AGREEMENT AND PLAN OF REORGANIZATION

                                   DATED AS OF

                                JANUARY 20, 1998,

                                      AMONG

                         CARDIAC CONTROL SYSTEMS, INC.,

                              CCS SUBSIDIARY, INC.

                                       AND

                          ELECTRO-CATHETER CORPORATION




                                                         
<PAGE>



                                    GLOSSARY

    The  following  terms used in this  Agreement  are defined in the  following
Sections:


SECTION OR TERM OR OTHER LOCATION
---------------------------------------------------------------------

Acquisition Transaction..................................................6.4(a)
Acquisition Sub........................................................Preamble
Actions......................... ..........................................3.14
Affiliate Agreements........................................................5.2
Agreement.......................................................First paragraph
Plan of Merger..................................................First paragraph
Benefit Arrangements....................................................3.17(d)
Break-up Fee............................................................10.1(b)
Business Day................................................................1.7
CCSFE.......................................................................4.2
Certificate.................................................................3.1
Closing.....................................................................1.7
Closing Date................................................................1.7
Code........................................................................1.6
Common Shares Trust..................................................2.2(d)(ii)
Company................................................................Preamble
Company Affiliate Agreement.................................................5.2
Company Common Stock............................................First paragraph
Company Disclosure Schedule...................................................3
Company Financial Statements................................................3.6
Company Options..........................................................2.3(a)
Company Returns.............................................................3.9
Company SEC Documents.......................................................3.5
Company Sub.................................................................3.1
Company Warrants............................................................3.3
Constituent Corporations....................................................1.1
Effective Time..............................................................1.2
Employee................................................................3.17(a)
Employee Plans..........................................................3.17(a)
Encumbrances...............................................................3.10
ERISA...................................................................3.17(a)
ERISA Affiliate.........................................................3.17(a)
Excess Shares.........................................................2.2(d)(i)
Exchange Act................................................................3.4
Exchange Agent...........................................................2.2(a)
Exchange Fund............................................................2.2(a)
Executory Period.........................................................6.1(a)
FAS No. 5...................................................................3.7
FDA........................................................................3.15
GAAP........................................................................3.6
Governmental Authority.....................................................3.14
GTH.........................................................................8.6
Intellectual Property Rights...............................................3.11
Liability...................................................................3.7
Material Adverse Effect.....................................................3.1
Merger......................................................................1.1
Merger Shares............................................................2.1(c)
Multiemployer Plan........................................................17(c)
New Jersey Statute..............................................First Paragraph
Old Certificates.........................................................2.2(a)
Other Filings...............................................................6.5
Parent.................................................................Preamble
Parent Common Stock.............................................First paragraph
Parent Disclosure Schedule....................................................4
Parent Financial Statements.................................................4.6
Parent Options..............................................................4.3
Parent SEC Documents........................................................4.5
Parent Warrants.............................................................4.3
Party....................................................................6.1(a)
Pension Plans...........................................................3.17(a)
Related Agreements..........................................................5.1
Rule 145....................................................................5.2
Rule 145 Affiliate..........................................................5.2
S-4.........................................................................6.5
SEC.........................................................................3.4
SSS&G.......................................................................8.5
Stockholder Action..........................................................6.9
Stockholder Statement.......................................................6.9
Stockholders.............................................................2.2(a)
Stockholders' Materials.....................................................6.9
Stockholders' Meeting.......................................................6.9
Subsidiary...............................................................2.1(b)
Superior Proposal........................................................6.4(a)
Surviving Corporation.......................................................1.1
Tax.........................................................................3.9
Taxes.......................................................................3.9
Unvested Company Option..................................................2.3(b)
Vested Company Option....................................................2.3(c)
Voting Agreement............................................................5.1





                                                        

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                                TABLE OF CONTENTS



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                                   ARTICLE I.
                                    GENERAL 

1.1. THE MERGER
1.2. THE EFFECTIVE TIME OF THE MERGER
1.3. EFFECT OF MERGER
1.4. CERTIFICATE AND BY-LAWS OF SURVIVING CORPORATION
1.5. TAKING OF NECESSARY ACTION
1.6. TAX-FREE REORGANIZATION
1.7. CLOSING

                                   ARTICLE II.
                EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
               CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

2.1. EFFECT ON CAPITAL STOCK
2.2. EXCHANGE OF CERTIFICATES
2.3. COMPANY WARRANTS

                                  ARTICLE III.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1. ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER
3.2. EQUITY INVESTMENTS
3.3. CAPITAL STOCK; SECURITIES
3.4. AUTHORITY; NO CONSENTS
3.5. SEC DOCUMENTS
3.6. FINANCIAL STATEMENTS
3.7. ABSENCE OF UNDISCLOSED LIABILITIES
3.8. ABSENCE OF CHANGES
3.9. TAX MATTERS
3.10. TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED MATTERS
3.11. INTELLECTUAL PROPERTY
3.12. AGREEMENTS, ETC
3.13. NO DEFAULTS, ETC
3.14. LITIGATION, ETC
3.15. COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS
3.16. LABOR RELATIONS; EMPLOYEES
3.17. EMPLOYEE BENEFIT PLANS AND CONTRACTS
3.18. CERTAIN AGREEMENTS
3.19. INSURANCE
3.20. BROKERS
3.21. RELATED TRANSACTIONS
3.22. BOARD APPROVAL
3.23. VOTE REQUIRED
3.24. INFORMATION SUPPLIED
3.25. COMPANY NOT AN INTERESTED STOCKHOLDER
3.26. DISCLOSURE
3.27. KNOWLEDGE DEFINITION
3.28. COMPANY REFERENCE INCLUDES COMPANY SUBS







                                       iv

<PAGE>



                                   ARTICLE IV.
          REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB

4.1. ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER
4.2. EQUITY INVESTMENTS
4.3. CAPITAL STOCK; SECURITIES
4.4. AUTHORITY; NO CONSENTS
4.5. SEC DOCUMENTS
4.6. FINANCIAL STATEMENTS
4.7. ABSENCE OF UNDISCLOSED LIABILITIES
4.8. ABSENCE OF CHANGES
4.9. TAX MATTERS
4.10. TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED MATTERS
4.11. INTELLECTUAL PROPERTY
4.12. AGREEMENTS, ETC.
4.13. NO DEFAULTS, ETC.
4.14. LITIGATION, ETC.
4.15. COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS
4.16. LABOR RELATIONS; EMPLOYEES
4.17. EMPLOYEE BENEFIT PLANS AND CONTRACTS
4.18. CERTAIN AGREEMENTS
4.19. INSURANCE
4.20. BROKERS
4.21. RELATED TRANSACTIONS
4.22. BOARD APPROVAL
4.23. INFORMATION SUPPLIED
4.24. ACQUISITION SUB
4.25. DISCLOSURE
4.26. KNOWLEDGE DEFINITION
4.27. PARENT REFERENCE INCLUDES CCSFE

                                   ARTICLE V.
                               RELATED AGREEMENTS

5.1. VOTING AGREEMENT
5.2. AFFILIATE AGREEMENTS

                                   ARTICLE VI.
                        CONDUCT AND TRANSACTIONS PRIOR TO
                      EFFECTIVE TIME; ADDITIONAL AGREEMENTS

6.1. ACCESS TO RECORDS AND PROPERTIES OF EACH PARTY;
       CONFIDENTIALITY
6.2. OPERATION OF BUSINESS OF THE COMPANY
6.3. OPERATION OF BUSINESS OF THE PARENT
6.4. NEGOTIATION WITH OTHERS
6.5. PREPARATION OF S-4; OTHER FILINGS
6.6. ADVICE OF CHANGES
6.7. LETTER OF THE COMPANY'S ACCOUNTANTS
6.8. LETTER OF PARENT'S ACCOUNTANTS
6.9. STOCKHOLDERS' APPROVAL
6.10. LEGAL CONDITIONS TO MERGER
6.11. CONSENTS
6.12. EFFORTS TO CONSUMMATE
6.13. NOTICE OF PROSPECTIVE BREACH
6.14. PUBLIC ANNOUNCEMENTS
6.15. AFFILIATES
6.16. PREFERRED STOCK; SECURED PROMISSORY NOTE

                                  ARTICLE VII.
                CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATIONS

7.1. STOCKHOLDER APPROVAL; AGREEMENT OF MERGER
7.2. APPROVALS
7.3. LEGAL ACTION
7.4. S-4
7.5. LEGISLATION
7.6. BID PRICE RATIO
7.7. FINANCING

                                  ARTICLE VIII.
             CONDITIONS TO OBLIGATIONS OF PARENT AND ACQUISITION SUB

8.1. REPRESENTATIONS AND WARRANTIES
8.2. PERFORMANCE OF OBLIGATIONS OF THE COMPANY
8.3. AUTHORIZATION OF MERGER
8.4. CERTIFICATE
8.5. OPINION OF THE COMPANY'S COUNSEL
8.6. ACCEPTANCE BY COUNSEL TO PARENT AND ACQUISITION SUB
8.7. CONSENTS AND APPROVALS
8.8. GOVERNMENT CONSENTS, AUTHORIZATIONS, ETC
8.9. RELATED AGREEMENTS

                                   ARTICLE IX.
                    CONDITIONS TO OBLIGATIONS OF THE COMPANY

9.1. REPRESENTATIONS AND WARRANTIES
9.2. PERFORMANCE OF OBLIGATIONS OF PARENT AND ACQUISITION SUB
9.3. AUTHORIZATION OF MERGER
9.4. CERTIFICATE
9.5. OPINION OF COUNSEL TO PARENT AND ACQUISITION SUB
9.6. TAX OPINION
9.7. ACCEPTANCE BY COUNSEL TO THE COMPANY
9.8. CONSENTS AND APPROVALS
9.9. GOVERNMENT CONSENTS, AUTHORIZATIONS, ETC
9.10. APPOINTMENT OF DIRECTORS
9.11. FAIRNESS OPINION
9.12. DIRECTOR INDEMNITY
9.13. COMPANY INDEBTEDNESS

                                   ARTICLE X.
                      PAYMENT OF CERTAIN FEES AND EXPENSES

10.1. PAYMENT OF CERTAIN FEES AND EXPENSES

                                   ARTICLE XI
                 TERMINATION, AMENDMENT, MODIFICATION AND WAIVER

11.1. TERMINATION
11.2. EFFECT OF TERMINATION

                                  ARTICLE XII.
                                  MISCELLANEOUS

12.1 ENTIRE AGREEMENT
12.2. DESCRIPTIVE HEADINGS
12.3. NOTICES
12.4. COUNTERPARTS
12.5. GOVERNING LAW
12.6. BENEFITS OF AGREEMENT
12.7. PRONOUNS
12.8. AMENDMENT, MODIFICATION AND WAIVER
12.9. SEVERABILITY







                                        v

<PAGE>


         AGREEMENT  AND PLAN OF  REORGANIZATION  dated as of January  20,  1998,
among CARDIAC CONTROL  SYSTEMS,  INC., a Delaware  corporation  ("Parent"),  CCS
SUBSIDIARY, INC., a New Jersey corporation and wholly-owned subsidiary of Parent
("Acquisition Sub"), and ELECTRO-CATHETER  CORPORATION, a New Jersey corporation
(the "Company").

         The Boards of Directors of Parent, Acquisition Sub and the Company have
each duly approved and adopted this Agreement and Plan of  Reorganization  (this
"Agreement"),  the plan of merger (the "Plan of Merger") and the proposed merger
of Acquisition  Sub with and into the Company in accordance with this Agreement,
the Plan of Merger and the New Jersey Business  Corporation Act (the "New Jersey
Statute"),  whereby,  among other things,  the issued and outstanding  shares of
common stock, $.10 par value, of the Company (the "Company Common Stock"),  will
be exchanged  and  converted  into shares of common  stock,  $.10 par value,  of
Parent (the "Parent  Common Stock") in the manner set forth in Article II hereof
and in the Plan of  Merger,  upon the terms and  subject to the  conditions  set
forth in this Agreement and the Plan of Merger.

         NOW,  THEREFORE,  in consideration of the mutual benefits to be derived
from this Agreement and the Plan of Merger and the representations,  warranties,
covenants, agreements, conditions and promises contained herein and therein, the
parties hereby agree as follows:

                                   ARTICLE I.
                                   ----------

                                     GENERAL

         1.1. THE MERGER.  In accordance  with the provisions of this Agreement,
the Plan of Merger and the New Jersey  Statute,  Acquisition Sub shall be merged
with and into the Company (the "Merger"),  which at and after the Effective Time
shall be, and is sometimes  herein referred to as, the "Surviving  Corporation".
Acquisition  Sub and the Company are sometimes  referred to as the  "Constituent
Corporations".

         1.2. THE  EFFECTIVE  TIME OF THE MERGER.  Subject to the  provisions of
this  Agreement,  the Plan of Merger in  substantially  the form of Exhibit  1.2
attached  hereto shall be executed,  delivered  and filed with the  Secretary of
State of the State of New Jersey by each of the Constituent  Corporations on the
Closing Date in the manner  provided under Section  14A:10-4.1 of the New Jersey
Statute.  The Merger  shall become  effective  (the  "Effective  Time") upon the
filing of the  Certificate of Merger (to which the Plan of Merger is an exhibit)
with the Secretary of State of the State of New Jersey.

         1.3. EFFECT OF MERGER. At the Effective Time the separate  existence of
Acquisition  Sub shall cease and  Acquisition  Sub shall be merged with and into
the Surviving  Corporation,  and the Surviving  Corporation shall possess all of
the  rights,  privileges,  powers  and  franchises  as well of a public  as of a
private nature, and be subject to all the restrictions,  disabilities and duties
of each of the  Constituent  Corporations  and shall have such other  effects as
provided by the New Jersey Statute.

         1.4.  CERTIFICATE AND BY-LAWS OF SURVIVING CORPORATION.  From and
after the Effective Time: (a) the Certificate of the Company shall be
amended so that the Fourth Article thereof shall read in its entirety
as set forth in Exhibit 1.4 attached hereto, and the Certificate of the Company,
as so amended, shall be the Certificate of the Surviving Corporation, unless and
until altered,  amended or repealed as provided in the New Jersey  Statute;  (b)
the current amended and restated  by-laws of the Company shall be the by-laws of
the  Surviving  Corporation,  unless and until  altered,  amended or repealed as
provided in the New Jersey  Statute,  the  Certificate or such by-laws;  (c) the
directors of  Acquisition  Sub shall be Alan J. Rabin,  W. Alan Walton and Ervin
Schoenblum  each of whom shall be the  directors of the  Surviving  Corporation,
unless and until removed,  or until their  respective terms of office shall have
expired,  in accordance  with the New Jersey  Statute,  the  Certificate  or the
by-laws of the Surviving Corporation, as applicable; and (d) the officers of the
Company  shall be the officers of the  Surviving  Corporation,  unless and until
removed,  or until their terms of office shall have expired,  in accordance with
the  New  Jersey  Statute,  the  Certificate  or the  by-laws  of the  Surviving
Corporation, as applicable.

         1.5.  TAKING OF NECESSARY  ACTION.  Prior to the  Effective  Time,  the
parties  hereto  shall do or cause to be done all such acts and things as may be
necessary or appropriate in order to effectuate the Merger as  expeditiously  as
reasonably practicable,  in accordance with this Agreement,  the Plan of Merger,
and the New Jersey  Statute.  In case at any time after the Effective  Time, any
further  action is  necessary  or  desirable  to carry out the  purpose  of this
Agreement  and to vest in the  Surviving  Corporation  full title to all assets,
privileges, etc. of either Constituent Corporations,  the officers and directors
of such corporations shall take all such lawful and necessary action.

         1.6.  TAX-FREE  REORGANIZATION.  For Federal  income tax purposes,  the
parties  intend that the Merger be treated as a tax-free  reorganization  within
the meaning of Section  368(a)(1)(A)  of the Internal  Revenue Code of 1986,  as
amended (the "Code"), by reason of Section 368(a)(2)(E) of the Code.

         1.7. CLOSING.  Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement abandoned pursuant to the provisions
of Article  XI, and  subject to this  Agreement,  the closing of the Merger (the
"Closing") will take place at 10:00 a.m.  (Florida time) on a date (the "Closing
Date") to be mutually agreed upon by the parties,  which date shall be not later
than the third (3rd) Business Day after all the conditions set forth in Articles
VII, VIII and IX shall have been satisfied (or waived to the extent the same may
be waived),  unless  another  date is agreed to in writing by the  parties.  The
Closing  shall take place at the offices of  Greenberg  Traurig  Hoffman  Lipoff
Rosen & Quentel,  P.A., 111 North Orange Avenue,  20th Floor,  Orlando,  Florida
32801,  unless  another  place is agreed to in writing by the  parties.  As used
herein, the term "Business Day" shall mean any day other than a Saturday, Sunday
or day on which banks are permitted to close in New Jersey or Florida.


                                   ARTICLE II.

                EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
               CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

         2.1.  EFFECT ON CAPITAL STOCK.  At the Effective Time, subject
and  pursuant  to the terms and  conditions  of this  Agreement  and the Plan of
Merger,  by virtue  of the  Merger  and  without  any  action on the part of the
Constituent  Corporations or the holders of the capital stock of the Constituent
Corporations:

         (a) CAPITAL STOCK OF ACQUISITION SUB. Each issued and outstanding share
of common stock, par value $.01 per share, of Acquisition Sub shall  immediately
prior to the Effective  Time be deemed  cancelled  and converted  into and shall
represent  the right to receive  one share of common  stock,  par value $.10 per
share, of the Surviving Corporation.

