SECURITIES AND EXCHANGE COMMISSION

                                  Washington, D.C. 20549

                                  _______________________


                                         FORM 8-K


                                      CURRENT REPORT


                            Pursuant to Section 13 or 15(d) of
                            the Securities Exchange Act of 1934



                                    February 24, 1994        
                             (Date of earliest event reported)



                           ADVANCED TECHNOLOGY LABORATORIES, INC.       
                  (Exact name or registrant as specified in its charter)


                   Delaware              0-15160            91-1353386     
               (State or other        (Commission       (I.R.S. Employer
               jurisdiction or            File           Identification
               organization)             Number)             Number)




                   22100 Bothell-Everett Highway
                       Post Office Box 3003
                        Bothell, Washington                 98041-3003
               (Address of principal executive offices)     (Zip Code)



                                       (206) 487-7000                  
                   (Registrant's telephone number, including area code)







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               Item 5.  OTHER EVENTS

                         On February 24, 1994, Advanced Technology
               Laboratories, Inc. (the "Company" or "ATL") announced that
               it had amended and restated its Merger Agreement with
               Interspec, Inc., whereby Interspec would become a wholly
               owned subsidiary of ATL, to reflect the changes contemplated
               as a result of the determination that the pooling of
               interests methof of accounting is appropriate for the merger
               transaction.  As previously disclosed, the exchange ratio
               applicable to the merger has now been adjusted to be 0.413
               of a share of ATL stock for each share of Interspec stock.

                         As previously disclosed, the merger is subject to
               customary conditions, including approval by the shareholders
               of ATL and Interspec.  ATL and Interspec currently
               anticipate that the transaction will close in the latter
               part of the second quarter.

               Item 7.   FINANCIAL STATEMENT, PRO FORMA FINANCIAL
                         INFORMATION AND EXHIBITS

                         c.  Exhibits

                           2.      Amended and Restated Agreement and Plan
                                   of Merger dated as of February 10, 1994.

                           2O      Press Release dated February 24, 1994.






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                                        SIGNATURES

                         Pursuant to the requirements of the Securities
               Exchange Act of 1934, the registrant has duly caused this
               report to be signed on its behalf by the undersigned
               hereunto duly authorized.

                                        ADVANCED TECHNOLOGY LABORATORIES,
                                        INC.,

                                          by
                                               /s/ Harvey N. Gillis       
                                            Name:  Harvey N. Gillis     
                                            Title: Senior Vice President
                                                   and Chief Financial
                                                   Officer


               Date:  March 2, 1994





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                                       EXHIBIT INDEX


               Exhibit                                      Sequentially
               Number                   Exhibit             Numbered Page

               2         Amended and Restated Agreement 
                         and Plan of Merger dated as of
                         February 10, 1994                        5

               20        Press Release dated February 24,
                         1994                                    80






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                                                                  EXHIBIT 2
                                                             CONFORMED COPY










                                   AMENDED AND RESTATED

                               AGREEMENT AND PLAN OF MERGER



                              Dated as of February 10, 1994,



                                           Among



                          ADVANCED TECHNOLOGY LABORATORIES, INC.



                                 ATL SUB ACQUISITION CORP.



                                            And



                                      INTERSPEC, INC.






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                                     TABLE OF CONTENTS


                                                                       Page

               Parties and Recitals .............................       1 


                                       ARTICLE I

                                      The Merger

               SECTION 1.01.   The Merger ...........................   2
               SECTION 1.02.   Closing ..............................   2
               SECTION 1.03.   Effective Time .......................   2
               SECTION 1.04.   Effects of the Merger ................   3
               SECTION 1.05.   Articles of Incorporation and 
                                 By-Laws ............................   3
               SECTION 1.06.   Directors ............................   3
               SECTION 1.07.   Officers .............................   3
                

                                      ARTICLE II

                   Effect of the Merger on the Capital Stock of the
                  Constituent Corporations; Exchange of Certificates

               SECTION 2.01.   Effect on Capital Stock ..............   4
               SECTION 2.02.   Exchange of Certificates .............   5
                

                                      ARTICLE III

                            Representations and Warranties

               SECTION 3.01.   Representations and Warranties of
                                 the Company ........................  10
               SECTION 3.02.   Representations and Warranties of
                                 Parent and Sub .....................  28


                                      ARTICLE IV

                       Covenants Relating to Conduct of Business

               SECTION 4.01.   Conduct of Business ..................  39
               SECTION 4.02.   No Solicitation ......................  43




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                                       ARTICLE V

                                 Additional Agreements

               SECTION 5.01.   Preparation of Form S-4 and the 
                                 Joint Proxy Statement; 
                                 Stockholders Meetings ..............  45
               SECTION 5.02.   Letter of the Company's Accountants ..  47
               SECTION 5.03.   Letter of Parent's Accountants .......  47
               SECTION 5.04.   Access to Information;
                                 Confidentiality ....................  47
               SECTION 5.05.   Best Efforts; Notification ...........  48
               SECTION 5.06.   Stock Options ........................  49
               SECTION 5.07.   Benefit Plans ........................  51
               SECTION 5.08.   Indemnification and Insurance ........  52
               SECTION 5.09.   Fees and Expenses ....................  53
               SECTION 5.10.   Public Announcements .................  53
               SECTION 5.11.   Affiliates and Certain Stockholders ..  54
               SECTION 5.12.   National Market System Trading .......  55
               SECTION 5.13.   Stockholder Litigation ...............  55
               SECTION 5.14.   Tax Represenation Letters of the             
                                 Company and Parent .................  55
               SECTION 5.15.   Directorship .........................  56
               SECTION 5.16.   Employment Agreements ................. 56


                                      ARTICLE VI

                                 Conditions Precedent

               SECTION 6.01.   Conditions to Each Party's Obligation
                                 To Effect the Merger ...............  56
               SECTION 6.02.   Conditions to Obligations of Parent
                                 and Sub ............................  58
               SECTION 6.03.   Conditions to Obligation of the
                                 Company ............................  60
               SECTION 6.04.   Frustration of Closing Conditions ....  62


                                      ARTICLE VII

                           Termination, Amendment and Waiver

               SECTION 7.01.   Termination ..........................  62
               SECTION 7.02.   Effect of Termination ................  64
               SECTION 7.03.   Amendment ............................  64
               SECTION 7.04.   Extension; Waiver ....................  64



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               SECTION 7.05.   Procedure for Termination, Amendment,
                                 Extension or Waiver ................  65


                                     ARTICLE VIII

                                  General Provisions

               SECTION 8.01.   Nonsurvival of Representations and
                                 Warranties .........................  65
               SECTION 8.02.   Notices ..............................  65
               SECTION 8.03.   Definitions ..........................  67
               SECTION 8.04.   Interpretation .......................  67
               SECTION 8.05.   Counterparts .........................  68
               SECTION 8.06.   Entire Agreement; No Third-Party
                                 Beneficiaries ......................  68
               SECTION 8.07.   Governing Law ........................  68
               SECTION 8.08.   Assignment ...........................  69
               SECTION 8.09.   Enforcement ..........................  69


               EXHIBIT A    - Form of Initial Press Release
               EXHIBIT B    - Form of Company Affiliate Letter
               EXHIBIT C    - Form of Company Significant Stockholder
                                Letter
               EXHIBIT D    - Form of Company Tax Representation Letter
               EXHIBIT E    - Form of Parent Tax Representation Letter
               EXHIBIT F-1  - Form of Employment Agreement with Edward Ray
               EXHIBIT F-2  - Form of Employment Agreement with Michael J.
                                Wassil
               EXHIBIT F-3  - Form of Employment Agreement with Patrick J.
                                Faivre
               EXHIBIT G    - Form of Representation Agreement
               EXHIBIT H    - Form of Amendment to the Company's
                                Convertible Note Documents


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                                                           CONFORMED COPY

               

                                   AMENDED AND RESTATED AGREEMENT AND PLAN    
                              OF MERGER dated as of February 10, 1994,
                              among ADVANCED TECHNOLOGY LABORATORIES, INC.,
                              a Delaware corporation ("Parent"), ATL SUB
                              ACQUISITION CORP., a Delaware corporation
                              ("Sub"), and a wholly owned subsidiary of
                              Parent, and INTERSPEC, INC., a Pennsylvania
                              corporation (the "Company").


                         WHEREAS the respective Boards of Directors of
               Parent, Sub and the Company have approved the merger of Sub
               into the Company (the "Merger"), upon the terms and subject
               to the conditions set forth in this Agreement, whereby each
               issued and outstanding share of common stock, par value
               $.001 per share, of the Company ("Company Common Stock"),
               other than shares owned directly or indirectly by Parent or
               the Company and Dissenting Shares (as defined in
               Section 2.01(d)), will be converted into the right to
               receive common stock, par value $.01 per share, of Parent
               ("Parent Common Stock");

                         WHEREAS the Merger requires the approval of a
               majority of votes cast by the holders of shares of the
               Company Common Stock entitled to vote thereon at the meeting
               of holders of Company Common Stock to be called therefor
               (the "Company Stockholder Approval");

                         WHEREAS each of (x) the issuance of shares of
               Parent Common Stock in the Merger and (y) the Stock Plan
               Amendment (as defined in Section 5.01(b)) requires the
               approval by an affirmative vote of the holders of a majority
               of the shares of the Parent Common Stock present, or
               represented, and entitled to vote thereon at the meeting of
               holders of Parent Common Stock to be called therefor (the
               "Parent Stockholder Approval");

                         WHEREAS Parent, Sub and the Company desire to make
               certain representations, warranties, covenants and
               agreements in connection with the Merger and also to
               prescribe various conditions to the Merger; 

                         WHEREAS, for Federal income tax purposes, it is
               intended that the Merger shall qualify as a reorganization
               under the provisions of Section 368(a) of the Internal
               Revenue Code of 1986, as amended (the "Code");





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                         WHEREAS, for accounting purposes, it is intended
               that the Merger shall be accounted for as a "pooling of
               interests"; and

                         WHEREAS, the parties desire to amend and restate
               the Agreement pursuant to Agreement dated as of February 10,
               1994, among Parent, Sub and the Company.


                         NOW, THEREFORE, in consideration of the
               representations, warranties, covenants and agreements
               contained in this Agreement and intending to be legally
               bound hereby, the parties agree as follows:


                                         ARTICLE I

                                        The Merger

                         SECTION 1.01.  The Merger.  Upon the terms and
               subject to the conditions set forth in this Agreement, and
               in accordance with the Pennsylvania Business Corporation Law
               of 1988 (the "PBCL") and the Delaware General Corporation
               Law (the "DGCL"), Sub shall be merged with and into the
               Company at the Effective Time of the Merger (as defined in
               Section 1.03).  Following the Effective Time of the Merger,
               the separate corporate existence of Sub shall cease and the
               Company shall continue as the surviving corporation (the
               "Surviving Corporation") and shall succeed to and assume all
               the rights and obligations of Sub in accordance with the
               PBCL and the DGCL.

                         SECTION 1.02.  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 (the "Closing Date"), which
               (subject to satisfaction or waiver of the conditions set
               forth in Sections 6.02 and 6.03) shall be no earlier than
               May 3, 1994, and no later than the second business day after
               satisfaction of the conditions set forth in Section 6.01, at
               the offices of Cravath, Swaine & Moore, Worldwide Plaza,
               825 Eighth Avenue, New York, New York 10019, unless another
               date or place is agreed to in writing by the parties hereto.

                         SECTION 1.03.  Effective Time.  Subject to the
               provisions of this Agreement, as soon as practicable
               following the satisfaction or waiver of the conditions set
               forth in Article VI, the parties shall file a certificate of
               merger, articles of merger or other appropriate documents


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               (in any such case, the "Certificate of Merger") executed in
               accordance with the relevant provisions of the PBCL and the
               DGCL and shall make all other filings or recordings required
               under the PBCL and the DGCL.  The Merger shall become
               effective at such time as the Certificate of Merger is duly
               filed with the Secretary of State of the Commonwealth of
               Pennsylvania and the State of Delaware, or at such other
               time as Sub and the Company shall agree should be specified
               in the Certificate of Merger (the time the Merger becomes
               effective being hereinafter referred to as the "Effective
               Time of the Merger").

                         SECTION 1.04.  Effects of the Merger.  The Merger
               shall have the effects set forth in Section 1929 of the PBCL
               and Section 259 of the DGCL.

                         SECTION 1.05.  Articles of Incorporation and
               By-laws.  (a)  The articles of incorporation of the Company,
               as in effect immediately prior to the Effective Time of the
               Merger, shall be amended as of the Effective Time of the
               Merger so that Article 5 of such articles of incorporation
               reads in its entirety as follows:  "The total number of
               shares of all classes of stock which the corporation shall
               have authority to issue is 100 shares of Common Stock, par
               value $1.00 per share." and, as so amended, such articles of
               incorporation shall be the articles of incorporation of the
               Surviving Corporation until thereafter changed or amended as
               provided therein or by applicable law.

                         (b)  The by-laws of the Company as in effect at
               the Effective Time of the Merger shall be the by-laws of the
               Surviving Corporation until thereafter changed or amended as
               provided therein or by applicable law.

                         SECTION 1.06.  Directors.  The directors of Sub at
               the Effective Time of the Merger shall be the directors of
               the Surviving Corporation, until the earlier of their
               resignation or removal or until their respective successors
               are duly elected and qualified, as the case may be.

                         SECTION 1.07.  Officers.  The officers of the
               Company at the Effective Time of the Merger shall be the
               officers of the Surviving Corporation, until the earlier of
               their resignation or removal or until their respective
               successors are duly elected and qualified, as the case may
               be.




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                                        ARTICLE II

                     Effect of the Merger on the Capital Stock of the
                    Constituent Corporations; Exchange of Certificates

                         SECTION 2.01.  Effect on Capital Stock.  As of the
               Effective Time of the Merger, by virtue of the Merger and
               without any action on the part of the holder of any shares
               of Company Common Stock or any shares of capital stock of
               Sub:

                         (a)  Capital Stock of Sub.  Each issued and
                    outstanding share of capital stock of Sub shall be
                    converted into and become one fully paid and
                    nonassessable share of Common Stock, par value $1.00
                    per share, of the Surviving Corporation.

                         (b)  Cancellation of Treasury Stock and Parent-
                    Owned Stock.  Each share of Company Common Stock that
                    is owned by the Company or by any subsidiary (as
                    defined in Section 8.03) of the Company and each share
                    of Company Common Stock that is owned by Parent, Sub or
                    any other subsidiary of Parent shall automatically be
                    cancelled and retired and shall cease to exist, and no
                    Parent Common Stock or other consideration shall be
                    delivered in exchange therefor.

                         (c)  Conversion of Company Common Stock.  Subject
                    to Section 2.02(e), each issued and outstanding share
                    of Company Common Stock (other than shares to be
                    cancelled in accordance with Section 2.01(b)) shall be
                    converted into the right to receive 0.413 of a fully
                    paid and nonassessable share of Parent Common Stock
                    (the "Exchange Ratio").  Pursuant to the Rights
                    Agreement (as defined in Section 3.02(b)), one Right
                    (as defined in the Rights Agreement) will be attached
                    to each share of Parent Common Stock issued in
                    connection with the Merger upon conversion of Company
                    Common Stock.  As of the Effective Time of the Merger,
                    all such shares of Company Common Stock 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 of Company
                    Common Stock shall cease to have any rights with
                    respect thereto, except the right to receive the shares
                    of Parent Common Stock and any cash in lieu of
                    fractional shares of Parent Common Stock to be issued
                    or paid in consideration therefor upon surrender of


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                    such certificate in accordance with Section 2.02,
                    without interest. 

                         (d)  Dissenting Shares.  Notwithstanding anything
                    in this Agreement to the contrary, shares of Company
                    Common Stock outstanding immediately prior to the
                    Effective Time of the Merger held by a holder (if any)
                    who is entitled to demand, and who properly demands,
                    appraisal for such shares in accordance with
                    Section 1571 of the PBCL ("Dissenting Shares") shall
                    not be converted into a right to receive Parent Common
                    Stock and any cash in lieu of fractional shares of
                    Parent Common Stock unless such holder fails to perfect
                    or otherwise loses such holder's right to appraisal, if
                    any.  If, after the Effective Time of the Merger, such
                    holder fails to perfect or loses any such right to
                    appraisal, such shares shall be treated as if they had
                    been converted as of the Effective Time of the Merger
                    into the right to receive Parent Common Stock pursuant
                    to Section 2.01(c) and the cash in lieu of fractional
                    shares of Parent Common Stock specified in
                    Section 2.02(e).  The Company shall give prompt notice
                    to Parent of any demands received by the Company for
                    appraisal of shares of Company Common Stock, and Parent
                    shall have the right to participate in and direct all
                    negotiations and proceedings with respect to such
                    demands.  The Company shall not, except with the prior
                    written consent of Parent, make any payment with
                    respect to, or settle or offer to settle, any such
                    demands.

                         SECTION 2.02.  Exchange of Certificates. 
               (a)  Exchange Agent.  As of the Effective Time of the
               Merger, Parent shall deposit with First Chicago Trust
               Company of New York or such other bank or trust company as
               may be designated by Parent (the "Exchange Agent"), for the
               benefit of the holders of shares of Company Common Stock,
               for exchange in accordance with this Article II, through the
               Exchange Agent, certificates representing the shares of
               Parent Common Stock (such shares of Parent Common Stock,
               together with any dividends or distributions with respect
               thereto, being hereinafter referred to as the "Exchange
               Fund") issuable pursuant to Section 2.01 in exchange for
               outstanding shares of Company Common Stock.

                         (b)  Exchange Procedures.  As soon as reasonably
               practicable after the Effective Time of the Merger, the
               Exchange Agent shall mail to each holder of record of a


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               certificate or certificates which immediately prior to the
               Effective Time of the Merger represented outstanding shares
               of Company Common Stock (the "Certificates") whose shares
               were converted into the right to receive shares of Parent
               Common Stock pursuant to Section 2.01, (i) 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
               Exchange Agent and shall be in such form and have such other
               provisions as Parent may reasonably specify) and
               (ii) instructions for use in effecting the surrender of the
               Certificates in exchange for certificates representing
               shares of Parent Common Stock.  Upon surrender of a
               Certificate for cancellation to the Exchange Agent or to
               such other agent or agents as may be appointed by Parent,
               together with such letter of transmittal, duly executed, and
               such other documents as may reasonably be required by the
               Exchange Agent, the holder of such Certificate shall be
               entitled to receive in exchange therefor a certificate
               representing that number of whole shares of Parent Common
               Stock which such holder has the right to receive pursuant to
               the provisions of this Article II and cash in lieu of
               fractional shares of Parent Common Stock as contemplated by
               this Section 2.02, and the Certificate so surrendered shall
               forthwith be cancelled.  In the event of a transfer of
               ownership of Company Common Stock which is not registered in
               the transfer records of the Company, a certificate
               representing the proper number of shares of Parent Common
               Stock may be issued to a person other than the person in
               whose name the Certificate so surrendered is registered, if
               such Certificate shall be properly endorsed or otherwise be
               in proper form for transfer and the person requesting such
               payment shall pay any transfer or other taxes required by
               reason of the issuance of shares of Parent Common Stock to a
               person other than the registered holder of such Certificate
               or establish to the satisfaction of Parent that such tax has
               been paid or is not applicable.  Until surrendered as
               contemplated by this Section 2.02, each Certificate shall be
               deemed at any time after the Effective Time of the Merger to
               represent only the right to receive upon such surrender the
               certificate representing shares of Parent Common Stock and
               cash in lieu of any fractional shares of Parent Common Stock
               as contemplated by this Section 2.02.  No interest will be
               paid or will accrue on any cash payable in lieu of any
               fractional shares of Parent Common Stock.

