MERIDIAN MEDICAL TECHNOLOGIES, INC.




                              NOTE AND WARRANT PURCHASE AGREEMENT



                                            with



                                  NOMURA HOLDING AMERICA INC.



                            12.0% Senior Subordinated Notes Due 2005.

                      Warrants to purchase 204,770 Shares of Common Stock.





                                 Dated as of April 30, 1998



















          658180v11





          TABLE OF CONTENTS
          (Not Part of Agreement)

          Page


          Section 1.   Definitions .......................................1
               Section 1.1.   Defined Terms...............................1
               Section 1.2.   Accounting Terms...........................19
               Section 1.3.   Rules of Construction......................19


          Section 2.   Sale and Purchase of Notes and Warrants ..........19
               Section 2.1.   Authorization of Notes and Warrants........19
               Section 2.2.   Issuance and Sale of Notes and Warrants....20
               Section 2.3.   Closing....................................20
               Section 2.4.   Fees.......................................21
               Section 2.5    Interest Rate Limitation...................21
               Section 2.6.   Allocation of Purchase Price...............21
               Section 2.7.   Reduced Return.............................22


          Section 3.   Payments and Prepayments of Notes ................22
               Section 3.1.   Optional Prepayments of the Notes..........22
               Section 3.2.   Notice of Prepayment of the Notes..........23
               Section 3.3.   Allocation of Payments.....................23
               Section 3.4.   Payments...................................23
               Section 3.5.   Taxes......................................24
               Section 3.6.   Surrender of Notes; Notation Thereon.......25
               Section 3.7.   Purchase of Notes..........................25


          Section 4.   Representations and Warranties of the Company ....26
               Section 4.1.   Corporate Existence and Power..............26
               Section 4.2.   Corporate Authority........................26
               Section 4.3.   Binding Effect.............................26
               Section 4.4.   Capital Stock..............................26
               Section 4.5.   Business Operations and Other
                              Information; Financial Condition...........27
               Section 4.6.   Subsidiaries...............................28
               Section 4.7.   Litigation; No Violation of Governmental
                              Orders or Laws.............................28
               Section 4.8.   No Conflicts with Agreements, Statutes,
                              Orders, Etc................................29
               Section 4.9.   Consent, Etc...............................29
               Section 4.10.  Outstanding Indebtedness;  Investments.....30
               Section 4.11.  Assets and Properties......................30
               Section 4.12.  Taxes......................................31
               Section 4.13.  Disclosure.................................31
               Section 4.14.  Offering of Securities.....................32
               Section 4.15.  Broker's or Finder's Commissions...........32
               Section 4.16.  Labor Matters..............................32
               Section 4.17.  Environmental Matters......................33
               Section 4.18.  Margin Regulations; Use of Proceeds........34

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          658180v11





               Section 4.19.  Compliance with ERISA......................34
               Section 4.20.  Material Contracts.........................36
               Section 4.21.  Insurance..................................38
               Section 4.22.  Possession of Franchises, Licenses, Etc....38
               Section 4.23.  Intellectual Property......................38
               Section 4.24.  Customers and Suppliers....................39
               Section 4.25.  Status under Certain Laws..................39
               Section 4.26.  Certain Transactions.......................40
               Section 4.27.  Solvency...................................40
               Section 4.28.  Use of Proceeds............................40
               Section 4.29.  Ranking of Notes...........................40


          Section 5.   Representations of the Purchaser .................40


          Section 6.   Closing Conditions ...............................41
               Section 6.1.   Proceedings Satisfactory...................41
               Section 6.2.   Opinion of Purchaser's Special Counsel.....41
               Section 6.3.   Opinions of Counsel to the Company.........42
               Section 6.4.   Representations and Warranties True,
                              Etc.; Certificates.........................42
               Section 6.5.   Absence of Material Adverse Change, Etc....42
               Section 6.6.   Consents and Approvals.....................42
               Section 6.7.   Absence of Litigation, Orders, Etc.........42
               Section 6.8.   Subordination Agreement....................43
               Section 6.9.   Total Indebtedness under Credit
                              Agreement..................................43
               Section 6.10.  Fees.......................................43
               Section 6.11.  Wire Instructions..........................43
               Section 6.12.  Put Subordination Agreement................43


          Section 7.   Financial Statements and Information .............44


          Section 8.   Inspection of Properties and Books ...............48


          Section 9.   Affirmative Covenants ............................49
               Section 9.1.   Payment of Principal and Interest..........49
               Section 9.2.   Payment of Taxes and Claims................49
               Section 9.3.   Maintenance of Properties, Records and
                              Corporate Existence........................50
               Section 9.4.   Insurance..................................51
               Section 9.5.   Subsidiary Guarantors......................52
               Section 9.6.   Pension and Benefit Plan Covenants.........53
               Section 9.7.   Notice of Default..........................54


          Section 10.  Negative and Maintenance Covenants ...............54
               Section 10.1.  Restrictions on Indebtedness...............54
               Section 10.2.  Restrictions on Liens......................55
               Section 10.3.  Limitation on Sale and Leasebacks..........57