         (b) CANCELLATION OF CERTAIN SHARES OF COMPANY COMMON STOCK.  Each share
of Company  Common Stock that is  immediately  prior to the Effective  Time: (i)
owned by the  Company as treasury  stock;  (ii) owned by any  Subsidiary  of the
Company;  or  (iii)  owned by  Parent  or any  subsidiary  of  Parent,  shall be
cancelled and no Parent Common Stock or other  consideration  shall be delivered
in  exchange  therefor.  As  used  in  this  Agreement,  a  "Subsidiary"  of any
corporation  means  another  corporation  an amount of whose  voting  securities
sufficient  to elect at least a  majority  of its  Board of  Directors  is owned
directly or indirectly by such corporation.

         (c) EXCHANGE  RATIO FOR COMPANY  COMMON STOCK.  Subject to Section 2.2,
each share of Company Common Stock issued and outstanding  immediately  prior to
the  Effective  Time (other than shares  cancelled  pursuant to Section  2.1(b))
shall be deemed  cancelled and converted  into and shall  represent the right to
receive  two-thirds  (2/3) of a share of Parent Common Stock in accordance  with
Section 2.2. For convenience of reference,  the shares of Parent Common Stock to
be issued upon the exchange and conversion of Company Common Stock in accordance
with this Section 2.1(c) are sometimes  hereinafter  collectively referred to as
the "Merger Shares".

         (d) ADJUSTMENTS FOR CAPITAL  CHANGES.  If, prior to the Effective Time,
Parent or the Company  recapitalizes  through a subdivision  of its  outstanding
shares into a greater  number of shares,  or a  combination  of its  outstanding
shares into a lesser number of shares, or reorganizes, reclassifies or otherwise
changes its outstanding  shares into the same or a different number of shares or
other  classes,  or declares a dividend  on its  outstanding  shares  payable in
shares of its capital stock or securities convertible into shares of its capital
stock,  then the  applicable  exchange  ratio for Company  Common  Stock will be
adjusted appropriately so as to maintain the relative proportionate interests of
the  holders  of shares of  Company  Common  Stock and the  holders of shares of
Parent Common Stock.

         2.2.  EXCHANGE OF CERTIFICATES.

         (a)  PROCEDURE FOR  EXCHANGE.  Prior to the Closing Date,  Parent shall
select an exchange  agent (the  "Exchange  Agent")  reasonably  satisfactory  to
Company  to act in such  capacity  in  connection  with  the  Merger.  As of the
Effective Time, Parent shall deposit with the Exchange Agent, for the benefit of
the holders of shares of Company Common Stock (the "Stockholders"), for exchange
in  accordance  with  this  Article  II and  the  Plan of  Merger,  certificates
representing  the shares of Parent  Common  Stock  contemplated  to be issued as
Merger Shares (which shares of Parent Common Stock,  together with any dividends
or distributions  with respect  thereto,  being  hereinafter  referred to as the
"Exchange  Fund").  As soon as  practicable  after the Effective  Time but in no
event  later than  twenty  (20)  Business  Days after the  Effective  Time,  the
Exchange  Agent  shall  mail  to each  holder  of  record  of a  certificate  or
certificates  which immediately before the Effective Time represented issued and
outstanding   shares  of   Company   Common   Stock   (collectively,   the  "Old
Certificates"):  (i) a letter of transmittal  advising such holders of the terms
of the exchange  effected by the Merger (and  specifying  how delivery  shall be
effected,  and risk of loss and title to the Old  Certificates  shall pass, only
upon delivery of the Old 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 Old Certificates in exchange
for  certificates   representing   Merger  Shares.  Upon  surrender  of  an  Old
Certificate  for  cancellation  to  the  Exchange  Agent,  together  with a duly
executed  letter of  transmittal  and such other  documents as may be reasonably
required by the  Exchange  Agent,  the holder of such Old  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 the Plan of Merger and
the Old Certificate so surrendered shall forthwith be cancelled. In the event of
a  transfer  of  ownership  of  shares of  Company  Common  Stock  which are not
registered  on the transfer  records of the Company,  it shall be a condition of
the exchange thereof that the Old Certificate  representing  such Company Common
Stock is presented  to the Exchange  Agent  properly  endorsed and  otherwise in
proper form for transfer and  accompanied by all documents  required to evidence
and effect such  transfer and by evidence  that any  applicable  stock  transfer
taxes have been paid.  Until  surrendered as contemplated by this Section 2.2(a)
and the Plan of Merger,  each Old Certificate  shall be deemed, on and after the
Effective  Time, to represent  only the right to receive upon such surrender the
certificate  representing  shares  of  Parent  Common  Stock and cash in lieu of
fractional   shares  (as  hereinafter   provided)  of  Parent  Common  Stock  as
contemplated by this Article II and the Plan of Merger.

         (b)  DISTRIBUTIONS  WITH  RESPECT  TO  UNSURRENDERED  CERTIFICATES.  No
dividends or other distributions  declared or made after the Effective Time with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any  unsurrendered  Old 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 2.2(d) or
the Plan of Merger  until the  holder  of record of such Old  Certificate  shall
surrender  such Old  Certificate.  Subject  to the  effect of  applicable  laws,
following  surrender  of any such Old  Certificate,  there  shall be paid to the
record  holder of the  certificates  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 2.2(d)
and the Plan of Merger and the amount of dividends or other distributions with a
record date after the Effective Time 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 but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Parent Common Stock.

         (c) NO FURTHER  OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All shares of
Parent  Common Stock issued upon the surrender for exchange of shares of Company
Common  Stock in  accordance  with the terms of this  Article II and the Plan of
Merger  (including  any cash paid pursuant to Section 2.2(b) or 2.2(d)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Company  Common  Stock and there shall be no further  registration  or
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. If, after the Effective  Time, any Old Certificate is presented
to the  Surviving  Corporation  for any reason,  such Old  Certificate  shall be
cancelled and exchanged as provided in this Article II and the Plan of Merger.

         (d)  NO  ISSUANCE  OF  FRACTIONAL  SHARES.  No  certificates  or  scrip
representing  fractional  shares of Parent Common Stock shall be issued upon the
surrender for exchange of Old Certificates,  and such fractional share interests
shall not entitle the owner thereof to vote or to any rights of a stockholder of
Parent such as rights to dividends,  stock splits or interest in lieu of issuing
certificates for fractional shares.

         (i) As  promptly as  practicable  following  the  Effective  Time,  the
         Exchange  Agent  shall  determine  the excess of (x) the number of full
         shares of Parent Common Stock delivered to the Exchange Agent by Parent
         pursuant to Section  2.2(a) over (y) the maximum  number of full shares
         of Parent Common Stock distributable to holders of Company Common Stock
         pursuant to Section 2.2(a) (such excess being herein called the "Excess
         Shares"). As soon after the Effective Time as practicable, the Exchange
         Agent,  as  agent  for the  holders  of  Company  Common  Stock,  shall
         aggregate and sell the Excess Shares at then  prevailing  prices in the
         over-the-counter  market, all in the manner provided in subsection (ii)
         of this Section 2.2(d).

         (ii) The sale of the  Excess  Shares  by the  Exchange  Agent  shall be
         executed  in the  over-the-counter  market  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
         Company  Common  Stock  as  contemplated  in  subsection  (iii) of this
         Section  2.2(d),  the Exchange  Agent shall hold such proceeds in trust
         for the holders of Company  Common Stock (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 Company
         Common Stock 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 Company  Common  Stock is entitled and
         the  denominator of which is the aggregate  amount of fractional  share
         interests to which all holders of Company Common Stock are entitled.

         (iii) As soon as practicable after the determination of the
         amount of cash,  if any,  to be paid to the  holders of Company  Common
         Stock in lieu of any  fractional  share  interests,  the Exchange Agent
         shall make available such amounts  without  interest to such holders of
         Company Common Stock.

         (e)  LOST,  STOLEN  OR  DESTROYED  CERTIFICATES.  In the  event any Old
Certificates  shall have been lost,  stolen or destroyed,  upon the making of an
affidavit of that fact by the person  claiming such Old  Certificate to be lost,
stolen or destroyed,  the Exchange  Agent shall issue an exchange for such loss,
stolen or  destroyed  Old  Certificate  the  consideration  payable and exchange
therefor  pursuant  to this  Article  II. The  Exchange  Agent or the  Surviving
Corporation may, in its discretion and as a condition  precedent to the issuance
thereof,  require the owner of such lost, stolen or destroyed Old Certificate to
give  the  Exchange  Agent a bond in such  reasonable  sum as it may  direct  as
indemnity  against any claim that may be made against the Surviving  Corporation
with  respect  to the Old  Certificate  alleged  to have  been  lost,  stolen or
destroyed.

         (f)  TERMINATION OF EXCHANGE FUND AND COMMON SHARES TRUST.  Any portion
of the Exchange Fund and Common Shares Trust which remains  undistributed to the
stockholders of the Company for six (6) months after the Effective Time shall be
delivered to Parent, upon demand, and any former Stockholders of the Company who
have not theretofore  complied with this Article II and the Plan of Merger 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 (and Parent shall
remain obligated to so pay and/or distribute).

         (g) NO LIABILITY.  Neither the Exchange Agent, Parent,  Acquisition Sub
nor the Company shall be liable to any holder of shares of Company  Common Stock
or  Parent  Common  Stock,  as the case may be,  for  shares  (or  dividends  or
distributions  with  respect  thereto)  of Parent  Common  Stock to be issued in
exchange for Company  Common Stock pursuant to this Section 2.2, if, on or after
the expiration of twelve (12) months  following the Effective  Date, such shares
are  delivered  to a  public  official  pursuant  to  any  applicable  abandoned
property, escheat or similar law.

         2.3. COMPANY  WARRANTS AND OPTIONS.  At the Effective Time, each of the
Company's then outstanding  Company Warrants and Company Options (whether or not
exercisable  at the  Effective  Time),  by virtue of the Merger and  without any
further action on the part of any holder thereof, shall be assumed by Parent and
automatically converted, on the same terms, into a warrant or option to purchase
a number of shares of Parent Common Stock (to be registered shares to the extent
the option or  warrant  holder is, by the terms of the  Company  option  plan or
warrant in effect,  entitled upon exercise of the option or warrant,  to receive
registered  stock)  determined  by  multiplying  the number of shares of Company
Common Stock covered by such Company  Warrants and Company  Options  immediately
prior to the Effective Time by two-thirds (2/3) (rounded up to the nearest whole
number of shares),  at an exercise  price per share of Parent Common Stock equal
to the exercise price in effect under such Company  Warrants or Company  Options
immediately  prior to the Effective Time divided by two-thirds (2/3) (rounded up
to the nearest cent). The converted warrants and options shall be exercisable on
the same terms and  conditions  as the  existing  Company  Warrants  and Company
Options  without  however giving effect to any mandatory or permissive  exercise
arising by virtue of the Merger of the Company with the Subsidiary  provided for
herein.

         As used in this Agreement, the following terms shall have the following
meanings:

         (a)  "Company  Options"  shall mean and  include any  Unvested  Company
Option and any Vested Company Option.

         (b)  "Unvested  Company  Option"  shall  mean  each of the  options  to
purchase  Company Common Stock that is outstanding at the Effective Time,  which
is not exercisable immediately prior to the Effective Time pursuant to its terms
in effect as of the date hereof.

         (c) "Vested  Company Option" shall mean each of the options to purchase
Company  Common  Stock  that is  outstanding  at the  Effective  Time,  which is
exercisable  immediately  prior to the  Effective  Time pursuant to its terms in
effect as of the date hereof.


                                  ARTICLE III.

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to Parent and Acquisition Sub that,
except as disclosed  in the Company SEC  Documents  or the  disclosure  schedule
dated the date  hereof,  certified by the  President or Acting  President of the
Company  and   delivered   by  the  Company  to  Parent  and   Acquisition   Sub
simultaneously  herewith  (which  disclosure  schedule  shall  contain  specific
references  to the  representations  and  warranties  to which  the  disclosures
contained therein relate) (the "Company Disclosure Schedule"):

         3.1. ORGANIZATION; GOOD STANDING;  QUALIFICATION AND POWER. Each of the
Company and the wholly-owned  subsidiary of the Company set forth in the Company
Disclosure  Schedule (the "Company Sub"):  (a) is a corporation  duly organized,
validly existing and in good standing under the laws of the State of New Jersey;
(b) has all requisite  corporate  power and authority to own,  lease and operate
its  properties  and assets and to carry on its business as now being  conducted
and as currently proposed to be conducted; and (c) is duly qualified and in good
standing  to do  business  in all  jurisdictions  in which the  failure to be so
qualified and in good standing  could  reasonably be expected to have a material
adverse effect on the business,  properties,  Liabilities,  assets,  operations,
results of operations,  condition (financial or otherwise), prospects or affairs
(a  "Material  Adverse  Effect") of the Company.  The Company has all  requisite
corporate  power and  authority  to enter  into this  Agreement  and the Plan of
Merger and each of the Related Agreements to which it is a party, to perform its
obligations   hereunder  and  thereunder  and  to  consummate  the  transactions
contemplated  hereby and thereby.  The Company has  delivered to Parent true and
complete  copies of the Charter and by-laws of the Company and the Company  Sub,
respectively,  in each  case as  amended  to the  date  hereof.  As used in this
Agreement,  "Certificate"  shall mean,  with respect to any  corporation,  those
instruments  that at the  time  constitute  its  corporate  charter  as filed or
recorded  under  the  general   corporation  law  of  the  jurisdiction  of  its
incorporation,  including  the  articles  or  certificate  of  incorporation  or
organization, and any amendments thereto, as the same may have been
restated,  and any amendments thereto (including any articles or certificates of
merger or  consolidation  or certificates of designation or similar  instruments
which effect any such  amendment)  which became  effective after the most recent
such restatement.

         3.2. EQUITY INVESTMENTS. The Company does not currently own any capital
stock or other proprietary interest, directly or indirectly, in any corporation,
association,  trust,  partnership,  joint venture or other entity other than the
Company Sub. Other than the Company Sub, the Company does not currently have any
Subsidiaries.  The Company owns 100% of the issued and outstanding capital stock
of the Company Sub, free and clear of all  Encumbrances.  Except for the Company
Options and the Company Warrants, there are no options, warrants, rights, calls,
commitments  or  agreements of any character to which the Company or the Company
Sub is a party or by which the Company or the  Company Sub is bound  calling for
the issuance of shares of capital stock of the Company or the Company Sub or any
securities  convertible into or exercisable or exchangeable for, or representing
the right to purchase or otherwise  receive,  any such capital  stock,  or other
arrangement to acquire, at any time or under any circumstance,  capital stock of
the Company or any such other securities of the Company or the Company Sub.

         3.3.  CAPITAL STOCK;  SECURITIES.  The authorized  capital stock of the
Company  consists  of  20,000,000  shares  of  Company  Common  Stock,  of which
6,383,611 shares are outstanding as of November 18, 1997 and 1,000,000 shares of
preferred  stock with no par value,  of which no shares are  outstanding.  As of
November 30, 1997,  the Company has  outstanding  warrants for 583,344 shares of
Company  Common Stock (with no shares of Company  Common Stock reserved for such
purpose)  (collectively,  the  "Company  Warrants")  and (y)  675,000  shares of
Company  Common  Stock  reserved  for  issuance  upon the  exercise  of  351,200
outstanding  Company  Options,  of which 274,700 are Vested Company  Options and
76,500 are Unvested Company Options.  Other than the 583,344 outstanding Company
Warrants and the 351,200 outstanding Company Options,  the Company does not have
outstanding any options to purchase,  or any pre-emptive  rights or other rights
to subscribe for or to purchase, any securities or obligations convertible into,
or any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. All outstanding
shares of Company  Common Stock are validly issued and  outstanding,  fully paid
and  non-assessable  and not subject to preemptive  rights.  There are no voting
trusts, voting agreements (except in favor of the Merger),  proxies (except as a
part of voting agreements in favor of the Merger),  first refusal rights,  first
offer rights,  co-sale rights,  transfer  restrictions  (other than restrictions
imposed by federal or state securities laws) or other agreements, instruments or
understandings (whether written or oral, formal or informal) with respect to the
voting,  transfer or disposition of Company Common Stock to which the Company is
a party or by which it is bound, or, to the best knowledge of the Company, among
or between any persons other than the Company.

