1
EXHIBIT (c)(4)

AGREEMENT AND PLAN OF MERGER

among

THE REYNOLDS AND REYNOLDS COMPANY,

DELAWARE ACQUISITION CO.,

and

DUPLEX PRODUCTS INC.

dated as of

April 20, 1996

2
TABLE OF CONTENTS

1. THE OFFER AND MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.1 The Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Company Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.3 Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.4 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.5 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.6 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.7 Surviving Corporation Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . 8
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1.8 Shareholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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1.9 Merger Without Meeting of Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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2. CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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2.1 Conversion of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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2.2 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------------------------
2.3 Company Option Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------------------------------
3.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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3.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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3.3 Authorization; Validity of Agreement; Company Action. . . . . . . . . . . . . . . . . . . . 15
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3.4 Consents and Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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3.5 SEC Reports and Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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3.6 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.7 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
--------------------------
3.8 Information in Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
------------------------------
3.9 Employee Benefit Plans; ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-----------------------------
3.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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3.11 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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3.12 Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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3.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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3.14 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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3.15 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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3.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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3.17 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3.18 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3.19 Opinions of Financial Advisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3.20 Vote Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3.21 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3.22 Intellectual Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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3.23 Broker's or Finder's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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3.24 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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3.25 State Takeover Statutes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.26 Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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4. REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER. . . . . . . . . . . . . . . . . . . 30
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4.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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4.2 Authorization; Validity of Agreement; Necessary Action. . . . . . . . . . . . . . . . . . . 30
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4.3 Consents and Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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4.4 Information in Proxy Statement; Schedule 14D-9. . . . . . . . . . . . . . . . . . . . . . . 31
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4.5 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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4.6 Purchaser's Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.1 Interim Operations of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------------------
5.2 Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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5.3 HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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5.4 Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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5.5 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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5.6 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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5.7 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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5.8 Brokers or Finders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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5.9 Additional Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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5.10 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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5.11 Notification of Certain Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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5.12 Directors' and Officers' Insurance and Indemnification. . . . . . . . . . . . . . . . . . . 38
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6. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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6.1 Shareholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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6.2 Statutes; Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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6.3 Injunctions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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6.4 Purchase of Shares in Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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7. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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7.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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8.1 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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8.2 Amendment and Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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8.3 Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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8.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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8.5 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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8.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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8.7 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership. . . . . . . . . . . . . 44
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8.8 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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8.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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8.10 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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8.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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8.12 Extension; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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INDEX OF DEFINED TERMS

Defined Term Section No.

Acquisition Proposal. . . . . . . . . . 5.7(b)
Agreement . . . . . . . . . . . . . . . Recitals
Appointment Date. . . . . . . . . . . . 5.1
Benefit Plans . . . . . . . . . . . . . 3.9(a)
Certificate of Merger . . . . . . . . . 1.5(a)
Certificates. . . . . . . . . . . . . . 2.2(b)
Claims. . . . . . . . . . . . . . . . . 3.24(b)
Closing . . . . . . . . . . . . . . . . 1.6
Closing Date. . . . . . . . . . . . . . 1.6
Code. . . . . . . . . . . . . . . . . . 3.9(b)
Company . . . . . . . . . . . . . . . . Introduction
Company Common Stock. . . . . . . . . . 1.1(a)
Company SEC Documents . . . . . . . . . 3.5
Confidentiality Agreement . . . . . . . 5.4
DGCL. . . . . . . . . . . . . . . . . . 1.4
Disclosure Letter . . . . . . . . . . . 3.4
Dissenting Stock. . . . . . . . . . . . 2.1(c)
Dissenting Stockholder. . . . . . . . . 2.1(c)
Duff & Phelps . . . . . . . . . . . . . 1.2(b)
Exchange Act . . . . . . . . . . . . . 1.1(a)
Effective Time. . . . . . . . . . . . . 1.5(a)
Environmental Claim . . . . . . . . . . 3.24(b)
Environmental Law . . . . . . . . . . . 3.24(b)
ERISA . . . . . . . . . . . . . . . . . 3.9(a)
ERISA Affiliate . . . . . . . . . . . . 3.9(a)
Exchange Act. . . . . . . . . . . . . . 1.1(a)
GAAP. . . . . . . . . . . . . . . . . . 3.5
Governmental Entity . . . . . . . . . . 3.4
Hazardous Substances. . . . . . . . . . 3.24(b)
HSR Act . . . . . . . . . . . . . . . . 3.4
Indemnified Parties . . . . . . . . . . 5.12(a)
Intellectual Property . . . . . . . . . 3.22
Know-how. . . . . . . . . . . . . . . . 3.22
Indenture . . . . . . . . . . . . . . . 3.2(a)
Material Agreements . . . . . . . . . . 3.4
Merger. . . . . . . . . . . . . . . . . 1.4
Merger Consideration. . . . . . . . . . 2.1(c)
Minimum Condition . . . . . . . . . . . 1.1(a)
1984 Option Plan. . . . . . . . . . . . 2.3(a)
1993 Option Plan. . . . . . . . . . . . 2.3(a)
1995 Financial Statements . . . . . . . 3.5
1995 Form 10-K. . . . . . . . . . . . . 3.5
NLRB. . . . . . . . . . . . . . . . . . 3.14
Offer . . . . . . . . . . . . . . . . . 1.1(a)
Offer Documents . . . . . . . . . . . . 1.1(d)
Offer Price . . . . . . . . . . . . . . 1.1(a)
Offer to Purchase . . . . . . . . . . . 1.1(b)
Option Plans. . . . . . . . . . . . . . 2.3(a)
Options . . . . . . . . . . . . . . . . 2.3(a)

iii

Parent. . . . . . . . . . . . . . . . . Introduction
Paying Agent. . . . . . . . . . . . . . 2.2(a)
Payment Fund. . . . . . . . . . . . . . 2.2(d)
PBGC. . . . . . . . . . . . . . . . . . 3.9(e)
Permitted Investments . . . . . . . . . 2.2(d)
Preferred Stock . . . . . . . . . . . . 3.2(a)
Proxy Statement . . . . . . . . . . . . 1.8(a)
Purchaser . . . . . . . . . . . . . . . Introduction
Purchaser Common Stock. . . . . . . . . 2.1
Restricted Stock Plan . . . . . . . . . 2.3(b)
Rights. . . . . . . . . . . . . . . . . 1.1(a)
Rights Agreement. . . . . . . . . . . . 1.1(a)
Rights Amendment. . . . . . . . . . . . 1.2(e)
Schedule 14D-1. . . . . . . . . . . . . 1.1(d)
Schedule 14D-9. . . . . . . . . . . . . 1.2(c)
SEC . . . . . . . . . . . . . . . . . . 1.1(d)
Secretary of State. . . . . . . . . . . 1.5(a)
Securities Act. . . . . . . . . . . . . 3.4
Section 16. . . . . . . . . . . . . . . 2.3(a)
Service . . . . . . . . . . . . . . . . 3.9(d)
Shares. . . . . . . . . . . . . . . . . 1.1(a)
Special Meeting . . . . . . . . . . . . 1.8(a)
Subsidiary. . . . . . . . . . . . . . . 3.1
Superior Proposal . . . . . . . . . . . 5.7(b)
Surviving Corporation . . . . . . . . . 1.4
Taxes . . . . . . . . . . . . . . . . . 3.13(t)
Tax Return. . . . . . . . . . . . . . . 3.13(t)
Tender Agreements . . . . . . . . . . . 1.2(a)
Tender Offer Conditions . . . . . . . . 1.1(a)
Third Party Confidentiality Agreements. 5.7(d)
Transactions. . . . . . . . . . . . . . 1.2(a)
Trigger Event . . . . . . . . . . . . . 8.1(b)
Voting Debt . . . . . . . . . . . . . . 3.2(a)

6
AGREEMENT AND PLAN OF MERGER

THE REYNOLDS AND REYNOLDS COMPANY ("PARENT"), DELAWARE ACQUISITION CO. (the
"PURCHASER"), and DUPLEX PRODUCTS INC. (the "COMPANY") agree as follows:

RECITALS

Parent is an Ohio corporation. The Purchaser is a Delaware corporation and a
wholly owned subsidiary of Parent. The Company is a Delaware corporation.

The Boards of Directors of Parent, the Purchaser and the Company have
approved, and deem it advisable and in the best interests of their respective
shareholders to consummate, the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth in this agreement (the
"AGREEMENT").

1. THE OFFER AND MERGER.
---------------------

1.1 THE OFFER.

(a) As promptly as practicable (but in no event later than five business
days after the public announcement of the execution hereof) and provided that
none of the events described in the attached Annex A has occurred and is then
continuing, the Purchaser shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) an
offer (the "OFFER") to purchase for cash all of the issued and outstanding
common stock, par value $1.00 per share (either the "SHARES" or "COMPANY COMMON
STOCK"), of the Company (including the associated Preferred Stock Purchase
Rights (the "RIGHTS") issued pursuant to the Rights Agreement between the
Company and Harris Trust and Savings Bank, dated as of June 8, 1989, as amended
(the "RIGHTS AGREEMENT")), at a price of $12.00 per Share, net to the seller in
cash (such price, or such higher price per Share as may be paid in the Offer,
being referred to herein as the "OFFER PRICE"), subject to there being validly
tendered and not withdrawn prior to the expiration of the Offer, that number of
Shares which, together with the Shares beneficially owned by Parent or the
Purchaser, represent at least 70% of the Shares outstanding on a fully diluted
basis (the "MINIMUM CONDITION") and to the other conditions set forth in Annex
A (collectively, the "TENDER OFFER CONDITIONS").

(b) The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver (subject to the limitations on waiver described in the
first sentence of Section 1.1(c)) of the Tender Offer Conditions, accept for
payment and pay for Shares tendered as soon as it is legally permitted to do so
under applicable law. The obligations of the Purchaser to commence the Offer
and to accept for payment and to pay for any Shares validly tendered on or
prior to the expiration of the Offer and not withdrawn shall be subject

7
only to the Tender Offer Conditions. The Offer shall be made by means of an
offer to purchase (the "OFFER TO PURCHASE") containing the terms set forth in
this Agreement and the Tender Offer Conditions.

(c) (i) Any of the Tender Offer Conditions may be waived; provided,
however, that, without the consent of the Company, the Purchaser shall not
waive the Minimum Condition. The Tender Offer Conditions are for the sole
benefit of Parent and the Purchaser and may be asserted by Parent and the
Purchaser regardless of the circumstances giving rise to any such Tender Offer
Conditions and, subject to the preceding sentence, may be waived by Parent and
the Purchaser in whole or in part.

(ii) The Purchaser expressly reserves the right to modify the terms of
the Offer (except as provided in the following sentence), including, without
limitation, to extend the Offer beyond any scheduled expiration date; provided,
however, without the consent of the Company, the Purchaser shall not (A) reduce
the number of Shares to be purchased in the Offer, (B) reduce the Offer Price,
(C) modify or add to the Tender Offer Conditions or (D) change the form of
consideration payable in the Offer. Notwithstanding the preceding sentence,
if, as of the scheduled expiration date of the Offer (as the same may have been
duly extended), any of the Tender Offer Conditions shall not have been
satisfied, the Offer may be extended in Purchaser's sole discretion; provided,
however, that under any circumstance the Offer may not be extended beyond June
15, 1996. In addition, the Offer Price may be increased (any increase shall be
at Purchaser's sole discretion and Purchaser shall have no obligation to
increase the Offer Price) and the Offer may be extended to the extent required
by law in connection with such increase, in each case without the consent of
the Company.

(d) (i) As soon as practicable on the date the Offer is commenced, Parent
and the Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer (together with all amendments and supplements thereto and
including the exhibits thereto, the "SCHEDULE 14D-1"). The Schedule 14D-1 will
include, as exhibits, the Offer to Purchase and a form of letter of transmittal
and summary advertisement (collectively, together with any amendments and
supplements thereto, the "OFFER DOCUMENTS").