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          658180v11<PAGE>





               Section 10.4.  Consolidation. Merger or Disposition of
                              Assets; Acquisitions.......................57
               Section 10.5.  Sale or Discount of Receivables............58
               Section 10.6.  Conduct of Business........................58
               Section 10.7.  Restricted Payments and Restricted
                              Investments................................59
               Section 10.8.  Issuance of Capital Stock..................59
               Section 10.9.  Transactions with Affiliates...............59
               Section 10.10. Termination of Pension Plans...............59
               Section 10.11. Maintenance of Capital Expenditures........59
               Section 10.12. Certain Contracts..........................60
               Section 10.13. Limitation on Dividend Restrictions
                              Affecting Subsidiaries.....................61
               Section 10.14. No Amendment of Charter, By-Laws...........61
               Section 10.15. Acquisition of Margin Securities...........61
               Section 10.16. Financial Covenants........................62
               Section 10.17  Certificate Regarding Additional
                              Permitted Indebtedness.....................64


          Section 11.  Events of Default ................................64
               Section 11.1.  Events of Default; Remedies................64
               Section 11.2.  Suits for Enforcement......................68
               Section 11.3.  Remedies Cumulative........................68
               Section 11.4.  Remedies Not Waived........................69


          Section 12.  Registration, Exchange, and Transfer of Notes ....69


          Section 13.  Lost, Stolen, Damaged and Destroyed Notes ........69


          Section 14.  Miscellaneous ....................................70
               Section 14.1.  Amendment and Waiver.......................70
               Section 14.2.  Expenses...................................71
               Section 14.3.  Survival of Representations and
                              Warranties.................................72
               Section 14.4.  Successors and Assigns; Limitation on
                              Transfer...................................72
               Section 14.5.  Notices....................................73
               Section 14.6.  Indemnification............................74
               Section 14.7.  Public Announcements.......................75
               Section 14.8.  No Fiduciary Relationship..................75
               Section 14.9.  Confidentiality............................75
               Section 14.10. Integration and Severability...............76
               Section 14.11. Counterparts...............................76
               Section 14.12. Governing Law..............................76
               Section 14.13. Submission to Jurisdiction: Waiver of
                              Service and Venue..........................76
               Section 14.14. Waiver of Right to Trial by Jury...........77


          SCHEDULES

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          658180v11<PAGE>






          Schedule 4.4        Capital Stock

          Schedule 4.5        Financial Statements

          Schedule 4.6        Subsidiaries

          Schedule 4.7        Litigation

          Schedule 4.9        Consents

          Schedule 4.10A Existing Indebtedness

          Schedule 4.10B Existing Investments

          Schedule 4.11  Real Property Leases

          Schedule 4.16  Labor Matters

          Schedule 4.17  Environmental Matters

          Schedule 4.19  Pension and Benefit Plans

          Schedule 4.20A Material Contracts

          Schedule 4.20B Contracting Suspensions

          Schedule 4.21  Insurance

          Schedule 4.23  Intellectual Property

          Schedule 4.24  Customers; Suppliers

          Schedule 4.26  Related Party Transactions


          EXHIBITS


          Exhibit A      Form of Senior Subordinated Note

          Exhibit B      Form of Subsidiary Guarantee

          Exhibit C      Form of Subordination Agreement

          Exhibit D      Form of Registration Rights Agreement

          Exhibit E      Form of Warrant

          Exhibit F      Form of Opinion of Counsel to the Company





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          658180v11<PAGE>





          NOTE AND WARRANT PURCHASE AGREEMENT


               This NOTE AND WARRANT PURCHASE AGREEMENT (this "Agreement")
          is made and entered into as of April 30, 1998, by and between
          MERIDIAN MEDICAL TECHNOLOGIES, INC., a Delaware corporation
          (together with its successors, the "Company"), and NOMURA HOLDING
          AMERICA INC., a Delaware corporation (together with its
          successors, assigns and transferees, the "Purchaser").

          RECITALS

               WHEREAS, the Company has proposed to issue and sell to the
          Purchaser (i) its 12.0% Senior Subordinated Notes Due 2005 in the
          aggregate original principal amount of $15,000,000, and (ii) its
          Warrants to purchase an aggregate of 204,770 shares (subject to
          adjustment as therein provided) of the Company's Common Stock,
          all for the consideration and upon the terms and conditions
          hereinafter provided; and

               WHEREAS, the proceeds of the issuance and sale of the Notes
          are to be used to repay certain existing Indebtedness of the
          Company and its Subsidiaries and for general corporate purposes
          of the Company and its Subsidiaries;

               NOW, THEREFORE, the Company and the Purchaser agree as
          follows:

               Section 1.     Definitions{tc "Section 1.    Definitions" \f
          C \l 1}.