                         (c)  Distributions with Respect to Unexchanged
               Shares.  No dividends or other distributions with respect to


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               Parent Common Stock with a record date after the Effective
               Time of the Merger shall be paid to the holder of any
               unsurrendered Certificate with respect to the shares of
               Parent Common Stock represented thereby, and no cash payment
               in lieu of fractional shares shall be paid to any such
               holder pursuant to Section 2.02(e), in each case until the
               surrender of such Certificate in accordance with this
               Article II.  Subject to the effect of applicable laws,
               following surrender of any such Certificate, there shall be
               paid to the holder of the certificate representing whole
               shares of Parent Common Stock issued in exchange therefor,
               without interest, (i) at the time of such surrender, the
               amount of any cash payable in lieu of a fractional share of
               Parent Common Stock to which such holder is entitled
               pursuant to Section 2.02(e) and the amount of dividends or
               other distributions with a record date after the Effective
               Time of the Merger theretofore paid with respect to such
               whole shares of Parent Common Stock, and (ii) at the
               appropriate payment date, the amount of dividends or other
               distributions with a record date after the Effective Time of
               the Merger but prior to such surrender and with a payment
               date subsequent to such surrender payable with respect to
               such whole shares of Parent Common Stock.

                         (d)  No Further Ownership Rights in Company Common
               Stock.  All shares of Parent Common Stock issued upon the
               surrender for exchange of Certificates in accordance with
               the terms of this Article II (including any cash paid
               pursuant to Section 2.02(c) or 2.02(e)) shall be deemed to
               have been issued (and paid) in full satisfaction of all
               rights pertaining to the shares of Company Common Stock
               theretofore represented by such Certificates, subject,
               however, to the Surviving Corporation's obligation to pay
               any dividends or make any other distributions with a record
               date prior to the Effective Time of the Merger which may
               have been declared or made by the Company on such shares of
               Company Common Stock in accordance with the terms of this
               Agreement or prior to the date of this Agreement and which
               remain unpaid at the Effective Time of the Merger, and there
               shall be no further registration of transfers on the stock
               transfer books of the Surviving Corporation of the shares of
               Company Common Stock which were outstanding immediately
               prior to the Effective Time of the Merger.  If, after the
               Effective Time of the Merger, Certificates are presented to
               the Surviving Corporation or the Exchange Agent for any
               reason, they shall be cancelled and exchanged as provided in
               this Article II, except as otherwise provided by law.



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                         (e)  No Fractional Shares.  (i)  No certificates
               or scrip representing fractional shares of Parent Common
               Stock shall be issued upon the surrender for exchange of
               Certificates, and such fractional share interests will not
               entitle the owner thereof to vote or to any rights of a
               stockholder of Parent.

                         (ii)  As promptly as practicable following the
               Effective Time of the Merger, the Exchange Agent shall
               determine the excess of (x) the number of shares of Parent
               Common Stock delivered to the Exchange Agent by Parent
               pursuant to Section 2.02(a) over (y) the aggregate number of
               whole shares of Parent Common Stock to be distributed to
               holders of the Certificates pursuant to Section 2.02(b)
               (such excess being hereinafter referred to as the "Excess
               Shares").  As soon after the Effective Time of the Merger as
               practicable, the Exchange Agent, as agent for the holders of
               the Certificates, shall sell the Excess Shares at then
               prevailing prices on the National Association of Securities
               Dealers, Inc. Automated Quotations National Market System
               ("NASDAQ/NMS"), all in the manner provided in
               paragraph (iii) of this Section 2.02(e).

                         (iii)  The sale of the Excess Shares by the
               Exchange Agent shall be executed on the NASDAQ/NMS through
               one or more member firms of the National Association of
               Securities Dealers, Inc. and shall be executed in round lots
               to the extent practicable.  Until the net proceeds of such
               sale or sales have been distributed to the holders of the
               Certificates, the Exchange Agent will hold such proceeds in
               trust for the holders of the Certificates (the "Common
               Shares Trust").  Parent shall pay all commissions, transfer
               taxes and other out-of-pocket transaction costs, including
               the expenses and compensation of the Exchange Agent,
               incurred in connection with such sale of the Excess Shares. 
               The Exchange Agent shall determine the portion of the Common
               Shares Trust to which each holder of a Certificate shall be
               entitled, if any, by multiplying the amount of the aggregate
               net proceeds comprising the Common Shares Trust by a
               fraction, the numerator of which is the amount of the
               fractional share interest to which such holder of a
               Certificate is entitled and the denominator of which is the
               aggregate amount of fractional share interests to which all
               holders of the Certificates are entitled.

                         (iv)  As soon as practicable after the
               determination of the amount of cash, if any, to be paid to
               holders of the Certificates in lieu of any fractional share


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               interests, the Exchange Agent shall make available such
               amounts, without interest, to such holders of the
               Certificates.

                         (f)  Termination of Exchange Fund and Common
               Shares Trust.  Any portion of the Exchange Fund and Common
               Shares Trust which remains undistributed to the holders of
               the Certificates for six months after the Effective Time of
               the Merger shall be delivered to Parent, upon demand, and
               any holders of the Certificates who have not theretofore
               complied with this Article II shall thereafter look only to
               Parent for payment of their claim for Parent Common Stock,
               any cash in lieu of fractional shares of Parent Common Stock
               and any dividends or distributions with respect to Parent
               Common Stock.

                         (g)  No Liability.  None of Parent, Sub, the
               Company or the Exchange Agent shall be liable to any person
               in respect of any shares of Parent Common Stock (or
               dividends or distributions with respect thereto) or cash
               from the Exchange Fund or the Common Shares Trust delivered
               to a public official pursuant to any applicable abandoned
               property, escheat or similar law.  If any Certificates shall
               not have been surrendered prior to seven years after the
               Effective Time of the Merger (or immediately prior to such
               earlier date on which any shares of Parent Common Stock, any
               cash in lieu of fractional shares of Parent Common Stock or
               any dividends or distributions with respect to Parent Common
               Stock in respect of such Certificate would otherwise escheat
               to or become the property of any Governmental Entity (as
               defined in Section 3.01(d)), any such shares, cash,
               dividends or distributions in respect of such Certificate
               shall, to the extent permitted by applicable law, become the
               property of the Surviving Corporation, free and clear of all
               claims or interest of any person previously entitled
               thereto.

                         (h)  Investment of Exchange Fund and Common Shares
               Trust.  The Exchange Agent shall invest any cash included in
               the Exchange Fund and the Common Shares Trust, as directed
               by Parent, on a daily basis.  Any interest and other income
               resulting from such investments shall be paid to Parent.




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                                                                         10
                                        ARTICLE III

                              Representations and Warranties

                         SECTION 3.01.  Representations and Warranties of
               the Company.  Except as set forth on the Disclosure Schedule
               delivered by the Company to Parent prior to the execution of
               this Agreement (the "Company Disclosure Schedule"), the
               Company represents and warrants to Parent and Sub as
               follows:

                         (a)  Organization, Standing and Corporate Power. 
                    Each of the Company and each of its subsidiaries is a
                    corporation duly organized, validly existing and in
                    good standing under the laws of the jurisdiction in
                    which it is incorporated and has the requisite
                    corporate power and authority to carry on its business
                    as now being conducted.  Each of the Company and each
                    of its subsidiaries is duly qualified or licensed to do
                    business and is in good standing in each jurisdiction
                    in which the nature of its business or the ownership or
                    leasing of its properties makes such qualification or
                    licensing necessary, other than in such jurisdictions
                    where the failure to be so qualified or licensed
                    individually or in the aggregate would not have a
                    material adverse effect on the Company.  The Company
                    has delivered to Parent complete and correct copies of
                    its articles of incorporation and by-laws and the
                    certificates of incorporation and by-laws of its
                    subsidiaries, in each case as amended to the date
                    hereof.

                         (b)  Subsidiaries.  Exhibit 22 to the Company's
                    Form 10-K for the fiscal year ended November 30, 1992,
                    lists each subsidiary of the Company.  All the
                    outstanding shares of capital stock of each such
                    subsidiary have been validly issued and are fully paid
                    and nonassessable and are owned by the Company, free
                    and clear of all pledges, claims, liens, charges,
                    encumbrances and security interests of any kind or
                    nature whatsoever (collectively, "Liens").  Except for
                    the capital stock of its subsidiaries, the Company does
                    not own, directly or indirectly, any capital stock or
                    other ownership interest in any corporation,
                    partnership, joint venture or other entity.

                         (c)  Capital Structure.  The authorized capital
                    stock of the Company consists of 10,000,000 shares of


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                                                                         11

                    Company Common Stock and 400,000 shares of preferred
                    stock, par value $.01 per share.  At the close of
                    business on February 8, 1994, (i) 6,274,877 shares of
                    Company Common Stock and no shares of preferred stock
                    were issued and outstanding, (ii) 10,390 shares of
                    Company Common Stock were held by the Company in its
                    treasury, (iii) 580,168 shares of Company Common Stock
                    were reserved for issuance pursuant to the Stock Plans
                    (as defined in Section 5.06) and (iv) 928,571 shares of
                    Company Common Stock were reserved for issuance upon
                    conversion of the Company's 11% Convertible
                    Subordinated Notes (the "Convertible Notes").  At the
                    close of business on February 8, 1994, there was
                    $6,500,000 aggregate principal amount outstanding of
                    the Convertible Notes, which are convertible into
                    shares of Company Common Stock at the option of the
                    holder thereof at an exchange price of $7 per share of
                    Company Common Stock.  Except as set forth above, at
                    the close of business on February 8, 1994, no shares of
                    capital stock or other voting securities of the Company
                    were issued, reserved for issuance or outstanding.  All
                    outstanding shares of capital stock of the Company are,
                    and all shares which may be issued pursuant to the
                    Stock Plans will be, when issued, duly authorized,
                    validly issued, fully paid and nonassessable and not
                    subject to preemptive rights.  There are no bonds,
                    debentures, notes or other indebtedness of the Company
                    having the right to vote (or, except for the
                    Convertible Notes, convertible into, or exchangeable
                    for, securities having the right to vote) on any
                    matters on which stockholders of the Company may vote. 
                    Except as set forth above, as of the date hereof, there
                    are no outstanding securities, options, warrants,
                    calls, rights, commitments, agreements, arrangements or
                    undertakings of any kind to which the Company or any of
                    its subsidiaries is a party or by which any of them is
                    bound obligating the Company or any of its subsidiaries
                    to issue, deliver or sell, or cause to be issued,
                    delivered or sold, additional shares of capital stock
                    or other voting securities of the Company or of any of
                    its subsidiaries or obligating the Company or any of
                    its subsidiaries to issue, grant, extend or enter into
                    any such security, option, warrant, call, right,
                    commitment, agreement, arrangement or undertaking.  As
                    of the date of this Agreement, there are not any
                    outstanding contractual obligations of the Company or
                    any of its subsidiaries to repurchase, redeem or
                    otherwise acquire any shares of capital stock of the


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                                                                         12

                    Company or any of its subsidiaries.  There are not any
                    outstanding contractual obligations of the Company to
                    vote or to dispose of any shares of the capital stock
                    of any of its subsidiaries.

                         (d)  Authority; Noncontravention.  The Company has
                    the requisite corporate power and authority to enter
                    into this Agreement and, subject to the Company
                    Stockholder Approval with respect to the Merger, to
                    consummate the transactions contemplated by this
                    Agreement.  The execution and delivery of this
                    Agreement by the Company and the consummation by the
                    Company of the transactions contemplated by this
                    Agreement have been duly authorized by all necessary
                    corporate action on the part of the Company, subject,
                    in the case of the Merger, to the Company Stockholder
                    Approval.  This Agreement has been duly executed and
                    delivered by the Company and constitutes a valid and
                    binding obligation of the Company, enforceable against
                    the Company in accordance with its terms.  The
                    execution and delivery of this Agreement do not, and
                    the consummation of the transactions contemplated by
                    this Agreement and compliance with the provisions of
                    this Agreement will not, conflict with, or result in
                    any violation of, or default (with or without notice or
                    lapse of time, or both) under, or give rise to a right
                    of termination, cancellation or acceleration of any
                    obligation or loss of a material benefit under, or
                    result in the creation of any Lien upon any of the
                    properties or assets of the Company or any of its
                    subsidiaries under, (i) the articles of incorporation
                    or by-laws of the Company or the comparable charter or
                    organizational documents of any of its subsidiaries,
                    (ii) any loan or credit agreement, note, bond,
                    mortgage, indenture, lease or other agreement,
                    instrument, permit, concession, franchise or license
                    applicable to the Company or any of its subsidiaries or
                    their respective properties or assets or (iii) subject
                    to the governmental filings and other matters referred
                    to in the following sentence, any judgment, order,
                    decree, statute, law, ordinance, rule or regulation
                    applicable to the Company or any of its subsidiaries or
                    their respective properties or assets, other than, in
                    the case of clause (ii), any such conflicts,
                    violations, defaults, rights or Liens that individually
                    or in the aggregate would not (x) have a material
                    adverse effect on the Company, (y) impair the ability
                    of the Company to perform its obligations under this


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                                                                         13

                    Agreement or (z) prevent the consummation of any of the
                    transactions contemplated by this Agreement.  No
                    consent, approval, order or authorization of, or
                    registration, declaration or filing with, any Federal,
                    state, local or foreign government or any court,
                    administrative agency or commission or other
                    governmental authority or agency, domestic or foreign
                    (a "Governmental Entity"), is required by or with
                    respect to the Company or any of its subsidiaries in
                    connection with the execution and delivery of this
                    Agreement by the Company or the consummation by the
                    Company of the transactions contemplated by this
                    Agreement, except for (1) the filing of a premerger
                    notification and report form by the Company under the
                    Hart-Scott-Rodino Antitrust Improvements Act of 1976
                    (the "HSR Act"), (2) the filing with the Securities and
                    Exchange Commission (the "SEC") of (A) a proxy
                    statement relating to the Company Stockholder Approval
                    (such proxy statement, together with the proxy
                    statement relating to the Parent Stockholder Approval,
                    in each case as amended or supplemented from time to
                    time, the "Joint Proxy Statement"), and (B) such
                    reports under Section 13(a) of the Securities Exchange
                    Act of 1934, as amended (the "Exchange Act"), as may be
                    required in connection with this Agreement and the
                    transactions contemplated by this Agreement, (3) the
                    filing of the Certificate of Merger with the Secretary
                    of State of the Commonwealth of Pennsylvania and the
                    State of Delaware and appropriate documents with the
                    relevant authorities of other states in which the
                    Company is qualified to do business, (4) such consents,
                    approvals, orders, authorizations, registrations,
                    declarations and filings as may be required under the
                    laws of any foreign country in which the Company,
                    Parent or any of their respective subsidiaries conducts
                    any business or owns any property or assets or (5) such
                    other consents, approvals, orders, authorizations,
                    registrations, declarations and filings as would not
                    individually or in the aggregate (A) have a material
                    adverse effect on the Company, (B) impair the ability
                    of the Company to perform its obligations under this
                    Agreement or (C) prevent the consummation of any of the
                    transactions contemplated by this Agreement.

                         (e)  SEC Documents; Undisclosed Liabilities.  The
                    Company has filed all required reports, schedules,
                    forms, statements and other documents with the SEC
                    since December 1, 1992 (the "SEC Documents").  As of


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                                                                         14

                    their respective dates, the SEC Documents complied in
                    all material respects with the requirements of the
                    Securities Act of 1933, as amended (the "Securities
                    Act"), or the Exchange Act, as the case may be, and the
                    rules and regulations of the SEC promulgated thereunder
                    applicable to such SEC Documents, and none of the SEC
                    Documents contained any untrue statement of a material
                    fact or omitted 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.  Except to the
                    extent that information contained in any SEC Document
                    has been revised or superseded by a later Filed SEC
                    Document (as defined in Section 3.01(g)), none of the
                    SEC Documents contains any untrue statement of a
                    material fact or omits 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.  The financial statements of the Company
                    included in the SEC Documents comply as to form in all
                    material respects with applicable accounting
                    requirements and the published rules and regulations of
                    the SEC with respect thereto, have been prepared in
                    accordance with generally accepted accounting
                    principles (except, in the case of unaudited
                    statements, as permitted by Form 10-Q of the SEC)
                    applied on a consistent basis during the periods
                    involved (except as may be indicated in the notes
                    thereto) and fairly present the consolidated financial
                    position of the Company and its consolidated
                    subsidiaries as of the dates thereof and the
                    consolidated results of their operations and cash flows
                    (or changes in financial position prior to the approval
                    of Financial Accounting Standards Board Statement of
                    Financial Accounting Standards No. 95) for the periods
                    then ended (subject, in the case of unaudited
                    statements, to normal year-end audit adjustments). 
                    Other than with respect to ERISA (as defined in
                    Section 3.01(j) below) and tax matters, which are
                    addressed by Sections 3.01(j) and 3.01(k),
                    respectively, except as set forth in the Filed SEC
                    Documents, neither the Company nor any of its
                    subsidiaries has any liabilities or obligations of any
                    nature (whether accrued, absolute, contingent or
                    otherwise and whether or not required by generally
                    accepted accounting principles to be recognized or
                    disclosed on a consolidated balance sheet of the


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                                                                         15

                    Company and its consolidated subsidiaries or in the
                    notes thereto) which individually or in the aggregate
                    could reasonably be expected to have a material adverse
                    effect on the Company.

                         (f)  Information Supplied.  None of the
                    information supplied or to be supplied by the Company
                    specifically for inclusion or incorporation by
                    reference in (i) the registration statement on Form S-4
                    to be filed with the SEC by Parent in connection with
                    the issuance of Parent Common Stock in the Merger (the
                    "Form S-4") will, at the time the Form S-4 is filed
                    with the SEC, at any time it is amended or supplemented
                    or at the time it becomes effective under the
                    Securities Act, 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 not misleading or (ii) the Joint
                    Proxy Statement will, at the date it is first mailed to
                    the Company's stockholders or at the time of the
                    Stockholders Meeting (as defined in Section 5.01(b)),
                    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.  The Joint Proxy Statement
                    will comply as to form in all material respects with
                    the requirements of the Exchange Act and the rules and
                    regulations thereunder, except that no representation
                    or warranty is made by the Company with respect to
                    statements made or incorporated by reference therein
                    based on information supplied by Parent or Sub
                    specifically for inclusion or incorporation by
                    reference in the Joint Proxy Statement.