(ii) The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation

8
is made by Parent or Purchaser with respect to information supplied by the
Company in writing for inclusion in the Offer Documents. Each of Parent and
the Purchaser further agrees to take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Each of Parent and the Purchaser, on the one hand, and the Company, on
the other hand, agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that it shall have become false
and misleading in any material respect and the Purchaser further agrees to take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and
to the extent required by applicable federal securities laws. The Company and
its counsel shall be given the opportunity to review the Schedule 14D-1 before
it is filed with the SEC. In addition, Parent and the Purchaser agree to
provide the Company and its counsel in writing with any comments Parent, the
Purchaser or their counsel may receive from time to time from the SEC with
respect to the Offer Documents promptly after receipt of such comments.

1.2 COMPANY ACTIONS.

(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors, at a meeting duly called and held, has:

(i) determined by unanimous vote that each of this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (as
defined in Section 1.4) is fair to and in the best interest of the holders of
the Company Common Stock (the Offer and the Merger are collectively referred
to in this Agreement as the "TRANSACTIONS");

(ii) approved by unanimous vote this Agreement and each of the
Transactions and, for the purposes of Section 203 of the DGCL (as defined in
Section 1.4), the tender agreements (or letters of intent to tender) to be
entered into immediately after this Agreement on the date hereof between
Parent, the Purchaser and one or more of Tweedy Browne & Company, LP, College
Retirement Equities Fund - Stock, Smith (Donald) & Company, Inc. Franklin
Balance Sheet Investment Fund, Delphi Management, David L. Babson & Company,
Inc., Babson Enterprise Fund, Brinson Partners, Brinson Post-Venture Fund and
The Franklin Microcap Value Fund (collectively, the "TENDER AGREEMENTS");

(iii) resolved to recommend that the shareholders of the Company accept
the Offer, tender their Shares thereunder to the Purchaser and approve and
adopt this Agreement and the Merger; provided, that such recommendation may be
withdrawn, modified or amended only under the circumstances described in
Section 5.7; and

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(iv) taken all other action necessary to render the Rights Agreement
inapplicable to the Transactions and the Tender Agreements.

The Company represents that the actions set forth in this Section 1.2(a) and
all other actions it has taken in connection therewith are, assuming the
accuracy of, and in reliance upon, the information received in writing from
Parent as to the ownership of Shares by Parent, Purchaser and their affiliates,
sufficient to render (i) Section 203 of the DGCL inapplicable to the
Transactions and the Tender Agreements and (ii) the super-majority voting
requirements set forth in the Company's Restated Certificate of Incorporation
inapplicable to this Agreement and the Transactions.

(b) The Company further represents that Duff & Phelps Capital Markets
Company ("DUFF & PHELPS") has delivered to the Company its opinion that the
consideration to be received by the holders of Company Common Stock pursuant
to the Offer and the Merger is fair to such holders from a financial point
of view, subject to the assumptions and qualifications set forth in such
opinion.

(c) (i) Concurrently with the commencement of the Offer, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto and including the
exhibits thereto, the "SCHEDULE 14D-9") which shall, subject to the fiduciary
duties of the Company's directors under applicable law (and the provisions of
Section 5.7) and to the provisions of this Agreement, contain the
recommendation referred to in clause (iii) of Section 1.2(a) hereof.

(ii) The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Parent or the Purchaser in writing for
inclusion in the Schedule 14D-9. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws. Each of the Company, on the one hand,
and Parent and the Purchaser, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false and misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and

10
its counsel shall be given the opportunity to review the Schedule 14D-9 before
it is filed with the SEC. The Company agrees to provide Parent and its counsel
with any comments the Company or its counsel may receive from the SEC with
respect to the Schedule 14D-9 promptly after receipt of such comments, and
shall provide Parent and its counsel with an opportunity to participate,
including by way of discussions with the SEC, in the response of the Company to
such comments. Notwithstanding anything to the contrary contained herein, the
subsequent withdrawal, modification or amendment of such recommendation under
the circumstances described in Section 5.7 shall not constitute a breach of
this Agreement.

(d) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
furnish the Purchaser with such information and assistance as the Purchaser or
its agents may reasonably request in communicating the Offer to the
shareholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be delivered
to the Company all copies of such information then in its possession or the
possession of its agents or representatives.

(e) As promptly as practicable on or after the date hereof, but in no
event later than two days following announcement of the Offer, the Company will
amend the Rights Agreement, as necessary (the "RIGHTS AMENDMENT"), (i) to
prevent this Agreement, the Transactions or the Tender Agreements or the
consummation of any of the Transactions contemplated thereby, including without
limitation, the publication or other announcement of the Offer and the
consummation of the Offer and the Merger, from resulting in the distribution of
separate Rights certificates or the occurrence of a Distribution Date (as
defined therein) or being deemed a Triggering Event (as defined therein) and
(ii) to provide that neither Parent nor the Purchaser shall be deemed to be an
Acquiring Person (as defined therein) by reason of the transactions expressly
provided for in this Agreement and the Tender Agreements. The Company
represents that the Rights Amendment will be sufficient to render the Rights
inoperative with respect to any acquisition of Shares by Parent, the Purchaser
or any of their affiliates pursuant to this Agreement and/or the Tender
Agreements. As a result of the Rights Amendment, the Rights shall not be
exercisable upon or at any time after, the acceptance for payment of Shares
pursuant to the Offer and/or the purchase of Shares pursuant to the Tender
Agreements.

11
1.3 DIRECTORS.

(a) Promptly upon the purchase of and payment for any Shares by Parent and
Purchaser which represents at least a majority of the outstanding shares of
Company Common Stock (on a fully diluted basis) Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as is equal to the product of the total
number of directors on such Board (giving effect to the directors designated by
Parent pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned by the Purchaser and Parent bears
to the total number of shares of Company Common Stock then outstanding. The
Company shall, upon request of the Purchaser, use its best efforts promptly
either to increase the size of its Board of Directors and/or, at the Company's
election, secure the resignations of such number of its incumbent directors as
is necessary to enable Parent's designees to be so elected to the Company's
Board, and shall cause Parent's designees to be so elected. At such time, the
Company shall also cause persons designated by Parent to constitute the same
percentage (rounded up to the next whole number) as is on the Company's Board
of Directors of (i) each committee of the Company's Board of Directors, (ii)
each board of directors (or similar body) of each Subsidiary (as defined in
Section 3.1) of the Company and (iii) each committee (or similar body) of each
such board, in each case only to the extent permitted by applicable law or the
rules of any stock exchange on which the Company Common Stock is listed.
Notwithstanding the foregoing, until the Effective Time (as defined in Section
1.5 hereof), the Company shall use all reasonable efforts to retain as a member
of its Board of Directors at least two directors who are directors of the
Company on the date hereof; provided, that subsequent to the purchase of and
payment for Shares pursuant to the Offer, Parent shall always have its
designees represent at least a majority of the entire Board of Directors. The
Company's obligations under this Section 1.3(a) shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company
shall promptly take all actions required pursuant to such Section 14(f) and
Rule 14f-1 in order to fulfill its obligations under this Section 1.3(a),
including mailing to shareholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be elected
to the Company's Board of Directors. Parent or the Purchaser will supply the
Company any information with respect to either of them and their nominees,
officers, directors and affiliates required by such Section 14(f)and Rule
14f-1. The provisions of this Section 1.3(a) are in addition to and shall not
limit any rights which the Purchaser, Parent or any of their affiliates may
have as a holder or beneficial owner of Shares as a matter of law with respect
to the election of directors or otherwise.

(b) From and after the time, if any, that Parent's designees constitute a
majority of the Company's Board of

12
Directors, any amendment of this Agreement, any termination of this Agreement
by the Company, any extension of time for performance of any of the obligations
of Parent or the Purchaser hereunder, any waiver of any condition or any of the
Company's rights hereunder or other action by the Company hereunder may be
effected only by the action of a majority of the directors of the Company then
in office who were directors of the Company on the date hereof, which action
shall be deemed to constitute the action of the full Committee and the full
Board of Directors; provided, that if there shall be no such directors, such
actions may be effected by majority vote of the entire Board of Directors of
the Company.

1.4 THE MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.5 hereof), the Company and the
Purchaser shall consummate a merger (the "MERGER") pursuant to which (a) the
Purchaser shall be merged with and into the Company and the separate corporate
existence of the Purchaser shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Delaware under the name of "Duplex
Products Inc.", and (c) the separate corporate existence of the Company with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger. Pursuant to the Merger, (x) the Restated Certificate
of Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Restated
Certificate of Incorporation, and (y) the By-laws of the Company, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Restated
Certificate of Incorporation and such By-laws. The corporation surviving the
Merger is sometimes hereinafter referred to as the "SURVIVING CORPORATION."
The Merger shall have the effects set forth in the Delaware General
Corporation Law (the "DGCL").

1.5 EFFECTIVE TIME. Parent, the Purchaser and the Company will cause an
appropriate Certificate of Merger (the "CERTIFICATE OF MERGER") to be executed,
acknowledged and filed on the date of the Closing (as defined in Section 1.6)
(or on such other date as Parent and the Company may agree) with the Secretary
of State of the State of Delaware (the "SECRETARY OF STATE") as provided in the
DGCL. The Merger shall become effective on the date on which the Certificate
of Merger has been duly filed with the Secretary of State or such time as is
agreed upon by the parties and specified in the Certificate of Merger, and such
time is hereinafter referred to as the "EFFECTIVE TIME."

1.6 CLOSING. The closing of the Merger (the "CLOSING") will take place at
10:00 a.m. on a date to be specified by the parties, which shall be no later
than the fifth business day after satisfaction or waiver of all of the
conditions set forth in Section 6 hereof (the "CLOSING DATE"), at the Chicago,
Illinois

13
offices of Hinshaw & Culbertson, unless another date or place is agreed to in
writing by the parties hereto.

1.7 SURVIVING CORPORATION DIRECTORS AND OFFICERS. The directors and
officers of the Purchaser at the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors shall have been duly elected or appointed or
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-laws.

1.8 SHAREHOLDERS' MEETING.

(a) If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:

(i) duly call, give notice of, convene and hold a special meeting of its
shareholders (the "SPECIAL MEETING") as soon as practicable following the
acceptance for payment and purchase of Shares by the Purchaser pursuant to
the Offer for the purpose of considering and taking action upon this
Agreement;

(ii) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and use its reasonable
efforts (x) to obtain and furnish the information required to be included by
the SEC in the Proxy Statement (as defined below) and, after consultation
with Parent, to respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement (the "PROXY STATEMENT") to be
mailed to its shareholders and (y) to obtain the necessary approvals of the
Merger and this Agreement by its shareholders; and

(iii) include in the Proxy Statement the recommendation of the Board that
shareholders of the Company vote in favor of the approval of the Merger and
the adoption of this Agreement, subject, however, to the withdrawal,
modification or amendment of that recommendation under the circumstances
described in Section 5.7 of this Agreement.

(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, the Purchaser or any of its other subsidiaries and
affiliates in favor of the approval of the Merger and the adoption of this
Agreement.

1.9 MERGER WITHOUT MEETING OF SHAREHOLDERS. Notwithstanding Section 1.8
hereof, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the Company Common Stock, pursuant to the
Offer or otherwise, the

14
parties hereto agree, at the request of Parent and subject to Section 6
hereof, to take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without a
meeting of shareholders of the Company, in accordance with Section 253 of the
DGCL.

2. CONVERSION OF SECURITIES.

2.1 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holders of any shares of
Company Common Stock or common stock, no par value, of the Purchaser (the
"PURCHASER COMMON STOCK"):

(a) Purchaser Common Stock. Each issued and outstanding share of the
Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.

(b) Cancellation of Treasury Stock and Parent-Owned Stock. All shares of
Company Common Stock that are owned by the Company as treasury stock and any
shares of Company Common Stock owned by Parent, the Purchaser or any other
wholly owned Subsidiary (as defined in Section 3.1 hereof) of Parent shall be
cancelled and retired and shall cease to exist, and no stock of Parent or other
consideration shall be delivered in exchange therefor.