               Section 1.1.   Defined Terms{tc "Section 1.1.     Defined
          Terms" \f C \l 2}.  For the purposes of this Agreement, the
          following terms shall have the following respective meanings:

               "Accountants" has the meaning specified in Section 7.

               "Additional Debt" means:

                         (i) the portion, if any, of the aggregate
               outstanding principal amount of Senior Indebtedness
               (including the maximum aggregate amount of all commitments
               to extend any revolving credit, working capital, letter of
               credit or similar credit facility in connection therewith,
               and including the face amount of all letters of credit and
               other contingent obligations (whether issued or guaranteed
               by the holders of such Indebtedness) from time to time
               outstanding in connection therewith) that exceeds the
               Maximum Commitment, as the same may be from time to time
               reduced ("Excess Principal") and all interest accrued
               thereon (including, without limitation, interest accruing
               after the filing of any petition in bankruptcy, or the
               commencement of any insolvency, reorganization or like
               proceeding, relating to the Company and its Subsidiaries,


          658180v11<PAGE>





               whether or not a claim for post-filing or post-petition
               interest is allowed in such proceeding), prepayment charges,
               if any, payable with respect thereto, and all other sums
               payable under or in connection with such Senior Loan
               Documents, including, without limitation, all indebtedness
               and obligations incurred or to be incurred pursuant to
               letters of credit (whether issued or guaranteed by the
               holders of such Indebtedness) or other commitments by the
               holders of such Indebtedness extended for the benefit of the
               Company and its Subsidiaries pursuant to the Credit
               Agreement or any other such Senior Loan Document, in each
               case to the extent the foregoing relate to Excess Principal,
               and

                         (ii) any aggregate outstanding principal amount of
               Indebtedness (other than Senior Indebtedness) incurred by
               the Company and its Subsidiaries (including the maximum
               aggregate amount of all commitments to extend any revolving
               credit, working capital, letter of credit or similar credit
               facility in connection therewith, and including the face
               amount of all letters of credit and other contingent
               obligations (whether issued or guaranteed by the holders of
               such Indebtedness) from time to time outstanding in
               connection therewith) and all interest accrued thereon
               (including, without limitation, interest accruing after the
               filing of any petition in bankruptcy, or the commencement of
               any insolvency, reorganization or like proceeding, relating
               to the Company and its Subsidiaries, whether or not a claim
               for post-filing or post-petition interest is allowed in such
               proceeding), prepayment charges, if any, payable in
               connection therewith, and all other sums payable under or in
               connection therewith, including, without limitation, all
               indebtedness and obligations incurred or to be incurred
               pursuant to letters of credit (whether issued or guaranteed
               by the holders of such Indebtedness).

               "Additional Permitted Indebtedness" means any Additional
          Debt incurred by the Company or any of its Subsidiaries after the
          date hereof, provided that:

                         (i)  the Pro Forma Interest Coverage Ratio at the
               time of such incurrence of Additional Debt is not less than
               the Interest Coverage Ratio in effect at such time pursuant
               to Section 10.16(d); and

                         (ii) the Pro Forma Leverage Ratio at the time of
               such incurrence of Additional Debt is not more than
               4.25:1.00 for any incurrence of Additional Debt on or before
               April 30, 1999 and 4.00:1.00 for any incurrence of
               Additional Debt thereafter; and provided further that:

                         (x) if any Additional Debt incurred by the Company
               or any of its Subsidiaries by its terms ranks senior in
               liquidation (without regard to any security interest) to the

                                        - 2 -
          658180v11<PAGE>





               Indebtedness evidenced hereby, such Additional Debt shall
               not constitute Additional Permitted Indebtedness unless the
               lenders of such Additional Debt, pursuant to a written
               instrument satisfactory to the Purchaser, become parties to
               and "Senior Lenders" under the Subordination Agreement and
               such Additional Debt is included thereunder as Designated
               Senior Indebtedness.

                         (y) any extension, renewal, refunding or
               refinancing of any Additional Debt shall be treated as the
               incurrence of Indebtedness for the purposes of this
               definition.