                         (g)  Absence of Certain Changes or Events.  Except
                    as disclosed on the Company Disclosure Schedule or in
                    the SEC Documents filed and publicly available prior to
                    the date of this Agreement (the "Filed SEC Documents"),
                    since the date of the most recent audited financial
                    statements included in the Filed SEC Documents, the
                    Company has conducted its business only in the ordinary
                    course, and there has not been (i) any material adverse
                    change in the Company, (ii) any declaration, setting
                    aside or payment of any dividend or other distribution
                    (whether in cash, stock or property) with respect to
                    any of the Company's capital stock, (iii) any split,
                    combination or reclassification of any of its capital


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                                                                         16

                    stock or any issuance or the authorization of any
                    issuance of any other securities in respect of, in lieu
                    of or in substitution for shares of its capital stock,
                    (iv) (x) any granting by the Company or any of its
                    subsidiaries to any executive officer or other employee
                    of the Company or any of its subsidiaries of any
                    increase in compensation, except in the ordinary course
                    of business consistent with prior practice or as was
                    required under employment agreements in effect as of
                    the date of the most recent audited financial
                    statements included in the Filed SEC Documents, (y) any
                    granting by the Company or any of its subsidiaries to
                    any such executive officer of any increase in severance
                    or termination pay, except as was required under any
                    employment, severance or termination agreements in
                    effect as of the date of the most recent audited
                    financial statements included in the Filed SEC
                    Documents or (z) any entry by the Company or any of its
                    subsidiaries into any employment, severance or
                    termination agreement with any such executive officer,
                    (v) any damage, destruction or loss, whether or not
                    covered by insurance, that has or could reasonably be
                    expected to have a material adverse effect on the
                    Company or (vi) any change in accounting methods,
                    principles or practices by the Company materially
                    affecting its assets, liabilities or business, except
                    insofar as may have been required by a change in
                    generally accepted accounting principles.

                         (h)  Litigation.  Except as disclosed in the Filed
                    SEC Documents, there is no suit, action or proceeding
                    pending or, to the knowledge of the Company, threatened
                    against or affecting the Company or any of its
                    subsidiaries (and the Company is not aware of any basis
                    for any such suit, action or proceeding) that 
                    individually or in the aggregate could reasonably be
                    expected to (i) have a material adverse effect on the
                    Company, (ii) impair the ability of the Company to
                    perform its obligations under this Agreement or
                    (iii) prevent the consummation of any of the
                    transactions contemplated by this Agreement, nor is
                    there any judgment, decree, injunction, rule or order
                    of any Governmental Entity or arbitrator outstanding
                    against the Company or any of its subsidiaries having,
                    or which is reasonably likely to have, any effect
                    referred to in clause (i), (ii) or (iii) above.




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                                                                         17

                         (i)  Absence of Changes in Benefit Plans.  Except
                    as disclosed in the Filed SEC Documents, since the date
                    of the most recent audited financial statements
                    included in the Filed SEC Documents, there has not been
                    any adoption or amendment in any material respect by
                    the Company or any of its subsidiaries of any
                    collective bargaining agreement or any bonus, pension,
                    profit sharing, deferred compensation, incentive
                    compensation, stock ownership, stock purchase, stock
                    option, phantom stock, retirement, vacation, severance,
                    disability, death benefit, hospitalization, medical or
                    other plan, arrangement or understanding (whether or
                    not legally binding) providing benefits to any current
                    or former employee, officer or director of the Company
                    or any of its subsidiaries.  Except as disclosed in the
                    Filed SEC Documents, there exist no employment,
                    consulting, severance, termination or indemnification
                    agreements, arrangements or understandings between the
                    Company or any of its subsidiaries and any current or
                    former employee, officer or director of the Company or
                    any of its subsidiaries.

                         (j)  ERISA Compliance.  (i)  The Company
                    Disclosure Schedule contains a list and brief
                    description of each "employee pension benefit plan" (as
                    defined in Section 3(2) of the Employee Retirement
                    Income Security Act of 1974, as amended ("ERISA")),
                    each "employee welfare benefit plan" (as defined in
                    Section 3(1) of ERISA) (sometimes referred to herein as
                    a "Welfare Plan"), each stock option, stock purchase,
                    deferred compensation plan or arrangement and each
                    other employee fringe benefit plan or arrangement
                    maintained, contributed to or required to be maintained
                    or contributed to by the Company, any of its
                    subsidiaries or any other person or entity that,
                    together with the Company, is treated as a single
                    employer under Section 414(b), (c), (m) or (o) of the
                    Code (each, a "Commonly Controlled Entity") for the
                    benefit of any current or former employees, officers,
                    directors or independent contractors of the Company or
                    any of its subsidiaries (collectively, "Benefit
                    Plans").  The Company has delivered to Parent true,
                    complete and correct copies of (w) each Benefit Plan
                    (or, in the case of any unwritten Benefit Plans,
                    descriptions thereof), (x) the most recent annual
                    report on Form 5500 filed with the Internal Revenue
                    Service with respect to each Benefit Plan (if any such
                    report was required), (y) the most recent summary plan


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                                                                         18

                    description for each Benefit Plan for which such
                    summary plan description is required and (z) each
                    currently effective trust agreement and insurance or
                    group annuity contract relating to any Benefit Plan.

                        (ii)  Each Benefit Plan has been administered in
                    all material respects in accordance with its terms. 
                    The Company, its subsidiaries and all the Benefit Plans
                    are in compliance in all material respects with the
                    applicable provisions of ERISA and the Code.  All
                    reports, returns and similar documents with respect to
                    the Benefit Plans required to be filed with any
                    governmental agency or distributed to any Benefit Plan
                    participant have been duly and timely filed or
                    distributed.  To the knowledge of the Company, there
                    are no investigations by any governmental agency,
                    termination proceedings or other claims (except claims
                    for benefits payable in the normal operation of the
                    Benefit Plans), suits or proceedings against or
                    involving any Benefit Plan or asserting any rights or
                    claims to benefits under any Benefit Plan that could
                    give rise to any material liability, and, to the
                    knowledge of the Company, there are not any facts that
                    could give rise to any material liability in the event
                    of any such investigation, claim, suit or proceeding.

                        (iii)  (1) All contributions to, and payments from,
                    the Benefit Plans that may have been required to be
                    made in accordance with the terms of the Benefit Plans,
                    any applicable collective bargaining agreement and,
                    when applicable, Section 302 of ERISA or Section 412 of
                    the Code, have been timely made, (2) there has been no
                    application for or waiver of the minimum funding
                    standards imposed by Section 412 of the Code with
                    respect to any Benefit Plan that is an "employee
                    pension benefit plan" (as defined in Section 3(2) of
                    ERISA) (sometimes referred to herein as a "Pension
                    Plan") and (3) no Pension Plan had an "accumulated
                    funding deficiency" within the meaning of Section
                    412(a) of the Code as of the end of the most recently
                    completed plan year.  

                       (iv)  Each Pension Plan has been the subject of a
                    determination letter from the Internal Revenue Service
                    to the effect that such Pension Plan is qualified and
                    exempt from Federal income taxes under Sections 401(a)
                    and 501(a), respectively, of the Code; no such
                    determination letter has been revoked, and, to the


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                                                                         19

                    knowledge of the Company, revocation has not been
                    threatened; and such Pension Plan has not been amended
                    since the effective date of its most recent
                    determination letter in any respect that would
                    adversely affect its qualification, materially increase
                    its costs or require security under Section 307 of
                    ERISA.  The Company has delivered to Parent a copy of
                    the most recent determination letter received with
                    respect to each Pension Plan for which such a letter
                    has been issued, as well as a copy of any pending
                    application for a determination letter.  The Company
                    has also provided to Parent a list of all Pension Plan
                    amendments as to which a favorable determination letter
                    has not yet been received.  To the knowledge of the
                    Company, no event has occurred that could subject any
                    Pension Plan to tax under Section 511 of the Code.

                         (v)  To the knowledge of the Company, (1) no
                    "prohibited transaction" (as defined in Section 4975 of
                    the Code or Section 406 of ERISA) has occurred that
                    involves the assets of any Benefit Plan; (2) no
                    prohibited transaction has occurred that could subject
                    the Company, any of its subsidiaries, any employee of
                    the Company or its subsidiaries or, to the knowledge of
                    the Company, a trustee, administrator or other
                    fiduciary of any trust created under any Benefit Plan
                    to the tax or penalty on prohibited transactions
                    imposed by Section 4975 of the Code or the sanctions
                    imposed under Title I of ERISA; (3) no Pension Plan has
                    been terminated or has been the subject of a
                    "reportable event" (as defined in Section 4043 of ERISA
                    and the regulations thereunder); and (4) none of the
                    Company or any trustee, administrator or other
                    fiduciary of any Benefit Plan or any agent of any of
                    the foregoing has engaged in any transaction or acted
                    in a manner that could, or failed to act so as to,
                    subject the Company or any trustee, administrator or
                    other fiduciary to any liability for breach of
                    fiduciary duty under ERISA or any other applicable law.

                        (vi)  As of the most recent valuation date for each
                    Pension Plan that is a "defined benefit pension plan"
                    (as defined in Section 3(35) of ERISA) (a "Defined
                    Benefit Plan"), there was not any amount of "unfunded
                    benefit liabilities" (as defined in Section 4001(a)(18)
                    of ERISA) under such Defined Benefit Plan, and the
                    Company is not aware of any facts or circumstances that
                    would materially change the funded status of any such


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                    Defined Benefit Plan.  The Company has furnished to
                    Parent the most recent actuarial report or valuation
                    with respect to each Defined Benefit Plan.  The
                    information supplied to the actuary by the Company and
                    any of its subsidiaries for use in preparing those
                    reports or valuations was complete and accurate in all
                    material respects and the Company has no reason to
                    believe that the conclusions expressed in those reports
                    or valuations are incorrect.

                       (vii)  No Commonly Controlled Entity has incurred
                    any liability to an "employee pension benefit plan" (as
                    defined in Section 3(2) of ERISA) (other than for
                    contributions not yet due) or to the Pension Benefit
                    Guaranty Corporation (other than for the payment of
                    premiums not yet due), which liability has not been
                    fully paid as of the date hereof.

                      (viii)  No Commonly Controlled Entity has (a) engaged
                    in a transaction described in Section 4069 of ERISA
                    that could subject the Company to liability at any time
                    after the date hereof or (b) acted in a manner that
                    could, or failed to act so as to, result in fines,
                    penalties, taxes or related charges under
                    (x) Section 502(c)(i) or (l) of ERISA, (y) Section 4071
                    of ERISA or (z) Chapter 43 of the Code.

                        (ix)  No Commonly Controlled Entity is required to
                    contribute to any "multiemployer plan" (as defined in
                    Section 4001(a)(3) of ERISA) or has withdrawn from any
                    multiemployer plan where such withdrawal has resulted
                    or would result in any "withdrawal liability" (as
                    defined in Section 4201 of ERISA) that has not been
                    fully paid.

                         (x)  The list of Welfare Plans on the Company
                    Disclosure Schedule discloses whether each Welfare Plan
                    is (i) unfunded, (ii) funded through a "welfare benefit
                    fund", as such term is defined in Section 419(e) of the
                    Code, or other funding mechanism or (iii) insured. 
                    Each such Welfare Plan may be amended or terminated
                    without material liability to the Company at any time
                    after the Effective Time of the Merger.  The Company
                    and its subsidiaries comply in all material respects
                    with the applicable requirements of Section 4980B(f) of
                    the Code with respect to each Benefit Plan that is a
                    group health plan, as such term is defined in Section
                    5000(b)(1) of the Code.  


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                                                                         21

                        (xi)  Except as disclosed on the Company Disclosure
                    Schedule, no employee of the Company will be entitled
                    to any additional benefits or any acceleration of the
                    time of payment or vesting of any benefits under any
                    Benefit Plan as a result of the transactions
                    contemplated by this Agreement.

                         (k)  Taxes.  (i)  Each of the Company and its
                    subsidiaries has filed all tax returns and reports
                    required to be filed by it or requests for extensions
                    to file such returns or reports have been timely filed,
                    granted and have not expired, except to the extent that 
                    such failures to file or to have extensions granted
                    that remain in effect individually and in the aggregate
                    would not have a material adverse effect on the
                    Company.  All returns filed by the Company and each of
                    its subsidiaries are complete and accurate in all
                    material respects to the knowledge of the Company.  The
                    Company and each of its subsidiaries has paid (or the
                    Company has paid on its behalf) all taxes shown as due
                    on such returns, and the most recent financial
                    statements contained in the Filed SEC Documents reflect
                    an adequate reserve for all taxes payable by the
                    Company and its subsidiaries for all taxable periods
                    and portions thereof accrued through the date of such
                    financial statements.

                        (ii)  No deficiencies for any taxes have been
                    proposed, asserted or assessed against the Company or
                    any of its subsidiaries that are not adequately
                    reserved for, except for deficiencies that individually
                    or in the aggregate would not have a material adverse
                    effect on the Company, and no requests for waivers of
                    the time to assess any such taxes have been granted or
                    are pending.  None of the Federal income tax returns of
                    the Company and each of its subsidiaries consolidated
                    in such returns have been examined by and settled with
                    the United States Internal Revenue Service.  The
                    statute of limitations on assessment or collection of
                    any taxes due from the Company or any of its
                    subsidiaries has expired for all taxable years of the
                    Company or any of its subsidiaries through November 30,
                    1989.

                       (iii)  Neither the Company nor any of its
                    subsidiaries has taken any action or has any knowledge
                    of any fact or circumstance that is reasonably likely
                    to prevent the transactions contemplated hereby,


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                                                                         22

                    including the Merger, from qualifying as a
                    reorganization within the meaning of Section 368(a) of
                    the Code.

                        (iv)  No real estate transfer tax or real estate
                    gains tax will be imposed by the Commonwealth of
                    Pennsylvania or any political subdivision thereof as a
                    consequence of the Merger or any other transaction
                    contemplated by this Agreement.

                         (v)  As used in this Agreement, "taxes" shall
                    include all Federal, state, local and foreign income,
                    property, sales, excise and other taxes, tariffs or
                    governmental charges of any nature whatsoever.

                         (l)  No Excess Parachute Payments; Section 162(m)
                    of the Code.  (i)  Any amount that could be received
                    (whether in cash or property or the vesting of
                    property) as a result of any of the transactions
                    contemplated by this Agreement by any employee, officer
                    or director of the Company or any of its affiliates who
                    is a "disqualified individual" (as such term is defined
                    in proposed Treasury Regulation Section 1.280G-1) under
                    any employment, severance or termination agreement,
                    other compensation arrangement or Benefit Plan
                    currently in effect would not be characterized as an
                    "excess parachute payment" (as such term is defined in
                    Section 280G(b)(1) of the Code).  

                         (ii)  The disallowance of a deduction under
                    Section 162(m) of the Code for employee renumeration
                    will not apply to any amount paid or payable by the
                    Company or any subsidiary of the Company under any
                    contract, plan, program, arrangement or understanding.

                         (m)  Voting Requirements.  The affirmative vote of
                    a majority of the votes cast by the holders of the
                    shares of Company Common Stock entitled to vote thereon
                    at the Stockholders Meeting with respect to the
                    approval of the Merger is the only vote of the holders
                    of any class or series of the Company's capital stock
                    necessary to approve this Agreement and the
                    transactions contemplated by this Agreement.

                         (n)  State Takeover Statutes.  The Board of
                    Directors of the Company has approved the execution and
                    delivery of this Agreement and the consummation of the
                    Merger and the other transactions contemplated by this


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                    Agreement, and such approval is sufficient to render
                    inapplicable to this Agreement, the Merger and the
                    other transactions contemplated by this Agreement the
                    provisions of Subchapter 25F of the PBCL.  To the best
                    of the Company's knowledge, no other state takeover
                    statute or similar statute or regulation applies or
                    purports to apply to the Merger, this Agreement or any
                    of the transactions contemplated by this Agreement and
                    no provision of the articles of incorporation, by-laws
                    or other governing instruments of the Company or any of
                    its subsidiaries would, directly or indirectly,
                    restrict or impair the ability of Parent to vote, or
                    otherwise to exercise the rights of a stockholder with
                    respect to, shares of the Company and its subsidiaries
                    that may be acquired or controlled by Parent.

                         (o)  Labor Matters.  There are no collective
                    bargaining or other labor union agreements to which the
                    Company or any of its subsidiaries is a party or by
                    which any of them is bound.  To the best knowledge of
                    the Company, since December 1, 1992, neither the
                    Company nor any of its subsidiaries has encountered any
                    labor union organizing activity, or had any actual or
                    threatened employee strikes, work stoppages, slowdowns
                    or lockouts.

                         (p)  Brokers; Schedule of Fees and Expenses.  No
                    broker, investment banker, financial advisor or other
                    person, other than Merrill Lynch & Co. ("Merrill
                    Lynch"), the fees and expenses of which will be paid by
                    the Company, is entitled to any broker's, finder's,
                    financial advisor's or other similar fee or commission
                    in connection with the transactions contemplated by
                    this Agreement based upon arrangements made by or on
                    behalf of the Company.  The estimated fees and expenses
                    incurred and to be incurred by the Company in
                    connection with this Agreement and the transactions
                    contemplated by this Agreement (including the fees of
                    the Company's legal counsel) are set forth on the
                    Company Disclosure Schedule.

                         (q)  Opinion of Financial Advisor.  The Company
                    has received the oral opinion of Merrill Lynch to the
                    effect that, based upon and subject to assumptions made
                    by Merrill Lynch in rendering such opinion and based
                    upon such other matters as they consider relevant, as
                    of the date of this Agreement, the Exchange Ratio is



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                                                                         24

                    fair to the Company's stockholders from a financial
                    point of view.

                         (r)  Accounting Matters.  Neither the Company nor,
                    to its best knowledge, any of its affiliates, has taken
                    or agreed to take any action that (without giving
                    effect to any action taken or agreed to be taken by
                    Parent or any of its affiliates) would prevent Parent
                    from accounting for the business combination to be
                    effected by the Merger as a pooling of interests.

