings           38\n6.7 Non-Foreign Person Affidavit                 38\n6.8 Transfer of Real Property                    38\n6.9 Certain Dividends                            39\n6.10 Certain Actions Prior to the Closing Date   39\n6.11 Claims History                              39\n6.12 FDA Recertification                         39\n6.13 Grant of License                            39\n6.14 Other Financial Statements                  40\n\n\n                                   ARTICLE 7\n\n                              ADDITIONAL COVENANTS\n\n7.1 Liability for Employee Benefit Plans   40\n7.2 Tax Matters                            42\n7.3 Liability for Executive Arrangements   47\n7.4 Non-Competition                        48\n7.5 Non-Solicitation                       49\n7.6 Siemens Name                           49\n7.7 Confidentiality                        49\n7.8 Bulk Sales Laws                        49\n7.9 Guarantee                              49\n7.10 Real Estate Inspections               50\n7.11 Real Estate Related Reports           50\n\n\n                                   ARTICLE 8\n\n                        CONDITIONS TO SJM'S OBLIGATIONS\n\n\n8.1 Representations, Warranties and\nCovenants of Shareholder and the Company   50\n8.2 No Prohibition                         51\n8.3 Deliveries                             51\n8.4 No Material Adverse Effect             51\n8.5 HSR Compliance                         51\n8.6 Other Governmental Approvals           51\n8.7 Non-U.S. Asset Purchase Agreement      51\n\n\n                                  ARTICLE 9\n\n                          CONDITIONS TO SHAREHOLDER'S\n                         AND THE COMPANY'S OBLIGATIONS\n\n9.1 Representations, Warranties and Covenants of SJM   51\n9.2 No Prohibition                                     52\n9.3 Deliveries                                         52\n9.4 HSR Compliance                                     52\n9.5 Other Governmental Approvals                       52\n9.6 Non-U.S. Asset Purchase Agreement                  52\n\n\n                                   ARTICLE 10\n\n                      INDEMNIFICATION AND RELATED MATTERS\n\n10.1 Survival                                           52\n10.2 Indemnification by Shareholder                     52\n10.3 Indemnification by SJM                             53\n10.4 Determination of Damages and Related Matters       53\n10.5 Limitation on Indemnification Liabilities          54\n10.6 Notice of Indemnification                          54\n10.7 Indemnification Procedure for Third-Party Claims   54\n\n\n                                   ARTICLE 11\n\n                          TERMINATION PRIOR TO CLOSING\n\n11.1 Termination                   55\n11.2 Effect of Termination         55\n\n\n                                   ARTICLE 12\n\n                                 MISCELLANEOUS\n\n12.1 Entire Agreement              56\n12.2 Amendment; Waiver             56\n12.3 Assignment                    56\n12.4 Headings; Usage               56\n12.5 Cooperation                   57\n12.6 Expenses                      57\n12.7 Governing Law                 57\n12.8 Disputes                      57\n12.9 Severability                  58\n12.10 Counterparts                 58\n12.11 Interpretation               58\n12.12 Notices                      58\n12.13 Publicity                    60\n12.14 No Third Party Beneficiary   60\n\n\n                                   ARTICLE 13\n\n                                  DEFINITIONS\n\n13.1 Definitions                                                              60\n\n\n3.2.1      Form of Shareholder Officers' Certificates\n\n3.2.2      Form of Opinions of Counsel for Shareholder and the Company\n\n3.2.4      Form of Medtronics Assignment and Assumption Agreement\n\n3.2.8A     Form of Bill of Sale and Assignment\n\n3.2.8B     Form of Deed\n\n3.2.10     Form of Canadian Transitional Services Agreement\n\n3.3.2      Form of SJM Officer's Certificate\n\n3.3.3      Form of Opinion of Counsel for SJM\n\n3.3.7      Form of Assumption Agreement\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8909],"corporate_contracts_industries":[9436],"corporate_contracts_types":[9623,9622],"class_list":["post-43310","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-st-jude-medical-inc","corporate_contracts_industries-health__instruments","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43310","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=43310"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43310"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43310"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}