               For such purposes, the "Pro Forma Interest Coverage Ratio"
          for any incurrence of Additional Debt means the ratio of (A)
          EBITDA to (B) Interest Expense, calculated in the case of each of
          such amounts for the period of 12 consecutive full calendar
          months most recently ended prior to the incurrence of such
          Additional Debt on a pro forma basis, assuming that (x) such
          Additional Debt was incurred by the Company or its Subsidiaries
          immediately prior to the commencement of such 12-month period,
          and (y) the net proceeds of such Additional Debt were applied,
          and any related transaction (including, without limitation, any
          acquisition of Capital Stock or assets of any Person financed in
          whole or in part by means of such Additional Debt and any
          concurrent repayment of outstanding Indebtedness) occurred,
          immediately prior to the commencement of such 12-month period;
          and the "Pro Forma Leverage Ratio" for any incurrence of
          Additional Debt means the ratio of (C) Consolidated Total
          Indebtedness, calculated as of the date of incurrence of such
          Additional Debt immediately after giving effect thereto and to
          any concurrent repayment of outstanding Indebtedness, to (D)
          EBITDA, calculated for the period of 12 consecutive full calendar
          months most recently ended prior to the incurrence of such
          Additional Debt on a pro forma basis assuming that the net
          proceeds of such Additional Debt were applied, and any related
          transaction (including, without limitation, any acquisition of
          Capital Stock or assets of any Person financed in whole or in
          part by means of such Additional Debt and any concurrent
          repayment of outstanding Indebtedness) occurred, immediately
          prior to the commencement of such 12-month period.  For the
          purposes of this definition, Indebtedness of the Company or its
          Subsidiaries provided for under a revolving credit or similar
          arrangement (including, without limitation, the Indebtedness
          provided for under the Senior Loan Documents as in effect on the
          date hereof) shall be deemed to be incurred at the time of any
          increase in the maximum commitment amount relating thereto
          (whether or not such increase is accompanied by an increase in
          the principal amount thereof at the time outstanding), but not at
          the time of any increase in the outstanding principal amount of
          such Indebtedness to an amount which is less than or equal to the
          maximum commitment amount thereof at the time in effect.



                                        - 3 -
          658180v11<PAGE>





               "Affiliate" means, as to any Person, any other Person which
          directly or indirectly controls, is controlled by, or is under
          common control with such Person, except ING shall not be deemed
          to constitute an Affiliate of the Company.  For purposes of this
          definition, "control" of a Person shall mean the power, direct or
          indirect, (i) to vote or direct the voting of 10% or more of the
          outstanding shares of Voting Stock of such Person, or (ii) to
          direct or cause the direction of the management and policies of
          such Person whether by ownership of Capital Stock, by contract or
          otherwise.

               "Audited Financial Statements" has the meaning specified in
          Section 4.5(b).

               "Authorized Officer" with respect to any Person means the
          Chief Executive Officer, the President, any Vice President, the
          Chief Financial Officer or the Treasurer of such Person, or any
          further or different officer of such Person so designated by any
          Authorized Officer in a written notice to the holders of Notes.

               "Bankruptcy Code" means 11 U.S. C. Sec. 101 et seq., as from
          time to time hereafter amended, and any successor or similar
          statute.

               "Business Day" means any day except a Saturday, a Sunday or
          a legal holiday in New York City.

               "Capitalized Lease Obligation" means, as to any Person, all
          monetary obligations of such Person under any leasing or similar
          arrangement which, in accordance with GAAP, are or would be
          classified as capitalized leases.

               "Capital Stock" means and includes any and all shares,
          interests, participations or other equivalents of or interests in
          (however designated) corporate stock, including, without
          limitation, shares of preferred or preference stock.

               "Cash Equivalents" means:

                    (i)  marketable obligations maturing within one year
               after acquisition thereof issued or fully guaranteed by the
               United States of America or an instrumentality or agency
               thereof (provided that the full faith and credit of the
               United States of America is pledged in support thereof),

                    (ii) open market commercial paper, maturing within 180
               days after acquisition thereof, which has the highest credit
               rating of either Standard & Poor's Rating Services, a
               division of the McGraw-Hill Companies or Moody's Investor
               Services, Inc., or an equivalent rating by any other
               nationally recognized credit rating agency of similar
               standing, issued by a corporation organized under the laws
               of any State of the United States of America or of the
               District of Columbia,

                                        - 4 -
          658180v11<PAGE>






                    (iii)     certificates of deposit or bankers
               acceptances or other obligations maturing within one year
               after acquisition thereof issued by a domestic commercial
               bank which is a member of the Federal Reserve System and has
               capital and surplus and undivided profits in excess of
               $500,000,000, and

                    (iv) other certificates of deposit maturing within one
               year after acquisition thereof in respect of deposits fully
               insured by the Federal Deposit Insurance Corporation.

               "Certified" when used with respect to any financial
          information of any Person to be certified by any of its officers,
          indicates that such information is to be accompanied by a
          certificate to the effect that such financial information has
          been prepared in accordance with GAAP consistently applied (other
          than with respect to budgets and projections), subject in the
          case of interim financial information to normal year-end audit
          adjustments and absence of the footnotes required by GAAP, and
          presents fairly, in all material respects, the information
          contained therein as at the dates and for the periods covered
          thereby.

               "Change of Control" means any transaction or event as a
          direct or indirect result of which:

                    (i)  any Person is or becomes the beneficial owner (as
               defined in Rules 13d-3 and 13d-5 under the Exchange Act),
               directly or indirectly, of more than 25% of the outstanding
               shares of Voting Stock of the Company; or

                    (ii) during any period of 12 consecutive months
               (whether commencing before or after the Closing Date),
               individuals who on the first day of such period constituted
               the Board of Directors of the Company (together with any new
               directors whose election by such Board of Directors or whose
               nomination for election by the stockholders of the Company
               was approved by a vote of a majority of the directors of the
               Company then still in office who were either directors at
               the beginning of such period or whose election or nomination
               for election was previously so approved) cease for any
               reason to constitute a majority of the Board of Directors of
               the Company then in office.