                         (s)  Compliance with Applicable Laws.  (i)  Each
                    of the Company and its subsidiaries has in effect all
                    Federal, state, local and foreign governmental
                    approvals, authorizations, certificates, filings,
                    franchises, licenses, notices, permits and rights
                    ("Permits") necessary for it to own, lease or operate
                    its properties and assets and to carry on its business
                    as now conducted, and there has occurred no default
                    under any such Permit, except for the lack of Permits
                    and for defaults under Permits which lack or default
                    individually or in the aggregate would not have a
                    material adverse effect on the Company.  Except as
                    disclosed in the Filed SEC Documents, the Company and
                    its subsidiaries are in compliance with all applicable
                    statutes, laws, ordinances, rules, orders and
                    regulations of any Governmental Entity, except for
                    possible noncompliance which individually or in the
                    aggregate would not have a material adverse effect on
                    the Company.

                         (ii)  To the best of the Company's knowledge, each
                    of the Company and its subsidiaries is, and has been,
                    and each of the Company's former subsidiaries, while
                    subsidiaries of the Company, was in compliance with all
                    applicable Environmental Laws, except for possible
                    noncompliance which individually or in the aggregate
                    would not have a material adverse effect on the
                    Company.  The term "Environmental Laws" means any
                    Federal, state, local or foreign statute, code,
                    ordinance, rule, regulation, policy, guideline, permit,
                    consent, approval, license, judgment, order, writ,
                    decree, directive, injunction or other authorization,
                    including the requirement to register underground
                    storage tanks, relating to:  (A) emissions, discharges,
                    Releases (as defined below) or threatened Releases of
                    Hazardous Material (as defined below) into the
                    environment, including into ambient air, soil,


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                                                                         25

                    sediments, land surface or subsurface, buildings or
                    facilities, surface water, groundwater, publicly-owned
                    treatment works, septic systems or land; (B) the
                    generation, treatment, storage, disposal, use,
                    handling, manufacturing, transportation or shipment of
                    Hazardous Material; or (C) pollution of the environment
                    or the protection of human health or safety.

                        (iii)  During the period of ownership or operation
                    by the Company and its subsidiaries of any of their
                    respective current or previously-owned properties,
                    there have been no Releases of Hazardous Material in,
                    on, under or affecting such properties or, to the
                    knowledge of the Company, any surrounding site, except
                    in each case for those which individually or in the
                    aggregate would not have a material adverse effect on
                    the Company.  Prior to the period of ownership or
                    operation by the Company and its subsidiaries of any of
                    their respective current or previously-owned
                    properties, to the knowledge of the Company, no
                    Hazardous Material was generated, treated, stored,
                    disposed of, used, handled or manufactured at, or
                    transported, shipped or disposed of from, such current
                    or previously-owned properties, and there were no
                    Releases of Hazardous Material in, on, under or
                    affecting any such property or any surrounding site,
                    except in each case for those which individually or in
                    the aggregate would not have a material adverse effect
                    on the Company.  The term "Release" has the meaning set
                    forth in 42 U.S.C. Section 9601(22).  The term
                    "Hazardous Material" means (1) hazardous materials,
                    pollutants, contaminants, constituents, medical wastes,
                    hazardous or infectious wastes and hazardous substances
                    as those terms are defined in the following statutes
                    and their implementing regulations:  the Hazardous
                    Materials Transportation Act, 49 U.S.C. Section 1801 et
                    seq., the Resource Conservation and Recovery Act, 42
                    U.S.C. Section 6901 et seq., the Comprehensive
                    Environmental Response, Compensation and Liability Act,
                    as amended by the Superfund Amendments and
                    Reauthorization Act, 42 U.S.C. Section 9601 et seq.,
                    the Occupational Safety and Health Act, 29 U.S.C.
                    Section 651 et seq., the Clean Water Act, 33 U.S.C.
                    Section 1251 et seq., the Toxic Substances Control Act,
                    15 U.S.C. Section 2601 et seq. and the Clean Air Act,
                    42 U.S.C. Section 7401 et seq., (2) petroleum,
                    including crude oil and any fractions thereof,
                    (3) natural gas, synthetic gas and any mixtures
                    thereof, (4) asbestos




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                                                                         26

                    and/or asbestos-containing material and (5) PCBs, or
                    materials or fluids containing PCBs.

                         (t)  Contracts; Debt Instruments.  (i)  Except as
                    disclosed in the Filed SEC Documents or on the Company
                    Disclosure Schedule, there are no contracts or
                    agreements that are material to the business,
                    properties, assets, condition (financial or otherwise),
                    results of operations or prospects of the Company and
                    its subsidiaries taken as a whole.  Neither the Company
                    nor any of its subsidiaries is in violation of or in
                    default under (nor does there exist any condition which
                    upon the passage of time or the giving of notice would
                    cause such a violation of or default under) any loan or
                    credit agreement, note, bond, mortgage, indenture,
                    lease, permit, concession, franchise, license or any
                    other contract, agreement, arrangement or understanding
                    to which it is a party or by which it or any of its
                    properties or assets is bound, except for violations or
                    defaults that individually or in the aggregate would
                    not have a material adverse effect on the Company.

                        (ii)  Set forth on the Company Disclosure Schedule
                    is (x) a list of all loan or credit agreements, notes,
                    bonds, mortgages, indentures and other agreements and
                    instruments pursuant to which any indebtedness of the
                    Company or any of its subsidiaries in an aggregate
                    principal amount in excess of $25,000 is outstanding or
                    may be incurred and (y) the respective principal
                    amounts currently outstanding thereunder.  For purposes
                    of this Agreement, "indebtedness" shall mean, with
                    respect to any person, without duplication, (A) all
                    obligations of such person for borrowed money, or with
                    respect to deposits or advances of any kind to such
                    person, (B) all obligations of such person evidenced by
                    bonds, debentures, notes or similar instruments,
                    (C) all obligations of such person upon which interest
                    charges are customarily paid, (D) all obligations of
                    such person under conditional sale or other title
                    retention agreements relating to property purchased by
                    such person, (E) all obligations of such person issued
                    or assumed as the deferred purchase price of property
                    or services (excluding obligations of such person to
                    creditors for raw materials, inventory, services and
                    supplies incurred in the ordinary course of such
                    person's business), (F) all capitalized lease
                    obligations of such person, (G) all obligations of
                    others secured by any lien on property or assets owned


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                                                                         27

                    or acquired by such person, whether or not the
                    obligations secured thereby have been assumed, (H) all
                    obligations of such person under interest rate or
                    currency hedging transactions (valued at the
                    termination value thereof), (I) all letters of credit
                    issued for the account of such person and (J) all
                    guarantees and arrangements having the economic effect
                    of a guarantee of such person of any indebtedness of
                    any other person.

                         (u)  Title to Properties.  (i)  Each of the
                    Company and each of its subsidiaries has good and
                    marketable title to, or valid leasehold interests in,
                    all its material properties and assets except for such
                    as are no longer used or useful in the conduct of its
                    businesses or as have been disposed of in the ordinary
                    course of business and except for defects in title,
                    easements, restrictive covenants and similar
                    encumbrances or impediments that individually or in the
                    aggregate would not materially interfere with its
                    ability to conduct its business as currently conducted. 
                    All such material assets and properties, other than
                    assets and properties in which the Company or any of
                    its subsidiaries has leasehold interests, are free and
                    clear of all Liens, except for Liens that individually
                    or in the aggregate would not materially interfere with
                    the ability of the Company and its subsidiaries to
                    conduct business as currently conducted.

                        (ii)  Each of the Company and each of its
                    subsidiaries has complied in all material respects with
                    the terms of all material leases to which it is a party
                    and under which it is in occupancy, and all such leases
                    are in full force and effect.  Each of the Company and
                    each of its subsidiaries enjoys peaceful and
                    undisturbed possession under all such material leases.

                         (v)  Intellectual Property.  To the best of the
                    Company's knowledge, the Company and its subsidiaries
                    own, or are validly licensed or otherwise have the
                    right to use, all patents, patent rights, trademarks,
                    trademark rights, trade names, trade name rights,
                    service marks, service mark rights, copyrights and
                    other proprietary intellectual property rights and
                    computer programs (collectively, "Intellectual Property
                    Rights") which are material to the conduct of the
                    business of the Company and its subsidiaries taken as a
                    whole.  The Company Disclosure Schedule sets forth a


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                                                                         28

                    description of all Intellectual Property Rights which
                    are material to the conduct of the business of the
                    Company and its subsidiaries taken as a whole.  Except
                    as set forth on the Company Disclosure Schedule, no
                    claims are pending or, to the knowledge of the Company,
                    threatened that the Company or any of its subsidiaries
                    is infringing or otherwise adversely affecting the
                    rights of any person with regard to any Intellectual
                    Property Right.  To the knowledge of the Company,
                    except as set forth on the Company Disclosure Schedule,
                    no person is infringing the rights of the Company or
                    any of its subsidiaries with respect to any
                    Intellectual Property Right.

                         SECTION 3.02.  Representations and Warranties of
               Parent and Sub.  Except as set forth on the Disclosure
               Schedule delivered by Parent to the Company prior to the
               execution of this Agreement (the "Parent Disclosure
               Schedule"), Parent and Sub represent and warrant to the
               Company as follows:

                         (a)  Organization, Standing and Corporate Power. 
                    Each of Parent and Sub is a corporation duly organized,
                    validly existing and in good standing under the laws of
                    the jurisdiction in which it is incorporated and has
                    the requisite corporate power and authority to carry on
                    its business as now being conducted.  Each of Parent
                    and Sub is duly qualified or licensed to do business
                    and is in good standing in each jurisdiction in which
                    the nature of its business or the ownership or leasing
                    of its properties makes such qualification or licensing
                    necessary, other than in such jurisdictions where the
                    failure to be so qualified or licensed individually or
                    in the aggregate would not have a material adverse
                    effect on Parent.  Parent has delivered to the Company
                    complete and correct copies of its certificate of
                    incorporation and by-laws and the certificate of
                    incorporation and by-laws of Sub, in each case as
                    amended to the date hereof.

                         (b)  Capital Structure.  The authorized capital
                    stock of Parent consists of 50,000,000 shares of Parent
                    Common Stock and 6,000,000 shares of preferred stock,
                    par value $1 per share.  At the close of business on
                    February 8, 1994, (i) 10,491,489 shares of Parent
                    Common Stock and no shares of preferred stock, par
                    value $1 per share, were issued and outstanding,
                    (ii) 760,457 shares of Parent Common Stock were held by


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                                                                         29

                    Parent in its treasury, (iii) 1,601,983 shares of
                    Parent Common Stock were reserved for issuance pursuant
                    to the Company's 1986 Amended and Restated Option,
                    Restricted Stock, Stock Appreciation Right and
                    Performance Unit Plan, the Amended Westmark
                    International Incorporated Incentive Savings and Stock
                    Ownership Plan and Trust, the Amended and Restated
                    Retirement Plan, the Management Incentive Compensation
                    Plan, the 1992 Option, Stock Appreciation Right,
                    Restricted Stock, Stock Grant and Performance Unit Plan
                    (the "1992 Option Plan"), the Amended and Restated
                    Nonofficer Employee Option, Restricted Stock and Stock
                    Grant Plan, the 1992 Nonofficer Employee Stock Option
                    Plan and the Stock Option Plan for Nonemployee
                    Directors (the "Parent Stock Plans") and
                    (iv) 500,000 shares of Series A Participating
                    Cumulative Preferred Stock ("Parent Preferred Stock")
                    (subject to increase and adjustment as set forth in the
                    Rights Agreement and the Certificate of Designations
                    attached as an exhibit thereto) were reserved for
                    issuance in connection with the rights (the "Rights")
                    to purchase shares of Parent Preferred Stock pursuant
                    to the Amended and Restated Rights Agreement dated as
                    of June 26, 1992, between Parent and First Chicago
                    Trust Company of New York, as Rights Agent (the "Rights
                    Agreement").  Except as set forth above, at the close
                    of business on February 8, 1994, no shares of capital
                    stock or other voting securities of Parent were issued,
                    reserved for issuance or outstanding.  All outstanding
                    shares of capital stock of Parent are, and all shares
                    which may be issued pursuant to this Agreement will be,
                    when issued, duly authorized, validly issued, fully
                    paid and nonassessable and not subject to preemptive
                    rights.  There are no bonds, debentures, notes or other
                    indebtedness of Parent having the right to vote (or
                    convertible into, or exchangeable for, securities
                    having the right to vote) on any matters on which
                    stockholders of Parent may vote.  Except as set forth
                    above or as otherwise contemplated by this Agreement,
                    as of the date of this Agreement, there are no
                    securities, options, warrants, calls, rights,
                    commitments, agreements, arrangements or undertakings
                    of any kind to which Parent or any of its subsidiaries
                    is a party or by which any of them is bound obligating
                    Parent or any of its subsidiaries to issue, deliver or
                    sell, or cause to be issued, delivered or sold,
                    additional shares of capital stock or other voting
                    securities of Parent or obligating Parent or any of its


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                                                                         30

                    subsidiaries to issue, grant, extend or enter into any
                    such security, option, warrant, call, right,
                    commitment, agreement, arrangement or undertaking.  As
                    of the date of this Agreement, there are no outstanding
                    contractual obligations of Parent or any of its
                    subsidiaries to repurchase, redeem or otherwise acquire
                    any shares of capital stock of Parent or any of its
                    subsidiaries.  As of the date of this Agreement, the
                    authorized capital stock of Sub consists of 100 shares
                    of common stock, par value $1.00 per share, all of
                    which have been validly issued, are fully paid and
                    nonassessable and are owned by Parent free and clear of
                    any Lien.

                         (c)  Authority; Noncontravention.  Parent and Sub
                    have all requisite corporate power and authority to
                    enter into this Agreement and, subject to the Parent
                    Stockholder Approval with respect to the issuance of
                    Parent Common Stock in the Merger and the Stock Plan
                    Amendment, to consummate the transactions contemplated
                    by this Agreement.  The execution and delivery of this
                    Agreement by Parent and Sub and the consummation by
                    Parent and Sub of the transactions contemplated by this
                    Agreement have been duly authorized by all necessary
                    corporate action on the part of Parent and Sub,
                    subject, in the case of the issuance of Parent Common
                    Stock in the Merger and the Stock Plan Amendment, to
                    the Parent Stockholder Approval.  This Agreement has
                    been duly executed and delivered by Parent and Sub and
                    constitutes a valid and binding obligation of each such
                    party, enforceable against such party in accordance
                    with its terms.  The execution and delivery of this
                    Agreement do not, and the consummation of the
                    transactions contemplated by this Agreement and
                    compliance with the provisions of this Agreement will
                    not, conflict with, or result in any violation of, or
                    default (with or without notice or lapse of time, or
                    both) under, or give rise to a right of termination,
                    cancellation or acceleration of any obligation or loss
                    of a material benefit under, or result in the creation
                    of any Lien upon any of the properties or assets of
                    Parent or any of its subsidiaries under, (i) the
                    certificate of incorporation or by-laws of Parent or
                    Sub or the comparable charter or organizational
                    documents of any other subsidiary of Parent, (ii) any
                    loan or credit agreement, note, bond, mortgage,
                    indenture, lease or other agreement, instrument,
                    permit, concession, franchise or license applicable to


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                    Parent, Sub or any other subsidiary of Parent or their
                    respective properties or assets or (iii) subject to the
                    governmental filings and other matters referred to in
                    the following sentence, any judgment, order, decree,
                    statute, law, ordinance, rule or regulation applicable
                    to Parent, Sub or any other subsidiary of Parent or
                    their respective properties or assets, other than, in
                    the case of clause (ii), any such conflicts,
                    violations, defaults, rights or Liens that individually
                    or in the aggregate would not (x) have a material
                    adverse effect on Parent, (y) impair the ability of
                    Parent and Sub to perform their respective obligations
                    under this Agreement or (z) prevent the consummation of
                    any of the transactions contemplated by this Agreement. 
                    No consent, approval, order or authorization of, or
                    registration, declaration or filing with, any
                    Governmental Entity is required by or with respect to
                    Parent, Sub or any other subsidiary of Parent in
                    connection with the execution and delivery of this
                    Agreement or the consummation by Parent or Sub, as the
                    case may be, of any of the transactions contemplated by
                    this Agreement, except for (1) the filing of a
                    premerger notification and report form under the HSR
                    Act, (2) the filing with the SEC of the Form S-4, the
                    Joint Proxy Statement relating to the Parent
                    Stockholder Approval and such reports under
                    Section 13(a) of the Exchange Act as may be required in
                    connection with this Agreement and the transactions
                    contemplated by this Agreement, (3) the filing of the
                    Certificate of Merger with the Secretary of State of
                    the Commonwealth of Pennsylvania and the State of
                    Delaware and appropriate documents with the relevant
                    authorities of other states in which Parent is
                    qualified to do business, (4) such consents, approvals,
                    orders, authorizations, registrations, declarations and
                    filings as may be required under the "takeover" or
                    "blue sky" laws of various states or the laws of any
                    foreign country in which the Company, Parent or any of
                    their respective subsidiaries conducts any business or
                    owns any property or assets and (5) such other
                    consents, approvals, orders, authorizations,
                    registrations, declarations and filings as would not
                    individually or in the aggregate (A) have a material
                    adverse effect on Parent, (B) impair the ability of
                    Parent and Sub to perform their respective obligations
                    under this Agreement or (C) prevent the consummation of
                    any of the transactions contemplated by this Agreement.



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                         (d)  SEC Documents; Undisclosed Liabilities. 
                    Parent has filed all required reports, schedules,
                    forms, statements and other documents with the SEC
                    since January 1, 1993 (the "Parent SEC Documents").  As
                    of their respective dates, the Parent SEC Documents
                    complied in all material respects with the requirements
                    of the Securities Act or the Exchange Act, as the case
                    may be, and the rules and regulations of the SEC
                    promulgated thereunder applicable to such Parent SEC
                    Documents, and none of the Parent SEC Documents
                    contained any untrue statement of a material fact or
                    omitted 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.  Except to the extent that
                    information contained in any Parent SEC Document has
                    been revised or superseded by a later Filed Parent SEC
                    Document (as defined in Section 3.02(f)), none of the
                    Parent SEC Documents contains any untrue statement of a
                    material fact or omits 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.  The financial statements of Parent
                    included in the Parent SEC Documents comply as to form
                    in all material respects with applicable accounting
                    requirements and the published rules and regulations of
                    the SEC with respect thereto, have been prepared in
                    accordance with generally accepted accounting
                    principles (except, in the case of unaudited
                    statements, as permitted by Form 10-Q of the SEC)
                    applied on a consistent basis during the periods
                    involved (except as may be indicated in the notes
                    thereto) and fairly present the consolidated financial
                    position of Parent and its consolidated subsidiaries as
                    of the dates thereof and the consolidated results of
                    their operations and cash flows (or changes in
                    financial position prior to the approval of Financial
                    Accounting Standards Board Statement of Financial
                    Accounting Standards No. 95) for the periods then ended
                    (subject, in the case of unaudited statements, to
                    normal year-end audit adjustments).  Other than with
                    respect to ERISA and tax matters, which are addressed
                    by Sections 3.02(n) and 3.02(o), respectively, except
                    as set forth in the Filed Parent SEC Documents, neither
                    Parent nor any of its subsidiaries has any liabilities
                    or obligations of any nature (whether accrued,
                    absolute, contingent or otherwise and whether or not


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                                                                         33

                    required by generally accepted accounting principles to
                    be recognized or disclosed on a consolidated balance
                    sheet of Parent and its consolidated subsidiaries or in
                    the notes thereto) which individually or in the
                    aggregate could reasonably be expected to have a
                    material adverse effect on Parent.