         3.4. AUTHORITY; NO CONSENTS. The execution, delivery and performance by
the Company of this Agreement,  the Plan of Merger and the Related Agreements to
which it is a party and the consummation of the transactions contemplated hereby
and thereby have been duly and validly  authorized  by all  necessary  corporate
action on the part of the Company; and this Agreement and the Related Agreements
to which it is a party  have  been,  and the Plan of Merger  when  executed  and
delivered by the Company will be, duly and validly executed and delivered by the
Company,  and this  Agreement and the Related  Agreements to which it is a party
are, and the Plan of Merger when executed and  delivered by the parties  thereto
will be, the valid and binding  obligations of the Company,  enforceable against
the  Company  in  accordance  with  their  respective  terms,   except  as  such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.  Neither the execution, delivery and
performance of this Agreement, the Plan of Merger or Related Agreements to which
it  is a  party  nor  the  consummation  by  the  Company  of  the  transactions
contemplated  hereby or thereby nor compliance by the Company with any provision
hereof or thereof will:  (a) conflict with; (b) result in any violations of; (c)
cause a default under (with or without due notice,  lapse of time or both);  (d)
give rise to any right of termination,  amendment,  cancellation or acceleration
of any obligation contained in or the loss of any material benefit under; or (e)
result in the  creation of any  Encumbrance  on or against any assets,  right or
property of the  Company  under any term,  condition  or  provision  of: (x) any
instrument  or  agreement  to which  the  Company  is a party,  or,  to the best
knowledge of the Company, by which the Company or any of its properties,  assets
or rights  may be bound  (except as shall  have been  waived or with  respect to
which  consent  shall have been  obtained  prior to the  Closing);  (y) any law,
statute, rule, regulation, order, writ, injunction,  decree, permit, concession,
license or franchise of any Governmental  Authority applicable to the Company or
any of its  properties,  assets or rights;  or (z) the Company's  Certificate or
by-laws,  as amended  through the date hereof.  Except as  contemplated  by this
Agreement or the Plan of Merger, no permit,  authorization,  consent or approval
of or by, or any notification of or filing with, any  Governmental  Authority is
required in  connection  with the  execution,  delivery and  performance  by the
Company of this Agreement, the Plan of Merger or the Related Agreements to which
the  Company is a party or the  consummation  of the  transactions  contemplated
hereby or thereby,  except for: (i) the filing with the  Securities and Exchange
Commission (the "SEC") of (A) the S-4 and (B) such reports and information under
the Securities and Exchange Act of 1934, as amended (the  "Exchange  Act"),  and
the rules and regulations promulgated by the SEC thereunder,  as may be required
in  connection  with this  Agreement,  the Plan of Merger  and the  transactions
contemplated  hereby and  thereby;  (ii) such  filings as may be required by the
Over the Counter  Bulletin  Board Service with respect to Parent Common Stock to
be issued in connection  with the Merger and the Company  Warrants to be assumed
by Parent in the  Merger;  (iii) the  filing  of such  documents  with,  and the
obtaining of such orders from, various state securities and blue-sky authorities
as are required in connection with the transactions  contemplated  hereby;  (iv)
the distribution of the Stockholders'  Materials with respect to the adoption by
the Stockholders of this Agreement and the Plan of Merger; (v) the filing of the
Plan of  Merger  with the  Secretary  of State of the  State of New  Jersey  and
appropriate documents with the relevant authorities of other states in which the
Company is  qualified  to do business;  and (vi) such other  consents,  waivers,
authorizations,  filings,  approvals and registrations  which if not obtained or
made  would not have a Material  Adverse  Effect on the  Company  or  materially
impair  the  ability of the  Company  and the  Stockholders  to  consummate  the
transactions  contemplated  by this Agreement or the Plan of Merger,  including,
without limitation,  the Merger.  3.5. SEC DOCUMENTS.  The Company has furnished
Parent with a correct and complete copy of each report,  schedule,  registration
statement and definitive proxy statement filed by the Company with the SEC on or
after August 31, 1996 (the "Company SEC Documents"), which are all the documents
(other than  preliminary  material)  that the  Company was  required to file (or
otherwise  did  file)  with the SEC on or after  August  31,  1996.  As of their
respective dates, none of the Company SEC Documents  (including all exhibits and
schedules thereto and documents incorporated by reference therein) 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,  and the
Company SEC Documents complied when filed in all material respects with the then
applicable  requirements  of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations promulgated by the SEC thereunder.

         3.6.  FINANCIAL  STATEMENTS.  The  financial  statements of the Company
included in the Company SEC Documents (the "Company Financial Statements"):  (a)
complied as to form in all material respects with the then applicable accounting
requirements  and the published  rules and  regulations  of the SEC with respect
thereto,   were  prepared  in  accordance  with  generally  accepted  accounting
principals ("GAAP"),  consistently applied (except as may have been indicated in
the notes thereto or, in the case of the unaudited  statements,  as permitted by
Form 10-Q  promulgated  by the SEC);  (b) were in accordance  with the books and
records of the  Company;  and (c) fairly  present  (subject,  in the case of the
unaudited   statements,   to  normal,   nonrecurring   audit   adjustments)  the
consolidated financial position of the Company and its consolidated subsidiaries
as at the dates thereof and the  consolidated  results of their  operations  and
cash flows for the periods then ended.

         3.7.  ABSENCE OF UNDISCLOSED  LIABILITIES.  At August 31, 1997: (a) the
Company had no liability or obligation of any nature  (whether known or unknown,
matured or unmatured, fixed or contingent ("Liability")), which was not provided
for or disclosed on the Company SEC  Documents  for the fiscal year ended August
31, 1997;  and (b) all  liability  reserves  established  by the Company and set
forth on the  Company  Financial  Statements  were  adequate,  in the good faith
judgment of the Company,  for all such  Liabilities  at the date thereof.  There
were no  material  loss  contingencies  (as such  term is used in  Statement  of
Financial  Accounting  Standards  No.  5  issued  by  the  Financial  Accounting
Standards Board in March 1975 ("FAS No. 5")) which were not adequately  provided
for on the Company Financial Statements as required by FAS No. 5.

         3.8.  ABSENCE OF CHANGES.  Since August 31, 1997,  the Company has been
operated in the ordinary  course,  consistent with past practice,  and there has
not been:

         (a) to the best  knowledge of the Company,  any damage,  destruction or
loss,  whether or not covered by insurance,  having or which could reasonably be
expected to have a Material Adverse Effect;

         (b) to the  best  knowledge  of the  Company,  any  Liability  created,
assumed,  guaranteed  or  incurred,  or any  material  transaction,  contract or
commitment  entered  into,  by the  Company,  other  than the  license,  sale or
transfer  of the  Company's  products to  customers  in the  ordinary  course of
business;

         (c) any declaration,  setting aside or payment of any dividend or other
distribution  of any assets of any kind whatsoever with respect to any shares of
the capital stock of the Company, or any direct or indirect redemption, purchase
or other acquisition of any such shares of the capital stock of the Company;

         (d) any payment,  discharge or satisfaction of any material Encumbrance
or Liability or any  cancellation by the Company of any material debts or claims
or any  amendment,  termination  or waiver of any right of material value to the
Company;

         (e) any stock split, reverse stock split, combination, reclassification
or  recapitalization  of any Company Common Stock,  or any issuance of any other
security in respect of or in exchange for, any shares of Company Common Stock;

         (f) any  issuance by the Company of any shares of its capital  stock or
any debt security or securities, rights, options or warrants convertible into or
exercisable or exchangeable for any shares of its capital stock or debt security
(other  than shares of Company  Common  Stock  issued  upon  exercise of Company
Options in accordance with the present terms thereof);

         (g) any  termination  of,  or, to the best  knowledge  of the  Company,
indication  of an intention to  terminate or not renew,  any material  contract,
license, commitment or other agreement between the Company and any other person,
or the  assignment  by the Company of any  interest in any contract to which the
Company is a party;

         (h) any  material  write-down  or write-up of the value of any asset of
the Company,  or any material  write-off  of any  accounts  receivable  or notes
receivable of the Company or any portion thereof;

         (i) any increase in or  modification or acceleration of compensation or
benefits  payable or to become payable to any officer,  employee,  consultant or
agent of the Company other than in the ordinary course,  or the entering into of
any employment contract with any officer or employee;

         (j) the  making of any loan,  advance  or  capital  contribution  to or
investment in any person or the engagement in any transaction with any employee,
officer,  director  or  stockholder  of the  Company,  other  than  advances  to
employees  in the ordinary  course of business  for travel and similar  business
expenses;

         (k) any change in the accounting  methods or practices  followed by the
Company,  or any  change  in  depreciation  or  amortization  policies  or rates
theretofore adopted by the Company;

         (l) any termination of employment of any officer or key employee of the
Company or, to the best knowledge of the Company, any expression of intention by
any  officer  or key  employee  of the  Company  to  terminate  such  office  or
employment with the Company;

         (m)  any amendments or changes in the Company's Certificate or
by-laws;

         (n) to the best  knowledge  of the  Company,  the  commencement  of any
litigation or other action by or against the Company; or

         (o) any agreement, understanding, authorization or proposal, whether in
writing or  otherwise,  for the Company to take any of the actions  specified in
items (a) through (n) above.

         3.9. TAX MATTERS.  The Company and each other  corporation  included in
any  consolidated or combined tax return in which the Company has been included:
(a) have filed and will file,  in a timely and proper  manner,  consistent  with
applicable  laws,  all  Federal,  state and local Tax  returns  and Tax  reports
required to be filed by them  through the Closing Date (the  "Company  Returns")
with the appropriate governmental agencies in all jurisdictions in which Company
Returns are  required  to be filed and have paid or will pay all  amounts  shown
thereon to be due; and (b) have paid and shall timely pay all Taxes  required to
have been paid on or before the  Closing  Date.  All Taxes  attributable  to all
taxable periods ending on or before the Closing Date, to the extent not required
to have been previously  paid have been  adequately  provided for on the Company
Financial  Statements  and the Company will not accrue a Tax liability  from the
date of the Company  Financial  Statements up to and including the Closing Date,
other than a Tax  liability  accrued in the  ordinary  course of  business.  The
Company has not been  notified  by the  Internal  Revenue  Service or any state,
local or foreign  taxing  authority  that any issues  have been  raised (and are
currently  pending) in  connection  with any Company  Return,  and no waivers of
statutes  of  limitations  have been  given or  requested  with  respect  to the
Company.  Except  as  contested  in good  faith  and  disclosed  in the  Company
Disclosure  Schedule,   any  deficiencies  asserted  or  assessments  (including
interest  and  penalties)  made as a result of any  examination  by the Internal
Revenue  Service or by any other taxing  authorities  of any Company Return have
been  fully  paid  or are  adequately  provided  for on  the  Company  Financial
Statements and no proposed additional Taxes have been asserted.  The Company has
not made an election to be treated as a "consenting  corporation"  under Section
341(f) of the Code nor is it a "personal  holding company" within the meaning of
Section 542 of the Code.  The Company has not agreed to, nor is required to make
any  adjustment  under  Section  481(a)  of the Code by  reason  of a change  in
accounting  method or  otherwise.  The  Company  will not incur a Tax  liability
resulting from the Company  ceasing to be a member of a consolidated or combined
group that had previously filed  consolidated,  combined or unitary Tax returns.
As used in this Agreement,  "Tax" means any of the Taxes and "Taxes" means, with
respect to any entity:  (x) all income taxes (including any tax on or based upon
net income,  gross income,  income as specially  defined,  earnings,  profits or
selected items of income,  earnings or profits) and all gross  receipts,  sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise,  severance,  stamp,  occupation,  premium,  property or windfall profits
taxes,  alternative  or add-on  minimum  taxes,  customs duties and other taxes,
fees, assessments or charges of any kind whatsoever,  together with all interest
and  penalties,  additions to tax and other  additional  amounts  imposed by any
taxing authority (domestic or foreign) on such entity; and (y) any liability for
the payment of any amount of the type  described  in the  immediately  preceding
clause (x) as a result  of:  (i) being a  "transferee"  (within  the  meaning of
Section 6901 of the Code or any other  applicable law) of another  entity;  (ii)
being a member of an  affiliated  or combined  group;  or (iii) any  contractual
obligations or otherwise.

         3.10. TITLE TO ASSETS,  PROPERTIES AND RIGHTS AND RELATED MATTERS.  The
Company has good and marketable title to all assets, properties and interests in
properties,  real, personal or mixed,  reflected on the Company SEC Documents or
acquired after August 31, 1997, except for: (a) those  Encumbrances set forth in
the Company  Disclosure  Schedule;  (b) liens for current  taxes not yet due and
payable;  (c)  statutory  mechanics  and  materialmen's  liens;  and (d) utility
easements.  As used in this Agreement,  the term  "Encumbrances"  shall mean and
include security interests,  mortgages,  liens,  pledges,  guarantees,  charges,
easements, reservations, restrictions, clouds, equities, rights of way, options,
rights of first refusal and all other  encumbrances,  whether or not relating to
the extension of credit or the borrowing of money.

         3.11. INTELLECTUAL PROPERTY. The Company Disclosure Schedule sets forth
a list of all patents, copyrights,  trademarks, tradenames and service marks and
any  licensed   intellectual   property   rights   (other  than   commercial  or
"shrink-wrap"  licenses covering software generally available to the public on a
retail basis) (collectively,  "Intellectual Property Rights") of the Company. To
the best  knowledge of the Company,  the  ownership or use of such  Intellectual
Property  Rights by the Company does not infringe on the  intellectual  property
rights of others and the  Company  has not  received  notice  alleging  any such
infringement,  and,  to the best  knowledge  of the  Company,  no third party is
infringing on the  Intellectual  Property Rights of the Company.  The Company is
not  obligated  to pay any  third  party any  royalty  or fee for the use of the
Intellectual Property Rights used in its business.

         3.12.  AGREEMENTS,  ETC. The Company  Disclosure  Schedule sets forth a
true and complete list of all written or oral  contracts,  agreements  and other
instruments to which the Company is a party and not made in the ordinary  course
of  business,  or made in the  ordinary  course of business  and  referred to in
clauses (a) through (i) of this Section 3.12:

         (a)  any joint venture, partnership or other agreement or
arrangement for the sharing of profits;

         (b) any  collective  bargaining  contract  or  other  contract  with or
commitment to any labor union;

         (c)  the  future  purchase,  sale or  license  of  products,  material,
supplies,  equipment or services requiring payments to or from the Company in an
amount  in  excess  of  $25,000  per  annum,  which  agreement,  arrangement  or
understanding  is not  terminable  on thirty (30) days'  notice  without cost or
other  liability  at or at any time after the  Effective  Time,  or in which the
Company has granted or  received  manufacturing  rights,  most  favored  nations
pricing  provisions  or  exclusive  marketing  or other  rights  relating to any
product, group of products, services, technology, assets or territory;

         (d) the employment of any officer, employee, consultant or agent or any
other type of contract,  commitment or understanding with any officer, employee,
consultant or agent which (except as otherwise  generally provided by applicable
law) is not immediately  terminable without cost or other liability at or at any
time after the Effective Time;

         (e) an indenture,  mortgage, promissory note, loan agreement, guarantee
or other  agreement or  commitment  for the  borrowing  of money,  for a line of
credit or, if involving  payments in excess of $25,000 per annum,  for a leasing
transaction of a type required to be capitalized in accordance with Statement of
Financial  Accounting  Standards  No. 13 of the Financial  Accounting  Standards
Board;

         (f) a contract or commitment for capital  expenditures  individually in
excess of $25,000;

         (g) any  agreement or contract  with a  "disqualified  individual"  (as
defined in Section 280G(c) of the Code), which could result in a disallowance of
the  deduction  for any  "excess  parachute  payment"  (as  defined  in  Section
280G(b)(i) of the Code) under Section 280G of the Code;

         (h) an agreement or arrangement for the sale of any assets,  properties
or rights having a value in excess of $25,000; or

         (i) an  agreement  which  restricts  the Company  from  engaging in any
aspect of its business or  competing  in any line of business in any  geographic
area.

         The Company has  furnished  to Parent true and  complete  copies of all
such  agreements  listed  in the  Company  Disclosure  Schedule  and  each  such
agreement: (i) is the legal, valid and binding obligation of the Company and, to
the best knowledge of the Company,  the legal,  valid and binding  obligation of
each other party thereto, in each case enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting the  enforcement of
creditors' rights generally and general equitable  principles;  (ii) to the best
knowledge  of the  Company  is in full force and  effect;  and (iii) to the best
knowledge  of the Company,  the other party or parties  thereto is or are not in
material default thereunder.

         3.13.  NO  DEFAULTS,  ETC.  The  Company has in all  material  respects
performed all the obligations  required to be performed by it to date and is not
in material  default or, to the best knowledge of the Company,  alleged to be in
material  default under:  (a) its  Certificate  or by-laws;  or (b) any material
agreement,  lease, contract,  commitment,  instrument or obligation to which the
Company  is a party or by which any of its  properties,  assets or rights are or
may be bound or  affected,  and, to the best  knowledge  of the  Company,  there
exists no event,  condition or occurrence  which,  with or without due notice or
lapse of time,  or both,  would  constitute  such a default  by it of any of the
foregoing.  To the best  knowledge  of the  Company,  no  current  customer  has
notified,  or expressed an intention to notify,  the Company that such  customer
will materially reduce the dollar amount of business it will do with the Company
or cease  doing  business  with  the  Company  under  circumstances  where  such
notification or intention has been reported to an officer of the Company.

         3.14.  LITIGATION,  ETC.  There are no:  (a)  actions,  suits,  claims,
investigations   or  legal  or   administrative   or   arbitration   proceedings
(collectively,  "Actions")  pending,  or to the best  knowledge  of the Company,
threatened against the Company, whether at law or in equity, or before or by any
Federal,  state,  municipal,  foreign or other governmental  court,  department,
commission, board, bureau, agency or instrumentality ("Governmental Authority");
(b) judgments,  decrees,  injunctions or orders of any Governmental Authority or
arbitrator  against the  Company;  or (c) to the best  knowledge of the Company,
material  disputes with customers or vendors,  in each case, except for any such
matter which would not have a material adverse effect on the Company.