               "Closing Date" has the meaning specified in Section 2.3.

               "Code" means the Internal Revenue Code of 1986, as amended.

               "Common Stock" means the Common Stock, par value $0.10 per
          share, of the Company.

               "Company" means Meridian Medical Technologies, Inc., a
          Delaware corporation, and any successor thereto.

                                        - 5 -
          658180v11<PAGE>






               "Company Reports" has the meaning specified in Section
          4.5(a).

               "Consolidated Capital Expenditure" means, for any period,
          without duplication, the sum of (a) the gross dollar amount of
          additions during such period to property, plant, equipment and
          other fixed assets of the Company and its Subsidiaries, including
          those additions made in the ordinary course of business, but
          excluding routine maintenance and repairs, plus (b) the aggregate
          amount of Capitalized Lease Obligations incurred during such
          period by the Company and its Subsidiaries.

               "Consolidated Total Indebtedness" means, as of any date of
          determination, the aggregate amount of outstanding Indebtedness
          of the Company and its Subsidiaries as of such date, determined
          on a consolidated basis in accordance with GAAP.

               "Control Affiliate" means, as to any Person, any other
          Person which directly or indirectly controls, is controlled by,
          or is under common control with such Person. For purposes of this
          definition, "control" of a Person shall mean the power, direct or
          indirect, (i) to vote or direct the voting of a majority of the
          Voting Stock of such Person, or (ii) to direct or cause the
          direction of the management and policies of such Person whether
          by ownership of Voting Stock, by contract or otherwise.

               "Contracts" mean all contracts, agreements, mortgages,
          indentures, licenses, leases, commitments, plans, arrangements,
          sales orders and purchase orders of every kind.

               "Credit Agreement" means the Credit Agreement dated as of
          April 15, 1996 among Brunswick Biomedical Corporation, a
          Massachusetts corporation, various lenders as are, or may become
          parties thereto and ING, individually and as Agent, assumed by
          the Company by an agreement dated November 20, 1996, as such
          Credit Agreement may from time to time be amended, modified or
          supplemented in accordance with its terms.

               "Default" means any event or condition which, with due
          notice or lapse of time or both, would become an Event of
          Default.

               "Designated Senior Indebtedness" has the meaning specified
          in the Subordination Agreement.

               "Dollars" and "$" shall mean lawful money of the United
          States of America.

               "EBITDA" means, for any period, an amount equal to Net
          Income plus (to the extent deducted in determining Net Income)
          interest expense, provisions for income taxes, depreciation,
          amortization of intangible assets and the write-off of in-process
          research and development expense, in each case for the Company

                                        - 6 -
          658180v11<PAGE>





          and its Subsidiaries on a consolidated basis; provided, that (a)
          any calculation of EBITDA that takes into account the fourth
          quarter of the Company's 1997 Fiscal Year shall exclude from such
          calculation the $1,539,400 pre-tax charge incurred during the
          fourth quarter of the Company's 1997 Fiscal Year, which charge is
          related to the voluntary product exchange program, and (b) any
          calculation of EBITDA shall exclude any extraordinary item
          associated with the extinguishment of Indebtedness as a result of
          any refinancing of all or any part of the Indebtedness evidenced
          by the Estate Subordinated Note or the Junior Subordinated Note
          or the obligations under the Senior Loan Documents.

               "Environmental Laws" means any and all Federal, state,
          local, and foreign Statutes, Orders, permits, regulations,
          concessions, grants, franchises, licenses, agreements or
          governmental restrictions relating to pollution, the protection
          of the environment or the generation, treatment, storage, use,
          maintenance, recycling, transportation, release or disposal of
          Hazardous Materials, including, without limitation, the
          Comprehensive Environmental Response, Compensation and Liability
          Act, the Resource Conservation and Recovery Act, the Emergency
          Planning and Community Right to Know Act, the Safe Drinking Water
          Act, the Hazardous Materials Transportation Act, the Clean Air
          Act, the Clean Water Act, the Federal Insecticide, Fungicide and
          Rodenticide Act, the Noise Control Act, the Occupational Safety
          and Health Act, the Toxic Substances Control Act, any so-called
          "Superfund" or "Superlien" law, and any regulation promulgated
          under any of the foregoing, all as now or at any time hereafter
          may be in effect.

               "Environmental Matter" means any claim, investigation,
          litigation, administrative proceeding or Order asserted, arising
          or entered under or pursuant to any Environmental Law, or
          relating to any Hazardous Materials, in each case against or
          affecting the Company, any of its Subsidiaries, their respective
          operations, or any Properties owned or operated by any of them.

               "ERISA" means the Employee Retirement Income Security Act of
          1974, as from time to time amended.