(c) Exchange of Shares. Each issued and outstanding share of Company
Common Stock, including the associated Rights (other than shares to be
cancelled in accordance with Section 2.1(b)) shall be converted into the right
to receive the Offer Price, payable to the holder thereof, without interest
(the "MERGER CONSIDERATION"), upon surrender of the certificate formerly
representing such share of Company Common Stock in the manner provided in
Section 2.2. All such shares of Company Common Stock, when so converted, shall
no longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such
certificate in accordance with Section 2.2, without interest. Notwithstanding
anything in this Agreement to the contrary, but only to the extent required by
DGCL, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and with respect to which the holders
comply with all the provisions of the DGCL concerning the right of holders of
Company Common Stock to dissent from the Merger and require appraisal of their
shares of Company Common Stock ("DISSENTING STOCK") shall not be converted into
the right to receive the Merger Consideration but shall become the right to
receive such consideration as may be determined to be due the holders of the
Dissenting Stock ("DISSENTING STOCKHOLDERS") pursuant to the DGCL; provided,
however, that (i) if any Dissenting Stockholder shall subsequently deliver a
written withdrawal of his or her demand for appraisal

15
(with the written approval of the Surviving Corporation, if such withdrawal is
not tendered within 60 days after the Effective Time), or (ii) if any
Dissenting Stockholder fails to establish and perfect his or her entitlement to
appraisal rights as provided by the DGCL, or (iii) if within 120 days of the
Effective Time neither any Dissenting Stockholder nor the Surviving Corporation
has filed a petition demanding a determination of the value of all shares of
Company Common Stock outstanding at the Effective Time and held by Dissenting
Stockholders in accordance with the DGCL, then such Dissenting Stockholder or
Stockholders, as the case may be, shall forfeit the right to appraisal of such
shares and such shares shall thereupon be deemed to have been converted into
the right to receive, as of the Effective Time, the Merger Consideration,
without interest. The Company shall give Parent and the Purchaser (A) prompt
notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other related instruments received by the Company, and (B)
the opportunity to direct all negotiations and proceedings with respect to
demands for appraisal. The Company will not voluntarily make any payment with
respect to any demands for appraisal and will not, except with the prior
written consent of Parent, settle or offer to settle any such demand.

2.2 EXCHANGE OF CERTIFICATES.

(a) Paying Agent. Parent shall designate a bank or trust company to act
as agent for the holders of shares of Company Common Stock in connection with
the Merger (the "PAYING AGENT") to receive the funds to which holders of shares
of Company Common Stock shall become entitled pursuant to Section 2.1(c). Such
funds shall be invested by the Paying Agent as directed by Parent or the
Surviving Corporation.

(b) Exchange Procedures. (i) As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "CERTIFICATES"),
whose shares were converted pursuant to Section 2.1 into the right to receive
the Merger Consideration (A) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and
shall be in such form and have such other provisions as Parent and the Company
may reasonably specify) and (B) instructions for use in effecting the surrender
of the Certificates in exchange for payment of the Merger Consideration.

(ii) Upon surrender of a Certificate for cancellation to the Paying Agent
or to such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor the Merger Consideration for each
share of Company Common Stock formerly represented by such

16
Certificate and the Certificate so surrendered shall forthwith be cancelled.
If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the person
requesting such payment shall have paid any transfer and other taxes required
by reason of the payment of the Merger Consideration to a person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such tax either has been
paid or is not applicable.

(iii) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Section 2, provided that, the person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the Surviving
Corporation a bond in such sum as it may direct or otherwise indemnify the
Surviving Corporation in a manner satisfactory to it against any claim that may
be made against the Surviving Corporation with respect to the Certificate
claimed to have been lost, stolen or destroyed.

(iv) Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration in cash as contemplated by
this Section 2.2.

(c) Transfer Books; No Further Ownership Rights in Company Common Stock.
At the Effective Time, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers of shares of
Company Common Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Section 2.

(d) Termination of Fund; No Liability. (i) Concurrently with the
Effective Time, Parent or the Purchaser shall deposit in trust with the Paying
Agent cash in United States dollars in an aggregate amount equal to the product
of (A) the number of shares of Company Common Stock outstanding immediately
prior to the Effective Time (less those shares to be cancelled in accordance
with Section 2.1(b) and any shares known at the time of such deposit to be
Dissenting Stock), multiplied by (B) the Merger

17
Consideration (such amount being hereinafter referred to as the "PAYMENT
FUND"). The Payment Fund shall be invested by the Paying Agent as directed by
Parent in direct obligations of the United States, obligations for which the
full faith and credit of the United States is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest
quality by Moody's Investors Services, Inc. or Standard & Poor's Ratings Group
or certificates of deposit, bank repurchase agreements or bankers' acceptances
of a commercial bank having at least $100,000,000 in assets (collectively,
"PERMITTED INVESTMENTS") or in money market funds which are invested in
Permitted Investments, and any net earnings with respect thereto shall be paid
to Parent as and when requested by Parent. The Paying Agent shall, pursuant to
irrevocable instructions, make the payments referred to in Section 2.1(c)
hereof out of the Payment Fund. The Payment Fund shall not be used for any
other purpose except as otherwise agreed to by Parent.

(ii) At any time following one hundred twenty (120) days after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it the remaining balance of the Payment Fund
(including any interest received with respect thereto), and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.

2.3 COMPANY OPTION PLANS.

(a) Parent and the Company shall take all actions necessary to provide
that, effective as of the Effective Time, (i) each outstanding employee stock
option to purchase Shares (an "OPTION") granted under the Company's 1984
Incentive Stock Option Plan (the "1984 OPTION PLAN") or the Company's 1993
Incentive Stock Option Plan (the "1993 OPTION PLAN" and collectively with the
1984 Option Plan, the "OPTION PLANS"), whether or not then exercisable or
vested, shall become fully exercisable and vested, (ii) each Option that is
then outstanding shall be cancelled and (iii) in consideration of such
cancellation, and except to the extent that Parent or the Purchaser and the
holder of any such Option otherwise agree, the Company (or, at Parent's option,
the Purchaser) shall pay to such holders of Options an amount in respect
thereof equal to the product of (A) the excess, if any, of the Offer Price over
the exercise price thereof and (B) the number of Shares subject thereto (such
payment to be net of applicable withholding taxes); provided that the foregoing
(x) shall be subject to the obtaining of any necessary consents of holders of
Options and the making of any necessary amendments to the Option Plans, it
being agreed that

18
the Company and Parent will use all reasonable efforts to obtain any such
consents and make any such amendments, and (y) shall not require any action
that violates the Option Plans; provided, further, that if it is determined
that compliance with any of the foregoing would cause any individual subject to
Section 16 of the Exchange Act ("SECTION 16") to become subject to the profit
recovery provisions thereof, any Options held by such individual will be
cancelled or purchased, as the case may be, as promptly as possible so as not
to subject such individual to any liability pursuant to Section 16, subject to
receiving an agreement from the holder of such Option not to exercise such
Option after the Effective Time, and such individual shall be entitled to
receive from the Company, for each Share subject to an Option an amount equal
to the excess, if any, of the Offer Price over the per Share exercise price of
such Option. Notwithstanding the foregoing, any payment to the holders of
Options contemplated by this Section 2.3 may be withheld in respect of any
Option until any necessary consents or releases are obtained.

(b) Each Share previously issued in the form of restricted stock (both
"Restricted Shares" and "Investment Shares") under the Company's Restricted
Stock Purchase Plan (the "RESTRICTED STOCK PLAN") shall become fully and freely
transferable under the terms of the Offer immediately prior to the Effective
Time.

(c) Except as provided herein or as otherwise agreed to by the parties and
to the extent permitted by the Option Plans and the Restricted Stock Plan, (i)
the Option Plans and the Restricted Stock Plan shall terminate as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its subsidiaries shall be deleted as of
the Effective Time and (ii) the Company shall take all actions necessary to
ensure that following the Effective Time, the Company will not be bound by any
Options, other options, warrants, rights or agreements which would entitle any
person (other than Parent or the Purchaser) to own or acquire any equity
securities of the Company, the Surviving Corporation or any subsidiary thereof
or to receive any payment in respect thereof.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to Parent and the Purchaser as follows:

3.1 ORGANIZATION. Each of the Company and its Subsidiaries is a
corporation, partnership or other entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as now being conducted, except where the failure
to be so organized, existing and in good standing or to

19
have such power, authority, and governmental approvals would not have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
As used in this Agreement, the word "SUBSIDIARY" means, with respect to any
person, any corporation or other organization, whether incorporated or
unincorporated, of which (a) such person or any other Subsidiary of such person
is a general partner (excluding such partnerships where such person or any
Subsidiary of such person do not have a majority of the voting interest in such
partnership) or (b) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such person or by any one or more of its Subsidiaries, or by such person and
one or more of its Subsidiaries. As used in this Agreement, any reference to
any event, change or effect being material or having a material adverse effect
on or with respect to any person (or group of persons taken as a whole) means
such event, change or effect is materially adverse to the consolidated
financial condition, businesses or results of operations of such person (or, if
used with respect thereto, of such group of persons taken as a whole). The
Company and each of its Subsidiaries is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would not in the aggregate have
a material adverse effect on the Company and its Subsidiaries taken as a whole.
The only Subsidiary of the Company is Puerto Rico Envelopes, Inc.

3.2 CAPITALIZATION.

(a) The authorized capital stock of the Company consists of 20,000,000
shares of Company Common Stock and 1,000,000 preferred shares, $1.00 par value
(the "PREFERRED STOCK"). As of the date hereof, (i) 7,481,278 shares of
Company Common Stock are issued and outstanding, (ii) 753,190 shares of Company
Common Stock are issued and held in the treasury of the Company, and (iii)
188,000 shares of Company Common Stock are reserved for issuance upon exercise
of then outstanding Options granted under the Option Plans or rights granted
under the Restricted Stock Plan. As of the date hereof, there are no shares of
Preferred Stock issued and outstanding and 1,000,000 shares of Preferred Stock
were reserved for issuance upon exercise of the Rights. All the outstanding
shares of the Company's capital stock are, and all shares which may be issued
pursuant to the exercise of outstanding Options or Rights will be, when issued
in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and non-assessable. There are no bonds, debentures, notes
or other indebtedness having general voting rights (or convertible into
securities having such rights)("VOTING DEBT") of the Company or any of its
Subsidiaries issued and outstanding. Except as set forth

20
above and except for the transactions contemplated by this Agreement, as of the
date hereof, (x) there are no shares of capital stock of the Company
authorized, issued or outstanding and (y) there are no existing options,
warrants, calls, preemptive rights, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or
unissued capital stock of the Company or any of its Subsidiaries, obligating
the Company or any of its Subsidiaries to issue, transfer or sell or cause to
be issued, transferred or sold any shares of capital stock or Voting Debt of,
or other equity interest in, the Company or any of its Subsidiaries or
securities convertible into or exchangeable for such shares or equity interests
or obligations of the Company or any of its Subsidiaries to grant, extend or
enter into any such option, warrant, call, subscription or other right,
agreement, arrangement or commitment. Except as contemplated by this
Agreement, there are no outstanding contractual obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares
or the capital stock of the Company or any subsidiary or affiliate of the
Company or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any Subsidiary or any other entity. After
the Effective Time, the Surviving Corporation will have no obligation to issue,
sell or transfer any shares of capital stock of the Surviving Corporation
pursuant to any Benefit Plan (as defined in Section 3.9(a)).

(b) All of the outstanding shares of capital stock of each of the
Subsidiaries are beneficially owned by the Company, directly or indirectly, and
all such shares have been validly issued and are fully paid and nonassessable
and are owned by either the Company or one of its Subsidiaries free and clear
of all liens, charges, claims or encumbrances.

(c) There are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of the capital stock of the Company or any of the Subsidiaries. None of
the Company or its Subsidiaries is required to redeem, repurchase or otherwise
acquire shares of capital stock of the Company, or any of its Subsidiaries,
respectively, as a result of the transactions contemplated by this Agreement.

3.3 AUTHORIZATION; VALIDITY OF AGREEMENT; COMPANY ACTION.

(a) The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to obtaining the necessary approval of its
shareholders with respect to the Merger, to consummate the Transactions. The
execution, delivery and performance by the Company of this Agreement, and the
consummation by it of the Transactions, have been duly authorized by its Board
of Directors and, except for those actions contemplated by Section 1.2(a) and
obtaining the approval of its shareholders as contemplated by Section 1.8, no
other corporate action on the part

21
of the Company is necessary to authorize the execution and delivery by the
Company of this Agreement and the consummation by it of the Transactions. This
Agreement has been duly executed and delivered by the Company and is a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

(b) The Board of Directors of the Company has duly and validly approved
and taken all corporate action required to be taken by the Board of Directors
for the consummation of the Transactions, including the Offer, the acquisition
of Shares pursuant to the Offer, the Merger and the Tender Agreements,
including, but not limited to, all actions required to render Section 203 of
the DGCL, the super-majority voting provisions of Article IX of the Company's
Restated Certificate of Incorporation and the Rights Agreement inapplicable to
such transactions.