         3.15. COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS. To the best knowledge of
the  Company,  the  Company has  complied  within the last five (5) years and is
presently in  compliance  in all material  respects  with all material  Federal,
state, local or foreign laws,  ordinances,  regulations and orders applicable to
it  or  its  business,   including,   without  limitation,  the  Food  and  Drug
Administration  of the United  States  Department  of Health and Human  Services
("FDA"),  all Federal and state  securities  or "blue sky" laws and all laws and
regulations  relating to occupational safety and health and the environment.  To
the best knowledge of the Company, the Company has all material Federal,  state,
local and foreign governmental  authorizations,  security clearances,  consents,
approvals,  licenses  and permits  necessary  in the conduct of its  business as
presently   conducted  and  as  currently   proposed  to  be   conducted,   such
authorizations,  consents, approvals, licenses and permits are in full force and
effect,  no  material  violations  are or have been  recorded  in respect of any
thereof and no proceeding  is pending or, to the best  knowledge of the Company,
threatened to revoke or limit any thereof. To the best knowledge of the Company,
all of the Company's full-time and temporary personnel who provide services in a
manner or of the type that require  specific  certifications  or clearances have
provided  such  services  at all  times  while  having  such  certifications  or
clearances  in full force and  effect.  Neither  the  Company  nor,  to the best
knowledge of the Company,  any of its full-time or part-time  personnel has been
cited or alleged by the FDA or other  regulatory  authority within the last five
(5) years as failing to comply with regulatory requirements or guidelines in the
performance of services.

         3.16. LABOR RELATIONS;  EMPLOYEES. The Company Disclosure Schedule sets
forth the number of  full-time  and  part-time  employees of the Company and the
primary  locations at which such employees provide their services as of November
30,  1997.  To the  best  knowledge  of the  Company:  (a)  the  Company  is not
delinquent  in  payments  to any of  its  employees  for  any  wages,  salaries,
commissions,  bonuses or other direct compensation for any services performed by
them to  date or  amounts  required  to be  reimbursed  to such  employees;  (b)
Acquisition  Sub nor the Surviving  Corporation  will by reason of anything done
prior to the Closing be liable to any of such employees for severance pay or any
other payments;  (c) the Company is in compliance in all material  respects with
all material Federal,  state, local and foreign laws and regulations  respecting
labor,  employment and employment practices,  terms and conditions of employment
and  wages  and  hours;  and (d)  there  is no  unfair  labor  practice,  sexual
harassment  or  other  employment-related  complaint  pending  or,  to the  best
knowledge of the Company,  threatened against the Company or any employee of the
Company.  To the best knowledge of the Company, no employee of the Company is in
material  violation  of any  term of any  employment  contract,  confidentiality
agreement or any other  contract or agreement  relating to the  relationship  of
such  employee  with the Company or any other party because of the nature of the
business  conducted or proposed to be conducted by the Company or the  execution
and delivery of such agreement or contract by such employee.

         3.17.  EMPLOYEE BENEFIT PLANS AND CONTRACTS.

         (a) The Company Disclosure  Schedule  identifies each "employee benefit
plan," as defined in Section 1002(3) of the Employee  Retirement Income Security
Act of 1974,  as amended  ("ERISA"),  and all other  material  written or formal
plans or agreements  involving  direct or indirect  compensation  (including any
employment  agreements  entered into between the Company and any Employee of the
Company, but excluding workers' compensation,  unemployment compensation,  other
government-mandated  programs and the  Company's  salary and wage  arrangements)
currently  or  previously  maintained,  contributed  to or  entered  into by the
Company or any ERISA Affiliate thereof for the benefit of any Employee or former
Employee under which the Company or any ERISA Affiliate  thereof has any present
or future  obligation  or  liability  (the  "Employee  Plans").  The Company has
provided to Parent  true and  complete  copies of all  Employee  Plans (and,  if
applicable,  related trust  agreements)  and all amendments  thereto and written
interpretations  thereof.  For  purposes  of  the  preceding  sentence,   "ERISA
Affiliate" shall mean any entity which is a member of (A) a "controlled group of
corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under  "common  control,"  as defined  in  Section  414(c) of the Code or (C) an
"affiliated service group," as defined in Section 414(m) of the Code or treasury
regulations  promulgated under Section 414(o) of the Code, any of which includes
the  Company.  Any  Employee  Plans which  individually  or  collectively  would
constitute  an "employee  pension  benefit  plan," as defined in Section 3(2) of
ERISA,  but  which  are not  Multiemployer  Plans  (collectively,  the  "Pension
Plans"), are identified as such in the Company Disclosure Schedule. For purposes
of this Section 3.17 and Section 4.17, "Employee" means any common law employee,
consultant  or director  as to Section  3.17 of the  Company,  and as to Section
4.17, Parent.

         (b) Each Employee  Plan that is intended to be qualified  under Section
401(a) of the Code is so qualified  and has been so qualified  during the period
from its adoption to the date hereof,  and each trust  forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. The Company has provided
Parent with copies of the most recent  Internal  Revenue  Service  determination
letters with respect to any such  Employee  Plans.  Each  Employee Plan has been
maintained  substantially in compliance with its terms and with the requirements
prescribed by any and all statutes,  orders,  rules and regulations,  including,
without  limitation,  ERISA and the Code,  which are applicable to such Employee
Plans.

         (c) No Employee  Plan  constitutes  or since the enactment of ERISA has
constituted  a  "multiemployer  plan," as defined  in Section  3(37) of ERISA (a
"Multiemployer  Plan").  The  Company  has not  within  the past  five (5) years
incurred any material  liability  under Title IV of ERISA  arising in connection
with the  termination of any Pension Plan or the complete or partial  withdrawal
from any Multiemployer  Plan. If a "complete  withdrawal" by the Company were to
occur as of the Closing with  respect to all  Multiemployer  Plans,  the Company
would not incur any withdrawal liability under Title IV of ERISA.

         (d) The Company Disclosure Schedule lists each employment, severance or
other  similar  contract,  arrangement  or policy  and each plan or  arrangement
(written or oral) providing for insurance coverage
(including any self-insured arrangements), workers' benefits, vacation benefits,
retirement  benefits,  deferred  compensation,  profit-sharing,  bonuses,  stock
options,  stock  appreciation  or  other  forms  of  incentive  compensation  or
post-retirement  insurance,  compensation  or  benefits  which:  (i)  is  not an
Employee Plan;  (ii) is entered into,  maintained or contributed to, as the case
may be, by the Company;  (iii) covers any Employee or former Employee;  and (iv)
under  which the  Company  has any  present or future  obligation  or  liability
(excluding   workers'   compensation,   unemployment   compensation   or   other
government-mandated  programs and the Company's  salary and wage  arrangements).
Such  contracts,  plans and  arrangements as are described above are hereinafter
referred to collectively as the "Benefit Arrangements". Each Benefit Arrangement
has been  maintained  in  substantial  compliance  with its  terms  and with the
requirements  prescribed  by  any  and  all  material  laws,  statutes,   rules,
regulations,   orders  and  judgments  which  are  applicable  to  such  Benefit
Arrangements.

         (e) The Company has provided,  or will have  provided,  to  individuals
entitled thereto who are current or former Employees of the Company all required
notices within the applicable time period and coverage pursuant to Section 4980B
of the Code with  respect  to any  "qualifying  event"  (as  defined  in Section
4980B(f)(3) of the Code)  occurring prior to and including the Closing Date, and
no tax payable on account of Section  4980B of the Code has been  incurred  with
respect to any current or former Employees of the Company.

         3.18.  CERTAIN  AGREEMENTS.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will: (a)
result in any payment (including,  without limitation,  severance,  unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of the Company from the Company,  under any Employee  Plan,  Benefit
Arrangement or otherwise; (b) materially increase any benefits otherwise payable
under  any  Employee  Plan or the  Benefit  Arrangement;  or (c)  result  in the
acceleration of the time of payment or vesting of any such benefits.

         3.19.  INSURANCE.  The Company maintains policies of liability,  theft,
fidelity,  fire, product liability,  workmen's compensation,  indemnification of
directors  and  officers  and other  similar  forms of  insurance.  The  Company
Disclosure  Schedule sets forth a history of all claims within the last five (5)
years in  excess  of  $50,000  made by the  Company  thereunder  and the  status
thereof.  All such  policies of  insurance  are in full force and effect and all
premiums with respect  thereto are currently  paid and, to the best knowledge of
the Company,  no basis exists for  termination of any thereof on the part of the
insurer. The amounts of coverage under such policies conform to the requirements
set forth in the Company's customer  contracts.  The Company has not, during the
last three fiscal  years,  been denied or had revoked or rescinded any policy of
insurance.

         3.20.  BROKERS.  The  Company  has not,  nor have any of its  officers,
directors,  stockholders or employees, employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions  contemplated by this Agreement, the Plan of Merger or any
of the Related Agreements.

         3.21.  RELATED TRANSACTIONS.  Except for compensation to regular
employees of the Company, no current or former director, officer or
stockholder  that is an affiliate of the Company or any associate (as defined in
the rules  promulgated  under the  Exchange  Act)  thereof,  is now, or has been
during the last five (5) fiscal years:  (a) a party to any transaction  with the
Company  (including,  but not  limited  to,  any  contract,  agreement  or other
arrangement  providing  for the  furnishing of services by, or rental of real or
personal property from, or borrowing money from, or otherwise requiring payments
to, any such  director,  officer or  affiliated  stockholder  of the  Company or
associate  thereof);  or (b) the direct or indirect  owner of an interest in any
corporation,  firm,  association or business  organization which is a present or
potential   competitor,   supplier  or  customer  of  the  Company  (other  than
non-affiliated  holdings in publicly-held  companies),  nor does any such person
receive  income  from any source  other than the  Company  which  relates to the
business of, or should properly accrue to, the Company.

         3.22.  BOARD  APPROVAL.  The  Board of  Directors  of the  Company  has
unanimously:  (a) approved  this  Agreement,  the Plan of Merger and each of the
Related  Agreements  to  which  the  Company  is a party  and  the  transactions
contemplated  hereby and thereby;  (b) determined that the Merger is in the best
interests  of the  Stockholders  of the  Company  and,  subject  to receipt of a
fairness  opinion,  is on  terms  that are  fair to such  Stockholders;  and (c)
recommended  that  the  Stockholders  of  the  Company  approve  the  Merger  in
accordance  with  the  Plan of  Merger  and the New  Jersey  Statute.  No  other
approvals  are  required   other  than  that  of  the  Board  of  Directors  and
Stockholders of the Company.

         3.23. VOTE REQUIRED.  The affirmative  vote of two-thirds  (2/3) of the
outstanding shares voting of the Company Common Stock approving the Merger, this
Agreement,  the Plan of Merger,  and the  transactions  contemplated  hereby and
thereby  are the only  votes  of the  holders  of any  class  or  series  of the
Company's capital stock necessary to approve this Agreement,  the Plan of Merger
and each of the  Related  Agreements  to which  the  Company  is a party and the
transactions contemplated hereby and thereby.

         3.24.  INFORMATION SUPPLIED.  None of the information supplied or to be
supplied by the Company or any  Stockholder  for inclusion in: (a) the S-4 will,
at the  time  that the S-4 is  filed  with the SEC and at the time  that the S-4
becomes  effective under the Securities Act,  contain 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 not misleading; and (b) the
Stockholders' Materials will, at the dates mailed to the Stockholders and at the
effective  date of the  Stockholder  Action,  contain any untrue  statement of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading.  The Stockholders' Materials will comply as
to form in all material  respects with the  provisions of all  applicable  laws,
rules and regulations of all Governmental Authorities.

         3.25.  COMPANY NOT AN  INTERESTED  STOCKHOLDER.  As of the date of this
Agreement,  neither the Company nor, to the best of the Company's knowledge, any
of its  Affiliates  is an  "Interested  Stockholder"  of  Parent as such term is
defined in Section 203 of the Delaware General Corporation Law.

         3.26.  DISCLOSURE.  No part of Article III of this Agreement (including
the  Company  Disclosure  Schedule)  nor  any  document,   written  information,
statement,  financial  statement,  certificate  or  exhibit  furnished  or to be
furnished  to Parent or  Acquisition  Sub by or on behalf of the  Company or any
Stockholder pursuant hereto or in connection with the transactions  contemplated
hereby,  contains or will  contain any untrue  statement  of a material  fact or
omits  or will  omit to state a  material  fact  necessary  in order to make the
statements or facts contained  herein and therein not misleading in light of the
circumstances under which they were made.

         3.27.  KNOWLEDGE  DEFINITION.  As used in this Agreement,  "to the best
knowledge of the Company"  and like phrases  shall mean and include:  (a) actual
knowledge; and (b) that knowledge which a prudent businessperson  (including the
officers,  directors and other key employees of the Company) would have obtained
in the  management  of his or her business  affairs after making due inquiry and
exercising  reasonable diligence with respect thereto. In connection  therewith,
the knowledge (both actual and  constructive) of any officer,  director or other
key employee of the Company shall be imputed to be the knowledge of the Company.

         3.28.  COMPANY  REFERENCE  INCLUDES COMPANY SUBS. Each reference to the
Company in this Article III shall be deemed to be a reference to the Company and
the Company Sub, unless the context requires otherwise. Accordingly, the Company
Disclosure  Schedule shall include  disclosures with respect to the Company Sub,
as well as the Company,  in response to the  representations  and warranties set
forth in this Article III, as applicable.


                                   ARTICLE IV.

          REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB

         Parent and  Acquisition  Sub,  jointly  and  severally,  represent  and
warrant to the Company that,  except as disclosed in the Parent SEC Documents or
the  disclosure  schedule  dated the date hereof,  certified by the President of
Parent and  delivered by Parent to the Company  simultaneously  herewith  (which
disclosure schedule shall contain specific references to the representations and
warranties  to which the  disclosures  contained  therein  relate)  (the "Parent
Disclosure Schedule"):

         4.1.  ORGANIZATION;  GOOD STANDING;  QUALIFICATION  AND POWER.  Each of
Parent  and  Acquisition  Sub:  (a) is a  corporation  duly  organized,  validly
existing  and in good  standing  under the laws of the State of Delaware and New
Jersey,  respectively;  (b) has all requisite  corporate  power and authority to
own, lease and operate its properties and assets and to carry on its business as
now being  conducted and as currently  proposed to be  conducted,  to enter into
this Agreement,  the Plan of Merger (in the case of Acquisition Sub) and each of
the Related  Agreements to which either is a party,  to perform its  obligations
hereunder and thereunder and to consummate the transactions  contemplated hereby
and thereby; and (c) is duly qualified and in good standing in all jurisdictions
in which the failure to be so qualified and in good standing could reasonably be
expected to have a Material  Adverse  Effect on the Parent or  Acquisition  Sub.
Parent has delivered to the Company true and complete  copies of the Certificate
and by-laws of each of Parent and Acquisition Sub.

         4.2. EQUITY  INVESTMENTS.  Other than Cardiac Control Systems Far East,
Ltd.  ("CCSFE") and  Acquisition  Sub, the Company does not  currently  have any
Subsidiaries,  nor does it currently own any capital stock or other  proprietary
interest,  directly  or  indirectly,  in any  corporation,  association,  trust,
partnership,  joint venture or other entity.  Parent owns 100% of the issued and
outstanding  capital stock of CCSFE, free and clear of all Encumbrances.  Except
for the Parent Options and the Parent Warrants, there are no options,  warrants,
rights,  calls,  commitments  or  agreements of any character to which Parent or
Acquisition  Sub is a party  or by  which  Parent  or  Acquisition  Sub is bound
calling for the issuance of shares of capital stock of Parent or Acquisition Sub
or any  securities  convertible  into or  exercisable  or  exchangeable  for, or
representing the right to purchase or otherwise receive, any such capital stock,
or other arrangement to acquire, at any time or under any circumstance,  capital
stock of Parent or any such other securities of Parent or Acquisition Sub.

         4.3. CAPITAL STOCK; SECURITIES.  The authorized capital stock of Parent
consists of 30,000,000  shares of Parent Common Stock, of which 2,648,739 shares
are  outstanding  as of November 30, 1997.  As of November 30, 1997,  Parent has
reserved (x) 690,965 shares of Parent Common Stock for issuance upon exercise of
outstanding  warrants  (collectively,  the  "Parent  Warrants")  and (y) 413,165
shares of Parent  Common  Stock for issuance  upon the  exercise of  outstanding
options (the "Parent  Options"),  of which 373,356 are vested Parent Options and
39,809 are unvested Parent Options.  Other than the 690,965  outstanding  Parent
Warrants  and the  413,165  outstanding  Parent  Options,  Parent  does not have
outstanding any options to purchase,  or any pre-emptive  rights or other rights
to subscribe for or to purchase, any securities or obligations convertible into,
or any contracts or commitments to issue or sell, shares of its capital stock or
any such options,  rights,  convertible securities or obligations.  There are no
voting trusts,  voting agreements,  proxies,  first refusal rights,  first offer
rights,  co-sale rights,  transfer restrictions (other than restrictions imposed
by  federal  or  state  securities  laws) or other  agreements,  instruments  or
understandings (whether written or oral, formal or informal) with respect to the
voting,  transfer or  disposition  of Parent  Common  Stock to which Parent is a
party or by which it is bound,  or, to the best  knowledge  of Parent,  among or
between any persons other than Parent.  All outstanding  shares of Parent Common
Stock are  validly  issued,  fully paid and  non-assessable  and not  subject to
preemptive  rights.  Parent has duly  authorized  and  reserved for issuance the
Merger Shares,  and, when issued in accordance  with the terms of Article II and
the Plan of Merger,  the Merger  Shares will be validly  issued,  fully paid and
nonassessable  and free of preemptive  rights.  Parent owns all the  outstanding
shares of capital stock of  Acquisition  Sub, and all of such shares are validly
issued, fully paid and nonassessable and not subject to preemptive rights.