               "ERISA Affiliate" means any corporation or other Person
          (including, without limitation, any Subsidiary of the Company)
          which is a member of the same controlled group (within the
          meaning of Section 414(b) of the Code) of corporations or other
          Persons as the Company, or which is under common control (within
          the meaning of Section 414(c) of the Code) with the Company, or
          any corporation or other Person which is a member of an
          affiliated service group (within the meaning of Section 414(m) of
          the Code) with the Company, or any corporation or other Person
          which is required to be aggregated with the Company pursuant to
          Section 414(o) of the Code or the regulations promulgated
          thereunder.



                                        - 7 -
          658180v11<PAGE>





               "Estate Subordinated Note" has the meaning specified in the
          Credit Agreement.

               "Event of Default" has the meaning specified in Section
          11.1.

               "Exchange Act" means the Securities Exchange Act of 1934, as
          amended, or any similar federal statute then in effect, and a
          reference to a particular section thereof shall include a
          reference to the comparable section, if any, of any such similar
          federal statute.

               "Existing Senior Debt" has the meaning specified in the
          Subordination Agreement.

               "Fair Market Value" means what a willing buyer would pay to
          a willing seller in an arm's-length transaction.

               "Financial Statements" has the meaning specified in Section
          4.5(b).

               "GAAP" means generally accepted accounting principles as in
          effect from time to time in the United States of America, applied
          on a consistent basis both as to classification of items and
          amounts.

               "Governmental Body" means any federal, state, provincial,
          county, city, town, village, municipal or other government or
          governmental department, commission, council, board, bureau,
          agency, authority or instrumentality, of or within the United
          States of America or its territories or possessions, or of or
          within any other country, or of any international community
          established by treaty.

               "Government Contract" means any contract or agreement with
          or for any Governmental Body (including, without limitation, any
          such contract or agreement with respect to which the Company or
          any of its Subsidiaries is a subcontractor at any level), other
          than any purchase order issued in the ordinary course of business
          and having a face amount (including all addenda, modifications
          and supplements thereto) of less than $500,000.

               "Guarantee" means any guarantee or other contingent
          liability (other than any endorsement for collection or deposit
          in the ordinary course of business), direct or indirect, with
          respect to any obligations of another Person, through an
          agreement or otherwise, including, without limitation, (i) any
          other endorsement or discount with recourse or undertaking
          substantially equivalent to or having economic effect similar to
          a guarantee in respect of any such obligations, and (ii) any
          agreement (A) to purchase, or to advance or supply funds for the
          payment or purchase of, any such obligations, (B) to purchase,
          sell or lease Property, products, materials or supplies, or
          transportation or services, in respect of enabling such other

                                        - 8 -
          658180v11<PAGE>





          Person to pay any such obligation or to assure the owner thereof
          against loss regardless of the delivery or nondelivery of the
          Property, products, materials or supplies or transportation or
          services or (C) to make any loan, advance or capital contribution
          to or other investment in, or to otherwise provide funds to or
          for, such other Person in respect of enabling such Person to
          satisfy any obligation (including any liability for a dividend,
          stock liquidation payment or expense) or to assure a minimum
          equity, working capital or other balance sheet condition in
          respect of any such obligation. The amount of any Guarantee shall
          be equal to the outstanding amount of the obligations directly or
          indirectly guaranteed.

               "Hazardous Material" means the following:

                    (i)  any "hazardous substance" as defined in, or for
               purposes of, the Comprehensive Environmental Response,
               Compensation and Liability Act, 42 U.S.C.A. SS 9601 & 9602,
               as may be amended from time to time, or any other so-called
               "superfund" or "superlien" law and any judicial
               interpretation of any of the foregoing;

                    (ii) any "regulated substance" as defined pursuant to
               40 C.F.R. Part 280;

                    (iii)     any "pollutant or contaminant" as defined in
               42 U.S.C.A. S 9601 (33);

                    (iv) any "hazardous waste" as defined in, or for
               purposes of, the Resource Conservation and Recovery Act;

                    (v)  any "hazardous chemical" as defined in 29 C.F.R.
               Part 1910;

                    (vi) any "hazardous material" as defined in, or for
               purposes of, the Hazardous Materials Transportation Act; and

                    (vii)     any other substance, regardless of physical
               form, or form of energy or pathogenic agent that is subject
               to any other past, present or future law or requirement of
               any Governmental Body regulating, relating to, or imposing
               obligations, liability, or standards of conduct concerning
               the protection of human health, plant life, animal life,
               natural resources, Property or the reasonable enjoyment of
               life or Property from the presence in the environment of any
               solid, liquid, gas, odor, pathogen or form of energy, from
               whatever source.

               Without limiting the generality of the foregoing, the term
          "Hazardous Material" thus includes, but is not limited to, any
          material, waste or substance that contains petroleum or any
          fraction thereof, asbestos, or polychlorinated biphenyls, or that
          is flammable, explosive or radioactive.