3.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), the Securities Act of
1933, as amended (the "SECURITIES ACT"), state securities or blue sky laws,
applicable state takeover statutes and the DGCL, none of the execution,
delivery or performance of this Agreement by the Company or the consummation by
the Company of the Transactions or the compliance by the Company with any of
the provisions hereof will (a) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws or similar
organizational documents of the Company or of any of its Subsidiaries, (b)
require any filing with, or permit, authorization, consent or approval of, any
court, arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency (a "GOVERNMENTAL ENTITY"),
except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings would not have a material adverse effect on
the Company and its Subsidiaries taken as a whole, (c) except for the those
agreements described in Section 3.4 of the disclosure letter prepared by the
Company for the benefit of Parent and the Purchaser in connection with the
transactions contemplated by this Agreement (the "DISCLOSURE LETTER"), result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound and

22
which either (i) has been filed as an exhibit to the Company SEC Documents (as
defined in Section 3.5) or (ii) is otherwise material to the financial
condition, business or results of operations of the Company (such agreements,
contracts, etc. described in the foregoing clauses (i) and (ii) to be referred
to herein as the "MATERIAL AGREEMENTS") or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any
of its Subsidiaries or any of their properties or assets, except in the case of
(c) or (d) for such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries taken as a whole, and which will not materially impair the
ability of the Company to consummate the transactions contemplated hereby and
to operate in the ordinary course of business after the Effective Time.

3.5 SEC REPORTS AND FINANCIAL STATEMENTS. The Company has filed with the
SEC, and has heretofore made available to Parent true and complete copies of,
all forms, reports, schedules, statements and other documents required to be
filed by it since November 1, 1992 under the Exchange Act or the Securities Act
(as such documents have been amended since the time of their filing,
collectively, the "COMPANY SEC DOCUMENTS"). As of their respective dates or,
if amended, as of the date of the last such amendment, the Company SEC
Documents, including, without limitation, any financial statements or schedules
included therein (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC thereunder.
None of the Subsidiaries is required to file any forms, reports or other
documents with the SEC pursuant to Section 12 or 15 of the Exchange Act. The
financial statements of the Company (the "1995 FINANCIAL STATEMENTS") included
in the Company's annual report on Form 10-K for the fiscal year ended October
28, 1995, as amended and subsequently restated (including the related notes
thereto) (the "1995 FORM 10-K")and in the quarterly report on Form 10-Q for the
fiscal quarter filed since the 1995 Form 10-K have been prepared from, and are
in accordance with, the books and records of the Company and its consolidated
subsidiaries, comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto and
subject, in the case of quarterly financial statements, to normal and recurring
year-end adjustments) and fairly present the consolidated financial position
and the consolidated results of operations and cash flows (and changes in
financial position, if any) of the Company and its consolidated

23
subsidiaries as at the dates thereof or for the periods presented therein.

3.6 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company SEC
Documents or in Section 3.6 of the Disclosure Letter, the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary
and usual course and there has not occurred (i) any events, changes, or effects
(including the incurrence of any liabilities of any nature, whether accrued,
contingent or otherwise) having, individually or in the aggregate, a material
adverse effect on the Company and its Subsidiaries, taken as a whole; (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to the equity interests of
the Company or of any of its Subsidiaries; or (iii) any change by the Company
or any of its Subsidiaries in accounting principles or methods, except insofar
as may be required by a change in GAAP.

3.7 NO UNDISCLOSED LIABILITIES. Except (a) as disclosed in the Company's
SEC Documents and (b) for liabilities and obligations incurred in the ordinary
course of business and consistent with past practice, since October 28, 1995,
neither the Company nor any of its Subsidiaries has incurred any liabilities or
obligations of any nature, whether accrued, contingent or otherwise, that have,
or would be reasonably likely to have, a material adverse effect on the Company
and its Subsidiaries taken as a whole or would be required by GAAP to be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
(including the notes thereto). Section 3.7 of the Disclosure Letter sets forth
a list of all debt obligations of the Company (including capitalized leases),
and the total amounts of principal (both current and long-term portions) and
unpaid interest outstanding under the same (even if $0).

3.8 INFORMATION IN PROXY STATEMENT. The Proxy Statement (or any amendment
thereof or supplement thereto) will, at the date mailed to Company shareholders
and at the time of the meeting of Company shareholders to be held in connection
with the Merger, not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the Company with
respect to statements made therein based on information supplied by Parent or
the Purchaser in writing for inclusion in the Proxy Statement. The Proxy
Statement will comply in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.

3.9 EMPLOYEE BENEFIT PLANS; ERISA.

(a) Section 3.9(a) of the Disclosure Letter lists all material employee
benefit plans, arrangements, contracts or agreements (including employment
agreements and severance

24
agreements) of any type, including but not limited to plans described in
section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all retirement, savings and other pension plans, all health,
severance, insurance, disability and other employee welfare plans and all
incentive, vacation, accrued leave, sick pay, sick leave and other similar
plans, all bonus, stock option, stock purchase, restricted stock, incentive,
profit-sharing, deferred compensation, supplemental retirement, unemployment
benefit, severance and other employee benefit plans, programs or arrangements
(whether or not insured) and all material employment, consulting, termination,
or compensation agreements, in each case for the benefit of, or relating to
current employees and former employees or directors of the Company, whether or
not any such items are in writing or are exempt from the provisions of ERISA,
that have been established, maintained or contributed to or with respect to
which any potential material liability is borne by the Company, any of its
Subsidiaries or any trade or business, whether or not incorporated (an "ERISA
AFFILIATE"), that together with the Company would be deemed a "single employer"
within the meaning of section 4001(b)(15) of ERISA, or with respect to which
the Company or any of its Subsidiaries has or may have a liability
(collectively, the "BENEFIT PLANS"). Neither the Company nor any ERISA
Affiliate has any formal plan or commitment, whether legally binding or not, to
create any additional Benefit Plan or modify or change any existing Benefit
Plan that would affect any employee or terminated employee of the Company or
any Subsidiary.

(b) (i) Neither the Company nor any ERISA Affiliate has at any time
maintained, contributed to, had an obligation to contribute to, or otherwise
sponsored a "defined benefit plan," as defined in ERISA Section 3(35), a plan
subject to Section 412 of the Internal Revenue Code of 1986, as amended (the
"CODE"), or a "multiemployer plan," as defined in ERISA Section 4001(a)(3).

(ii) Neither the Company nor any ERISA Affiliate maintains any Benefit
Plan which is a "group health plan" (as such term is defined in Section
5000(b)(1) of the Code) that has not been administered and operated in all
material respects in compliance with the applicable requirements of Section 601
of ERISA and Section 4980B(f) of the Code and neither the Company nor any of
its subsidiaries is subject to any material liability as a result of such
administration and operation. Except as set forth in Section 3.9(b) of the
Disclosure Letter, neither the Company nor any ERISA Affiliate maintains any
Benefit Plan (whether qualified or nonqualified within the meaning of Section
401(a) of the Code) providing for retiree health and/or life benefits and
having material unfunded liabilities.

(iii) Except as set forth in Section 3.9(b) of the Disclosure Letter
neither the Company nor any ERISA Affiliate has any material unfunded
liabilities pursuant to any Benefit Plan that

25
is not intended to be qualified under Section 401(a) of the Code.

(c) All Benefit Plans have at all times been maintained and operated in all
material respects in compliance with their terms and the requirements
prescribed by all applicable statutes, orders or governmental rules or
regulations with respect thereto, and the Company and its ERISA Affiliates have
performed all material obligations required to be performed by them under, and
are not in any material respect in default under or in violation of, any of
the Benefit Plans. No condition or circumstance exists that would prevent the
amendment or termination of any Benefit Plan.

(d) Except as set forth in Section 3.9(d) of the Disclosure Letter, each
Benefit Plan intended to be qualified under Section 401(a) of the Code has
heretofore been determined by the Internal Revenue Service (the "SERVICE") to
so qualify, and each trust created thereunder has heretofore been determined by
the Service to so qualify, and each trust created thereunder has heretofore
been determined by the Service to be exempt from tax under the provisions of
Section 501(a) of the Code and, to the best knowledge of the Company nothing
has occurred since the date of the most recent determination that would be
reasonably likely to cause any such Benefit Plan or trust to fail to qualify
under Section 401(a) or 501(a) of the Code.

(e) The Company has not incurred any material liability to the Pension
Benefit Guaranty Corporation ("PBGC") under Section 4001 et seq. of ERISA, and
no condition exists that could reasonably be expected to result in the Company
incurring material liability under Title IV of ERISA, either singly or as a
member of any trade or business, whether or not incorporated, under common
control of or affiliated with the Company, within the meaning of Section
414(b), (c), (m) or (o) of the Code. All premiums payable to the PBGC have
been paid when due.

(f) The Company has made available to Parent, copies of all material
documents in connection with each Benefit Plan including, without limitation
(where applicable), (i) all Benefit Plans as in effect on the date hereof,
together with all amendments thereto, including, in the case of any Benefit
Plan not set forth in writing, a written description thereof; (ii) all current
summary plan descriptions, summaries of material modifications and material
communications; (iii) all current trust agreements, declarations of trust and
other documents establishing other funding arrangements (and all amendments
thereto and the latest financial statements thereof); (iv) the most recent
Service determination letter, if applicable; (v) annual reports required to be
filed within the last year pursuant to ERISA or the Code with respect to the
Benefit Plans; (vi) the most recently prepared financial statements; and (vii)
all material contracts relating to each Benefit Plan, including, without
limitation, service provider agreements, insurance contracts, annuity
contracts, investment management

26
agreements, subscription agreements, participation agreements, and
recordkeeping agreements.

(g) Neither the Company nor any of its ERISA Affiliates nor, to the best
knowledge of the Company, any of their respective directors, officers,
employees or other persons who participate in the operation of any Benefit Plan
or related trust or funding vehicle, has engaged in any transaction with
respect to any Benefit Plan or breached any applicable fiduciary
responsibilities or obligations under Title I of ERISA that would subject any
of them to a material tax, penalty or liability for prohibited transactions
under ERISA or the Code or would result in any material claim being made under,
by or on behalf of any such Benefit Plan by any party with standing to make
such claim.

(h) Full payment has been made of all amounts which the Company or any of
its ERISA Affiliates is required, under applicable law or under any Benefit
Plan or any agreement relating to any Benefit Plan to which the Company or any
of ERISA Affiliates is a party, to have paid as contributions thereto as of the
last day of the most recent fiscal year of such Benefit Plan ended prior to the
date hereof. Benefits under all Benefit Plans are as represented and have not
been increased subsequent to the date as of which documents have been provided.

(i) There are no actions, suits or claims pending, or to the best
knowledge of the Company, threatened or anticipated (other than routine claims
for benefits) with respect to any Benefit Plan.

(j) Except as set forth in Section 3.9(j) of the Disclosure Letter, no
Benefit Plan provides for the payment of severance benefits upon the
termination of an employee's employment. No compensation or benefit that is or
will be payable in connection with the Transactions contemplated by this
Agreement will be characterized as an "excess parachute payment" within the
meaning of Section 280G of the Code.

(k) The Company has not made any commitment to establish any new Benefit
Plan, to modify any Benefit Plan or to increase benefits or compensation of
employees or former employees of the Company (except for normal increases in
compensation consistent with past practices or as disclosed in Section 3.9(k)
of the Disclosure Letter), nor has any intention to do so been communicated to
employees or former employees of the Company.

3.10 LITIGATION. Except as disclosed in the Company SEC Documents, filed
prior to the date of this Agreement, there is no suit, claim, action,
proceeding or investigation pending or, to the best knowledge of the Company,
threatened against or affecting, the Company or any of its Subsidiaries which,
if concluded adversely to the Company or its Subsidiary, would have,
individually or in the aggregate, a material adverse effect on the Company and
its Subsidiaries, taken as a whole, or a material adverse effect on the

27
ability of the Company to consummate the transactions contemplated by this
Agreement or to operate in the ordinary course of business after the Effective
Time.