         4.4. AUTHORITY; NO CONSENTS. The execution, delivery and performance by
Parent of this  Agreement  and each of the Related  Agreements  to which it is a
party, the execution, delivery and performance of this Agreement and the Plan of
Merger by Acquisition Sub and the consummation of the transactions  contemplated
hereby and thereby have been duly authorized by all necessary  corporate  action
on the part of  Parent  and  Acquisition  Sub.  This  Agreement  and each of the
Related Agreements to which Parent is a party are valid and binding  obligations
of Parent, enforceable against Parent in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium,  or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles; and this Agreement
is, and the Plan of Merger when  executed and delivered by  Acquisition  Sub, as
contemplated  hereby,  will be, the valid and binding obligations of Acquisition
Sub,  enforceable  against  Acquisition Sub in accordance with their  respective
terms,  except as such  enforcement  may be  limited by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium,  or other  similar laws  affecting the
enforcement of creditors'  rights  generally and general  equitable  principles.
Neither the execution,  delivery and performance by Parent of this Agreement and
the Related  Agreements  to which it is a party,  the  execution,  delivery  and
performance of this Agreement and the Plan of Merger by Acquisition Sub, nor the
consummation  of the  transactions  contemplated  hereby or thereby,  will:  (a)
conflict  with; (b) result in any violations of; (c) cause a default under (with
or without  due  notice,  lapse of time or both);  (d) give rise to any right of
termination, amendment, cancellation or acceleration of any obligation contained
in or the loss of any material  benefit under;  or (e) result in the creation of
any  Encumbrance  on or against  any  assets,  rights or  property  of Parent or
Acquisition Sub, as the case may be, under any term,  condition or provision of:
(x) any instrument or agreement to which Parent or  Acquisition  Sub is a party,
or, to the best knowledge of Parent,  by which Parent or Acquisition  Sub or any
of their respective  properties,  assets or rights may be bound (except as shall
have been waived or with respect to which consent shall have been obtained prior
to  the  Closing);  (y)  any  law,  statute,  rule,  regulation,   order,  writ,
injunction, decree, permit, concession, license or franchise of any Governmental
Authority  applicable to Parent or  Acquisition  Sub or any of their  respective
properties,  assets or rights;  or (z) Parent's or Acquisition Sub's Certificate
or by-laws,  as amended through the date hereof.  Except as contemplated by this
Agreement or the Plan of Merger, no permit,  authorization,  consent or approval
of or by, or any notification of or filing with, any  Governmental  Authority is
required in connection with the execution, delivery and performance by Parent or
Acquisition Sub of this Agreement,  the Plan of Merger or the Related Agreements
to which they are party or the  consummation  of the  transactions  contemplated
hereby or thereby,  except  for:  (i) the filing with the SEC of (A) the S-4 and
(B) such  reports and  information  under the  Exchange  Act,  and the rules and
regulations promulgated by the SEC thereunder,  as may be required in connection
with this  Agreement  and the Plan of Merger and the  transactions  contemplated
hereby and thereby; (ii) such filings as may be required by the Over the Counter
Bulletin  Board  Service  with  respect to Parent  Common  Stock to be issued in
connection  with the Merger and the Company  Warrants to be assumed by Parent in
the Merger;  (iii) the filing of such documents  with, and the obtaining of such
orders from,  various state securities and blue-sky  authorities as are required
in connection with the transactions  contemplated hereby; (iv) the filing of the
Plan of Merger with the  Secretary of State of the State of New Jersey;  and (v)
such  other   consents,   waivers,   authorizations,   filings,   approvals  and
registrations  which if not  obtained or made would not have a Material  Adverse
Effect on Parent or materially  impair the ability of Parent or Acquisition  Sub
to consummate the  transactions  contemplated  by this Agreement and the Plan of
Merger, including,  without limitation,  the Merger. 

         4.5. SEC DOCUMENTS. Parent has furnished the Company with a correct and
complete copy of each report,  schedule,  registration  statement and definitive
proxy  statement  filed by Parent  with the SEC on or after  March 31, 1996 (the
"Parent SEC  Documents"),  which are all the documents  (other than  preliminary
material)  that Parent was required to file (or otherwise did file) with the SEC
on or after March 31, 1996. As of their respective dates, none of the Parent SEC
Documents   (including   all  exhibits  and  schedules   thereto  and  documents
incorporated by reference  therein) 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,  and the  Parent  SEC  Documents
complied  when  filed  in  all  material   respects  with  the  then  applicable
requirements  of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations promulgated by the SEC thereunder.

         4.6. FINANCIAL STATEMENTS.  The financial statements of Parent included
in the Parent SEC Documents (the "Parent Financial Statements"): (a) complied as
to  form  in  all  material   respects  with  the  then  applicable   accounting
requirements  and the published  rules and  regulations  of the SEC with respect
thereto, were prepared in accordance with GAAP,  consistently applied (except as
may have been  indicated in the notes  thereto or, in the case of the  unaudited
statements,  as permitted by Form 10-QSB  promulgated  by the SEC);  (b) were in
accordance  with the  books  and  records  of  Parent;  and (c)  fairly  present
(subject, in the case of the unaudited statements, to normal, nonrecurring audit
adjustments) the consolidated  financial position of Parent and its consolidated
subsidiaries  as at the dates  thereof  and the  consolidated  results  of their
operations and cash flows for the periods then ended.

         4.7.  ABSENCE OF  UNDISCLOSED  LIABILITIES.  At September 30, 1997: (a)
Parent had no  Liability  which was not  provided for or disclosed on the Parent
SEC  Documents  for the quarter  period ended for  September  30, 1997;  and (b)
liability reserves established by Parent and set forth thereon were adequate, in
the good faith judgment of Parent, for all such Liabilities at the date thereof.
There were no material  loss  contingencies  (as such term is used in FAS No. 5)
which  were not  adequately  provided  on the  Parent  Financial  Statements  as
required by FAS No. 5.

         4.8.  ABSENCE OF CHANGES.  Since  September  30, 1997,  Parent has been
operated in the ordinary  course,  consistent with past practice,  and there has
not been:

         (a) to the best knowledge of Parent,  any damage,  destruction or loss,
whether  or not  covered  by  insurance,  having or which  could  reasonably  be
expected to have a Material Adverse Effect;

         (b) to the best knowledge of Parent,  any Liability  created,  assumed,
guaranteed  or incurred,  or any material  transaction,  contract or  commitment
entered  into, by Parent,  other than the license,  sale or transfer of Parent's
products to customers in the ordinary course of business;

         (c) any declaration,  setting aside or payment of any dividend or other
distribution of any assets of any kind whatsoever with respect
to any  shares  of the  capital  stock of  Parent,  or any  direct  or  indirect
redemption,  purchase  or other  acquisition  of any such  shares of the capital
stock of Parent;

         (d) any payment,  discharge or satisfaction of any material Encumbrance
or Liability or any  cancellation  by Parent of any material  debts or claims or
any amendment, termination or waiver of any right of material value to Parent;

         (e) any stock split, reverse stock split, combination, reclassification
or  recapitalization  of any Parent Common  Stock,  or any issuance of any other
security in respect of or in exchange for, any shares of Parent Common Stock;

         (f) any  issuance by Parent of any shares of its  capital  stock or any
debt security or securities,  rights,  options or warrants  convertible  into or
exercisable  or  exchangeable  for  any  shares  of its  capital  stock  or debt
security;

         (g) any termination of, or, to the best knowledge of Parent, indication
of an  intention to terminate  or not renew,  any  material  contract,  license,
commitment  or other  agreement  between  Parent  and any other  person,  or the
assignment by Parent of any interest in any contract to which Parent is a party;

         (h) any  material  write-down  or write-up of the value of any asset of
Parent, or any material write-off of any accounts receivable or notes receivable
of Parent or any portion thereof;

         (i) any increase in or  modification or acceleration of compensation or
benefits  payable or to become payable to any officer,  employee,  consultant or
agent of Parent other than in the ordinary  course,  or the entering into of any
employment contract with any officer or employee;

         (j) the  making of any loan,  advance  or  capital  contribution  to or
investment in any person or the engagement in any transaction with any employee,
officer,  director or stockholder of Parent, other than advances to employees in
the ordinary course of business for travel and similar business expenses;

         (k) any change in the  accounting  methods  or  practices  followed  by
Parent,  or any  change  in  depreciation  or  amortization  policies  or  rates
theretofore adopted by Parent;

         (l) any  termination  of  employment  of any officer or key employee of
Parent or, to the best  knowledge of Parent,  any expression of intention by any
officer or key employee of Parent to terminate  such office or  employment  with
Parent;

         (m) any amendments or changes in Parent's Certificate or by-laws;

         (n) to the best knowledge of Parent, the commencement of any litigation
or other action by or against Parent; or

         (o) any agreement, understanding, authorization or proposal, whether in
writing or otherwise,  for Parent to take any of the actions  specified in items
(a) through (i) above.

         4.9. TAX  MATTERS.  Parent and each other  corporation  included in any
consolidated or combined tax return in which Parent has been included:  (a) have
filed and will file, in a timely and proper manner,  consistent  with applicable
laws,  all Federal,  state and local Tax returns and Tax reports  required to be
filed  by them  through  the  Closing  Date  (the  "Parent  Returns")  with  the
appropriate  governmental  agencies in all jurisdictions in which Parent Returns
are required to be filed and have paid or will pay all amounts  shown thereon to
be due; and (b) have paid and shall  timely pay all Taxes  required to have been
paid on or before  the  Closing  Date.  All Taxes  attributable  to all  taxable
periods ending on or before the Closing Date, to the extent not required to have
been previously paid have been adequately  provided for on the Parent  Financial
Statements  and  Parent  will not  accrue a Tax  liability  from the date of the
Parent  Financial  Statements up to and including the Closing Date, other than a
Tax liability  accrued in the ordinary  course of business.  Parent has not been
notified by the Internal  Revenue Service or any state,  local or foreign taxing
authority  that any issues  have been  raised  (and are  currently  pending)  in
connection  with any Parent  Return,  and no waivers of statutes of  limitations
have been given or requested with respect to Parent. Except as contested in good
faith and disclosed in the Parent Disclosure Schedule, any deficiencies asserted
or  assessments  (including  interest  and  penalties)  made as a result  of any
examination by the Internal  Revenue Service or by any other taxing  authorities
of any Parent Return have been fully paid or are adequately  provided for on the
Parent Financial Statements and no proposed additional Taxes have been asserted.
Parent has not made an  election  to be treated  as a  "consenting  corporation"
under Section 341(f) of the Code nor is it a "personal  holding  company" within
the  meaning  of  Section  542 of the Code.  Parent  has not  agreed  to, nor is
required to make any adjustment  under Section 481(a) of the Code by reason of a
change in accounting method or otherwise.  Parent will not incur a Tax liability
resulting from Parent ceasing to be a member of a consolidated or combined group
that had previously filed consolidated, combined or unitary Tax returns.

         4.10.  TITLE TO ASSETS,  PROPERTIES  AND RIGHTS  AND  RELATED  MATTERS.
Parent has good and marketable title to all assets,  properties and interests in
properties,  real,  personal or mixed,  reflected on the Parent SEC Documents or
acquired after September 30, 1997, except for: (a) those  Encumbrances set forth
in the Parent Disclosure  Schedule;  (b) liens for current taxes not yet due and
payable;  (c)  statutory  mechanics  and  materialmen's  liens;  and (d) utility
easements.

         4.11.  INTELLECTUAL PROPERTY. The Parent Disclosure Schedule sets forth
a list of all Intellectual  Property Rights of Parent.  To the best knowledge of
Parent, the ownership or use of such Intellectual Property Rights by Parent does
not infringe on the  intellectual  property  rights of others and Parent has not
received  notice alleging any such  infringement,  and, to the best knowledge of
Parent,  no third party is infringing  on the  Intellectual  Property  Rights of
Parent.  Parent is not  obligated  to pay any third party any royalty or fee for
the use of the Intellectual Property Rights used in its business.

         4.12.  AGREEMENTS, ETC.  The Parent Disclosure Schedule sets
forth a true and complete list of all written or oral contracts,
agreements and other  instruments to which Parent is a party and not made in the
ordinary  course of  business,  or made in the  ordinary  course of business and
referred to in clauses (a) through (i) of this Section 4.12:

         (a)  any joint venture, partnership or other agreement or
arrangement for the sharing of profits;

         (b) any  collective  bargaining  contract  or  other  contract  with or
commitment to any labor union;

         (c)  the  future  purchase,  sale or  license  of  products,  material,
supplies,  equipment  or  services  requiring  payments  to or from Parent in an
amount  in  excess  of  $25,000  per  annum,  which  agreement,  arrangement  or
understanding  is not  terminable  on thirty (30) days'  notice  without cost or
other  liability at or at any time after the Effective  Time, or in which Parent
has granted or received  manufacturing  rights,  most  favored  nations  pricing
provisions or exclusive marketing or other rights relating to any product, group
of products, services, technology, assets or territory;

         (d) the employment of any officer, employee, consultant or agent or any
other type of contract,  commitment or understanding with any officer, employee,
consultant or agent which (except as otherwise  generally provided by applicable
law) is not immediately  terminable without cost or other liability at or at any
time after the Effective Time;

         (e) an indenture,  mortgage, promissory note, loan agreement, guarantee
or other  agreement or  commitment  for the  borrowing  of money,  for a line of
credit or, if involving  payments in excess of $25,000 per annum,  for a leasing
transaction of a type required to be capitalized in accordance with Statement of
Financial  Accounting  Standards  No. 13 of the Financial  Accounting  Standards
Board;

         (f) a contract or commitment for capital  expenditures  individually in
excess of $25,000;

         (g) any  agreement or contract  with a  "disqualified  individual"  (as
defined in Section 280G(c) of the Code), which could result in a disallowance of
the  deduction  for any  "excess  parachute  payment"  (as  defined  in  Section
280G(b)(i) of the Code) under Section 280G of the Code;

         (h) an agreement or arrangement for the sale of any assets,  properties
or rights having a value in excess of $25,000; or

         (i) an agreement which restricts  Parent from engaging in any aspect of
its business or competing in any line of business in any geographic area.

         Parent has  furnished to the Company  true and  complete  copies of all
such  agreements  listed  in  the  Parent  Disclosure  Schedule  and  each  such
agreement:  (i) is the legal, valid and binding obligation of Parent and, to the
best knowledge of Parent,  the legal, valid and binding obligation of each other
party thereto,  in each case  enforceable in accordance with its terms except as
such   enforcement  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally and general equitable  principles;  (ii) to the best
knowledge of Parent is in full force and effect; and (iii) to the best knowledge
of Parent,  the other party or parties thereto is or are not in material default
thereunder.

         4.13. NO DEFAULTS,  ETC. Parent has in all material respects  performed
all  the  obligations  required  to be  performed  by it to  date  and is not in
material default or, to the best knowledge of Parent,  alleged to be in material
default under:  (a) its Certificate or by-laws;  or (b) any material  agreement,
lease, contract, commitment, instrument or obligation to which Parent is a party
or by which  any of its  properties,  assets  or  rights  are or may be bound or
affected, and, to the best knowledge of Parent, there exists no event, condition
or occurrence which, with or without due notice or lapse of time, or both, would
constitute  such a default by it of any of the foregoing.  To the best knowledge
of Parent, no current customer has notified, or expressed an intention to notify
Parent that such customer will  materially  reduce the dollar amount of business
it will do with Parent or cease doing business with Parent.

         4.14.  LITIGATION,  ETC. There are no: (a) Actions  pending,  or to the
best  knowledge  of  Parent,  threatened  against  Parent,  whether at law or in
equity,  or before or by any  Governmental  Authority;  (b) judgments,  decrees,
injunctions or orders of any  Governmental  Authority or arbitrator  against the
Parent;  or (c) to the best  knowledge  of the Parent,  material  disputes  with
customers or vendors,  in each case,  except for any such matter which would not
have a material adverse effect of Parent.

         4.15. COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS. To the best knowledge of
Parent,  Parent has complied  within the last five (5) years and is presently in
compliance in all material respects with all material Federal,  state,  local or
foreign  laws,  ordinances,  regulations  and  orders  applicable  to it or  its
business,  including,  without  limitation,  the  FDA,  all  Federal  and  state
securities  or  "blue  sky"  laws  and all  laws  and  regulations  relating  to
occupational  safety and health and the  environment.  To the best  knowledge of
Parent,  Parent has all material Federal,  state, local and foreign governmental
authorizations,  security clearances,  consents, approvals, licenses and permits
necessary in the conduct of its business as presently conducted and as currently
proposed to be conducted, such authorizations, consents, approvals, licenses and
permits are in full force and effect,  no material  violations  are or have been
recorded in respect of any thereof and no  proceeding is pending or, to the best
knowledge  of Parent,  threatened  to revoke or limit any  thereof.  To the best
knowledge of Parent,  all of Parent's  full-time  and  temporary  personnel  who
provide services in a manner or of the type that require specific certifications
or  clearances  have  provided  such  services  at all times  while  having such
certifications  or clearances in full force and effect.  Neither  Parent nor, to
the best  knowledge of Parent,  any of its full-time or part-time  personnel has
been cited or alleged by the FDA or other  regulatory  authority within the last
five (5) years as failing to comply with  regulatory  requirements or guidelines
in the performance of services.