                                        - 9 -
          658180v11<PAGE>





               "Indebtedness" with respect to any Person means, without
          duplication:

                    (i)  all indebtedness of such Person for borrowed
               money,

                    (ii) any obligation incurred for all or any part of the
               purchase price of Property or services, other than accounts
               payable and accrued expenses included in current liabilities
               in accordance with GAAP and incurred in respect of Property
               or services purchased in the ordinary course of business,

                    (iii)     indebtedness or obligations evidenced by
               bonds, notes or similar written instruments,

                    (iv) all reimbursement obligations of such Person
               (whether contingent or otherwise) in respect of letters of
               credit, bankers' acceptances, surety or other bonds and
               similar instruments,

                    (v)  any obligation (whether or not such Person has
               assumed or become liable for the payment of such obligation)
               secured by a Lien on any Property of such Person,

                    (vi) Capitalized Lease Obligations of such Person,

                    (vii)     all obligations, contingent or otherwise, of
               such Person with respect to any Interest Rate Protection
               Agreement,

                    (viii)    all obligations, contingent or otherwise, of
               such Person under any foreign exchange contract, currency
               swap agreement or other similar agreement or arrangement
               designed to protect such Person against fluctuations in
               currency values,

                    (ix) all obligations of such Person to redeem, purchase
               or otherwise retire or extinguish any of its Capital Stock
               at a fixed or determinable date (whether by operation of a
               sinking fund or otherwise), at another's option or upon the
               occurrence of a condition not solely within the control of
               such Person (e.g., redemption from future earnings);
               provided, that (a) for purposes of determining the amount of
               Indebtedness outstanding at any time, the entire amount
               required to effect a redemption, repurchase, retirement or
               extinguishment of any Capital Stock shall be deemed to be
               outstanding Indebtedness and (b) for purposes of determining
               whether the tests under the definition of Additional
               Permitted Indebtedness have been satisfied, the entire
               amount required to effect a redemption, repurchase,
               retirement or extinguishment of any Capital Stock shall be
               deemed to be incurred at the time of issuance thereof, and



                                       - 10 -
          658180v11<PAGE>





                    (x)  all Guarantees by such Person of obligations of
               any other Person of the types described in clauses (i)
               through (viii) of this definition, inclusive;

                    provided, however, Indebtedness shall not include, in
               respect of the put right granted to ING under the Warrant
               Purchase Agreement dated April 15, 1996 by and between ING
               and the Company, any claim or right that would otherwise
               constitute a claim if not otherwise subject to the Put
               Subordination Agreement.

               "ING" means ING (U.S.) Capital Corporation, a Delaware
          corporation.

               "Intellectual Property" means patents, patent applications,
          patent disclosures and inventions (whether or not patentable and
          whether or not reduced to practice); all registered and
          unregistered statutory and common law copyrights; all registered
          and unregistered trademarks, service marks, licenses, logos,
          sales materials and trade names; all registrations, applications
          and renewals for any of the foregoing; all trade secrets,
          confidential information, know-how, customer lists, formulae,
          manufacturing and production processes and techniques, research
          and development information, product designations, quality
          standards, investigations, drawings, specifications, designs,
          plans, improvements, proposals, technical and computer data; all
          license agreements and sublicense agreements to and from third
          parties relating to any of the foregoing; all other confidential
          information and proprietary rights (including, without
          limitation, all computer software and documentation); and all
          copies and tangible embodiments of the foregoing (in whatever
          form or medium).

               "Interest Coverage Ratio" means, for any period, the ratio
          of (a) EBITDA for such period to (b) Interest Expense during such
          period.

               "Interest Expense" means, for any period, the sum of (a) the
          Company's consolidated interest expense accrued during such
          period in respect of all Indebtedness of the Company and its
          Subsidiaries, minus (b) the Company's consolidated interest
          expense accrued during such period in respect of the Estate
          Subordinated Note and the Junior Subordinated Note to the extent
          that, in accordance with the terms of the Estate Subordinated
          Note and the Junior Subordinated Note, such interest expense is
          added to the respective principal amounts thereof and is not paid
          by the Company in cash, minus (c) to the extent included in the
          Company's consolidated interest expense accrued during such
          period, the amount of any original issued discount that is
          amortized during such period in respect of the Notes or the
          obligations under the Senior Loan Documents.

               "Interest Rate Protection Agreement" shall mean an interest
          rate swap, cap or collar agreement or similar arrangement between

                                       - 11 -
          658180v11<PAGE>





          any Person or Persons and one or more financial institutions
          providing for the transfer or mitigation of interest rate or
          expense risks either generally or under specific contingencies.

               "Internal Revenue Service" means the United States Internal
          Revenue Service and any successor or similar agency performing
          similar functions.

               "Inventory" means all goods, merchandise and other personal
          Property which are held for sale or lease or consignment or to be
          furnished under a contract of service, or are raw materials, work
          in process or material used or consumed, or to be used or
          consumed, in the business of the Company and its Subsidiaries.