3.11 CONDUCT OF BUSINESS. The business of the Company and each of its
Subsidiaries is not being conducted in default or violation of any term,
condition or provision of (a) its respective certificate of incorporation or
by-laws or similar organizational documents, (b) any Material Agreement or (c)
any federal, state, local or foreign statute, law, ordinance, rule, regulation,
judgment, decree, order, concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to the Company or any
of its Subsidiaries, excluding from the foregoing clauses (b) and (c), defaults
or violations that would not, individually or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries, taken as a whole. Except
as previously disclosed to Parent in writing, as of the date of this Agreement,
no investigation or review by any Governmental Entity or other entity with
respect to the Company or any of its Subsidiaries is pending or, to the best
knowledge of the Company, threatened, nor has any Governmental Entity or other
entity indicated an intention to conduct the same, other than, in each case,
those the outcome of which, as far as reasonably can be foreseen, in the future
will not, individually or in the aggregate have a material adverse effect on
the Company and its Subsidiaries, taken as a whole.

3.12 REIMBURSEMENT. The Company or its Subsidiaries, as the case may be, are
parties to such agreements with third party payors, including Medicaid, health
maintenance organizations, preferred provider organizations, insurance
companies and other payment sources, which are necessary to conduct their
respective businesses as of the date of this Agreement.

3.13 TAXES.

(a) The Company and its Subsidiaries have (i) duly filed (or there has
been filed on their behalf) with the appropriate governmental authorities all
Tax Returns (as hereinafter defined) required to be filed by them on or prior
to the date hereof, and such Tax Returns are true, correct and complete in all
material respects, and (ii) duly paid in full or made provision in accordance
with GAAP (or there has been paid or provision has been made on their behalf)
for the payment of all Taxes (as hereinafter defined) for all periods ending
through the date hereof.

(b) There are no material liens for Taxes upon any property or assets of
the Company or any Subsidiary thereof, except for liens for Taxes not yet due
and liens for Taxes the assessment of which is being contested in good faith
and with respect to which adequate reserves have been established in accordance
with GAAP (a list of such contests is set forth in Section 3.13(b) of the
Disclosure Letter).

28
(c) Since October 28, 1994, neither the Company nor any of its
Subsidiaries has made any change in accounting methods, received a ruling from
any taxing authority or signed an agreement likely to have a material adverse
effect on the Company and its Subsidiaries taken as a whole.

(d) The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes (including, without limitation, withholding of
Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions
under any foreign laws) and have, within the time and the manner prescribed
bylaw, withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over under
applicable laws.

(e) Except as described in Section 3.13(e) of the Disclosure Letter, no
federal, state, local or foreign audits or other administrative proceedings or
court proceedings are presently pending with regard to any Taxes or Tax Returns
of the Company or its Subsidiaries wherein an adverse determination or ruling
in any one such proceeding or in all such proceedings in the aggregate could
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole, and neither the Company nor its subsidiaries has received a written
notice of any pending audits or proceedings.

(f) The federal income Tax Returns of the Company and its Subsidiaries
have been examined by the Service (or the applicable statutes of limitation for
the assessment of federal income Taxes for such periods have expired) for all
periods through and including October 28, 1994, and no material deficiencies
were asserted as a result of such examinations which have not been resolved and
fully paid.

(g) There are no outstanding requests, agreements, consents or waivers to
extend the statutory period of limitations applicable to the assessment of any
Taxes or deficiencies against the Company or any of its Subsidiaries, and no
power of attorney granted by either the Company or any of its Subsidiaries with
respect to any Taxes is currently in force.

(h) Neither the Company nor any of its Subsidiaries is a party to any
agreement providing for the allocation or sharing of Taxes.

(i) Except as disclosed in Section 3.9(j) of the Disclosure Letter,
neither the Company nor its Subsidiaries is a party to any agreement, contract
or arrangement that could result, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of Section 280G
of the Code.

29
(j) Neither the Company nor any of its Subsidiaries has, with regard to
any assets or property held, acquired or to be acquired by any of them, filed a
consent to the application of Section 341(f) of the Code, or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as such term is defined in Section 341(f)(4) of the Code) owned by the
Company or any of its Subsidiaries.

(k) The deductibility of compensation paid by the Company and/or its
Subsidiaries will not be limited by Section 162(m) of the Code.

(l) None of the assets of the Company is property that the Company is
required to treat as being owned by any other person pursuant to the "safe
harbor lease" provisions of former Section 168(f)(8) of the Code.

(m) None of the assets of the Company directly or indirectly secures any
debt on interest which is tax-exempt under Section 103(a) of the Code.

(n) None of the assets of the Company is "tax-exempt use property" within
the meaning of Section 168(h) of the Code.

(o) The Company has not agreed to make nor is it required to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.

(p) The Company has not participated in an international boycott within
the meaning of Section 999 of the Code.

(q) The Company is not and has not been a United States real property
holding corporation (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(r) The Company does not have and has not had a permanent establishment in
any foreign countries, as defined in any application tax treaty or commitment
between the United States and such foreign country.

(s) Except as set forth in Section 3.13(s) of the Disclosure Letter, the
Company is not a party to any joint venture, partnership or other arrangement
or contract that could be treated as a partnership for federal income tax
purposes.

(t) "TAXES" shall mean any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross receipts, excise,
real or personal property, sales, withholding, social security, occupation,
use, service, service use, license, net worth, payroll, franchise, transfer and
recording taxes, fees and charges, imposed by the Service or any taxing
authority (whether domestic or foreign including, without

30
limitation, any state, county, local or foreign government or any subdivision
or taxing agency thereof (including a United States possession)), whether
computed on a separate, consolidated, unitary, combined or any other basis; and
such term shall include any interest whether paid or received, fines, penalties
or additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments. "TAX RETURN" shall mean
any report, return, document, declaration or other information or filing
required to be supplied to any taxing authority or jurisdiction (foreign or
domestic) with respect to Taxes, including, without limitation, information
returns, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information.

3.14 LABOR RELATIONS. There is no labor strike, slowdown or work stoppage or
lockout pending or to the Company's knowledge threatened against the Company or
any of its Subsidiaries. There is no unfair labor practice charge or complaint
against or pending before the National Labor Relations Board (the "NLRB") which
if decided adversely could have a material adverse effect on the Company and
its Subsidiaries, taken as a whole. There is no representation claim or
petition pending before the NLRB and no question concerning representation
exists with respect to the employees of the Company or its Subsidiaries. No
collective bargaining agreement is currently being negotiated by the Company or
any of its Subsidiaries and neither the Company nor any of its Subsidiaries is
a party to any collective bargaining agreement. Except as identified in
Section 3.14 of the Disclosure Letter, there exist no employment, consulting,
severance, indemnification or deferred compensation agreements between the
Company and any director, officer or employee of the Company or any agreement
that would give any person the right to receive any payment from the Company as
a result of the Transactions.

3.15 COMPLIANCE WITH LAWS. The Company and its Subsidiaries have complied in
a timely manner with all laws and governmental regulations and orders relating
to any of the Company or its Subsidiaries or the property owned, leased or used
by them, or applicable to their business, including, but not limited to, equal
employment opportunity, discrimination, occupational safety and health,
environmental, and antitrust laws, except where the failure to so comply would
not, individually or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.

3.16 INSURANCE. As of the date hereof, the Company and each of its
Subsidiaries are insured by insurers, reasonably believed by the Company to be
of recognized financial responsibility and solvency, against such losses and
risks and in such amounts as are customary in the businesses in which they are
engaged. All material policies of insurance and fidelity or surety bonds are
in

31
full force and effect. All necessary notifications of claims have been made to
insurance carriers other than those which will not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole. Section 3.16 of
the Disclosure Letter contains a complete list of all material insurance
policies and fidelity or surety bonds maintained by the Company as of the date
of this Agreement.

3.17 CONTRACTS. Each Material Agreement is legally valid and binding and in
full force and effect, except where failure to be legally valid and binding and
in full force and effect would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole, and there are no defaults
thereunder, except those defaults that would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole. The Company has
previously made available for inspection by Parent or the Purchaser all
Material Agreements. Neither the Company nor any of its Subsidiaries is a
party to or bound by the terms of any agreement, contract or commitment (a) to
obtain all or a substantial portion of its supply of any material good or
service from any other person (or group of persons), (b) to maintain the
confidentiality of any non-public information of another person; or (c) to
refrain from competing or otherwise offering its services or products to any
other person.

3.18 REAL PROPERTY. The Company and the Subsidiaries, as the case may be,
have sufficient title or leaseholds to real property to conduct their
respective businesses as currently conducted with only such exceptions as
individually or in the aggregate would not have a material adverse effect on
the Company and the Subsidiaries, taken as a whole.

3.19 OPINIONS OF FINANCIAL ADVISORS. The Company has received an opinion
from Duff & Phelps to the effect that the consideration to be received by the
shareholders of the Company pursuant to the Offer and the Merger is fair to
such shareholders from a financial point of view, and a complete and correct
signed copy of such opinion will be promptly delivered to Parent.

3.20 VOTE REQUIRED. Unless the Merger is consummated in accordance with the
provisions of Section 253 of the DGCL, the affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock are the only votes
of the holders of any class or series of the Company's capital stock necessary
to approve the Merger.

3.21 TITLE TO PROPERTIES. The Company and each of its Subsidiaries has good,
valid and marketable title to (a) all its material tangible properties and
assets (real and personal), including, without limitation, all material
properties and assets reflected in the consolidated balance sheet as of October
28, 1995 except as indicated in the notes thereto and except for properties and
assets reflected in the consolidated balance sheet as of

32
October 28, 1995 which have been sold or otherwise disposed of in the ordinary
course of business, and (b) all material tangible properties and assets
purchased by the Company and any of its Subsidiaries since October 28, 1995
except for such properties and assets which have thereafter been sold or
otherwise disposed of in the ordinary course of business; in each case subject
to no encumbrance, lien, charge or other restriction of any kind or character,
except for (w) liens reflected in the consolidated balance sheet as of October
28, 1995, (x) liens consisting of zoning or planning restrictions, easements,
permits and other restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially detract from the value
of, or impair the use of, such property by the Company or any of its
subsidiaries in the operation of its respective business, (y) liens for current
taxes, assessments or governmental charges or levies on such property not yet
due and delinquent and (z) mechanics, materialmen's and other similar liens
imposed by law and incurred in the ordinary course of business.

3.22 INTELLECTUAL PROPERTIES. (a) In the operation of its business, the
Company and its Subsidiaries have used, and currently use, domestic and foreign
patents, patent applications, patent licenses, software licenses, know-how
licenses, trade names, trademarks, copyrights, service marks, trademark
registrations and applications, service mark registrations and applications,
copyright registrations and applications, (collectively, the "INTELLECTUAL
PROPERTY") and unpatented inventions, trade secrets and other confidential
proprietary information (collectively, the "KNOW-HOW").

(b) Section 3.22 of the Disclosure Letter contains an accurate and
complete list of all Intellectual Property which, to the best knowledge of the
Company, is of material importance to the operation of the business of the
Company or any of its Subsidiaries. Unless otherwise indicated in Section 3.22
of the Disclosure Letter, the Company (or the Subsidiary indicated) owns the
entire right, title and interest in and to the Intellectual Property listed on
Section 3.22 of the Disclosure Letter used in the operation of its business
(including, without limitation, the exclusive right to use and license the
same) and each item constituting part of the Intellectual Property which is
owned by the Company or a Subsidiary and listed on Section 3.22 of the
Disclosure Letter has been, to the extent indicated in Section 3.22 of the
Disclosure Letter, duly registered with, filed in or issued by, as the case may
be, the United States Patent and Trademark Office or such other government
entities, domestic or foreign, as are indicated in Section 3.22 of the
Disclosure Letter and such registrations, filings and issuances remain in full
force and effect. Except as stated in such Section 3.22 of the Disclosure
Letter, there are no pending or to the best knowledge of the Company,
threatened proceedings or litigation which would have a material adverse effect
on the Company's use of such Intellectual Property or other material adverse
claims affecting or with respect

33
to the Intellectual Property or the Know-How. Section 3.22 of the Disclosure
Letter lists all notices or claims currently pending or received by the Company
or any of its subsidiaries during the past two years which claim infringement,
contributory infringement, inducement to infringe, misappropriation or breach
by the Company or any of its Subsidiaries of any domestic or foreign patents,
patent applications, patent licenses and know-how licenses, trade names,
trademark registrations and applications, service marks, copyrights, copyright
registrations or applications, trade secrets or other confidential proprietary
information. To the best knowledge of the Company, there exists no reasonable
basis upon which a claim may be asserted against the Company or any of its
Subsidiaries for infringement, contributory infringement, inducement to
infringe, misappropriation or breach of any domestic or foreign patents, patent
applications, patent licenses, know-how licenses, trade names, trademark
registrations and applications, common law trademarks, service marks,
copyrights, copyright registrations or applications, trade secrets or other
confidential proprietary information. To the best knowledge of the Company,
except as indicated on Section 3.22 of the Disclosure Letter, no person is
infringing the Intellectual Property or the Know-How.