         4.16. LABOR RELATIONS;  EMPLOYEES.  The Parent Disclosure Schedule sets
forth the number of full-time and part-time  employees of Parent and the primary
locations  at which such  employees  provide  their  services as of November 30,
1997. To the best knowledge of Parent:
(a) Parent is not  delinquent in payments to any of its employees for any wages,
salaries,  commissions,  bonuses or other direct  compensation  for any services
performed  by  them  to  date  or  amounts  required  to be  reimbursed  to such
employees;  (b) Acquisition Sub nor the Surviving  Corporation will by reason of
anything  done  prior to the  Closing  be  liable to any of such  employees  for
severance pay or any other payments; (c) Parent is in compliance in all material
respects  with  all  material  Federal,   state,  local  and  foreign  laws  and
regulations  respecting labor,  employment and employment  practices,  terms and
conditions of employment  and wages and hours;  and (d) there is no unfair labor
practice, sexual harassment or other employment-related complaint pending or, to
the best  knowledge  of Parent,  threatened  against  Parent or any  employee of
Parent.  To the best  knowledge of Parent,  no employee of Parent is in material
violation of any term of any employment contract,  confidentiality  agreement or
any other contract or agreement  relating to the  relationship  of such employee
with Parent or any other party  because of the nature of the business  conducted
or proposed to be  conducted  by Parent or the  execution  and  delivery of such
agreement or contract by such employee.

         4.17.  EMPLOYEE BENEFIT PLANS AND CONTRACTS

         (a) The Parent  Disclosure  Schedule  identifies each "employee benefit
plan," as defined in Section 1002(3) of ERISA, and all other material written or
formal plans or agreements involving direct or indirect compensation  (including
any  employment  agreements  entered  into  between  Parent and any  Employee of
Parent, but excluding workers' compensation,  unemployment  compensation,  other
government-mandated   programs  and  Parent's  salary  and  wage   arrangements)
currently or previously maintained,  contributed to or entered into by Parent or
any ERISA  Affiliate  thereof for the benefit of any Employee or former Employee
under  which  Parent or any ERISA  Affiliate  thereof  has any present or future
obligation  or  liability  (the  "Employee  Plans").  Parent has provided to the
Company true and  complete  copies of all Employee  Plans (and,  if  applicable,
related trust agreements) and all amendments thereto and written interpretations
thereof.  For purposes of the preceding  sentence,  "ERISA Affiliate" shall mean
any entity which is a member of (A) a  "controlled  group of  corporations,"  as
defined in Section  414(b) of the Code,  (B) a group of entities  under  "common
control," as defined in Section 414(c) of the Code or (C) an "affiliated service
group,"  as  defined  in  Section  414(m)  of the Code or  treasury  regulations
promulgated under Section 414(o) of the Code, any of which includes Parent.  Any
Employee Plans which  individually or collectively would constitute an "employee
pension  benefit  plan," as defined in Section 3(2) of ERISA,  but which are not
Multiemployer Plans (collectively,  the "Pension Plans"), are identified as such
in the Parent Disclosure Schedule.

         (b) Each Employee  Plan that is intended to be qualified  under Section
401(a) of the Code is so qualified  and has been so qualified  during the period
from its adoption to the date hereof,  and each trust  forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code.  Parent has provided the
Company with copies of the most recent Internal  Revenue  Service  determination
letters with respect to any such  Employee  Plans.  Each  Employee Plan has been
maintained  substantially in compliance with its terms and with the requirements
prescribed by any and all statutes,  orders,  rules and regulations,  including,
without  limitation,  ERISA and the Code,  which are applicable to such Employee
Plans.

         (c) No Employee  Plan  constitutes  or since the enactment of ERISA has
constituted  a  "multiemployer  plan," as defined  in Section  3(37) of ERISA (a
"Multiemployer  Plan").  Parent has not within the past five (5) years  incurred
any material  liability  under Title IV of ERISA arising in connection  with the
termination of any Pension Plan or the complete or partial  withdrawal  from any
Multiemployer Plan. If a "complete withdrawal" by Parent were to occur as of the
Closing  with  respect to all  Multiemployer  Plans,  Parent would not incur any
withdrawal liability under Title IV of ERISA.

         (d) The Parent Disclosure Schedule lists each employment,  severance or
other  similar  contract,  arrangement  or policy  and each plan or  arrangement
(written or oral) providing for insurance  coverage  (including any self-insured
arrangements),   workers'  benefits,  vacation  benefits,  retirement  benefits,
deferred   compensation,   profit-sharing,   bonuses,   stock   options,   stock
appreciation  or  other  forms  of  incentive  compensation  or  post-retirement
insurance,  compensation or benefits which: (i) is not an Employee Plan; (ii) is
entered into, maintained or contributed to, as the case may be, by Parent; (iii)
covers any  Employee or former  Employee;  and (iv) under  which  Parent has any
present or future  obligation  or liability  (excluding  workers'  compensation,
unemployment  compensation  or other  government-mandated  programs and Parent's
salary and wage  arrangements).  Such contracts,  plans and  arrangements as are
described  above  are  hereinafter  referred  to  collectively  as the  "Benefit
Arrangements".  Each Benefit  Arrangement  has been  maintained  in  substantial
compliance  with its terms and with the  requirements  prescribed by any and all
material laws,  statutes,  rules,  regulations,  orders and judgments  which are
applicable to such Benefit Arrangements.

         (e) Parent has provided, or will have provided, to individuals entitled
thereto  who are  current or former  Employees  of Parent all  required  notices
within the applicable time period and coverage  pursuant to Section 4980B of the
Code with respect to any "qualifying  event" (as defined in Section  4980B(f)(3)
of the Code)  occurring  prior to and  including  the Closing  Date,  and no tax
payable on account of Section  4980B of the Code has been  incurred with respect
to any current or former Employees of Parent.

         4.18.  CERTAIN  AGREEMENTS.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will: (a)
result in any payment (including,  without limitation,  severance,  unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of Parent from Parent,  under any Employee Plan, Benefit Arrangement
or otherwise;  (b) materially  increase any benefits otherwise payable under any
Employee Plan or the Benefit  Arrangement;  or (c) result in the acceleration of
the time of payment or vesting of any such benefits.

         4.19.  INSURANCE.   Parent  maintains  policies  of  liability,  theft,
fidelity,  fire, product liability,  workmen's compensation,  indemnification of
directors  and  officers  and  other  similar  forms of  insurance.  The  Parent
Disclosure  Schedule sets forth a history of all claims within the last five (5)
years in excess of $50,000 made by Parent thereunder and the status thereof. All
such  policies of insurance  are in full force and effect and all premiums  with
respect  thereto are  currently  paid and, to the best  knowledge of Parent,  no
basis exists for termination of any thereof on the part of the
insurer. The amounts of coverage under such policies conform to the requirements
set forth in the Parent's  customer  contracts.  Parent has not, during the last
three  fiscal  years,  been  denied or had  revoked or  rescinded  any policy of
insurance.

         4.20.  BROKERS.  Neither  Parent,  Acquisition  Sub,  nor any of  their
respective  officers,  directors or employees have employed any broker or finder
or incurred any liability for any brokerage  fees,  commissions or finders' fees
in connection with the transactions  contemplated by this Agreement, the Plan of
Merger or any of the Related Agreements.

         4.21.  RELATED   TRANSACTIONS.   Except  for  compensation  to  regular
employees of Parent, no current or former director,  officer or stockholder that
is an affiliate of Parent or any associate (as defined in the rules  promulgated
under the Exchange  Act)  thereof,  is now, or has been during the last five (5)
fiscal years:  (a) a party to any transaction  with Parent  (including,  but not
limited to, any  contract,  agreement  or other  arrangement  providing  for the
furnishing  of services  by, or rental of real or  personal  property  from,  or
borrowing  money from, or otherwise  requiring  payments to, any such  director,
officer or affiliated  stockholder of Parent or associate  thereof);  or (b) the
direct or indirect owner of an interest in any corporation, firm, association or
business  organization which is a present or potential  competitor,  supplier or
customer  of  Parent  (other  than  non-affiliated   holdings  in  publicly-held
companies),  nor does any such person  receive income from any source other than
Parent which relates to the business of, or should properly accrue to Parent.

         4.22. BOARD APPROVAL.  The Board of Directors of Parent and Acquisition
Sub have:  (a)  approved  this  Agreement,  the Plan of  Merger  and each of the
Related Agreements to which either is a party and the transactions  contemplated
hereby and thereby;  (b) determined  that the Merger is in the best interests of
the  stockholders of Parent and Acquisition Sub and is on terms that are fair to
such stockholders;  and (c) recommended that the stockholders of Acquisition Sub
approve  the  Merger in  accordance  with the Plan of Merger  and the New Jersey
statute.  No other  approvals  are  required  other  than  that of the  Board of
Directors of Parent and the Board of Directors and  stockholder  of  Acquisition
Sub.

         4.23.  INFORMATION SUPPLIED.  None of the information supplied or to be
supplied  by  Parent  or  Acquisition  Sub for  inclusion  or  incorporation  by
reference in the S-4 will,  at the time the S-4 is filed with the SEC and at the
time the S-4 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  in  order  to make the  statements  therein  not
misleading.

         4.24.  ACQUISITION SUB.  Acquisition Sub is a newly formed wholly-owned
subsidiary  of Parent,  currently  is not and has not  engaged in  business  and
currently has no assets or liabilities of a material nature.

         4.25.  DISCLOSURE.  No part of  Article  IV of this  Agreement  nor any
document, written information,  statement,  financial statement,  certificate or
exhibit furnished or to be furnished to the Company by or on behalf of Parent or
Acquisition  Sub  pursuant  hereto  or  in  connection  with  the   transactions
contemplated hereby contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material  fact  necessary  in order to make the  statements  or facts  contained
herein and therein not misleading in light of the circumstances under which they
were made.

         4.26.  KNOWLEDGE  DEFINITION.  As used in this Agreement,  "to the best
knowledge  of  Parent"  and like  phrases  shall  mean and  include:  (a) actual
knowledge; and (b) that knowledge which a prudent businessperson  (including the
officers,  directors  and other key  employees of Parent) would have obtained in
the  management  of his or her  business  affairs  after  making due inquiry and
exercising  reasonable diligence with respect thereto. In connection  therewith,
the knowledge (both actual and  constructive) of any officer,  director or other
key employee of Parent shall be imputed to be the knowledge of Parent.

         4.27. PARENT REFERENCE INCLUDES CCSFE. Each reference to Parent in this
Article IV shall be deemed to be a  reference  to Parent  and CCSFE,  unless the
context requires  otherwise.  Accordingly,  the Parent Disclosure Schedule shall
include disclosures with respect to CCSFE, as well as Parent, in response to the
representations and warranties set forth in this Article IV, as applicable.


                                   ARTICLE V.

                               RELATED AGREEMENTS

         5.1.  VOTING  AGREEMENT.  The T Partnership,  LLP, a New Jersey limited
liability  partnership ("The T Partnership") shall enter into a Voting Agreement
and  Irrevocable  Proxy with  Parent and the  Company in the form of Exhibit 5.1
attached hereto (the "Voting  Agreement"),  providing,  among other things, that
such Stockholder  shall vote in favor of or consent in writing to the Merger and
shall not  transfer its shares of Company  Common  Stock prior to the  Effective
Date (as defined therein).

         5.2.  AFFILIATE  AGREEMENTS.  The Company shall use its best efforts to
cause each of the persons  (within the meaning of Rule 145) who or which are, in
Parent's  reasonable  judgment on the date hereof,  "affiliates"  of the Company
within the meaning of Rule 145 of the rules and  regulations  promulgated by the
SEC under the Securities Act ("Rule 145") and identified as such on Schedule 5.2
attached hereto (each such person, together with the persons identified pursuant
to Section 6.16 hereof after the date hereof, a "Rule 145 Affiliate"), to, on or
prior to the date of  filing  of the S-4 with  the  SEC,  enter  into a  Company
Affiliate   Agreement   with  Parent,   effective  as  of  the  Effective   Time
(collectively,  the  "Company  Affiliate  Agreements;  together  with the Voting
Agreement,  the  "Related  Agreements"),  in the form of  Exhibit  5.2  attached
hereto;  providing,  among other things, that such persons shall receive certain
registration  rights,  and not  transfer  their  shares of Company  Common Stock
following  the Effective  Time,  except as provided  therein.  The Company shall
provide Parent such information and documents as Parent shall reasonably request
for  purposes of creating  Schedule  5.2.  Parent and  Acquisition  Sub shall be
entitled to place legends on the certificates evidencing any Parent Common Stock
to be  received  by each  Rule  145  Affiliate  pursuant  to the  terms  of this
Agreement  and the  Plan of  Merger,  and to  issue  appropriate  stop  transfer
instructions to the transfer agent for Parent Common Stock,  consistent with the
terms of the Company Affiliate Agreements,  whether or not the Company Affiliate
Agreements are actually delivered to Parent.


                                   ARTICLE VI.

    CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL AGREEMENTS

         6.1. ACCESS TO RECORDS AND PROPERTIES OF EACH PARTY; CONFIDENTIALITY.

         (a) From and after the date  hereof  until  the  Effective  Time or the
earlier  termination  of this  Agreement  pursuant  to Section  11.1 hereof (the
"Executory Period"),  each Party shall afford: (i) to the officers,  independent
certified public  accountants,  counsel and other  representatives  of the other
Party, free and full access at all reasonable times to all properties, books and
records (including tax returns filed and those in preparation) of such Party, in
order that the other Party and such other persons may have full  opportunity  to
make such investigations as they shall reasonably desire to make of the business
and  affairs  of such  Party;  and  (ii)  to the  independent  certified  public
accountants of the other Party,  free and full access at all reasonable times to
the work papers of the independent  certified public accountants for such Party.
Additionally,  each Party will  permit the other  Party to make such  reasonable
inspections of such Party and its respective  operations  during normal business
hours as the other  Party may  reasonably  require and each Party will cause its
officers to furnish to the other Party and such other persons,  such  additional
financial  and  operating  data and other  information  as to the  business  and
properties  of such Party as the other  Party or such other  persons  shall from
time to time reasonably request. No investigation  pursuant to this Section 6.1,
or made prior to the date hereof,  shall affect or otherwise diminish or obviate
in any respect any of the  representations  and  warranties of any Party made in
this Agreement.  As used in this  Agreement,  except as modified in Section 6.4,
the term  "Party"  shall  mean and refer to the  Company,  on the one hand,  and
Parent and Acquisition Sub, on the other hand.

         (b) Reference is made to the Confidentiality  Agreement dated September
11,  1997,  between the Company and  Parent,  which is hereby  confirmed  by the
parties  hereto and is and shall  remain in full force and effect in  accordance
with its terms,  and each of Parent and  Company  shall  observe and perform its
respective obligations thereunder. Acquisition Sub hereby affirms as if original
signatory to the Confidentiality Agreement referenced above.

         6.2. OPERATION OF BUSINESS OF THE COMPANY. During the Executory Period,
the Company will operate its business as now operated and only in the normal and
ordinary course and,  consistent with such operation,  will use its best efforts
to preserve  intact its present  business  organization,  to keep  available the
services  of  its  officers   and   employees   and  to  maintain   satisfactory
relationships with licensors,  franchisees,  licensees, suppliers,  contractors,
distributors,  customers and other  persons  having  business  dealings with it.
Without limiting the generality of the foregoing,  during the Executory  Period,
the Company shall not,  without the prior written  consent of Parent,  except as
legally  required and as required  under Section 7.7 or 7.8: (a) take any action
that would result in any of the  representations  and  warranties of the Company
herein  becoming  untrue or in any of the  conditions  to the  Merger  not being
satisfied;  or (b) take or cause to occur  any of the  actions  or  transactions
described in Section 3.8 hereof.

         6.3. OPERATION OF BUSINESS OF THE PARENT.  During the Executory Period,
Parent will  operate its  business  as now  operated  and only in the normal and
ordinary course and,  consistent with such operation,  will use its best efforts
to preserve  intact its present  business  organization,  to keep  available the
services  of  its  officers   and   employees   and  to  maintain   satisfactory
relationships with licensors,  franchisees,  licensees, suppliers,  contractors,
distributors,  customers and other  persons  having  business  dealings with it.
Without limiting the generality of the foregoing,  during the Executory  Period,
Parent shall not,  without the prior written  consent of the Company,  except as
legally  required and as required  under Section 7.7 or 7.8: (a) take any action
that would result in any of the  representations and warranties of Parent herein
becoming  untrue or in any of the conditions to the Merger not being  satisfied;
or (b) take or cause to occur any of the actions or  transactions  described  in
Section 4.8 hereof.

         6.4.  NEGOTIATION WITH OTHERS.

         (a)  During the  Executory  Period,  neither  Party  (which  solely for
purposes of this  Section  6.4 shall  include  The T  Partnership  or any of its
partners)   shall,   and  neither   Party  shall   permit  any  agent  or  other
representative of such Party to, directly or indirectly:  (i) solicit,  initiate
or engage in discussions or engage in negotiations with any person (whether such
negotiations  are  initiated by the Party or otherwise) or take any other action
to facilitate the efforts of any person, relating to the possible acquisition of
a Party (whether by way of merger, purchase of capital stock, purchase of assets
or otherwise)  or any material  portion of its capital stock or assets (any such
acquisition  being referred to as an  "Acquisition  Transaction");  (ii) provide
information  to  any  person,  other  than  a  Party,  relating  to  a  possible
Acquisition  Transaction;  (iii) enter into an agreement with any person,  other
than a Party, relating to a possible Acquisition Transaction; (iv) consummate an
Acquisition  Transaction  with any  person  other  than a Party or enter into an
agreement  with  any  person,  other  than a  Party,  providing  for a  possible
Acquisition Transaction; or (v) make or authorize any statement,  recommendation
or solicitation in support of any possible Acquisition  Transaction,  unless all
Parties are a party to such Acquisition  Transaction;  provided,  however,  that
nothing contained herein shall prohibit the Board of Directors of the Company or
Parent,   respectively,   from  furnishing  information  to,  or  entering  into
discussions or negotiations with (i) any unaffiliated  third party that makes or
is proposing to make an unsolicited written,  bona fide offer with respect to an
Acquisition  Transaction,  if the Board of  Directors  of the Company or Parent,
respectively,   based  upon  the  written   advice  of  outside  legal  counsel,
respectively,  determines  in good faith that such action is  necessary  for the
Board of  Directors of the Company or Parent,  respectively,  to comply with its
fiduciary duties under applicable law (such unsolicited written, bona fide offer
being referred to herein as a "Superior  Proposal") and prior to furnishing such
information to, or entering into  discussions or negotiations  with, such person
or entity, the Company or Parent provides,  respectively,  written notice to the
other Party, and (ii) such parties who have made proposals,  formal or informal,
which may become a Superior  Proposal as to which  either  Company or Parent has
advised the other, in writing,  prior to the date of this  Agreement.  If either
the  Company or Parent  receives  any  unsolicited  offer or  proposal  to enter
negotiations relating to an Acquisition Transaction, such Party shall notify the
other  Party  thereof,  including  information  as to the  identity of the party
making such offer or proposal and the specific  terms of such offer or proposal,
as the case may be.