                         (e)  Information Supplied.  None of the
                    information supplied or to be supplied by Parent or Sub
                    specifically for inclusion or incorporation by
                    reference in (i) the Form S-4 will, at the time the
                    Form S-4 is filed with the SEC, at any time it is
                    amended or supplemented or at the time it becomes
                    effective under the Securities Act, 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 not
                    misleading, or (ii) the Joint Proxy Statement will, at
                    the date the Joint Proxy Statement is first mailed to
                    Parent's stockholders or at the time of the Parent
                    Stockholders Meeting (as defined in Section 5.01(b)), 
                    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.  The Form S-4 will comply as
                    to form in all material respects with the requirements
                    of the Securities Act and the rules and regulations
                    promulgated thereunder and the Joint Proxy Statement
                    will comply as to form in all material respects with
                    the requirements of the Exchange Act and the rules and
                    regulations promulgated thereunder, except that no
                    representation or warranty is made by Parent or Sub
                    with respect to statements made or incorporated by
                    reference in either the Form S-4 or the Joint Proxy
                    Statement based on information supplied by the Company
                    specifically for inclusion or incorporation by
                    reference therein.

                         (f)  Absence of Certain Changes or Events.  Except
                    as disclosed in the Parent SEC Documents filed and
                    publicly available prior to the date of this Agreement
                    (the "Filed Parent SEC Documents"), since the date of
                    the most recent audited financial statements included
                    in the Filed Parent SEC Documents, Parent has conducted
                    its business only in the ordinary course, and there has
                    not been (i) any material adverse change in Parent,
                    (ii) any declaration, setting aside or payment of any


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                    dividend or distribution (whether in cash, stock or
                    property) with respect to any of Parent's capital
                    stock, (iii) any split, combination or reclassification
                    of any of its capital stock or any issuance or the
                    authorization of any issuance of any other securities
                    in respect of, in lieu of or in substitution for shares
                    of its capital stock, (iv) any damage, destruction or
                    loss, whether or not covered by insurance that has or
                    could reasonably be expected to have a material adverse
                    effect on Parent or (v) any change in accounting
                    methods, principles or practices by Parent materially
                    affecting its assets, liabilities or business, except
                    insofar as may have been disclosed in the Filed Parent
                    SEC Documents or required by a change in generally
                    accepted accounting principles.

                         (g)  Litigation.  Except as disclosed in the Filed
                    Parent SEC Documents, there is no suit, action or
                    proceeding pending or, to the knowledge of Parent,
                    threatened against or affecting Parent or any of its
                    subsidiaries (and Parent is not aware of any basis for
                    any such suit, action or proceeding) that individually
                    or in the aggregate could reasonably be expected to
                    (i) have a material adverse effect on Parent,
                    (ii) impair the ability of Parent and Sub to perform
                    their obligations under this Agreement or (iii) prevent
                    the consummation of any of the transactions
                    contemplated by this Agreement, nor is there any
                    judgment, decree, injunction, rule or order of any
                    Governmental Entity or arbitrator outstanding against
                    Parent or any of its subsidiaries having, or which is
                    reasonably likely to have, any effect referred to in
                    clause (i), (ii) or (iii) above.

                         (h)  Voting Requirements.  The affirmative vote of
                    the holders of a majority of the shares of Parent
                    Common Stock present, or represented, and entitled to
                    vote thereon at the Parent Stockholders Meeting with
                    respect to each of (i) the issuance of shares of Parent
                    Common Stock in the Merger and (ii) the Stock Plan
                    Amendment are the only votes of the holders of any
                    class or series of Parent's capital stock necessary to
                    approve this Agreement and the transactions
                    contemplated by this Agreement.

                         (i)  Labor Matters.  There are no collective
                    bargaining or other labor union agreements to which
                    Parent or any of its subsidiaries is a party or by


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                    which any of them is bound.  To the best knowledge of
                    Parent, since January 1, 1993, neither Parent nor any
                    of its subsidiaries has encountered any labor union
                    organizing activity, or had any actual or threatened
                    employee strikes, work stoppages, slowdowns or
                    lockouts.

                         (j)  Brokers.  No broker, investment banker,
                    financial advisor or other person, other than Goldman,
                    Sachs & Co., the fees and expenses of which will be
                    paid by Parent, is entitled to any broker's, finder's,
                    financial advisor's or other similar fee or commission
                    in connection with the transactions contemplated by
                    this Agreement based upon arrangements made by or on
                    behalf of Parent or Sub.

                         (k)  Opinion of Financial Advisor.  Parent has
                    received the oral opinion of Goldman, Sachs & Co. to
                    the effect that, based upon and subject to assumptions
                    made by Goldman, Sachs & Co. in rendering such opinion
                    and based upon such other matters as they consider
                    relevant, as of the date of this Agreement, the
                    Exchange Ratio is fair to Parent.

                         (l)  Accounting Matters.  Neither Parent nor, to
                    its best knowledge, any of its affiliates has taken or
                    agreed to take any action that (without giving effect
                    to any action taken or agreed to be taken by the
                    Company or any of its affiliates) would prevent Parent
                    from accounting for the business combination to be
                    effected by the Merger as a pooling of interests.

                         (m)  Interim Operations of Sub.  Sub was formed
                    solely for the purpose of engaging in the transactions
                    contemplated hereby, has engaged in no other business
                    activities and has conducted its operations only as
                    contemplated hereby.

                         (n)  Benefit Plans.  Parent and its subsidiaries
                    are in compliance in all material respects with the
                    applicable provisions of ERISA and the Code with
                    respect to each material "employee benefit plan" (as
                    defined in Section 3(3) of ERISA) maintained,
                    contributed to or required to be maintained or
                    contributed to by Parent or its subsidiaries for the
                    benefit of any present officers, employees or directors
                    of Parent or any of its subsidiaries in the United
                    States.


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                         (o)  Taxes.  (i)  Each of Parent and its
                    subsidiaries has filed all tax returns and reports
                    required to be filed by it or requests for extensions
                    to file such returns or reports have been timely filed,
                    granted and have not expired, except to the extent that
                    such failures to file or to have extensions granted
                    that remain in effect individually or in the aggregate
                    would not have a material adverse effect on Parent. 
                    All returns filed by Parent and each of its
                    subsidiaries are complete and accurate in all material
                    respects to the knowledge of Parent.  Parent and each
                    of its subsidiaries has paid (or Parent has paid on its
                    behalf) all taxes shown as due on such returns, and the
                    most recent financial statements contained in the Filed
                    Parent SEC Documents reflect an adequate reserve for
                    all taxes payable by Parent and its subsidiaries for
                    all taxable periods and portions thereof accrued
                    through the date of such financial statements.

                        (ii)  No deficiencies for any taxes have been
                    proposed, asserted or assessed against Parent or any of
                    its subsidiaries that are not adequately reserved for,
                    except for deficiencies that individually or in the
                    aggregate would not have a material adverse effect on
                    Parent, and no requests for waivers of the time to
                    assess any such taxes have been granted or are pending. 
                    The Federal income tax returns of Parent and each of
                    its subsidiaries consolidated in such returns have been
                    examined by and settled with the United States Internal
                    Revenue Service for all years through 1990.  The
                    statute of limitations on assessment or collection of
                    any taxes due from Parent or any of its subsidiaries
                    has expired for all taxable years of Parent or such
                    subsidiaries through 1990.

                       (iii)  Neither Parent nor any of its subsidiaries
                    has taken any action or has any knowledge of any fact
                    or circumstance that is reasonably likely to prevent
                    the transactions contemplated hereby, including the
                    Merger, from qualifying as a reorganization within the
                    meaning of Section 368(a) of the Code.

                         (p)  Rights Agreement.  The execution and delivery
                    of this Agreement by Parent and Sub and consummation of
                    the Merger and other transactions contemplated hereby
                    will not result in the grant or distribution of any
                    Rights to any person under the Rights Agreement (except
                    for the Rights attached to the Parent Common Stock


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                    issuable in the Merger or pursuant to this Agreement)
                    or enable or require any Rights to be exercised or
                    triggered.

                         (q)  Compliance with Applicable Laws.  (i)  Each
                    of Parent and its subsidiaries has in effect all
                    Permits necessary for it to own, lease or operate its
                    properties and assets and to carry on its business as
                    now conducted, and there has occurred no default under
                    any such Permit, except for the lack of Permits and for
                    defaults under Permits which lack or default
                    individually or in the aggregate would not have a
                    material adverse effect on Parent.  Except as disclosed
                    in the Filed Parent SEC Documents, Parent and its
                    subsidiaries are in compliance with all applicable
                    statutes, laws, ordinances, rules, orders and
                    regulations of any Governmental Entity, except for
                    possible noncompliance which individually or in the
                    aggregate would not have a material adverse effect on
                    Parent.

                         (ii)  Each of Parent and its subsidiaries is, and
                    has been, in compliance with all applicable
                    Environmental Laws, except for possible noncompliance
                    which individually or in the aggregate would not have a
                    material adverse effect on Parent.

                         (r)  Contracts; Debt Instruments.  Except as
                    disclosed in the Filed Parent SEC Documents or on the
                    Parent Disclosure Schedule, there are no contracts or
                    agreements that are material to the business,
                    properties, assets, condition (financial or otherwise),
                    results of operations or prospects of Parent and its
                    subsidiaries taken as a whole.  Neither Parent nor any
                    of its subsidiaries is in violation of or in default
                    under (nor does there exist any condition which upon
                    the passage of time or the giving of notice would cause
                    such a violation of or default under) any loan or
                    credit agreement, note, bond, mortgage, indenture,
                    lease, permit, concession, franchise, license or any
                    other contract, agreement, arrangement or understanding
                    to which it is a party or by which it or any of its
                    properties or assets is bound, except for violations or
                    defaults that individually or in the aggregate would
                    not have a material adverse effect on Parent.

                         (s)  Title to Properties.  (i)  Each of Parent and
                    each of its subsidiaries has good and marketable title


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                    to, or valid leasehold interests in, all its material
                    properties and assets except for such as are no longer
                    used or useful in the conduct of its businesses or as
                    have been disposed of in the ordinary course of
                    business and except for defects in title, easements,
                    restrictive covenants and similar encumbrances or
                    impediments that individually or in the aggregate would
                    not materially interfere with its ability to conduct
                    its business as currently conducted.  All such material
                    properties and assets, other than properties and assets
                    in which Parent or any of its subsidiaries has
                    leasehold interests, are free and clear of all Liens,
                    except for Liens that individually or in the aggregate
                    would not materially interfere with the ability of
                    Parent and its subsidiaries to conduct business as
                    current conducted.

                        (ii)  Each of Parent and each of its subsidiaries
                    has complied in all material respects with the terms of
                    all material leases to which it is a party and under
                    which it is in occupancy, and all such leases are in
                    full force and effect.  Each of Parent and each of its
                    subsidiaries enjoys peaceful and undisturbed possession
                    under all such material leases.

                         (t)  Intellectual Property.  Parent and its
                    subsidiaries own, or are validly licensed or otherwise
                    have the right to use, all Intellectual Property Rights
                    which are material to the conduct of the business of
                    Parent and its subsidiaries taken as a whole.  The
                    Parent Disclosure Schedule sets forth a description of
                    all Intellectual Property Rights which are material to
                    the conduct of the business of Parent and its
                    subsidiaries taken as a whole.  Except as set forth on
                    the Parent Disclosure Schedule, no claims are pending
                    or, to the knowledge of Parent, threatened that Parent
                    or any of its subsidiaries is infringing or otherwise
                    adversely affecting the rights of any person with
                    regard to any Intellectual Property Right.  To the
                    knowledge of Parent, except as set forth on the Parent
                    Disclosure Schedule, no person is infringing the rights
                    of Parent or any of its subsidiaries with respect to
                    any Intellectual Property Right.



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                                        ARTICLE IV

                         Covenants Relating to Conduct of Business

                         SECTION 4.01.  Conduct of Business.  (a)  Conduct
               of Business by the Company.  During the period from the date
               of this Agreement to the Effective Time of the Merger, the
               Company shall, and shall cause its subsidiaries to, carry on
               their respective businesses in the usual, regular and
               ordinary course in substantially the same manner as
               heretofore conducted and, to the extent consistent
               therewith, use all reasonable efforts to preserve intact
               their current business organizations, keep available the
               services of their current officers and employees and
               preserve their relationships with customers, suppliers,
               licensors, licensees, distributors and others having
               business dealings with them to the end that their goodwill
               and ongoing businesses shall be unimpaired at the Effective
               Time of the Merger.  Without limiting the generality of the
               foregoing, during the period from the date of this Agreement
               to the Effective Time of the Merger, the Company shall not,
               and shall not permit any of its subsidiaries to:

                         (i) (x) declare, set aside or pay any dividends
                    on, or make any other distributions in respect of, any
                    of its capital stock, other than dividends and
                    distributions by a direct or indirect wholly owned
                    subsidiary of the Company to its parent, (y) split,
                    combine or reclassify any of its capital stock or issue
                    or authorize the issuance of any other securities in
                    respect of, in lieu of or in substitution for shares of
                    its capital stock or (z) purchase, redeem or otherwise
                    acquire any shares of capital stock of the Company or
                    any of its subsidiaries or any other securities thereof
                    or any rights, warrants or options to acquire any such
                    shares or other securities;

                        (ii) issue, deliver, sell, pledge or otherwise
                    encumber any shares of its capital stock, any other
                    voting securities or any securities convertible into,
                    or any rights, warrants or options to acquire, any such
                    shares, voting securities or convertible securities
                    (other than (x) the issuance of Company Common Stock
                    upon the exercise of Employee Stock Options (as defined
                    in Section 5.06) outstanding on the date of this
                    Agreement and in accordance with their present terms
                    and (y) the issuance of Company Common Stock upon



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                    conversion of the Convertible Notes by the holders
                    thereof in accordance with their present terms);

                       (iii) amend its articles of incorporation, by-laws
                    or other comparable charter or organizational
                    documents;

                        (iv) acquire or agree to acquire (x) by merging or
                    consolidating with, or by purchasing a substantial
                    portion of the assets of, or by any other manner, any
                    business or any corporation, partnership, joint
                    venture, association or other business organization or
                    division thereof or (y) any assets that individually or
                    in the aggregate are material to the Company and its
                    subsidiaries taken as a whole, except purchases of
                    inventory in the ordinary course of business consistent
                    with past practice;

                         (v) sell, lease, license, mortgage or otherwise
                    encumber or subject to any Lien or otherwise dispose of
                    any of its properties or assets, except sales in the
                    ordinary course of business consistent with past
                    practice of inventory or of furniture, fixtures and
                    equipment that are no longer used by or useful to the
                    Company or its subsidiaries;

                        (vi) (x) incur any indebtedness, except for short-
                    term borrowings incurred in the ordinary course of
                    business consistent with past practice and except for
                    intercompany indebtedness between the Company and any
                    of its subsidiaries or between such subsidiaries, or
                    (y) make any loans, advances or capital contributions
                    to, or investments in, any other person, other than to
                    the Company or any direct or indirect wholly owned
                    subsidiary of the Company;

                       (vii) make or agree to make any new capital
                    expenditure or capital expenditures which individually
                    is in excess of $50,000 or in the aggregate are in
                    excess of $300,000;

                      (viii) make any tax election that could reasonably be
                    expected to have a material adverse effect on the
                    Company or settle or compromise any income tax
                    liability;

                        (ix) pay, discharge, settle or satisfy any claims,
                    liabilities or obligations (absolute, accrued, asserted


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                    or unasserted, contingent or otherwise), other than the
                    payment, discharge or satisfaction, in the ordinary
                    course of business consistent with past practice or in
                    accordance with their terms, of liabilities reflected
                    or reserved against in, or contemplated by, the most
                    recent consolidated financial statements (or the notes
                    thereto) of the Company included in the Filed SEC
                    Documents or incurred since the date of such financial
                    statements in the ordinary course of business
                    consistent with past practice;

                         (x) except in the ordinary course of business,
                    modify, amend or terminate any material contract or
                    agreement to which the Company or any subsidiary is a
                    party or waive, release or assign any material rights
                    or claims thereunder;

                        (xi) take any action that (without giving effect to
                    any action taken or agreed to be taken by Parent or any
                    of its affiliates) would prevent Parent from accounting
                    for the business combination to be effected by the
                    Merger as a pooling of interests or from treating the
                    Merger as a "reorganization" under Section 368(a) of
                    the Code; or

                       (xii) authorize any of, or commit or agree to take
                    any of, the foregoing actions.

                         (b)  Conduct of Business by Parent.  During the
               period from the date of this Agreement to the Effective Time
               of the Merger, Parent shall, and shall cause its
               subsidiaries to, carry on their respective businesses in the
               usual, regular and ordinary course in substantially the same
               manner as heretofore conducted and, to the extent consistent
               therewith, use all reasonable efforts to preserve intact
               their current business organizations, keep available the
               services of their current officers and employees and
               preserve their relationships with customers, suppliers,
               licensors, licensees, distributors and others having
               business dealings with them to the end that their goodwill
               and ongoing businesses shall be unimpaired at the Effective
               Time of the Merger; provided that the foregoing shall not
               prevent Parent or any of its subsidiaries from discontinuing
               or disposing of any part of its assets or business if such
               action is, in the judgment of Parent, desirable in the
               conduct of the business of Parent and its subsidiaries or if
               such action would not result in either of the effects
               referred to in clause (ii) below.  Without limiting the


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               generality of the foregoing, during the period from the date
               of this Agreement to the Effective Time of the Merger,
               Parent shall not, and shall not permit any of its
               subsidiaries to:

                         (i) (x) declare, set aside or pay any dividends
                    on, or make any other distributions in respect of, any
                    capital stock of Parent or (y) split, combine or
                    reclassify any of its capital stock or issue or
                    authorize the issuance of any other securities in
                    respect of, in lieu of or in substitution for shares of
                    Parent's capital stock (other than exchanges in the
                    ordinary course under Parent's employee stock plans);

                        (ii) take any action that (without giving effect to
                    any action taken or agreed to be taken by the Company
                    or any of its affiliates) would prevent Parent from
                    accounting for the business combination to be effected
                    by the Merger as a pooling of interests or from
                    treating the Merger as a "reorganization" under
                    Section 368(a) of the Code; 

                       (iii) amend the Rights Agreement in any manner
                    adverse to the holders of Company Common Stock;

                        (iv) issue, deliver, sell, pledge or otherwise
                    encumber any shares of its capital stock, any other
                    voting securities or any securities convertible into,
                    or any rights, warrants or options to acquire, any such
                    shares, voting securities or convertible securities, in
                    each case if any such action could reasonably be
                    expected to (A) delay materially the date of mailing of
                    the Joint Proxy Statement or, (B) if it were to occur
                    after such date of mailing, require an amendment of the
                    Joint Proxy Statement;

                         (v) acquire or agree to acquire (x) by merging or
                    consolidating with, or by purchasing a substantial
                    portion of the assets of, or by any other manner, any
                    business or any corporation, partnership, joint
                    venture, association or other business organization or
                    division thereof or (y) any assets that individually or
                    in the aggregate are material to the Company and its
                    subsidiaries taken as a whole, except purchases of
                    inventory in the ordinary course of business consistent
                    with past practice, in each case if any such action
                    could reasonably be expected to (A) delay materially
                    the date of mailing of the Joint Proxy Statement or,


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                    (B) if it were to occur after such date of mailing,
                    require an amendment of the Joint Proxy Statement; or

                        (vi) authorize any of, or commit or agree to take
                    any of, the foregoing actions.