3.23 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm acting on
behalf of the Company is, or will be, entitled to any fee, commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the Transactions.

3.24 ENVIRONMENTAL MATTERS. (a) Except as disclosed in the Company SEC
Documents or in Section 3.24 of the Disclosure Letter or as would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries taken as a whole, (i) the Company and its Subsidiaries are
in compliance with all Environmental Laws (as defined in Section 3.24(b)); (ii)
Hazardous Substances (as defined in Section 3.24(b)) requiring remediation
under any Environmental Law have not been released or disposed of on any real
property owned or operated by the Company or any of its Subsidiaries; (iii) the
Company and its Subsidiaries are not subject to liability for any off-site
disposal or contamination; (iv) the Company and its Subsidiaries have not
received any Environmental Claims (as defined in Section 3.24(b)) under any
Environmental Law; and (v) there are no facts, conditions, occurrences or
circumstances regarding the Company, its Subsidiaries or any property owned or
operated by the Company or its subsidiaries that could reasonably be expected
(A) to form the basis of any Environmental Claim against the Company, its
Subsidiaries or any property owned or operated by the Company or its
Subsidiaries, or (B) to cause such property to be subject to any restrictions
on the ownership, use, or transferability of any such property under any
Environmental Law.

34
(b) "ENVIRONMENTAL LAWS" means all federal, state and local statutory and
common laws, regulations or orders relating to pollution, protection of the
environment or human health and safety, including those relating to the
manufacture, production, distribution, use, treatment, storage, disposal,
transport or handling, emission, discharge or release of pollutants,
contaminants, chemicals, industrial, hazardous or toxic materials or wastes or
nuisance. "HAZARDOUS SUBSTANCE" means any hazardous or toxic material,
substance, waste, pollutant or contaminant as defined under any Environmental
Law, in any concentration, including, without limitation, any petroleum or
petroleum products, friable asbestos or polychlorinated biphenyls.
"ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or judicial
actions, suits, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law (hereinafter "CLAIMS"), including, without limitation, (i)
any and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health, safety or the environment.

3.25 STATE TAKEOVER STATUTES. The Board of Directors of the Company has
approved the Offer, the Merger, this Agreement and the entering into, and
performance, by Parent and Purchaser of the Tender Agreements and such approval
is sufficient to render Section 203 of the DGCL inapplicable to the Offer, the
Merger, this Agreement and the entering into, and performance, by Parent and
the Purchaser of the Tender Agreements and the other transactions contemplated
by this Agreement and the Tender Agreements.

3.26 RIGHTS AGREEMENT. The Company and the Board of Directors of the
Company have taken and will, until the termination, if any, of this Agreement
pursuant to Section 7.1, maintain in effect all necessary action to (i) render
the Rights Agreement inapplicable with respect to the Offer, the Merger, this
Agreement, and the entering into, and performance, by Parent and the Purchaser
of the Tender Agreements and the other transactions contemplated by this
Agreement and (ii) ensure that (A) neither Parent nor the Purchaser nor any of
their Affiliates (as defined in the Rights Agreement) or Associates (as defined
in the Rights Agreement) is considered to be an Acquiring Person (as defined in
the Rights Agreement) and (B) the provisions of the Rights Agreement, including
the occurrence of a Distribution Date (as defined in the Rights Agreement), are
not and shall not be triggered by reason of the announcement or consummation of
the Offer, the Merger, the Tender Agreements or the consummation of any of the
other transactions contemplated by this Agreement or the Tender Agreements.
The Company has delivered to Parent a complete

35
and correct copy of the Rights Agreement as amended and supplemented to the
date of this Agreement.

4. REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER.

Parent and the Purchaser represent and warrant to the Company as follows:

4.1 ORGANIZATION. Each of Parent and the Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate or other power
and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good standing or
to have such power, authority, and governmental approvals would not have a
material adverse effect on Parent and its Subsidiaries taken as a whole.
Parent and each of its Subsidiaries is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would not, in the aggregate,
have a material adverse effect on Parent and its Subsidiaries, taken as a
whole.

4.2 AUTHORIZATION; VALIDITY OF AGREEMENT; NECESSARY ACTION. Each of Parent
and the Purchaser has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the Offer and the Merger and of the other transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent
and the Purchaser and no other corporate proceedings on the part of Parent and
the Purchaser are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Parent and the Purchaser, as the case may be, and, assuming this
Agreement constitutes a valid and binding obligation of the Company,
constitutes a valid and binding obligation of each of Parent and the Purchaser,
as the case may be, enforceable against them in accordance with its respective
terms, except that (a) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, the Securities Act, the HSR Act,
the DGCL, state securities

or blue sky laws and applicable state takeover laws, neither the execution,
delivery or performance of this Agreement by Parent and the Purchaser nor the
consummation by Parent and the Purchaser of the transactions contemplated
hereby nor compliance by Parent and the Purchaser with any of the provisions
hereof will (a) conflict with or result in any breach of any provision of the
respective certificate of incorporation or by-laws of Parent and the Purchaser,
(b) require any filing with, or permit, authorization, consent or approval of,
any Governmental Entity (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not have a
material adverse effect on Parent and its Subsidiaries taken as a whole), (c)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (d) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their properties or
assets, except in the case of (c) and (d) for violations, breaches or defaults
which would not, individually or in the aggregate, have a material adverse
effect on Parent and its Subsidiaries taken as a whole.

4.4 INFORMATION IN PROXY STATEMENT; SCHEDULE 14D-9. None of the information
supplied by Parent or the Purchaser for inclusion or incorporation by reference
in the Proxy Statement or the Schedule 14D-9 will, at the date mailed to
shareholders and at the time of the meeting of shareholders to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.

4.5 FINANCING. Either Parent or the Purchaser has sufficient funds
available (through existing credit arrangements or otherwise) to purchase all
of the Shares outstanding on a fully diluted basis and to pay all fees and
expenses related to the transactions contemplated by this Agreement.

4.6 PURCHASER'S OPERATIONS. The Purchaser was formed solely for the purpose
of engaging in the transactions contemplated hereby and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated hereby.

5. COVENANTS.

5.1 INTERIM OPERATIONS OF THE COMPANY. The Company covenants and agrees
that, except (i) as expressly contemplated by this Agreement, or (ii) as agreed
in writing by Parent, after the date

37
hereof, and prior to the time the directors of the Purchaser have been elected
to, and shall constitute a majority of, the Board of Directors of the Company
pursuant to Section 1.3 (the "APPOINTMENT DATE"):

(a) the business of the Company and its Subsidiaries shall be conducted
only in the ordinary and usual course and, to the extent consistent therewith,
each of the Company and its Subsidiaries shall use its best efforts to preserve
its business organization intact and maintain its existing relations with
customers, suppliers, employees, creditors and business partners;

(b) the Company will not, directly or indirectly, (i) sell, transfer or
pledge or agree to sell, transfer or pledge any Company Common Stock, Preferred
Stock or capital stock of any of its Subsidiaries beneficially owned by it,
either directly or indirectly; or (ii) split, combine or reclassify the
outstanding Company Common Stock or any outstanding capital stock of any of the
Subsidiaries of the Company;

(c) except for those actions contemplated in Section 1.2, neither the
Company nor any of its Subsidiaries shall: (i) amend its certificate of
incorporation or by-laws or similar organizational documents; (ii) declare, set
aside or pay any dividend or other distribution payable in cash, stock or
property with respect to its capital stock; (iii) issue, sell, pledge, dispose
of or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than issuances pursuant to the exercise of Options
outstanding on the date hereof; (iv) transfer, lease, license, sell, mortgage,
pledge, dispose of, or encumber any material assets other than in the ordinary
and usual course of business and consistent with past practice, or incur or
modify any material indebtedness or other liability, other than in the ordinary
and usual course of business and consistent with past practice; or (v) redeem,
purchase or otherwise acquire directly or indirectly any of its capital stock;

(d) except as expressly provided in Section 2.3, neither the Company nor
any of its Subsidiaries shall: (i) grant any increase in the compensation
payable or to become payable by the Company or any of its Subsidiaries to any
of its executive officers or key employees or (A) adopt any new, or (B) amend
or otherwise increase, or accelerate the payment or vesting of the amounts
payable or to become payable under any existing, bonus, incentive compensation,
deferred compensation, severance, profit sharing, stock option, stock purchase,
insurance, pension, retirement or other employee benefit plan agreement or
arrangement; or (ii) enter into any employment or severance agreement with or,
except in accordance with the existing written policies of the Company, grant
any severance or termination pay to any officer, director or employee of the
Company or any its Subsidiaries;

(e) neither the Company nor any of its Subsidiaries shall modify, amend or
terminate any Material Agreement or waive, release or assign any material
rights or claims, except in the ordinary course of business and consistent with
past practice;

(f) neither the Company nor any of its Subsidiaries shall permit any
material insurance policy naming it as a beneficiary or a loss payable payee to
be cancelled or terminated without notice to Parent, except in the ordinary
course of business and consistent with past practice;

(g) neither the Company nor any of its Subsidiaries shall: (i) incur or
assume any long-term debt, or except in the ordinary course of business, incur
or assume any short-term indebtedness in amounts not consistent with past
practice; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of any other person, except in the ordinary course of business and consistent
with past practice; (iii) make any loans, advances or capital contributions to,
or investments in, any other person (other than to wholly-owned Subsidiaries of
the Company or customary loans or advances to employees in accordance with past
practice); or (iv) enter into any material commitment or transaction (including,
but not limited to, any borrowing, capital expenditure or purchase, sale or
lease of assets);

(h) neither the Company nor any of its Subsidiaries shall change any of
the accounting principles used by it unless required by GAAP;

(i) neither the Company nor any of its Subsidiaries shall pay, discharge
or satisfy any claims, liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of any such claims, liabilities or obligations, (i) in the
ordinary course of business and consistent with past practice, of claims,
liabilities or obligations reflected or reserved against in, or contemplated
by, the consolidated financial statements (or the notes thereto) of the Company
and its consolidated Subsidiaries, (ii) incurred in the ordinary course of
business and consistent with past practice or (iii) which are legally required
to be paid, discharged or satisfied (provided that if such claims, liabilities
or obligations referred to in this clause (iii) are legally required to be paid
and are also not otherwise payable in accordance with clauses (i) or (ii)
above, the Company will notify Parent in writing if such claims, liabilities or
obligations exceed, individually or in the aggregate, $50,000 in value,
reasonably in advance of their payment);

(j) neither the Company nor any of its Subsidiaries will adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other

39
reorganization of the Company or any of its Subsidiaries (other than the
Merger);

(k) neither the Company nor any of its Subsidiaries will take, or agree to
commit to take, any action that would make any representation or warranty of
the Company contained herein inaccurate in any respect at, or as of any time
prior to, the Effective Time; or

(l) neither the Company nor any of its Subsidiaries will enter into an
agreement, contract, commitment or arrangement to do any of the foregoing, or
to authorize, recommend, propose or announce an intention to do any of the
foregoing.

5.2 RIGHTS AGREEMENT. Except for the amendments contemplated by Section
1.2(d) hereof or amendments approved in writing by Parent or the Purchaser, the
Company will not, following the date hereof, amend the Rights Agreement in any
manner. In addition, the Company covenants and agrees that it will not redeem
the Rights unless such redemption is consented to in writing by Parent prior to
such redemption.