         (b) During the Executory  Period,  notwithstanding  anything  contained
herein  to the  contrary,  neither  Party  shall  enter  into or  consummate  an
Acquisition  Transaction with a party other than the other Party unless it shall
have terminated this Agreement pursuant to Section 11.1(h).

         6.5.  PREPARATION  OF S-4;  OTHER  FILINGS.  As promptly as practicable
after the date of this Agreement,  Parent and the Company shall properly prepare
and file with the SEC a  Registration  Statement on Form S-4 with respect to the
Merger  Shares,  the shares of Parent  Common Stock to be issued in exchange for
Vested  Company  Options  and the shares of Parent  Common  Stock  reserved  for
issuance  upon  exercise of the  assumed  Unvested  Company  Options and Company
Warrants  (as to which the  option  or  warrant  holder  is, by the terms of the
Company  option plan or warrant in effect,  entitled upon exercise of the option
or warrant,  to receive  registered stock) (the "S-4"), in which the Stockholder
Statement will be included as a prospectus. Each of Parent and the Company shall
use its best  efforts  to respond to any  comments  of the SEC,  to have the S-4
declared  effective  under the Securities  Act as promptly as practicable  after
such  filing  and  to  cause  the  Stockholder  Statement  to be  mailed  to the
Stockholders at the earliest  practicable time, but in any event within five (5)
Business Days after the S-4 has been declared  effective by the SEC. As promptly
as practicable  after the date of this  Agreement,  Parent and the Company shall
properly prepare and file any other filings required under the Exchange Act, the
Securities  Act or any other  Federal or state laws and  Parent  shall  properly
prepare and file any filings required under state securities or "blue sky" laws,
in each case,  relating to the Merger and the transactions  contemplated by this
Agreement  and the Plan of  Merger  (collectively,  the  "Other  Filings").  The
Company  shall  promptly  furnish  Parent with all  information  concerning  the
Company and the  Stockholders  as may be reasonably  required in connection with
any action  contemplated  by this Section 6.5.  Each Party will notify the other
Party  promptly of the receipt of any comments  from the SEC or its staff and of
any  request  by the SEC or its  staff or any  other  government  officials  for
amendments  or  supplements  to the S-4 or any Other  Filing  or for  additional
information  and will supply the other  Party with copies of all  correspondence
between such Party or any of its representatives,  on the one hand, and the SEC,
or its staff or any other government officials,  on the other hand, with respect
to the S-4, the Merger or any Other Filing.  Each Party shall  promptly  provide
the other Party (or its  counsel)  copies of all filings made by such Party with
any Governmental Authority in connection with this Agreement, the Plan of Merger
and the  transactions  contemplated  hereby and  thereby.  The S-4 and the Other
Filings shall comply in all material  respects with all applicable  requirements
of law.  Whenever  any event occurs which should be set forth in an amendment or
supplement  to the S-4 or any Other Filing,  Parent or the Company,  as the case
may be, shall promptly  inform the other Party of such  occurrence and cooperate
in filing with the SEC or its staff or any other  government  officials,  and/or
mailing to Stockholders of the Company, such amendment or supplement.

         6.6.  ADVICE OF  CHANGES.  The  Company  and Parent  shall  confer on a
regular and frequent  basis with the other,  report on  operational  matters and
promptly  advise  the  other  orally  and in  writing  of any  change,  event or
circumstance  having,  or which,  insofar as can  reasonably be foreseen,  could
have, a Material  Adverse Effect on itself or which could impair  (negatively or
positively) its financial projections or forecasts.

         6.7.  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,
LLP, the Company's independent accountant,  dated a date within two (2) Business
Days before the date on which the S-4 shall become  effective  and  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 S-4 (and, if requested, a
bring-down comfort letter at the closing of the Merger).

         6.8. LETTER OF PARENT'S ACCOUNTANTS.  Parent shall use its best efforts
to cause to be delivered to the Company a letter of BDO Seidman,  LLP,  Parent's
independent public accountants, dated a date within two (2) Business Days before
the date on which the S-4 shall become  effective  and 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 S-4 (and, if requested, a
bring-down comfort letter at the closing of the Merger).

         6.9.  STOCKHOLDERS'  APPROVAL.  The Company  shall:  (a) call a special
meeting of the  Stockholders  (the  "Stockholders'  Meeting") within 20 days (or
such other period as may be required by applicable law) after the S-4 shall have
been declared  effective by the SEC for the purpose of obtaining the approval of
the  Merger,  this  Agreement  and the  Plan  of  Merger  and  the  transactions
contemplated  hereby and thereby (the "Stockholder  Action");  and (b) recommend
(provided  there has been no Superior  Proposal) that the  Stockholders  vote in
favor of the Merger and approve this  Agreement  and the Plan of Merger and take
or cause to be taken all such other  action as may be required by the New Jersey
Statute  and any  other  applicable  law in  connection  with the  Merger,  this
Agreement  and the Plan of Merger,  in each case as  promptly as  possible.  The
Company  shall prepare and  distribute  any written  notice and other  materials
relating to the  Stockholder  Action,  including,  without  limitation,  a proxy
statement (the "Stockholder Statement"),  in accordance with the Certificate and
by-laws of the Company,  the New Jersey  Statute and any other Federal and state
laws relating to the Merger, such Stockholders' Meeting or any other transaction
relating to or contemplated by this Agreement (collectively,  the "Stockholders'
Materials");  provided,  however,  that  Parent and its  counsel  shall have the
opportunity  to review all  Stockholders'  Materials  prior to  delivery  to the
Stockholders,  and all  Stockholders'  Materials  shall be in form and substance
reasonably satisfactory to Parent and its counsel;  provided,  further, however,
that if any event occurs which should be set forth in an amendment or supplement
to any Stockholders' Materials, the Company shall promptly inform Parent thereof
(or, if such event relates solely to Parent,  Parent shall  promptly  inform the
Company  thereof),  and the  Company  shall  promptly  prepare an  amendment  or
supplement in form and substance  satisfactory  to Parent in accordance with the
Certificate  and by-laws of the  Company,  the New Jersey  Statute and any other
Federal or state laws.

         6.10. LEGAL CONDITIONS TO MERGER.  Each Party shall take all reasonable
actions  necessary to comply promptly with all legal  requirements  which may be
imposed on such Party  with  respect to the Merger and will take all  reasonable
action necessary to cooperate with and furnish information to the other Party in
connection  with  any  such  requirements  imposed  upon  such  other  Party  in
connection  with the  Merger.  Each  Party  shall  take all  reasonable  actions
necessary:  (a) to obtain (and will take all  reasonable  actions  necessary  to
promptly   cooperate   with  the  other  Party  in   obtaining)   any   consent,
authorization,  order or  approval  of, or any  exemption  by, any  Governmental
Authority,  or other third party,  required to be obtained or made by such Party
(or by the  other  Party) in  connection  with the  Merger or the  taking of any
action  contemplated  by this  Agreement  or the Plan of Merger;  (b) to defend,
lift, rescind or mitigate the effect of any lawsuit,  order, injunction or other
action  adversely  affecting  the  ability  of  such  Party  to  consummate  the
transactions  contemplated  hereby; and (c) to fulfill all conditions  precedent
applicable to such Party pursuant to this Agreement.

         6.11.  CONSENTS.  Each Party shall use its best efforts,  and the other
Party shall  cooperate  with such efforts,  to obtain any consents and approvals
of, or effect the  notification  of or filing  with,  each person or  authority,
whether private or governmental,  whose consent or approval is required in order
to permit  the  consummation  of the Merger  and the  transactions  contemplated
hereby and to enable  the  Surviving  Corporation  to conduct  and  operate  the
business of the Company  substantially as presently conducted and as proposed to
be conducted.

         6.12. EFFORTS TO CONSUMMATE. Subject to the terms and conditions herein
provided, each of the Parties hereto shall, in good faith, use reasonable effort
to do or cause to be done all such acts and things as may be  necessary,  proper
or advisable, consistent with all applicable laws and regulations, to consummate
and make  effective  the  transactions  contemplated  hereby  and by the Plan of
Merger and to satisfy or cause to be satisfied all conditions precedent that are
applicable  to each such Party that are set forth in this  Agreement  as soon as
reasonably practicable.

         6.13. NOTICE OF PROSPECTIVE BREACH. Each Party hereto shall immediately
notify  the  other  Party in  writing  upon the  occurrence  of any act,  event,
circumstance  or  thing  that is  reasonably  likely  to cause  or  result  in a
representation or warranty hereunder to be untrue at the Closing, the failure of
a closing  condition  to be  achieved  at the  Closing,  or any other  breach or
violation hereof or default hereunder.

         6.14. PUBLIC  ANNOUNCEMENTS.  Each Party hereto agrees that, subject to
public disclosure and other legal and regulatory obligations, none of them shall
issue any report,  statement  or release  pertaining  to this  Agreement  or any
transaction  contemplated hereby, without the prior written consent of the other
Parties.  Each Party further  agrees that no Party shall  unreasonably  withhold
their written consent to the issuance of a public disclosure referred to in this
Section 6.14.

         6.15. AFFILIATES.  Within ten (10) Business Days prior to the effective
date of the Stockholder Action,  Parent and the Company shall amend Schedule 5.2
hereto to add the names and addresses of any other person (within the meaning of
Rule 145) that Parent reasonably  identifies as being a person who may be deemed
to be a Rule 145  Affiliate  of the  Company  within  the  meaning  of Rule 145;
provided,  however,  that no such person  identified by Parent shall be added to
the list of Rule 145  Affiliates of the Company if Parent shall receive from the
Company,  on or before the  Effective  Time,  an  opinion of counsel  reasonably
satisfactory  to  Parent  to the  effect  that  such  person  is not a Rule  145
Affiliate.  The  Company  shall use its best  efforts  to deliver or cause to be
delivered to Parent,  prior to the Effective  Time, from each of such additional
Rule 145 Affiliates a Company Affiliate Agreement.

         6.16.  PREFERRED  STOCK;  SECURED  PROMISSORY  NOTE.  Parent  and The T
Partnership  agree that: (a) the  designation of the Series A Preferred Stock of
the  Surviving  Corporation,  which shall be  convertible  into shares of Parent
Common  Stock,  shall be as set forth in Exhibit 1.4 attached  hereto,  and such
number  of  shares  of  Preferred  Stock  having a  liquidation  value  equal to
$1,000,000  of  the  Company's  indebtedness   outstanding  and  due  to  The  T
Partnership  at the  time of the  Closing  shall  be  issued  in  redemption  of
$1,000,000 of such indebtedness; (b) Parent shall execute a conditional note for
the  benefit  of The T  Partnership  in the form set  forth in  Exhibit  6.16(b)
attached hereto;  and (c) Parent shall execute a secured promissory note for the
remaining   amount  of  the   Company's   indebtedness   to  The  T  Partnership
substantially in the form set forth in Exhibit 6.16(c) attached hereto.


                                  ARTICLE VII.

                CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATIONS

         The obligations of each Party to perform this Agreement and the Plan of
Merger and to consummate the transactions  contemplated  hereby and thereby will
be subject to the satisfaction of the following conditions unless waived (to the
extent such conditions can be waived) by each other Party:

         7.1.  STOCKHOLDER  APPROVAL;  AGREEMENT OF MERGER. This Agreement,  the
Plan of Merger and the Merger  shall have been  approved and adopted by at least
two-thirds  (2/3) of the outstanding  shares voting of Company Common Stock, and
the Plan of Merger shall have been executed and delivered by Acquisition Sub and
the Company and filed with and  accepted by the  Secretary of State of the State
of New Jersey.

         7.2. APPROVALS. All authorizations,  consents,  orders or approvals of,
or  declarations or filings with or expiration of waiting periods imposed by any
Governmental  Authority  necessary  for  the  consummation  of the  transactions
contemplated hereby shall have been obtained or made or shall have occurred.

         7.3.  LEGAL ACTION.  No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the
consummation  of the Merger shall have been issued by any Federal or state court
or other Governmental Authority and remain in effect.

         7.4. S-4. The S-4 shall have become  effective under the Securities Act
and shall not be the  subject  of any stop  order or  proceeding  seeking a stop
order.

         7.5. LEGISLATION.  No Federal, state, local or foreign statute, rule or
regulation  shall have been  enacted  which  prohibits,  restricts or delays the
consummation of the  transactions  contemplated by this Agreement or the Plan of
Merger or any of the conditions to the consummation of such transactions.

         7.6. BID PRICE RATIO.  The ratio of the closing bid price of a share of
Parent Common Stock to a share of Company Common Stock shall not be greater than
2.25 nor less than .75 based on the  average of  closing  bid prices for any ten
(10)  day  period  ending  on  and  including  the  second  NASDAQ  trading  day
immediately  preceding  the Closing Date and rounding the result of such average
to the nearest  1/100ths;  provided,  however,  this  condition  shall be deemed
satisfied if,  notwithstanding  the ratio, the Board of Directors of both Parent
and Company: (i) elect to proceed with the Plan of Merger; and (ii) agree upon a
revised exchange ratio under Section 2.1(c) which reasonably reflects the change
in values having caused the applicable increase or decrease in the ratio.

         7.7.  FINANCING.   A  minimum  of  $7,000,000  in  financing  on  terms
acceptable  to both Parent and the Company shall have been  obtained;  provided,
however, that if Parent's current senior lenders, Sirrom Capital Corporation and
Coast  Business  Credit,  both  agree to remain  creditors  of Parent  after the
Effective  Time,  then a minimum of $4,000,000 must be obtained in addition to a
minimum of $2,500,000 of existing financing.

                                  ARTICLE VIII.

            CONDITIONS TO OBLIGATIONS OF PARENT AND ACQUISITION SUB.

         The  obligations  of Parent to perform this Agreement and to consummate
the  transactions  contemplated  hereby and of  Acquisition  Sub to perform this
Agreement and the Plan of Merger and to consummate the transactions contemplated
hereby  and  thereby  will  be  subject  to the  satisfaction  of the  following
conditions unless waived (to the extent such conditions can be waived) by Parent
and Acquisition Sub:

         8.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company  set forth in Article  III hereof  shall in each case be true and
correct in all material respects (except for any representation or warranty that
by its terms is  qualified  by  materiality,  in which case it shall be true and
correct  in all  respects)  as of the  date  of  this  Agreement,  and as of the
effective  date of the  Stockholder  Action and as of the Closing Date as though
made at and as of such dates, respectively.

         8.2.  PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material  respects the obligations  required to be performed by
it under this  Agreement  and the Plan of Merger  prior to or as of the  Closing
Date.

         8.3.  AUTHORIZATION  OF MERGER.  All action  necessary to authorize the
execution,  delivery and performance of this  Agreement,  the Plan of Merger and
the Related  Agreements by the Company and the  consummation of the transactions
contemplated  hereby and thereby  shall have been duly and validly  taken by the
board of directors  and the  Stockholders  of the Company,  and the Parent shall
have received copies of all such  resolutions  certified by the Secretary of the
Company.  The Company and the  Stockholders of the Company shall have full power
and right to effect the Merger on the terms provided herein.

         8.4.  CERTIFICATE.  Parent and  Acquisition  Sub shall have  received a
certificate  dated the Closing Date, signed by the President or Acting President
of the Company as to the  satisfaction  of the conditions  contained in Sections
8.1 through 8.3, except to the extent waived by Parent and Acquisition Sub.

         8.5. OPINION OF THE COMPANY'S COUNSEL. Parent and Acquisition Sub shall
have  received an opinion  dated the Closing Date of Saiber  Schlesinger  Satz &
Goldstein ("SSS&G"), counsel to the Company, reasonably satisfactory in form and
substance to Parent and Acquisition Sub.

         8.6.  ACCEPTANCE BY COUNSEL TO PARENT AND ACQUISITION SUB. The form and
substance of all legal matters  contemplated  hereby and of all papers delivered
hereunder  shall be reasonably  acceptable to Greenberg  Traurig  Hoffman Lipoff
Rosen & Quentel, P.A. ("GTH"), counsel for Parent and Acquisition Sub.

         8.7.  CONSENTS AND  APPROVALS.  Parent and  Acquisition  Sub shall have
received duly executed copies of all consents and approvals contemplated by this
Agreement or the Company Disclosure Schedule, in form and substance satisfactory
to Parent and Acquisition Sub.