                         (c)  Other Actions.  The Company and Parent shall
               not, and shall not permit any of their respective
               subsidiaries to, take any action that would, or that could
               reasonably be expected to, result in (i) any of the
               representations and warranties of such party set forth in
               this Agreement that are qualified as to materiality becoming
               untrue, (ii) any of such representations and warranties that
               are not so qualified becoming untrue in any material respect
               or (iii) except as otherwise permitted by Section 4.02, any
               of the conditions to the Merger set forth in Article VI not
               being satisfied.

                         (d)  Advice of Changes.  The Company and Parent
               shall promptly advise the other party orally and in writing
               of any change or event having, or which, insofar as can
               reasonably be foreseen, would have, a material adverse
               effect on such party or on the truth of their respective
               representations and warranties.

                         SECTION 4.02.  No Solicitation.  (a)  The Company
               shall not, nor shall it permit any of its subsidiaries to,
               nor shall it authorize or permit any officer, director or
               employee of or any investment banker, attorney or other
               advisor or representative of, the Company or any of its
               subsidiaries to, directly or indirectly, (i) solicit,
               initiate or encourage the submission of, any takeover
               proposal or (ii) participate in any discussions or
               negotiations regarding, or furnish to any person any
               information with respect to, 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
               takeover proposal; provided, however, that prior to the
               Stockholders Meeting, to the extent required by the
               fiduciary obligations of the Board of Directors of the
               Company, as determined in good faith by the Board of
               Directors based on the advice of outside counsel, the
               Company may, (A) in response to an unsolicited request
               therefor, furnish information with respect to the Company to
               any person pursuant to a customary confidentiality agreement
               (as determined by the Company's outside counsel) and discuss
               such information (but not the terms of any possible takeover
               proposal) with such person and (B) upon receipt by the


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               Company of a takeover proposal, following delivery to Parent
               of the notice required pursuant to Section 4.02(c),
               participate in negotiations regarding such takeover
               proposal.  Without limiting the foregoing, it is understood
               that any violation of the restrictions set forth in the
               preceding sentence by any officer, director or employee of
               the Company or any of its subsidiaries or any investment
               banker, attorney or other advisor or representative of the
               Company or any of its subsidiaries, whether or not such
               person is purporting to act on behalf of the Company or any
               of its subsidiaries or otherwise, shall be deemed to be a
               breach of this Section 4.02(a) by the Company.  For purposes
               of this Agreement, "takeover proposal" means any proposal
               for a merger or other business combination involving the
               Company or any of its subsidiaries or any proposal or offer
               to acquire in any manner, directly or indirectly, an equity
               interest in, any voting securities of, or a substantial
               portion of the assets of the Company or any of its
               subsidiaries, other than the transactions contemplated by
               this Agreement.

                         (b)  Neither the Board of Directors of the Company
               nor any committee thereof shall (i) withdraw or modify, or
               propose to withdraw or modify, in a manner adverse to Parent
               or Sub, the approval or recommendation by such Board of
               Directors or any such committee of this Agreement or the
               Merger, (ii) approve or recommend, or propose to approve or
               recommend, any takeover proposal or (iii) enter into any
               agreement with respect to any takeover proposal. 
               Notwithstanding the foregoing, in the event the Board of
               Directors of the Company receives a takeover proposal that,
               in the exercise of its fiduciary obligations (as determined
               in good faith by the Board of Directors based on the advice
               of outside counsel), it determines to be a superior
               proposal, the Board of Directors may (subject to the
               following sentences) withdraw or modify its approval or
               recommendation of this Agreement and the Merger, approve or
               recommend any such superior proposal, enter into an
               agreement with respect to such superior proposal or
               terminate this Agreement, in each case at any time after the
               second business day following Parent's receipt of written
               notice (a "Notice of Superior Proposal") advising Parent
               that the Board of Directors has received a superior
               proposal, specifying the material terms and conditions of
               such superior proposal and identifying the person making
               such superior proposal.  In the event the Board of Directors
               of the Company takes any of the foregoing actions with
               respect to such superior proposal, the Company shall,


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               concurrently with the taking of any such action, pay to
               Parent the Termination Fee plus all Expenses pursuant to
               Section 5.09(b).  For purposes of this Agreement, "superior
               proposal" means a bona fide takeover proposal to acquire,
               directly or indirectly, for consideration consisting of cash
               and/or securities, more than 50% of the shares of Company
               Common Stock then outstanding or all or substantially all
               the assets of the Company, and otherwise on terms which the
               Board of Directors of the Company determines in its good
               faith reasonable judgment to be more favorable to the
               Company's stockholders than the Merger (based on the written
               opinion, with only customary qualifications, of the
               Company's independent financial advisor that the value of
               the consideration provided for in such proposal is superior
               to the value of the consideration provided for in the
               Merger) and for which financing, to the extent required, is
               then committed or which, in the good faith reasonable
               judgment of the Board of Directors, is reasonably capable of
               being financed by such third party.

                         (c)  In addition to the obligations of the Company
               set forth in paragraph (b) above, the Company promptly shall
               advise Parent orally and in writing of any request for
               information or of any takeover proposal or any inquiry with
               respect to or which could lead to any takeover proposal, the
               identity of the person making any such takeover proposal or
               inquiry and the material terms and conditions thereof.  The
               Company will keep Parent generally informed of the status
               and details of any such request, takeover proposal or
               inquiry.


                                         ARTICLE V

                                   Additional Agreements

                         SECTION 5.01.  Preparation of Form S-4 and the
               Joint Proxy Statement; Stockholders Meetings.  (a)  As soon
               as practicable following the date of this Agreement, the
               Company and Parent shall prepare and file with the SEC the
               Joint Proxy Statement and Parent shall prepare and file with
               the SEC the Form S-4, in which the Joint Proxy Statement
               will be included as a prospectus.  Each of the Company and
               Parent shall use its best efforts to have the Form S-4
               declared effective under the Securities Act as promptly as
               practicable after such filing.  The Company will use its
               best efforts to cause the Joint Proxy Statement to be mailed
               to the Company's stockholders, and Parent will use its best


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               efforts to cause the Joint Proxy Statement to be mailed to
               Parent's stockholders, in each case as promptly as
               practicable after the Form S-4 is declared effective under
               the Securities Act.  Parent shall also take any action
               (other than qualifying to do business in any jurisdiction in
               which it is not now so qualified) required to be taken under
               any applicable state securities laws in connection with the
               issuance of Parent Common Stock in the Merger and under the
               Stock Plans and the Company shall furnish all information
               concerning the Company and the holders of the Company Common
               Stock and rights to acquire Company Common Stock pursuant to
               the Stock Plans as may be reasonably requested in connection
               with any such action.

                         (b)  The Company will, as soon as practicable
               following the date of this Agreement, duly call, give notice
               of, convene and hold a meeting of its stockholders (the
               "Stockholders Meeting") for the purpose of approving the
               Merger.  Parent will, as promptly as practicable following
               the date of this Agreement, duly call, give notice of,
               convene and hold a meeting of its stockholders (the "Parent
               Stockholders Meeting") for the purpose of approving (i) the
               issuance of Parent Common Stock in the Merger and (ii) the
               amendment of the 1992 Option Plan to increase the number of
               shares of Parent Common Stock that are authorized for
               issuance thereunder by 450,000 shares (the "Stock Plan
               Amendment").  The Company and Parent will, through their
               respective Boards of Directors, recommend to their
               respective stockholders approval of the foregoing matters,
               except to the extent that the Board of Directors of the
               Company shall have withdrawn or modified its approval or
               recommendation of this Agreement or the Merger as permitted
               by Section 4.02(b).  Without limiting the generality of the
               foregoing, the Company agrees that its obligations pursuant
               to the first sentence of this Section 5.01(b) shall not be
               affected by (i) the commencement, public proposal, public
               disclosure or communication to the Company of any takeover
               proposal or (ii) the withdrawal or modification by the Board
               of Directors of the Company of its approval or
               recommendation of this Agreement or the Merger.  Parent and
               the Company will use reasonable efforts to hold the
               Stockholders Meeting and the Parent Stockholders Meeting on
               the same day and use their best efforts to hold such
               Meetings as soon as practicable after the date hereof. 

                         (c)  The Company shall use its best efforts to
               obtain the opinion of Merrill Lynch, dated on or about the
               date that is two business days prior to the mailing of the


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               Joint Proxy Statement, to the effect that, as of such date,
               the Exchange Ratio is fair to the Company's stockholders
               from a financial point of view, and shall cause a signed
               copy of such opinion to be delivered to Parent.

                         (d)  Parent shall use its best efforts to obtain
               the opinion of Goldman, Sachs & Co., dated on or about the
               date that is two business days prior to the mailing of the
               Joint Proxy Statement, to the effect that, as of such date,
               the Exchange Ratio is fair to Parent, and shall cause a
               signed copy of such opinion to be delivered to the Company.

                         SECTION 5.02.  Letter of the Company's
               Accountants.  The Company shall use its best efforts to
               cause to be delivered to Parent a letter of KPMG Peat
               Marwick, the Company's independent public accountants, dated
               a date within two business days before the date on which the
               Form S-4 shall become effective and a letter of KPMG Peat
               Marwick, dated a date within two business days before the
               Closing Date, each addressed to Parent, in form and
               substance reasonably satisfactory to Parent and customary in
               scope and substance for letters delivered by independent
               public accountants in connection with registration
               statements similar to the Form S-4.

                         SECTION 5.03.  Letter of Parent's Accountants. 
               Parent shall use its best efforts to cause to be delivered
               to the Company a letter of KPMG Peat Marwick, Parent's
               independent public accountants, dated a date within two
               business days before the date on which the Form S-4 shall
               become effective and a letter of KPMG Peat Marwick, dated a
               date within two business days before the Closing Date, each
               addressed to the Company, in form and substance reasonably
               satisfactory to the Company and customary in scope and
               substance for letters delivered by independent public
               accountants in connection with registration statements
               similar to the Form S-4.

                         SECTION 5.04.  Access to Information;
               Confidentiality.  (a)  Each of the Company and Parent shall,
               and shall cause each of its respective subsidiaries to,
               afford to the other party and to the officers, employees,
               accountants, counsel, financial advisors and other
               representatives of such other party, reasonable access
               during normal business hours during the period prior to the
               Effective Time of the Merger to all their respective
               properties, books, contracts, commitments, personnel and
               records and, during such period, each of the Company and


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               Parent shall, and shall cause each of its respective
               subsidiaries to, furnish promptly to the other party (a) a
               copy of each report, schedule, registration statement and
               other document filed by it during such period pursuant to
               the requirements of Federal or state securities laws and
               (b) all other information concerning its business,
               properties and personnel as such other party may reasonably
               request.  Except as required by law, each of the Company and
               Parent will hold, and will cause its respective officers,
               employees, accountants, counsel, financial advisors and
               other representatives and affiliates to hold, any nonpublic
               information in confidence until such time as such
               information becomes publicly available (otherwise than
               through the wrongful act of any such person) and shall use
               its best efforts to ensure that such persons do not disclose
               such information to others without the prior written consent
               of the Company or Parent, as the case may be.  In the event
               of the termination of this Agreement for any reason, the
               Company and Parent shall promptly return or destroy all
               documents containing nonpublic information so obtained from
               the other party or any of its subsidiaries and any copies
               made of such documents.  In addition, Parent and the Company
               shall not, and shall cause their respective advisors and
               agents not to, use any such nonpublic information for any
               purpose except in furtherance of the transactions
               contemplated by this Agreement.

                         (b)  Neither Parent nor any of its subsidiaries
               will solicit or employ any employees of the Company or any
               of its subsidiaries as long as they are employed by the
               Company or such subsidiary during the period prior to the
               Effective Time of the Merger (except as contemplated by this
               Agreement) and, in the event of termination of this
               Agreement for any reason, for a period of two years after
               the date of termination.

                         SECTION 5.05.  Best Efforts; Notification. 
               (a)  Upon the terms and subject to the conditions set forth
               in this Agreement, unless, to the extent permitted by
               Section 4.02(b), the Board of Directors of the Company
               approves or recommends a superior proposal, each of the
               parties agrees to use its best efforts to take, or cause to
               be taken, all actions, and to do, or cause to be done, and
               to assist and cooperate with the other parties in doing, all
               things necessary, proper or advisable to consummate and make
               effective, in the most expeditious manner practicable, the
               Merger and the other transactions contemplated by this
               Agreement, including (i) the obtaining of all necessary


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               actions or nonactions, waivers, consents and approvals from
               Governmental Entities and the making of all necessary
               registrations and filings (including filings with
               Governmental Entities, if any) and the taking of all
               reasonable steps as may be necessary to obtain an approval
               or waiver from, or to avoid an action or proceeding by, any
               Governmental Entity, (ii) the obtaining of all necessary
               consents, approvals or waivers from third parties and
               (iii) the execution and delivery of any additional
               instruments necessary to consummate the transactions
               contemplated by, and to fully carry out the purposes of,
               this Agreement.  In connection with and without limiting the
               foregoing, the Company and its Board of Directors shall
               (A) take all action necessary to ensure that no state
               takeover statute or similar statute or regulation is or
               becomes applicable to the Merger, this Agreement or any of
               the other transactions contemplated by this Agreement and
               (B) if any state takeover statute or similar statute or
               regulation becomes applicable to the Merger, this Agreement
               or any other transaction contemplated by this Agreement,
               take all action necessary to ensure that the Merger and the
               other transactions contemplated by this Agreement may be
               consummated as promptly as practicable on the terms
               contemplated by this Agreement and otherwise to minimize the
               effect of such statute or regulation on the Merger and the
               other transactions contemplated by this Agreement. 
               Notwithstanding the foregoing, the Board of Directors of the
               Company shall not be prohibited from taking any action
               permitted by Section 4.02(b).

                         (b)  The Company shall give prompt notice to
               Parent, and Parent or Sub shall give prompt notice to the
               Company, of (i) any representation or warranty made by it
               contained in this Agreement that is qualified as to
               materiality becoming untrue or inaccurate in any respect or
               any such representation or warranty that is not so qualified
               becoming untrue or inaccurate in any material respect or
               (ii) the failure by it to comply with or satisfy in any
               material respect any covenant, condition or agreement to be
               complied with or satisfied by it under this Agreement;
               provided, however, that no such notification shall affect
               the representations, warranties, covenants or agreements of
               the parties or the conditions to the obligations of the
               parties under this Agreement.

                         SECTION 5.06.  Stock Options.  (a)  As soon as
               practicable following the date of this Agreement, the Board
               of Directors of the Company (or, if appropriate, any


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               committee administering the Stock Plans) shall adopt such
               resolutions or take such other actions as may be required to
               effect the following:

                         (i) adjust the terms of all outstanding employee
                    stock options to purchase shares of Company Common
                    Stock ("Employee Stock Options") granted under the
                    Company's 1982 Incentive Stock Option Plan, the 1985
                    Incentive Stock Option Plan, the 1986 Non-Qualified
                    Stock Option Plan, the 1988 Non-Qualified Stock Option
                    Plan and the 1991 Non-Qualified Stock Option Plan and
                    any other stock option plan, program or arrangement of
                    the Company (collectively, the "Stock Plans"), whether
                    vested or unvested, as necessary to provide that, at
                    the Effective Time of the Merger, each Employee Stock
                    Option outstanding immediately prior to the Effective
                    Time of the Merger shall be deemed to constitute an
                    option to acquire, on the same terms and conditions as
                    were applicable under such Employee Stock Option,
                    including vesting, the same number of shares of Parent
                    Common Stock as the holder of such Employee Stock
                    Option would have been entitled to receive pursuant to
                    the Merger had such holder exercised such Employee
                    Stock Option in full immediately prior to the Effective
                    Time of the Merger, at a price per share equal to
                    (A) the aggregate exercise price for the shares of
                    Company Common Stock otherwise purchasable pursuant to
                    such Employee Stock Option divided by (B) the aggregate
                    number of shares of Parent Common Stock deemed
                    purchasable pursuant to such Employee Stock Option
                    (each, as so adjusted, an "Adjusted Option"); provided,
                    however, that in the case of any option to which
                    Section 421 of the Code applies by reason of its
                    qualification under any of Sections 422 through 424 of
                    the Code ("qualified stock options"), the option price,
                    the number of shares purchasable pursuant to such
                    option and the terms and conditions of exercise of such
                    option shall be determined in order to comply with
                    Section 424 of the Code; and

                        (ii) make such other changes to the Stock Plans as
                    it deems appropriate to give effect to the Merger
                    (subject to the approval of Parent, which shall not be
                    unreasonably withheld).

                         (b)  As soon as practicable after the Effective
               Time of the Merger, Parent shall deliver to the holders of
               Employee Stock Options appropriate notices setting forth


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               such holders' rights pursuant to the respective Stock Plans
               and the agreements evidencing the grants of such Employee
               Stock Options shall continue in effect on the same terms and
               conditions (subject to the adjustments required by this
               Section 5.06 after giving effect to the Merger).  Parent
               shall comply with the terms of the Stock Plans and ensure,
               to the extent required by, and subject to the provisions of,
               such Stock Plans, that the Employee Stock Options which
               qualified as qualified stock options prior to the Effective
               Time of the Merger continue to qualify as qualified stock
               options after the Effective Time of the Merger.

                         (c)  Parent agrees to use reasonable efforts to
               take such actions as are necessary for the conversion of the
               Employee Stock Options of the Company pursuant to
               Section 5.06(a), including the reservation, issuance and
               listing of Common Stock of Parent as is necessary to
               effectuate the transactions contemplated by Section 5.06(a).

                         (d)  A holder of an Adjusted Option may exercise
               such Adjusted Option in whole or in part in accordance with
               its terms by delivering a properly executed notice of
               exercise to Parent, together with the consideration therefor
               and the Federal withholding tax information, if any,
               required in accordance with the related Stock Plan.