5.3 HSR ACT. The Company and Parent shall take all reasonable actions
necessary to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Anti-trust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters.

5.4 ACCESS TO INFORMATION. Upon reasonable notice, the Company shall (and
shall cause each of its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financing sources and other representatives of Parent,
access, during normal business hours during the period prior to the Appointment
Date, to all its properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each of its Subsidiaries
to) furnish promptly to the Parent (a) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws, and (b) all
other information concerning its business, properties and personnel as Parent
may reasonably request. After the Appointment Date, the Company shall provide
Parent and such persons as Parent shall designate with all such information, at
such time, as Parent shall request. Unless otherwise required by law and until
the Appointment Date, Parent will hold any such information which is nonpublic
in confidence in accordance with the provisions of the letter agreement between
the Company and the Parent (the "CONFIDENTIALITY AGREEMENT") dated as of March
3, 1996, as amended by letter dated as of March 7, 1996 and letter dated April
16, 1996.

40
5.5 CONSENTS AND APPROVALS. Each of the Company, Parent and the Purchaser
will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
transactions contemplated hereby (which actions shall include, without
limitation, furnishing all information required under the HSR Act and in
connection with approvals of or filings with any other Governmental Entity) and
will promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of their
Subsidiaries in connection with this Agreement and the transactions
contemplated hereby. Each of the Company, Parent and the Purchaser will, and
will cause its Subsidiaries to, take all reasonable actions necessary to obtain
(and will cooperate with each other in obtaining) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity or other
public or private third party required to be obtained or made by Parent, the
Purchaser, the Company or any of their Subsidiaries in connection with the
Merger or the taking of any action contemplated thereby or by this Agreement.

5.6 EMPLOYEE BENEFITS. Parent agrees that following the Effective Time the
employees of the Company and its Subsidiaries will continue to be provided with
employee benefit plans (other than stock option, employee stock ownership or
other plans involving the potential issuance of securities of the Company or of
Parent) which in the aggregate are substantially comparable to those currently
provided by the Company and its Subsidiaries to such employees. Parent will,
and will cause the Surviving Corporation to, honor employee (or former
employee) benefit obligations and contractual rights existing as of the
Effective Time and all employment, incentive and deferred compensation or
severance agreements, plans or policies adopted by the Board of Directors of
the Company (or any committee thereof) prior to the date hereof in accordance
with their terms other than stock option, employee stock ownership or other
plans involving the potential issuance of securities of the Company or of
Parent.

5.7 NO SOLICITATION. (a) Neither the Company nor any of its Subsidiaries,
shall, directly or indirectly, take (and the Company shall not authorize or
permit its or its subsidiaries, officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants or
other agents or affiliates, to so take) any action to (i) solicit or initiate
the submission of any Acquisition Proposal (as defined in Section 5.7(b)), (ii)
enter into an agreement for the sale or other disposition by the Company or any
of its subsidiaries of a material amount of assets or a sale of shares of
capital stock whether by merger or other business combination or tender or
exchange offer or (iii) participate in any way in discussions or negotiations
with, or, furnish any information to, any person (other than Parent or the
Purchaser) in connection with, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal (and

41
the Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing); provided, however, that the Company may
participate in discussions or negotiations with or furnish information to any
third party which proposes a transaction which the Board of Directors of the
Company reasonably believes will result in an Acquisition Proposal, if the
Board of Directors reasonably and in good faith believes (and has received a
written opinion to that effect from independent counsel) that failing to take
such action would constitute a breach of its fiduciary duties and if such third
party, as a condition to receipt of such information, executes a
confidentiality agreement no less restrictive than the Confidentiality
Agreement. In addition, neither the Board of Directors of the Company nor any
Committee thereof shall withdraw or modify in a manner adverse to Parent the
approval and recommendation of the Offer and this Agreement or approve or
recommend any Acquisition Proposal, provided that the Company may recommend to
its shareholders an Acquisition Proposal and in connection therewith withdraw
or modify its approval or recommendation of the Offer or the Merger if (i) the
Board of Directors of the Company has reasonably and in good faith determined
that the Acquisition Proposal is a Superior Proposal (as defined in Section
5.7(b)) and the Board of Directors has received a written opinion from
independent legal counsel that failure to withdraw or modify its recommendation
of the Offer and the Merger and to terminate this Agreement pursuant to Section
7.1(e) would constitute a breach of the Board's fiduciary duties, (ii) all the
conditions to the Company's right to terminate this Agreement in accordance
with Section 7.1(e) have been satisfied (including the payment of the amount
required by Section 8.1), (iii) simultaneously with such withdrawal,
modification or recommendation, this Agreement is terminated in accordance with
Section 7.1(e) and (iv) the Acquisition Proposal does not provide for any
breakup fee or other inducement to the acquiror other than reimbursement of
documented out-of-pocket expenses incurred in connection with such Acquisition
Proposal. Any actions permitted under, and taken in compliance with, this
Section 5.7 shall not be deemed a breach of any other covenant or agreement of
such party contained in this Agreement.

(b) "ACQUISITION PROPOSAL" shall mean any proposed merger or other
business combination, sale or other disposition of any material amount of
assets, sale of shares of capital stock, tender offer or exchange offer or
similar transactions involving the Company or any of its Subsidiaries.
"SUPERIOR PROPOSAL" shall mean a bona fide proposal made by a third party to
acquire all of the outstanding shares of the Company pursuant to a tender offer
or a merger, or to purchase all or substantially all of the assets of the
Company on terms which a majority of the members of the Board of Directors of
the Company determines in its good faith reasonable judgment (based on the
advice of its financial and legal advisors) to be more favorable to the Company
and its shareholders than the transactions contemplated hereby, and which does
not provide for

42
any breakup fee or other inducement to the acquiror other than reimbursement of
documented out-of-pocket expenses incurred in connection with the Superior
Proposal.

(c) In addition to the obligations of the Company set forth in Section
5.7(a), the Company shall promptly advise Parent of any request for information
or of any Acquisition Proposal, or any proposal with respect to any Acquisition
Proposal, the material terms and conditions of such request or takeover
proposal, and the identity of the person making any such takeover proposal or
inquiry. The Company will use its reasonable best efforts to keep Parent
informed of the status and details (including amendments or proposed
amendments) of any such request, takeover proposal or inquiry.

(d) Immediately following the purchase of Shares pursuant to the Offer,
the Company will request each person (other than Purchaser or Parent) which has
heretofore executed a confidentiality agreement in connection with its
consideration of acquiring the Company or any portion thereof (the "THIRD PARTY
CONFIDENTIALITY AGREEMENTS") to return all confidential information heretofore
furnished to such person by or on behalf of the Company.

5.8 BROKERS OR FINDERS. Each of Parent and the Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement and each of Parent
and the Company agrees to indemnify and hold the other harmless from and
against any and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any person on the basis of any
act or statement alleged to have been made by such party or its affiliates.

5.9 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations, or
to remove any injunctions or other impediments or delays, legal or otherwise,
to consummate and make effective the Merger and the other transactions
contemplated by this Agreement (including the provision of such certificates
and opinions of counsel as are reasonable and customary under the
circumstances). In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of the Company and Parent shall use all
reasonable efforts to take, or cause to be taken, all such necessary actions.

5.10 PUBLICITY. The initial press release with respect to the execution of
this Agreement shall be a joint press release

acceptable to Parent and the Company. Thereafter, so long as this Agreement is
in effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other announcement
with respect to the Merger, this Agreement or the other transactions
contemplated hereby without the prior consultation of the other party, except
as may be required by law or by any listing agreement with a national
securities exchange.

5.11 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt notice
to Parent and Parent shall give prompt notice to the Company, of (a) the
occurrence, or non-occurrence of any event the occurrence, or non-occurrence of
which would cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time and (b) any material failure of the Company or Parent, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.11 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.

5.12 DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. (a) For two (2)
years from the Effective Time, the Surviving Corporation shall either (i)
maintain in effect the Company's current directors' and officers' liability
insurance covering those persons who are currently covered on the date of this
Agreement by the Company's directors' and officers' liability insurance policy
(a copy of which has been previously delivered to Parent) (the "INDEMNIFIED
PARTIES"); provided, however, that in no event shall Parent be required to
expend in any one year an amount in excess of 100% of the annual premiums
currently paid by the Company for such insurance which the Company represents
to be $74,000 for the twelve month period ended November 1, 1996; and; provided
further, that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with
the greatest coverage available for a cost not exceeding such amount; provided
further, that the Surviving Corporation may substitute for such Company
policies, policies with at least the same coverage containing terms and
conditions which are no less advantageous and provided that said substitution
does not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Effective Time or (ii) cause the Parent's directors' and
officers' liability insurance then in effect to cover those persons who are
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy with respect to those matters covered by the
Company's directors' and officers' liability policy.

(b) From and after the date of purchase of Shares pursuant to the Offer,
Parent shall (or shall cause the Surviving Corporation to) indemnify all
Indemnified Parties to the fullest extent permitted by Delaware law and the
Company's Restated

44
Certificate of Incorporation and By-laws with respect to all acts and omissions
arising out of such individuals' services as officers, directors, employees or
agents of the Company or any of its subsidiaries, occurring prior to the
Effective Time including, without limitation, the transactions contemplated by
this Agreement. Without limitation of the foregoing, in the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter, including without
limitation, the transactions contemplated by this Agreement, occurring prior
to, and including, the Effective Time, Parent, from and after the date of
purchase of Shares pursuant to the Offer, will pay as incurred such Indemnified
Party's reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith. Subject to
Section 5.12(c), Parent shall pay all reasonable expenses, including attorneys'
fees, that may be incurred by any Indemnified Party in enforcing this Section
5.12 or any action involving an Indemnified Party resulting from the
transactions contemplated by this Agreement.

(c) Any Indemnified Party wishing to claim indemnification under Section
5.12(b), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent thereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) Parent or the Surviving Corporation shall have
the right, from and after the purchase of Shares pursuant to the Offer, to
assume the defense thereof and Parent shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, (ii) the Indemnified Parties will cooperate in the defense of
any such matter and (iii) Parent shall not be liable for any settlement
effected without its prior written consent; and provided further that Parent
shall not have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.

6. CONDITIONS. The respective obligation of each party to effect the Merger
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions.

6.1 SHAREHOLDER APPROVAL. This Agreement shall have been approved and
adopted by the requisite vote of the holders of Company Common Stock, if
required by applicable law and the Restated Articles of Incorporation, in order
to consummate the Merger.

6.2 STATUTES; CONSENTS. No statute, rule, order, decree or regulation shall
have been enacted or promulgated by any foreign or domestic government or any
governmental agency or authority of

45
competent jurisdiction which prohibits the consummation of the Offer, the
Merger or the Tender Agreements or has the effect of making illegal the
purchase of Company Common Stock by Parent or the Purchaser and all foreign or
domestic governmental consents, orders and approvals required for the
consummation of the Offer, the Merger and the transactions contemplated by this
Agreement shall have been obtained and shall be in effect at the Effective
Time.

6.3 INJUNCTIONS. No preliminary or permanent injunction or other order
shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits the consummation of the Offer or the
Merger and the transactions contemplated by this Agreement and which is in
effect at the Effective Time, provided, however, that, in the case of a decree,
injunction or other order, each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to
appeal as promptly as possible any decree, injunction or other order that may
be entered.

6.4 PURCHASE OF SHARES IN OFFER. Parent, the Purchaser or their affiliates
shall have purchased shares of Company Common Stock pursuant to the Offer.