         8.8.   GOVERNMENT   CONSENTS,   AUTHORIZATIONS,   ETC.  All   consents,
authorizations,  orders or approvals of, and filings or registrations  with, any
Governmental  Authority  which  are  required  for  or in  connection  with  the
execution and delivery by the Company of this Agreement,  the Plan of Merger and
the Related  Agreements and the  consummation by the Company of the transactions
contemplated hereby and thereby shall have been obtained or made.

         8.9.  RELATED  AGREEMENTS.  Each of the Related  Agreements shall be in
full force and effect as of the Effective Time in accordance with the respective
terms  thereof,  and  each  person  or  entity  who  or  which  is  required  or
contemplated by the parties hereto to be a party to any Related Agreement who or
which did not  theretofore  enter into such Related  Agreement shall execute and
deliver such Related Agreement.

                                   ARTICLE IX.

                    CONDITIONS TO OBLIGATIONS OF THE COMPANY.

         The  obligations  of the Company to perform this Agreement and the Plan
of Merger,  and to consummate the transactions  contemplated  hereby and thereby
will be subject to the  satisfaction of the following  conditions  unless waived
(to the extent such conditions can be waived) by the Company:

         9.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Parent and  Acquisition  Sub set forth in Article IV hereof shall be true and
correct in all material respects (except for any representation or warranty that
by its terms is  qualified  by  materiality,  in which case it shall be true and
correct in all respects) as of the date of this Agreement, and as of the Closing
Date as though made at and as of such dates, respectively.

         9.2.  PERFORMANCE OF OBLIGATIONS OF PARENT AND ACQUISITION  SUB. Parent
and  Acquisition  Sub  shall  have  performed  in all  material  respects  their
respective obligations required to be performed by them under this Agreement and
the Plan of Merger prior to or as of the Closing Date.

         9.3.  AUTHORIZATION  OF MERGER.  All action  necessary to authorize the
execution, delivery and performance of this Agreement and the Related Agreements
by Parent,  the  execution,  delivery and  performance of this Agreement and the
Plan of Merger by  Acquisition  Sub, and the  consummation  of the  transactions
contemplated  hereby and by the Plan of Merger  shall have been duly and validly
taken by the board of directors of Parent and  Acquisition  Sub and by Parent as
the sole  stockholder  of  Acquisition  Sub, and the Company shall have received
copies of all such resolutions  certified by the respective  Secretary of Parent
and Acquisition Sub.

         9.4.  CERTIFICATE.  Parent and  Acquisition  Sub shall have  received a
certificate  dated the Closing  Date,  signed by the President of each of Parent
and  Acquisition  Sub as to the  satisfaction  of the  conditions  contained  in
Sections 9.1 through 9.3, except to the extent waived by the Company.

         9.5.  OPINION OF COUNSEL TO PARENT AND  ACQUISITION  SUB.  The  Company
shall  have  received  an  opinion  dated  the  Closing  Date of GTH in form and
substance reasonably satisfactory to the Company.

         9.6. TAX OPINION.  The Company  shall have  received an opinion in form
and substance  satisfactory to the Company or SSSG, counsel for the Company,  to
the effect 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,
Acquisition  Sub and the  Company  will  each be a party to that  reorganization
within the  meaning  of  Section  368(b) of the Code.  In  connection  with such
opinion,  counsel  shall be entitled  to rely upon  certain  representations  of
Parent, Acquisition Sub and the Company and certain stockholders of the Company.

         9.7.  ACCEPTANCE  BY COUNSEL TO THE COMPANY.  The form and substance of
all legal  matters  contemplated  herein and of all papers  delivered  hereunder
shall be reasonably acceptable to SSSG.

         9.8.  CONSENTS AND  APPROVALS.  The Company  shall have  received  duly
executed copies of all consents and approvals  contemplated by this Agreement or
the  Parent  Disclosure  Schedule,  in form and  substance  satisfactory  to the
Company.

         9.9.   GOVERNMENT   CONSENTS,   AUTHORIZATIONS,   ETC.  All   consents,
authorizations,  orders or approvals of, and filings or registrations  with, any
Governmental  Authority  which  are  required  for  or in  connection  with  the
execution and delivery by Parent and  Acquisition  Sub of this Agreement and the
Related  Agreements  and by  Acquisition  Sub of the  Plan  of  Merger  and  the
consummation  by Parent and  Acquisition  Sub of the  transactions  contemplated
hereby and thereby shall have been obtained or made.

         9.10. APPOINTMENT OF DIRECTORS.  The Board of Directors of Parent shall
have  taken such  action as shall be  necessary  to expand the size of  Parent's
Board of Directors and to appoint two (2) individuals  designated by the Company
and reasonably  acceptable to Parent as directors of Parent to serve on Parent's
Board of Directors until the next annual meeting of the  stockholders of Parent.
Parent  shall  continue  to  nominate  such  individuals  at the next  three (3)
successive  annual meetings of the stockholders  immediately  following the next
annual meeting of the  stockholders  in the same manner and on equal standing as
other director nominees comprising management's slate.

         9.11.  FAIRNESS OPINION.  The Company shall have received an opinion of
Compass Capital Partners,  Ltd. or other financial advisor  acceptable to it and
Parent with  respect to the  fairness,  from a financial  point of view,  to the
stockholders of the Company of the Merger, and such opinion shall remain in full
force and effect as of the Closing Date.

         9.12.  DIRECTOR  INDEMNITY.  The Company  shall have received a written
statement  signed  by the  President  of  Parent  that  Parent  will  honor  all
obligations  of the Company  under  Article  VIII of the  Company's  Amended and
Restated Bylaws pertaining to  indemnification of a corporate agent as that term
is  defined  in such  Article;  provided,  however,  such  commitment  to  honor
Company's  indemnification  obligations  shall only be  applicable  to events or
actions on the part of such  corporate  agent  occurring  or taken  prior to the
Closing Date.

         9.13. COMPANY INDEBTEDNESS. Provisions shall have been made for payment
at  Closing  of  indebtedness  of the  Company  which is due at Closing to The T
Partnership  in the  amount of  $100,000,  which  amount may be  increased  upon
agreement of both Parent and the Company,  and SSSG in an additional  amount not
to exceed $160,000.


                                   ARTICLE X.

         10.1.  PAYMENT OF CERTAIN FEES AND EXPENSES.

         (a) Except as set forth below, Parent and the Company shall pay its own
expenses that are incidental to negotiations,  preparation of agreements and the
Closing whether or not this Agreement and the transactions  contemplated  hereby
are actually consummated.

         (b) If this  Agreement is  terminated  by either  Parent or the Company
pursuant to Section 11.1(h), the terminating party shall pay the non-terminating
party within sixty (60) days following  such  termination a fee of $225,000 plus
all  out-of-pocket  expenses  (including,  without  limitation,  all attorneys',
investment   banking  and  commitment   fees  and  expenses)   incurred  by  the
non-terminating  party in connection with the transactions  contemplated by this
Agreement  (the "Break-up  Fee").  The Break-up Fee shall also be payable by the
Company  if  there  exists  a  Superior  Proposal  and,  at any  meeting  of the
stockholders of the Company, however called, or in any action by written consent
of the stockholders of the Company,  The T Partnership does not vote in favor of
the approval and adoption of this Agreement,  the Plan of Merger, the Merger and
the other transactions contemplated thereby (in which case the Break-up Fee will
be paid by the Company to Parent within sixty (60) days  following  such meeting
or action).

         (c) If this  Agreement is  terminated  by either Parent or the Company,
other than pursuant to Section  11.1(h) or  11.1(b)(ii),  Parent and the Company
will split  evenly the  aggregate  of all  attorneys',  investment  banking  and
commitment  fees and  expenses  incurred  by both  parties  in  relation  to the
transaction prior to the date of such termination.


                                   ARTICLE XI.

                 TERMINATION; AMENDMENT, MODIFICATION AND WAIVER

         11.1.  TERMINATION.  This Agreement may be  terminated,  and the Merger
abandoned,  notwithstanding  the  approval  by Parent,  Acquisition  Sub and the
Company of this Agreement, at any time prior to the Effective Time, by:

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

         (b) Parent,  Acquisition Sub or the Company, if: (i) the conditions set
forth in Article VII hereof shall not have been met by April 17, 1998, except if
such  conditions  have not been met solely as a result of the action or inaction
of the party  seeking to  terminate;  or (ii) the other  party or  parties  have
materially breached any material covenant or agreement set forth herein and such
breach  is not cured  (if  curable)  within  15 days  following  written  notice
thereof;

         (c) Parent and  Acquisition  Sub if the conditions set forth in Article
VIII hereof shall not have been met, and the Company if the conditions set forth
in Article IX hereof  shall not have been met, in either case by April 17, 1998,
except if such  conditions have not been met solely as a result of the action or
inaction of the party seeking to terminate;

         (d) Parent and  Acquisition  Sub on the one hand, or the Company on the
other hand, if such party or parties shall have  determined in its or their sole
discretion,  exercised  in good  faith,  that the  Merger  contemplated  by this
Agreement  and the Plan of  Merger  has  become  impracticable  by reason of the
institution  of any  litigation,  proceeding  or  investigation  to  restrain or
prohibit the  consummation  of the Merger,  or which  questions  the validity or
legality of the  transactions  contemplated  by this  Agreement  and the Plan of
Merger;

         (e) Parent and  Acquisition  Sub on the one hand, or the Company on the
other hand, if such party or parties shall have  determined in their or its sole
discretion,  exercised  in good faith,  that the  respective  observations  made
during their due diligence  process  disclosed  information  regarding the other
party  unsatisfactory  to the  party  performing  the due  diligence,  and  such
information  is: (i)  material;  (ii)  adverse;  and (iii) not disclosed in this
Agreement or the other party's Disclosure Schedule.


         (f) Parent and  Acquisition  Sub if any statute,  rule,  regulation  or
other  legislation shall have been enacted which, in the sole judgment of Parent
and  Acquisition  Sub,  exercised  reasonably  and  in  good  faith,  materially
adversely impairs the conduct or operation of the Company as presently conducted
and as contemplated to be conducted;

         (g) the Company if any statute,  rule,  regulation or other legislation
shall have been enacted  which,  in the sole judgment of the Company,  exercised
reasonably  and in good  faith,  materially  adversely  impairs  the  conduct or
operation of Parent's business as presently conducted;

         (h) Parent and  Acquisition  Sub on the one hand, or the Company on the
other hand,  if such parties or party shall have  received a Superior  Proposal,
and Parent's or the Company's Board of Directors,  based upon the written advice
of outside legal counsel,  determines in good faith that accepting such Superior
Proposal is  necessary  for the Board of  Directors  of Parent or the Company to
comply with its fiduciary duties to its stockholders under applicable law;

         (i) Parent and  Acquisition  Sub on the one hand, or the Company on the
other hand,  if the Board of Directors of the other party or parties shall have:
(i)  withdrawn,  modified  or amended in any  adverse  respect  its  approval or
recommendation  of this Agreement,  the Merger or the transactions  contemplated
hereby; or (ii) recommended to its stockholders an Acquisition  Transaction with
any party other than Parent or the Company, respectively.

Any termination pursuant to this Section 11.1 (other than a termination pursuant
to Section 11.1(a) hereof) shall be effected by written notice from the party or
parties so terminating to the other parties hereto.

         11.2.  EFFECT OF  TERMINATION.  In the event of the termination of this
Agreement as provided in Section  11.1,  this  Agreement  shall be of no further
force or effect and no party hereto, nor its stockholders,  directors,  officers
or  affiliates,  shall have any  liability  in  connection  herewith;  provided,
however,  that,  Section  6.1(b),  Article X, this  Section 11.2 and Article XII
shall survive the termination of this Agreement.  Notwithstanding the foregoing,
this Section 11.2 shall not relieve any party from liability in connection  with
an  intentional  or  willful  material  breach  of this  Agreement  prior to its
termination;  provided,  however,  that the payment set forth in Section 10.1(d)
shall be the sole and  exclusive  remedy of  either  Parent  or the  Company  in
connection  with the  consummation  of an Acquisition  Transaction  with a party
other than the other Party or the  termination  of this Agreement by the Company
or Parent pursuant to Section 6.4(b) in connection therewith.


                                  ARTICLE XII.

                                  MISCELLANEOUS

         12.1 ENTIRE AGREEMENT. This Agreement and the Plan of Merger (including
the Company Disclosure Schedule, the Parent Disclosure Schedule and the Exhibits
attached  hereto) and the other  writings  referred to herein contain the entire
agreement among the parties hereto with respect to the transactions contemplated
hereby and supersede all prior  agreements or  understandings,  written or oral,
among the  parties  with  respect  thereto  (including,  but not limited to, the
Letter of Intent dated  October 23,  1997,  as amended,  between  Parent and the
Company).

         12.2.  DESCRIPTIVE  HEADINGS.  Descriptive headings are for convenience
only and  shall not  control  or  affect  the  meaning  or  construction  of any
provision of this Agreement.

         12.3. NOTICES.  All notices or other  communications which are required
or  permitted  hereunder  shall  be  in  writing  and  sufficient  if  delivered
personally or sent by  nationally-recognized  overnight courier or by registered
or certified mail,  postage prepaid,  return receipt requested or by telecopier,
with confirmation as provided above addressed as follows:

         if to Parent or Acquisition Sub, to:

         Cardiac Control Systems, Inc.
         3 Commerce Boulevard
         Palm Coast, Florida 32164
         Attention: Alan J. Rabin
         Telephone: 800-227-7223
         Telecopier: 904-445-7226; and

         with a copy to:

         Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
         111 North Orange Avenue
         20th Floor
         Orlando, Florida 32801
         Attention: Randolph H. Fields, Esq.
         Telephone: (407) 420-1000
         Telecopier: (407) 420-5909








<PAGE>



         if to the Company, to:

         Electro-Catheter Corporation
         2100 Felver Court
         Rahway, New Jersey 07065
         Attention: Ervin Schoenblum
         Telephone: (732) 382-5600
         Telecopier: (732) 382-7107; and

         with a copy to:

         Saiber Schlesinger Satz & Goldstein, LLC
         One Gateway Center, 13th Floor
         Newark, New Jersey 07102-5311

         Attention: John L. Conover, Esq.
         Telephone: (973) 622-3333
         Telecopier: (973) 622-3349

or to such  other  address  as the party to whom  notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or  communications  shall be deemed to be received:  (a) in the case of personal
delivery  or  telecopy,  on the  date  of  such  delivery;  (b) in the  case  of
nationally-recognized overnight courier, on the next business day after the date
when sent;  and (c) in the case of mailing,  on the third business day following
the date on which the piece of mail containing such communication was posted.

         12.4.  COUNTERPARTS.  This  Agreement  may be executed in any number of
counterparts by original or facsimile signature,  each such counterpart shall be
an original instrument,  and all such counterparts together shall constitute one
and the same agreement.

         12.5.  GOVERNING LAW. This Agreement shall be governed by and construed
in accordance  with the New Jersey Statute and with the laws of the State of New
Jersey applicable to contracts made and to be performed wholly therein.

         12.6.  BENEFITS  OF  AGREEMENT.  All the terms and  provisions  of this
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective  successors and permitted assigns, and shall not confer any
rights or benefits on any other persons or entities. This Agreement shall not be
assignable by any party hereto without the consent of the other parties  hereto;
provided,   however,   that   anything   contained   herein   to  the   contrary
notwithstanding,  Acquisition  Sub may  assign  and  delegate  any or all of its
rights and  obligations  hereunder to any other direct or indirect  wholly-owned
subsidiary of Parent.

         12.7.  PRONOUNS.  As  used  herein,  all  pronouns  shall  include  the
masculine,  feminine,  neuter,  singular and plural thereof whenever the context
and facts require such construction.

         12.8.  AMENDMENT,  MODIFICATION AND WAIVER. This Agreement shall not be
altered or otherwise  amended except pursuant to an instrument in writing signed
by Parent and the Company;  provided,  however, that any party to this Agreement
may waive any obligation owed to it by any
other party under this Agreement.  The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.

         12.9. SEVERABILITY. If any provision of this Agreement is held illegal,
invalid or unenforceable, such illegality,  invalidity, or unenforceability will
not  affect  any  other   provision   hereof.   This  Agreement  will,  in  such
circumstances,  be deemed modified to the extent necessary to render enforceable
the provisions hereof.







                                                    

<PAGE>



         IN  WITNESS  WHEREOF,  each  of the  parties  hereto  has  caused  this
Agreement and Plan of  Reorganization to be executed on its behalf as of the day
and year first above written.



                                    CARDIAC CONTROL SYSTEMS, INC.


                                    By:_________________________
                                       Alan J. Rabin, President


                                     CCS SUBSIDIARY, INC.


                                     By:_________________________
                                        Alan J. Rabin, President


                                     ELECTRO-CATHETER CORPORATION


                                     By:_________________________
                                        Ervin Schoenblum, Acting
                                          President



         The T Partnership  hereby  executes this  Agreement for the limited and
sole purpose of agreeing to abide by its obligations under Sections 5.1, 6.4 and
6.16 hereof.

                                      THE T PARTNERSHIP, LLP


                                       By:_______________________
                                          Name:








                                                    

<PAGE>


EXHIBITS


Exhibit 1.2......................................................Plan of Merger

Exhibit 1.4......................Fourth Article to Certificate of Incorporation

Exhibit 5.1...................................................Voting Agreements

Exhibit 5.2.........................................Company Affiliate Agreement

Exhibit 6.16(b)................................................Conditional Note

Exhibit 6.16(c).........................................Secured Promissory Note



SCHEDULES


Schedule 5.2..........................................Affiliates of the Company