                         SECTION 5.07.  Benefit Plans.  (a)  Except as
               provided in Section 5.06 and subject to the provisions of
               ERISA and the Code, Parent agrees to cause the Surviving
               Corporation to maintain for a period of at least two years
               after the Effective Time of the Merger the Benefit Plans of
               the Company and its subsidiaries in effect on the date of
               this Agreement or to provide benefits to employees of the
               Company and its subsidiaries that are comparable in the
               aggregate to those in effect on the date of this Agreement,
               and thereafter Parent will cause the employees of the
               Surviving Corporation to have benefit plans that are at
               least comparable to those provided to the employees of
               Parent.  Parent will cause each employee benefit plan of the
               Surviving Corporation or Parent covering such employees of
               the Company and its subsidiaries to recognize the service of
               such employees with the Company and its subsidiaries prior
               to the Closing Date, but only for purposes of eligibility to
               participate and vesting under any such plan.

                         (b)  After the Effective Time of the Merger,
               Parent intends to grant to key employees of the Surviving
               Corporation options to purchase Parent Common Stock and


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               restricted stock awards commensurate with those granted to
               key employees of Parent.

                         SECTION 5.08.  Indemnification and Insurance. 
               (a)  Parent and Sub agree that all rights to indemnification
               for acts or omissions occurring at or prior to the Effective
               Time of the Merger now existing in favor of the current or
               former directors or officers of the Company and its
               subsidiaries as provided in their respective certificates of
               incorporation or by-laws shall survive the Merger and shall
               continue in full force and effect in accordance with their
               terms for a period of not less than six years from the
               Effective Time of the Merger.  Parent will cause to be
               maintained for a period of not less than five years from the
               Effective Time of the Merger the Company's current
               directors' and officers' insurance and indemnification
               policy to the extent that it provides coverage for events
               occurring prior to the Effective Time of the Merger (the
               "D&O Insurance") for all persons who are directors and
               officers of the Company on the date of this Agreement, so
               long as the annual premium therefor would not be in excess
               of 150% of the last annual premium paid prior to the date of
               this Agreement (the "Maximum Premium"); provided, however,
               that Parent may, in lieu of maintaining such existing D&O
               Insurance as provided above, cause comparable coverage to be
               provided under any policy maintained for the benefit of
               Parent or any of its subsidiaries, so long as the material
               terms thereof are no less advantageous that the existing D&O
               Insurance.  If the existing D&O Insurance expires, is
               terminated or cancelled during such five-year period, Parent
               will use all reasonable efforts to cause to be obtained as
               much D&O Insurance as can be obtained for the remainder of
               such period for an annualized premium not in excess of the
               Maximum Premium, on terms and conditions no less
               advantageous than the existing D&O Insurance.  The Company
               represents to Parent that the Maximum Premium is $72,500.

                         (b)  In the event Parent, the Surviving
               Corporation or any of their successors or assigns
               (i) consolidates with or merges into any other person and
               shall not be the continuing or surviving corporation or
               entity of such consolidation or merger or (ii) transfers all
               or substantially all of its properties and assets to any
               person, then and in each such case, proper provisions shall
               be made so that the successors and assigns of Parent or the
               Surviving Corporation, as the case may be, shall assume the
               obligations set forth in this Section 5.08.



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                         (c)  This Section 5.08 shall survive the
               consummation of the Merger at the Effective Time of the
               Merger, is intended to benefit the Company, Parent, the
               Surviving Corporation and the persons indemnified pursuant
               to Section 5.08(a), and shall be binding on all successors
               and assigns of Parent and the Surviving Corporation.

                         SECTION 5.09.  Fees and Expenses.  (a)  Except as
               provided below in this Section 5.09, all fees and expenses
               incurred in connection with the Merger, this Agreement and
               the transactions contemplated by this Agreement shall be
               paid by the party incurring such fees or expenses, whether
               or not the Merger is consummated, except that expenses
               incurred in connection with printing and mailing the Joint
               Proxy Statement and the Form S-4 shall be shared equally by
               Parent and the Company.

                         (b)  The Company shall pay to Parent upon demand a
               fee of $1,000,000 (the "Termination Fee"), payable in same
               day funds, plus all Expenses not exceeding $500,000 (as
               defined below), if a takeover proposal is commenced,
               publicly proposed, publicly disclosed or communicated to the
               Company (or the willingness of any person to make a takeover
               proposal is publicly disclosed or communicated to the
               Company) and (i) the Board of Directors of the Company
               withdraws or modifies its approval or recommendation of this
               Agreement or the Merger, approves or recommends such other
               takeover proposal, enters into an agreement with respect to
               such other takeover proposal or terminates this Agreement
               (other than as a result of a willful and material breach of
               this Agreement by Parent or Sub (which breach shall not have
               been cured within five business days following Parent's
               receipt of written notice of such breach from the Company)),
               (ii) the requisite approval of the Company's stockholders
               for the Merger is not obtained at the Stockholders Meeting
               or (iii) the Stockholders Meeting does not occur prior to
               the termination of this Agreement pursuant to
               Section 7.01(b)(ii).  For purposes of this paragraph,
               "Expenses" shall mean all out-of-pocket fees and expenses
               incurred or paid by or on behalf of Parent in connection
               with the Merger or the consummation of any of the
               transactions contemplated by this Agreement, including all
               fees and expenses of counsel, investment banking firms,
               accountants, experts and consultants to Parent.

                         SECTION 5.10.  Public Announcements.  Parent and
               Sub, on the one hand, and the Company, on the other hand,
               will consult with each other before issuing, and provide


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               each other the opportunity to review, comment upon and
               concur with, any press release or other public statements
               with respect to the transactions contemplated by this
               Agreement, including the Merger, and shall not issue any
               such press release or make any such public statement prior
               to such consultation, except as may be required by
               applicable law, court process or by obligations pursuant to
               any listing agreement with any national market system.  The
               parties agree that the initial press release to be issued
               with respect to the transactions contemplated by this
               Agreement is set forth in Exhibit A to this Agreement.

                         SECTION 5.11.  Affiliates and Certain
               Stockholders.  (a)  Prior to the Closing Date, the Company
               shall deliver to Parent a letter identifying all persons who
               are, at the time the Merger is submitted for approval to the
               stockholders of the Company, "affiliates" of the Company for
               purposes of Rule 145 under the Securities Act and for
               purposes of applicable interpretations regarding the
               pooling-of-interests method of accounting.  The Company
               shall use its best efforts to cause each such person to
               deliver to Parent on or prior to the Closing Date a written
               agreement substantially in the form attached as Exhibit B
               hereto.  If the Merger would otherwise qualify for pooling-
               of-interests accounting treatment, shares of Parent Common
               Stock issued to such affiliates of the Company in exchange
               for shares of Company Common Stock shall not be transferable
               until such time as financial results covering at least
               30 days of combined operations of Parent and the Company
               have been published within the meaning of Section 201.01 of
               the SEC's Codification of Financial Reporting Policies,
               regardless of whether each such affiliate has provided the
               written agreement referred to in this Section 5.11, except
               to the extent permitted by, and in accordance with,
               Accounting Series Release 135 and Staff Accounting
               Bulletins 65 and 76.  Any shares of Company Common Stock
               held by such affiliates shall not be transferable,
               regardless of whether each such affiliate has provided the
               written agreement referred to in this Section 5.11, if such
               transfer, either alone or in the aggregate with other
               transfers by affiliates, would preclude Parent's ability to
               account for the business combination to be effected by the
               Merger as a pooling of interests.  The Company shall not
               register the transfer of any certificate representing
               Company Common Stock, unless such transfer is made in
               compliance with the foregoing.  Parent shall not be required
               to maintain the effectiveness of the Form S-4 or any other
               registration statement under the Securities Act for the


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               purposes of resale of Parent Common Stock by such affiliates
               and the certificates representing Parent Common Stock
               received by such affiliates in the Merger shall bear a
               customary legend regarding applicable Securities Act
               restrictions and the provisions of this Section 5.11.

                         (b)  The Company shall deliver to Parent on the
               date of the Joint Proxy Statement and on the Closing Date
               letters, in each case dated as of such respective dates and
               identifying all persons who are, as of such respective
               dates, beneficial owners of five percent or more of the
               Company Common Stock.  The Company shall use its best
               efforts to cause each such person to deliver to counsel to
               Parent and to the Company on the date of the Joint Proxy
               Statement and on the Closing Date written agreements, in
               each case dated as of such respective dates and
               substantially in the form attached as Exhibit C hereto.

                         SECTION 5.12.  National Market System Trading. 
               Parent shall use its best efforts to cause the shares of
               Parent Common Stock to be issued in the Merger and under the
               Stock Plans to be approved for trading on the NASDAQ/NMS,
               subject to official notice of issuance, prior to the Closing
               Date.

                         SECTION 5.13.  Stockholder Litigation.  The
               Company shall give Parent the opportunity to participate in
               the defense or settlement of any stockholder litigation
               against the Company and its directors relating to the
               transactions contemplated by this Agreement; provided,
               however, that no such settlement shall be agreed to without
               Parent's consent, which consent shall not be unreasonably
               withheld.

                         SECTION 5.14.  Tax Representation Letters of the
               Company and Parent.  (i)  The Company will sign and deliver
               to Duane, Morris & Heckscher, counsel to the Company, and to
               Cravath, Swaine & Moore, counsel to Parent, on the date of
               the Joint Proxy Statement and on the Closing Date
               representation letters, in each case dated as of such
               respective dates and substantially in the form of Exhibit D
               hereto, for the purpose of the reliance of such counsel in
               delivering the opinions described in Section 6.01(g).

                        (ii) Parent will sign and deliver to Duane,
               Morris & Heckscher, counsel to the Company, and to Cravath,
               Swaine & Moore, counsel to Parent, on the date of the Joint
               Proxy Statement and on the Closing Date representation


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               letters, in each case dated as of such respective dates and
               substantially in the form of Exhibit E hereto, for the
               purpose of the reliance of such counsel delivering the
               opinions described in Section 6.01(g).

                         SECTION 5.15.  Directorship.  Promptly following
               the Effective Time of the Merger, Parent's Board of
               Directors will elect Edward Ray to be a director of Parent.

                         SECTION 5.16.  Employment Agreements.  Promptly
               following the Effective Time of the Merger, Parent shall, or
               shall cause the Surviving Corporation to, enter into an
               employment contract with Edward Ray, Michael J. Wassil and
               Patrick J. Faivre on substantially the terms set forth in
               Exhibits F-1, F-2 and F-3, respectively.


                                        ARTICLE VI

                                   Conditions Precedent

                         SECTION 6.01.  Conditions to Each Party's
               Obligation To Effect the Merger.  The respective obligation
               of each party to effect the Merger is subject to the
               satisfaction or waiver on or prior to the Closing Date of
               the following conditions:

                         (a)  Stockholder Approval.  Each of the Company
                    Stockholder Approval and the Parent Stockholder
                    Approval (with respect to both the issuance of Parent
                    Common Stock in the Merger and the Stock Plan
                    Amendment) shall have been obtained.

                         (b)  National Market System Trading.  The shares
                    of Parent Company Stock issuable to the Company's
                    stockholders pursuant to this Agreement and under the
                    Stock Plans shall have been approved for trading on the
                    NASDAQ/NMS, subject to official notice of issuance.

                         (c)  HSR Act.  The waiting period (and any
                    extension thereof) applicable to the Merger under the
                    HSR Act shall have been terminated or shall have
                    expired.

                         (d)  No Injunctions or Restraints.  No statute,
                    rule, regulation, executive order, decree, temporary
                    restraining order, preliminary or permanent injunction
                    or other order enacted, entered, promulgated, enforced


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                    or issued by any court of competent jurisdiction or
                    other Governmental Entity or other legal restraint or
                    prohibition preventing the consummation of the Merger
                    shall be in effect.

                         (e)  Form S-4.  The Form S-4 shall have become
                    effective under the Securities Act and shall not be the
                    subject of any stop order or proceedings seeking a stop
                    order.

                         (f)  Pooling.  Parent and the Company shall have
                    received from KPMG Peat Marwick, as independent
                    auditors of both Parent and the Company, on the date of
                    the Joint Proxy Statement and on the Closing Date
                    letters, in each case dated as of such respective
                    dates, addressed to Parent and the Company, in form and
                    substance reasonably acceptable to Parent and the
                    Company and stating that the business combination to be
                    effected by the Merger may be accounted for as a
                    pooling of interests by Parent for purposes of its
                    consolidated financial statements under generally
                    accepted accounting principles and applicable SEC rules
                    and regulations.  No action shall have been taken by
                    any Governmental Entity or any statute, rule,
                    regulation or order enacted, promulgated or issued by
                    any Governmental Entity, or any proposal made for any
                    such action by any Governmental Entity which is
                    reasonably likely to be put into effect, that would
                    prevent Parent from accounting for the business
                    combination to be effected by the Merger as a pooling
                    of interests.

                         (g)  Tax Opinions.  Parent shall have received
                    from Cravath, Swaine & Moore, counsel to Parent, and
                    the Company shall have received from Duane, Morris &
                    Heckscher, counsel to the Company, on the date of the
                    Joint Proxy Statement and on the Closing Date opinions,
                    in each case based on the representations of Parent and
                    the Company provided to such counsel pursuant to
                    Section 5.14, dated as of such respective dates and
                    stating that the Merger will be treated for Federal
                    income tax purposes as a reorganization within the
                    meaning of Section 368(a) of the Code and that Parent,
                    Sub and the Company will each be a party to that
                    reorganization within the meaning of Section 368(b) of
                    the Code.




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                         (h)  Dissenters.  No more than 5% of the
                    outstanding shares of Company Common Stock immediately
                    prior to the Merger shall constitute Dissenting Shares
                    in accordance with Section 2.01(d).

                         SECTION 6.02.  Conditions to Obligations of Parent
               and Sub.  The obligations of Parent and Sub to effect the
               Merger are further subject to satisfaction or waiver of the
               following conditions:

                         (a)  Representations and Warranties.  The
                    representations and warranties of the Company set forth
                    in this Agreement that are qualified as to materiality
                    shall be true and correct, and the representations and
                    warranties of the Company set forth in this Agreement
                    that are not so qualified shall be true and correct in
                    all material respects, in each case as of the date of
                    this Agreement and as of the Closing Date as though
                    made on and as of the Closing Date, except to the
                    extent such representations and warranties speak as of
                    an earlier date, and Parent shall have received a
                    certificate signed on behalf of the Company by the
                    chief executive officer and the chief financial officer
                    of the Company to such effect.

                         (b)  Performance of Obligations of the Company. 
                    The Company shall have performed in all material
                    respects all obligations required to be performed by it
                    under this Agreement at or prior to the Closing Date,
                    and Parent shall have received a certificate signed on
                    behalf of the Company by the chief executive officer
                    and the chief financial officer of the Company to such
                    effect.

                         (c)  Certificates; Letters from Company
                    Affiliates.  The Company shall have delivered to Parent
                    certified copies of resolutions duly adopted by the
                    Company's Board of Directors and stockholders
                    evidencing the taking of all corporate action necessary
                    to authorize the execution, delivery and performance of
                    this Agreement, and the consummation of the
                    transactions contemplated hereby, all in such
                    reasonable detail as Parent and its counsel shall
                    reasonably request prior to the date of the
                    Stockholders Meeting.  In addition, Parent shall have
                    received from each affiliate named in the letter
                    referred to in Section 5.11(a) an executed copy of an



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                    agreement substantially in the form of Exhibit B
                    hereto.

                         (d)  No Litigation.  There shall not be pending or
                    threatened by any Governmental Entity any suit, action
                    or proceeding and there shall not be pending by any
                    other person any suit, action or proceeding which has a
                    reasonable likelihood of success, in each case
                    (i) challenging the acquisition by Parent or Sub of any
                    shares of Company Common Stock, seeking to restrain or
                    prohibit the consummation of the Merger or any of the
                    other transactions contemplated by this Agreement or
                    seeking to obtain from the Company, Parent or Sub any
                    damages that are material in relation to the Company
                    and its subsidiaries taken as a whole or Parent and its
                    subsidiaries taken as a whole, as applicable,
                    (ii) seeking to prohibit or limit the ownership or
                    operation by the Company, Parent or any of their
                    respective subsidiaries of any material portion of the
                    business or assets of the Company, Parent or any of
                    their respective subsidiaries, or to compel the
                    Company, Parent or any of their respective subsidiaries
                    to dispose of or hold separate any material portion of
                    the business or assets of the Company, Parent or any of
                    their respective subsidiaries, as a result of the
                    Merger or any of the other transactions contemplated by
                    this Agreement, (iii) seeking to impose limitations on
                    the ability of Parent to acquire or hold, or exercise
                    full rights of ownership of, any shares of Company
                    Common Stock or common stock of the Surviving
                    Corporation, including the right to vote the Company
                    Common Stock, or Common Stock of the Surviving
                    Corporation, on all matters properly presented to the
                    stockholders of the Company or the Surviving
                    Corporation, respectively, (iv) seeking to prohibit
                    Parent or any of its subsidiaries from effectively
                    controlling in any material respect the business or
                    operations of the Company or its subsidiaries or
                    (v) which otherwise could reasonably be expected to
                    have a material adverse effect on the Company or
                    Parent.  In addition, there shall not be any statute,
                    rule, regulation, judgment or order enacted, entered,
                    enforced or promulgated that is reasonably likely to
                    result, directly or indirectly, in any of the
                    consequences referred to in clauses (ii) through (iv)
                    above.



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                         (e)  Approval of Company Board of Directors.  The
                    Board of Directors of the Company or any committee
                    thereof shall not have withdrawn or modified in a
                    manner adverse to Parent or Sub its approval or
                    recommendation of the Merger or this Agreement, or
                    approved or recommended any takeover proposal, (ii) the
                    Company shall not have entered into any agreement with
                    respect to any superior proposal in accordance with
                    Section 4.02(b) of this Agreement, (iii) Parent shall
                    not have received a Notice of Superior Proposal from
                    the Company or two business days shall not have elapsed
                    from the date of such receipt or (iv) the Board of
                    Directors of the Company or any committee thereof shall
                    not have resolved to take any of the foregoing actions
                    referred to in clause (i) or (ii) above.

                         (f)  Fairness Opinion.  The Company shall have
                    received the opinion of Merrill Lynch, dated on or
                    about the date that is two business days prior to the
                    mailing of the Joint Proxy Statement, to the effect
                    that, as of such date, the Exchange Ratio is fair to
                    the Company's stockholders from a financial point of
                    view, a signed copy of which opinion shall have been
                    delivered to Parent.