7. TERMINATION.

7.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the Company's stockholders:

(a) subject to the provisions of Section 1.3 hereof, by mutual consent of
the Company, on the one hand, and of Parent and the Purchaser, on the other
hand;

(b) by either Parent, on the one hand, or the Company, on the other hand,
if any Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Shares pursuant to
the Offer or the Merger and such order, decree or ruling or other action shall
have become final and nonappealable;

(c) by Parent, on the one hand, or the Company, on the other hand, if the
Effective Time shall not have occurred on or before June 15, 1996 unless the
Effective Time shall not have occurred because of a material breach of any
representation, warranty, obligation, covenant, agreement or condition set
forth in this Agreement on the part of the party seeking to terminate this
Agreement;

(d) by Parent, on the one hand, or the Company, on the other hand, if the
Offer is terminated or expires in accordance

46
with its terms without the Purchaser having purchased any Common Stock
thereunder due to a failure of any of the conditions set forth in Annex A
hereto to be satisfied, unless such termination or expiration has been caused
by or results from the failure of the party seeking to terminate this Agreement
to perform in any material respect any of its respective covenants or
agreements contained in this Agreement;

(e) by either Parent, on the one hand, or the Company, on the other hand,
if the Board of Directors of the Company reasonably and in good faith
determines that an Acquisition Proposal is a Superior Proposal and the Board
believes (and has received a written opinion from independent legal counsel)
that a failure to terminate this Agreement would constitute a breach of its
fiduciary duties; provided, however, the Company may not terminate this
Agreement pursuant to this Section 7.1(e) unless (i) the Company has notified
Parent and the Purchaser in writing promptly after receipt of any Acquisition
Proposal and following such notification by the Company, the Company has fully
cooperated with Parent, including, without limitation, informing Parent of the
terms and conditions of such Acquisition Proposal (and any modification
thereto), and the identity of the Person making such Proposal, with the intent
of enabling the parties hereto to agree to a modification of the terms and
conditions of this Agreement so that the transactions contemplated hereby may
be effected, and (ii) prior to such termination, Parent has received the amount
set forth in Section 8.1(b) by wire transfer in same day funds; and

(f) prior to the consummation of the Offer, by the Company, if (i) any of
the representations and warranties of Parent or the Purchaser contained in
this Agreement were untrue or incorrect in any material respect when made or
have since become, and at the time of termination remain, incorrect in any
material respect, or (ii) Parent or the Purchaser shall have breached or failed
to comply in any material respect with any of their respective obligations
under this Agreement, including, without limitation, their obligation to
commence the Offer within the time period required by Section 1.1(a) of this
Agreement.

7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void, and there shall be no liability on the part of the Parent or the
Company except (a) for fraud or for material breach of this Agreement and (b)
as set forth in this Section 7.2 and Section 8.1.

8. MISCELLANEOUS.

8.1 FEES AND EXPENSES. (a) Except as provided in Section 8.1(b) below, all
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions

47
contemplated hereby shall be paid by the party incurring such costs and
expenses.

(b) If this Agreement is terminated by Parent in accordance with Section
7.1(d) because of the occurrence of any of the events set forth in paragraphs
(iv)(e) or (iv)(h) of Annex A or if this Agreement is terminated by the Company
in accordance with Section 7.1(e), then the Company shall, within two business
days of such termination (except as required to be earlier paid in accordance
with Section 7.1(e)), pay to Parent in same day funds the sum of $3,366,575.

8.2 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement
may be amended, modified and supplemented in any and all respects, whether
before or after any vote of the shareholders of the Company contemplated
hereby, by written agreement of the parties hereto, by action taken by their
respective Boards of Directors (which in the case of the Company shall include
approvals as contemplated in Section 1.3(b)), at any time prior to the Closing
Date with respect to any of the terms contained herein; provided, however, that
after the approval of this Agreement by the shareholders of the Company, no
such amendment, modification or supplement shall reduce or change the Merger
Consideration.

8.3 REPRESENTATIONS AND WARRANTIES. The respective representations and
warranties of the Company, on the one hand, and Parent and the Purchaser, on
the other hand, contained herein or in any certificates or other documents
delivered prior to or at the Closing shall not be deemed waived or otherwise
affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or the
Purchaser shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 8.3 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Effective Time.

8.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by an overnight courier service, such as Federal Express, to
the parties at the following addresses(or at such other address for a party as
shall be specified by like notice):

(a) if to Parent or the Purchaser, to:

The Reynolds and Reynolds Company
115 South Ludlow Street
Dayton, Ohio 45402
ATTN: Adam M. Lutynski
Telecopy No. (513) 449-4123

with a copy to:

Coolidge Wall Womsley & Lombard
33 W. First Street, Suite 600
Dayton, Ohio 45402
ATTN: Jeffry A. Melnick
Telecopy No. (513) 449-5788

and

(b) if to the Company, to:

Duplex Products Inc.
1947 Bethany Road
Sycamore, Illinois 60178
ATTN: Mark A. Robinson, Esq.
Telecopy No. (815) 895-1091

with a copy to:

Hinshaw & Culbertson
220 East State Street
P.O. Box 1389
Rockford, Illinois 61105-1389
ATTN: Charles F. Thomas, Esq.
Telecopy No. (815) 965-9529

8.5 INTERPRETATION. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the date hereof", and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to April 20, 1996. As used in
this Agreement, the term "affiliate(s)" shall have the meaning set forth in
Rule 12b-2 of the Exchange Act. References to a party's "knowledge" or the
"best knowledge" of a party or words of similar import shall mean to the actual
knowledge of the officers and directors of the applicable party after
reasonable inquiry into the subject matter. The term "person" shall mean and
include an individual, a partnership (limited, limited liability or general), a
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization, a group and a government or other department or
agency thereof.

8.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the

49
same agreement and shall become effective when two or more counterparts have
been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.

8.7 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF OWNERSHIP.
This Agreement, the Disclosure Letter, and the Confidentiality Agreement
(including the documents and the instruments referred to herein and therein):
(a) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Sections 5.6 and 5.12 are
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.

8.8 SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.

8.9 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the state of Delaware without giving effect to the
principles of conflicts of law thereof.

8.10 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, except that the Purchaser may assign, in its sole discretion,
any or all of its rights, interest and obligations hereunder to Parent or to
any direct or indirect wholly owned Subsidiary of Parent. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.

8.11 HEADINGS. The descriptive headings of the Sections of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.

8.12 EXTENSION; WAIVER. Subject to the provisions of Sections 1.1 or 1.3
hereof, at any time prior to the Effective Time, the parties hereto, by action
taken by or on behalf of the respective Boards of Directors of the Company,
Parent or the Purchaser, may (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party or

50
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of such party.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

51
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the 20th day of April, 1996.

THE REYNOLDS AND REYNOLDS COMPANY
ATTEST:

By_______________________ By______________________________

Name:____________________ Name:___________________________

Title:___________________ Title:__________________________

DELAWARE ACQUISITION CO.

By_______________________ By______________________________

Name:____________________ Name:___________________________

Title:___________________ Title:__________________________

DUPLEX PRODUCTS INC.

By_______________________ By______________________________

Name:____________________ Name:___________________________

Title:___________________ Title:__________________________

52
ANNEX A

CONDITIONS TO THE TENDER OFFER

Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate the Offer as to any Shares not then paid for, if:

(i) any applicable waiting period under the HSR Act has not expired or
terminated;

(ii) the Minimum Condition has not been satisfied;

(iii) the Rights Agreement shall not have been amended in a manner which
renders the Rights inoperative with respect to any acquisition of Shares by
Parent or the Purchaser, or

(iv) at any time on or after April 20, 1996 and before the time of payment
for any such Shares, any of the following events shall occur or shall be
determined by the Purchaser to have occurred:

(a) there shall be threatened, instituted or pending any action or
proceeding by any Governmental Entity (i) challenging or seeking to, or which
could reasonably be expected to make illegal, impede, delay or otherwise
directly or indirectly restrain, prohibit or make materially more costly the
Offer or the Merger or seeking to obtain material damages, (ii) seeking to
prohibit or materially limit the ownership or operation by Parent or Purchaser
of all or any material portion of the business or assets of the Company or any
of its subsidiaries taken as a whole or to compel Parent or Purchaser to
dispose of or hold separately all or any material portion of the business or
assets of Parent or Purchaser or the Company or any of its subsidiaries taken
as a whole, or seeking to impose any material limitation on the ability of
Parent or Purchaser to conduct its business or own such assets, (iii) seeking
to impose material limitations on the ability of Parent or Purchaser
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by Purchaser
or Parent on all matters properly presented to the Company's stockholders, (iv)
seeking to require divestiture by Parent or Purchaser of any Shares, or (v)
otherwise materially adversely affecting the condition of the Company and its
subsidiaries taken as a whole;

A-1
53
(b) any court shall have entered an order which is in effect and which (i)
makes illegal, impedes, delays or otherwise directly or indirectly restrains,
prohibits or makes materially more costly the Offer or the Merger, (ii)
prohibits or materially limits the ownership or operation by Parent or
Purchaser of all or any material portion of the business or assets of the
Company or any of its subsidiaries taken as a whole or compels Parent or
Purchaser to dispose of or hold separately all or any material portion of the
business or assets of Parent or Purchaser or the Company or any of its
subsidiaries taken as a whole, or imposes any material limitation on the
ability of Parent or Purchaser to conduct its business or own such assets,
(iii) imposes material limitations on the ability of Parent or Purchaser
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by Purchaser
or Parent on all matters properly presented to the Company's stockholders, (iv)
requires divestiture by Parent or Purchaser of any Shares, or (v) otherwise
materially adversely affects the Company and its Subsidiaries taken as a whole;
provided, however, that in the case of a preliminary injunction to the effect
described in this paragraph (b), the provisions of this paragraph (b) shall not
be deemed to have been triggered until the earlier of (X) the date on which
such injunction becomes final or (Y) the Company ceases its efforts to have
such preliminary injunction dissolved;

(c) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted, enforced,
promulgated, amended, issued or deemed applicable to (i) Parent, Purchaser, the
Company or any subsidiary of the Company or (ii) the Offer or the Merger, by
any legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act to the Offer or to
the Merger, which could reasonably be expected to directly or indirectly result
in any of the consequences referred to in clauses (i) through (v) of paragraph
(a) above;

(d) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on the American Stock Exchange for a
period in excess of three hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States, (iv) any limitation (whether or not mandatory) by any foreign or United
States governmental authority on the extension of credit by banks or other
financial institutions, (v) any decline in either the Dow Jones Industrial
Average or the Standard & Poor's Index of 500 Industrial Companies by an amount
in excess of 20% measured from the close of business on April 19, 1996 or (vi)
in the case of any of the

A-2

54
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;

(e) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct in any material respect as of
the date of consummation of the Offer as though made on or as of such date,
except (i) for changes specifically permitted by the Merger Agreement and (ii)
those representations and warranties that address matters only as of a
particular date are true and correct as of such date, or the Company shall have
breached or failed in any material respect to perform or comply with any
material obligation, agreement or covenant required by the Merger Agreement to
be performed or complied with by it;

(f) the Merger Agreement shall have been terminated in accordance with its
terms;

(g) (i) it shall have been publicly disclosed or Parent or the Purchaser
shall have otherwise learned that any person, entity or "group" (as defined in
Section 13(d)(3)of the Exchange Act), other than Parent or its affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 19.9% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted an option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 19.9% of
any class or series of capital stock of the Company (including the Shares); or
(ii) any person or group shall have entered into a definitive agreement or
agreement in principle with the Company with respect to a merger, consolidation
or other business combination with the Company;

(h) the Company's Board of Directors shall have withdrawn, or modified or
changed in a manner adverse to Parent or the Purchaser (including by amendment
of the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement,
or the Merger, or recommended another proposal (including a Superior Proposal)
or offer, or shall have resolved to do any of the foregoing;

(i) any change shall have occurred or been threatened (or any condition,
event or development shall have occurred or been threatened involving a
prospective change), that is reasonably likely to have a material adverse
effect on the business, properties, assets, liabilities, operations, results of
operations, conditions (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole; or

(j) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or Purchaser with or from any Governmental Entity in connection
with the execution, delivery and performance of the Merger Agreement, the Offer
and the

A-3

55
consummation of the transactions contemplated by the Merger Agreement shall not
have been made or obtained and such failure could reasonably be expected to
have a material adverse effect on the Company and any of its Subsidiaries,
taken as a whole, or could be reasonably likely to prevent or materially delay
consummation of the transactions contemplated by the Merger Agreement.

The foregoing conditions are for the sole benefit of the Purchaser and Parent
and may be waived by Parent or the Purchaser, in whole or in part at any time
and from time to time in the sole discretion of Parent or the Purchaser;
provided that the Minimum Condition may not be waived without the written
consent of the Company. The failure by Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.

A-4