                         SECTION 6.03.  Conditions to Obligation of the
               Company.  The obligation of the Company to effect the Merger
               is further subject to satisfaction or waiver of the
               following conditions:

                         (a)  Representations and Warranties.  The
                    representations and warranties of Parent and Sub set
                    forth in this Agreement that are qualified as to
                    materiality shall be true and correct, and the
                    representations and warranties of Parent and Sub set
                    forth in this Agreement that are not so qualified shall
                    be true and correct in all material respects, in each
                    case as of the date of this Agreement and as of the
                    Closing Date as though made on and as of the Closing
                    Date, except to the extent such representations speak
                    as of an earlier date, and the Company shall have
                    received a certificate signed on behalf of Parent by
                    the chief executive officer and the chief financial
                    officer of Parent to such effect.

                         (b)  Performance of Obligations of Parent and Sub. 
                    Parent and Sub shall have performed in all material
                    respects all obligations required to be performed by


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                    them under this Agreement at or prior to the Closing
                    Date, and the Company shall have received a certificate
                    signed on behalf of Parent by the chief executive
                    officer and the chief financial officer of Parent to
                    such effect.

                         (c)  Certificates.  Parent shall have delivered to
                    the Company certified copies of resolutions duly
                    adopted by Parent's and Sub's respective Board of
                    Directors and stockholders of Parent evidencing the
                    taking of all corporate action necessary to authorize
                    the execution, delivery and performance of this
                    Agreement, and the consummation of the transactions
                    contemplated hereby, all in such reasonable detail as
                    the Company and its counsel shall reasonably request
                    prior to the date of the Parent Stockholders Meeting.

                         (d)  No Litigation.  There shall not be pending or
                    threatened by any Governmental Entity any suit, action
                    or proceeding and there shall not be pending by any
                    other person any suit, action or proceeding which has a
                    reasonable likelihood of success, in each case
                    (i) challenging the acquisition by Parent or Sub of any
                    shares of Company Common Stock, seeking to restrain or
                    prohibit the consummation of the Merger or any of the
                    other transactions contemplated by this Agreement or
                    seeking to obtain from the Company, Parent or Sub any
                    damages that are material in relation to the Company
                    and its subsidiaries taken as a whole or Parent and its
                    subsidiaries taken as a whole, as applicable,
                    (ii) seeking to prohibit or limit the ownership or
                    operation by the Company, Parent or any of their
                    respective subsidiaries of any material portion of the
                    business or assets of the Company, Parent or any of
                    their respective subsidiaries, or to compel the
                    Company, Parent or any of their respective subsidiaries
                    to dispose of or hold separate any material portion of
                    the business or assets of the Company, Parent or any of
                    their respective subsidiaries, as a result of the
                    Merger or any of the other transactions contemplated by
                    this Agreement, (iii) seeking to impose limitations on
                    the ability of Parent to acquire or hold, or exercise
                    full rights of ownership of, any shares of Company
                    Common Stock or common stock of the Surviving
                    Corporation, including the right to vote the Company
                    Common Stock, or Common Stock of the Surviving
                    Corporation, on all matters properly presented to the
                    stockholders of the Company or the Surviving


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                    Corporation, respectively, (iv) seeking to prohibit
                    Parent or any of its subsidiaries from effectively
                    controlling in any material respect the business or
                    operations of the Company or its subsidiaries or
                    (v) which otherwise could reasonably be expected to
                    have a material adverse effect on the Company or
                    Parent.  In addition, there shall not be any statute,
                    rule, regulation, judgment or order enacted, entered,
                    enforced or promulgated that is reasonably likely to
                    result, directly or indirectly, in any of the
                    consequences referred to in clauses (ii) through (iv)
                    above.

                         (e)  Fairness Opinion.  Parent shall have received
                    the opinion of Goldman, Sachs & Co., dated on or about
                    the date that is two business days prior to the mailing
                    of the Joint Proxy Statement, to the effect that, as of
                    such date, the Exchange Ratio is fair to Parent, a
                    signed copy of which opinion shall have been delivered
                    to the Company.

                         SECTION 6.04.  Frustration of Closing Conditions. 
               None of the Company, Parent and Sub may rely on the failure
               of any condition set forth in Section 6.01, 6.02 or 6.03, as
               the case may be, to be satisfied if such failure was caused
               by such party's failure to act in good faith or to use its
               best efforts to consummate the Merger and the other
               transactions contemplated by this Agreement, as required by
               Section 5.05.


                                        ARTICLE VII

                             Termination, Amendment and Waiver

                         SECTION 7.01.  Termination.  This Agreement may be
               terminated at any time prior to the Effective Time of the
               Merger, whether before or after approval of matters
               presented in connection with the Merger by the stockholders
               of the Company:

                         (a) by mutual written consent of Parent, Sub and
                    the Company;

                         (b) by either Parent or the Company:

                              (i) if, upon a vote at a duly held
                         Stockholders Meeting or Parent Stockholders


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                         Meeting or any adjournment thereof, any required
                         approval of the stockholders of the Company or
                         Parent, as the case may be, shall not have been
                         obtained;

                             (ii) if the Merger shall not have been
                         consummated on or before the date 180 calendar
                         days following the date of this Agreement, unless
                         the failure to consummate the Merger is the result
                         of a willful and material breach of this Agreement
                         by the party seeking to terminate this Agreement;
                         provided, however, that the passage of such period
                         shall be tolled for any part thereof (but not
                         exceeding 60 calendar days in the aggregate)
                         during which any party shall be subject to a
                         nonfinal order, decree, ruling or action
                         restraining, enjoining or otherwise prohibiting
                         the consummation of the Merger or the calling or
                         holding of the Stockholders Meeting or the Parent
                         Stockholders Meeting;

                            (iii) if any Governmental Entity shall have
                         issued an order, decree or ruling or taken any
                         other action permanently enjoining, restraining or
                         otherwise prohibiting the Merger and such order,
                         decree, ruling or other action shall have become
                         final and nonappealable; or

                             (iv) in the event of a breach by the other
                         party of any representation, warranty, covenant or
                         other agreement contained in this Agreement which
                         (A) would give rise to the failure of a condition
                         set forth in Section 6.02(a) or (b) or
                         Section 6.03(a) or (b), as applicable, and
                         (B) cannot be or has not been cured within 30 days
                         after the giving of written notice to the
                         breaching party of such breach (a "Material
                         Breach") (provided that the terminating party is
                         not then in Material Breach of any representation,
                         warranty, covenant or other agreement contained in
                         this Agreement); 

                         (c) by the Company in accordance with the
                    provisions of Section 4.02(b); or

                         (d) by Parent on March 7, 1994, if on or prior to
                    such date (i) the Company shall not have caused a
                    representation agreement in the form of Exhibit G


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                    hereto to be executed and delivered by the Company and
                    each of the persons named in Schedule I thereto or
                    (ii) the Company shall not have caused an amendment to
                    the Convertible Notes and the Note Purchase Agreement
                    dated as of May 31, 1989, among the Company and the
                    holders of the Convertible Notes, in generally the form
                    of Exhibit H hereto to be executed and delivered by the
                    Company and those holders of the Convertible Notes
                    necessary for such amendment to be effective against
                    all holders (other than as a result of the failure by
                    Parent to execute and deliver a guarantee in
                    substantially the form of an exhibit to the form of
                    amendment attached as Exhibit H hereto).

                         SECTION 7.02.  Effect of Termination.  In the
               event of termination of this Agreement by either the Company
               or Parent as provided in Section 7.01, this Agreement shall
               forthwith become void and have no effect, without any
               liability or obligation on the part of Parent, Sub or the
               Company, other than the provisions of Section 3.01(p),
               Section 3.02(j), the last two sentences of Section 5.04,
               Section 5.09, this Section 7.02 and Article VIII and except
               to the extent that such termination results from the willful
               and material breach by a party of any of its
               representations, warranties, covenants or agreements set
               forth in this Agreement.

                         SECTION 7.03.  Amendment.  This Agreement may be
               amended by the parties at any time before or after any
               required approval of matters presented in connection with
               the Merger by the stockholders of the Company and at any
               time before or after any required approval of matters
               presented in connection with the issuance of shares of
               Parent Common Stock in the Merger and the Stock Plan
               Amendment by the stockholders of Parent; provided, however,
               that after any such approval, there shall be made no
               amendment that by law requires further approval by such
               stockholders without the further approval of such
               stockholders.  This Agreement may not be amended except by
               an instrument in writing signed on behalf of each of the
               parties.

                         SECTION 7.04.  Extension; Waiver.  At any time
               prior to the Effective Time of the Merger, the parties may
               (a) extend the time for the performance of any of the
               obligations or other acts of the other parties, (b) waive
               any inaccuracies in the representations and warranties of
               the other parties contained in this Agreement or in any


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               document delivered pursuant to this Agreement or (c) subject
               to the proviso of Section 7.03, waive compliance by the
               other parties with any of the agreements or conditions
               contained in this Agreement.  Any agreement on the part of a
               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.  The failure of any party to this Agreement to
               assert any of its rights under this Agreement or otherwise
               shall not constitute a waiver of such rights.

                         SECTION 7.05.  Procedure for Termination,
               Amendment, Extension or Waiver.  A termination of this
               Agreement pursuant to Section 7.01, an amendment of this
               Agreement pursuant to Section 7.03 or an extension or waiver
               pursuant to Section 7.04 shall, in order to be effective,
               require in the case of Parent, Sub or the Company, action by
               its Board of Directors or the duly authorized designee of
               its Board of Directors.


                                       ARTICLE VIII

                                    General Provisions

                         SECTION 8.01.  Nonsurvival of Representations and
               Warranties.  None of the representations and warranties in
               this Agreement or in any instrument delivered pursuant to
               this Agreement shall survive the Effective Time of the
               Merger.  This Section 8.01 shall not limit any covenant or
               agreement of the parties which by its terms contemplates
               performance after the Effective Time of the Merger.

                         SECTION 8.02.  Notices.  All notices, requests,
               claims, demands and other communications under this
               Agreement shall be in writing and shall be deemed given if
               delivered personally, telecopied (which is confirmed) or
               sent by overnight courier (providing proof of delivery) to





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               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 Sub, to

                              Advanced Technology Laboratories, Inc.
                              22100 Bothell Everett Highway
                              P.O. Box 3003
                              Bothell, WA 98041-3003
                              Telecopy No. (206) 485-3680

                              Attention:  Harvey N. Gillis, Senior Vice
                                          President, Chief Financial
                                          Officer and Treasurer

                              with a copy to:

                              Cravath, Swaine & Moore
                              825 Eighth Avenue
                              New York, NY 10019
                              Telecopy No. (212) 474-3700

                              Attention:  Allen Finkelson, Esq.; and

                         (b) if to the Company, to

                              Interspec, Inc.
                              110 West Butler Avenue
                              Ambler, PA 19002-5795
                              Telecopy No. (215) 540-9707

                              Attention:  Edward Ray, Chairman,
                                          President and 
                                          Chief Executive Officer

                              with a copy to:

                              Duane, Morris & Heckscher
                              One Liberty Place (37th Floor)
                              Philadelphia, PA 19103-7396
                              Telecopy No. (215) 979-1020

                              Attention:  Kathleen Shay, Esq.



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                         SECTION 8.03.  Definitions.  For purposes of this
               Agreement:

                         (a) an "affiliate" of any person means another
                    person that directly or indirectly, through one or more
                    intermediaries, controls, is controlled by, or is under
                    common control with, such first person;

                         (b) "indebtedness" has the meaning assigned
                    thereto in Section 3.01(t)(ii);

                         (c) "material adverse change" or "material adverse
                    effect" means, when used in connection with the Company
                    or Parent, any change or effect that is materially
                    adverse to the business, properties, assets, condition
                    (financial or otherwise), results of operations or
                    prospects of such party and its subsidiaries taken as a
                    whole;

                         (d) "person" means an individual, corporation,
                    partnership, joint venture, association, trust,
                    unincorporated organization or other entity;

                         (e) a "subsidiary" of any person means another
                    person, an amount of the voting securities, other
                    voting ownership or voting partnership interests of
                    which is sufficient to elect at least a majority of its
                    Board of Directors or other governing body (or, if
                    there are no such voting interests, 50% or more of the
                    equity interests of which) is owned directly or
                    indirectly by such first person;

                         (f) "superior proposal" has the meaning assigned
                    thereto in Section 4.02; 

                         (g) "takeover proposal" has the meaning assigned
                    thereto in Section 4.02; and

                         (h) "taxes" has the meaning assigned thereto in
                    Section 3.01(k).

                         SECTION 8.04.  Interpretation.  When a reference
               is made in this Agreement to an Article, Section, Exhibit or
               Schedule, such reference shall be to an Article or Section
               of, or an Exhibit or Schedule to, this Agreement unless
               otherwise indicated.  The table of contents and headings
               contained in this Agreement are for reference purposes only
               and shall not affect in any way the meaning or


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               interpretation of this Agreement.  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 words "hereof", "herein" and
               "hereunder" and words of similar import when used in this
               Agreement shall refer to this Agreement as a whole and not
               to any particular provision of this Agreement.  All terms
               defined in this Agreement shall have the defined meanings
               when used in any certificate or other document made or
               delivered pursuant hereto unless otherwise defined herein. 
               The definitions contained in this Agreement are applicable
               to the singular as well as the plural forms of such terms
               and to the masculine as well as to the feminine and neuter
               genders of such term.  Any agreement, instrument or statute
               defined or referred to herein or in any agreement or
               instrument that is referred to herein means such agreement,
               instrument or statute as from time to time amended, modified
               or supplemented, including (in the case of agreements or
               instruments) by waiver or consent and (in the case of
               statutes) by succession of comparable successor statutes and
               references to all attachments thereto and instruments
               incorporated therein.  References to a person are also to
               its permitted successors and assigns.

                         SECTION 8.05.  Counterparts.  This Agreement may
               be executed in one or more counterparts, all of which shall
               be considered one and the same agreement and shall become
               effective when one or more counterparts have been signed by
               each of the parties and delivered to the other parties.

                         SECTION 8.06.  Entire Agreement; No Third-Party
               Beneficiaries.  This Agreement (including the documents and
               instruments referred to herein) (a) constitutes the entire
               agreement, and supersedes all prior agreements and
               understandings, both written and oral, among the parties
               with respect to the subject matter of this Agreement and
               (b) except for the provisions of Article II, Section 5.06,
               Section 5.07 and Section 5.08, are not intended to confer
               upon any person other than the parties any rights or
               remedies.

                         SECTION 8.07.  Governing Law.  This Agreement
               shall be governed by, and construed in accordance with, the
               laws of the State of Delaware, regardless of the laws that
               might otherwise govern under applicable principles of
               conflicts of laws thereof.




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                         SECTION 8.08.  Assignment.  Neither this Agreement
               nor any of the rights, interests or obligations under this
               Agreement shall be assigned, in whole or in part, by
               operation of law or otherwise by any of the parties without
               the prior written consent of the other parties, except that
               Sub may assign, in its sole discretion, any of or all its
               rights, interests and obligations under this Agreement to
               Parent or to any direct or indirect wholly owned subsidiary
               of Parent, but no such assignment shall relieve Sub of any
               of its obligations under this Agreement.  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.

                         SECTION 8.09.  Enforcement.  The parties agree
               that irreparable damage would occur in the event that any of
               the provisions of this Agreement were not performed in
               accordance with their specific terms or were otherwise
               breached.  It is accordingly agreed that the parties shall
               be entitled to an injunction or injunctions to prevent
               breaches of this Agreement and to enforce specifically the
               terms and provisions of this Agreement in any court of the
               United States located in the Commonwealth of Pennsylvania or
               the State of Delaware or in Delaware state court, this being
               in addition to any other remedy to which they are entitled
               at law or in equity.  In addition, each of the parties
               hereto (a) consents to submit itself to the personal
               jurisdiction of any Federal court located in the
               Commonwealth of Pennsylvania or the State of Delaware or any
               Delaware state court in the event any dispute arises out of
               this Agreement or any of the transactions contemplated by
               this Agreement, (b) agrees that it will not attempt to deny
               or defeat such personal jurisdiction by motion or other
               request for leave from any such court and (c) agrees that it
               will not bring any action relating to this Agreement or any
               of the transactions contemplated by this Agreement in any





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               court other than a Federal court sitting in the Commonwealth
               of Pennsylvania or the State of Delaware or a Delaware state
               court.


                         IN WITNESS WHEREOF, Parent, Sub and the Company
               have caused this Agreement to be signed by their respective
               officers thereunto duly authorized, all as of the date first
               written above.

                                            ADVANCED TECHNOLOGY LABORATORIES,
                                            INC.,

                                              by
                                                    /s/ Dennis C. Fill
                                                 Name:  Dennis C. Fill
                                                 Title: Chairman of the Board
                                                        and Chief Executive
                                                        Officer

               Attest:

                  /s/ W. Brinton Yorks, Jr.
               Name:  W. Brinton Yorks, Jr.
               Title: Secretary


                                            ATL SUB ACQUISITION CORP.,

                                              by
                                                    /s/ Dennis C. Fill
                                                 Name:  Dennis C. Fill
                                                 Title: Chairman of the Board

               Attest:

                  /s/ W. Brinton Yorks, Jr.
               Name:  W. Brinton Yorks, Jr.
               Title: Secretary





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                                                                      71

                                             INTERSPEC, INC.,

                                               by
                                                     /s/ Edward Ray
                                                  Name:  Edward Ray
                                                  Title: President and Chief   
                                                         Executive Officer


               Attest:

                  /s/ Michael J. Wassil        
               Name:  Michael J. Wassil    
               Title: Vice President and
                      Chief Financial
                      Officer





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                                       PRESS RELEASE               EXHIBIT 20


             For Immediate Release                 Contact:  Anne Marie Bugge
                                                             (206) 487-7081  


                        ATL/INTERSPEC MERGER TO BE POOLING OF INTERESTS


             BOTHELL, Washington, February 24, 1994--ATL (Advanced Technology
             Laboratories, Inc.) reported today that it has determined its
             recently announced plans to acquire Interspec, Inc. would
             qualify for pooling of interests accounting treatment.  If
             approved by both companies' shareholders, Interspec would become
             a wholly owned subsidiary of ATL through an exchange ratio of
             0.4130 shares of ATL stock for each share of Interspec stock.
             Interspec has approximately 6.3 million shares outstanding.


             The proposed acquisition would create the world's leading
             ultrasound company with combined revenues of approximately $365
             million, an installed base of over 20,000 systems and a product
             line spanning all major clinical applications.


             Interspec of Ambler, Pennsylvania is a leading manufacturer of
             high quality medical diagnostic ultrasound systems, probes and
             transducers.  Interspec stock is traded on the NASDAQ National
             Market System under the symbol ISPC.


             ATL, with headquarters in Bothell, Washington, is a worldwide
             leader in the development, manufacture, distribution and service
             of diagnostic medical ultrasound systems.  ATL stock is traded
             on the NASDAQ National Market System under the symbol ATLI.


                                            ###

                                         22494/106


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