               "Investment" when used with reference to any investment of
          the Company or any of its Subsidiaries means any investment so
          classified under GAAP, and, whether or not so classified,
          includes (i) any Indebtedness owed by any Person to the Company
          or to any such Subsidiary, (ii) any Guarantee or contingent
          obligation of the Company or any such Subsidiary of Indebtedness
          or other obligations of any Person, and (iii) any Capital Stock
          of, partnership interest in, or other ownership or similar
          interest in any Person held by the Company or any such
          Subsidiary; and the amount of any Investment shall be the
          original principal or capital amount thereof less all cash
          returns of principal or equity thereof (and without adjustment by
          reason of the financial condition of such other Person).

               "Junior Subordinated Note" has the meaning specified in the
          Credit Agreement.

               "Lien" means any security interest, mortgage, pledge, lien,
          claim, charge, encumbrance, conditional sale or title retention
          agreement, lessor's interest under a capitalized lease or
          analogous instrument, in, of or on any of a Person's Property
          (whether held on the date hereof or hereafter acquired), or any
          signed or filed financing statement which names such Person as
          the debtor, or the execution of any security agreement or the
          like authorizing any other Person as the secured party thereunder
          to file such a financing statement.

               "Majority Holders" means the holders of at least a majority
          in principal amount of the Notes at the applicable time
          outstanding.

               "Material Adverse Effect" means any change or changes or
          effect or effects that individually or in the aggregate are
          materially adverse to (i) the condition (financial or otherwise),
          operations, performance, business, properties or prospects of the
          Company and its Subsidiaries taken as a whole, (ii) the rights
          and remedies of the Purchaser under this Agreement, the Notes,
          the Warrants or the Registration Rights Agreement, (iii) the
          ability of the Company to fulfill its obligations under this
          Agreement, the Notes, the Warrants or the Registration Rights

                                       - 12 -
          658180v11<PAGE>





          Agreement or (iv) the legality, validity or enforceability of
          this Agreement, the Notes, the Warrants or the Registration
          Rights Agreement.

               "Material Contracts" means all oral or written supply
          agreements, requirements contracts, customer agreements,
          franchise agreements, license agreements, distribution
          agreements, joint venture agreements, asset purchase agreements,
          stock purchase agreements, merger agreements, agency or
          advertising agreements, leases of real or personal property,
          credit agreements, loan agreements, security agreements, pledge
          agreements, mortgages, trust deeds, trust indentures, stockholder
          agreements, consulting agreements, management agreements,
          employment agreements, severance agreements, collective
          bargaining agreements, employee benefit plans or arrangements,
          tax sharing agreements, and other contracts, agreements and
          commitments to which the Company or any of its Subsidiaries are
          parties, in each case which have a face amount or value
          (including all addenda, modifications and supplements thereto) of
          $500,000 or more. The term "Material Contract" shall include, in
          any event, without limitation, (i) any Government Contract to
          which the Company or any of its Subsidiaries is a party, (ii) the
          Specified IP Contracts  and (iii) any "material" contract
          required to be filed with the Company's periodic reports pursuant
          to Item 601(b)(10) of Regulation S-K promulgated by the
          Securities and Exchange Commission.

               "Maximum Commitment" means, at any time, the lesser of (i)
          $13,500,000 and (ii) the aggregate commitment at such time under
          the Senior Loan Documents.

               "Multiemployer Plan" means a multiemployer plan as defined
          in Section 3(37) or Section 4001(a)(3) of ERISA or Section 414(f)
          of the Code contributed to by the Company or any of its
          Subsidiaries or ERISA Affiliates.

               "Net Income" means, as to any Person, for any period, the
          net income (or loss) of such Person for such period, determined
          in accordance with GAAP, but excluding extraordinary gains or
          losses for such period.

               "Note" and "Notes" have the meanings specified in Section
          2.1 (a).

               "Officer's Certificate" means, with respect to any
          corporation, a certificate signed by the Chief Executive Officer,
          the President, one of the Vice Presidents, or the Chief Financial
          Officer of the specified corporation.

               "Order" means any order, writ, injunction, decree, judgment,
          award, determination or written direction or demand of any court,
          arbitrator or Governmental Body.

               "Other Taxes" has the meaning specified in Section 3.5(c).

                                       - 13 -
          658180v11<PAGE>






               "PBGC" means the Pension Benefit Guaranty Corporation, and
          any successor agency or Governmental Body performing similar
          functions.

               "Pension Plan" means an employee pension benefit plan, as
          defined in Section 3(2) of ERISA, excluding any Multiemployer
          Plans, maintained by or contributed to by the Company or any of
          its Subsidiaries or ERISA Affiliates.

               "Permitted Lien" means any of the Liens permitted to be
          incurred under Section 10.2.

               "Person" means and includes an individual, a partnership, a
          joint venture, a corporation, a company, a trust, an
          unincorporated organization and a government or any department or
          agency thereof.

               "Plan" and "Plans" means any employee benefit plan as
          defined in Section 3(3) of  ERISA, excluding a Multiemployer
          Plan, established or maintained for the benefit of employees of
          the Company or any of its Subsidiaries or ERISA Affiliates.

               "Prepayment Premium" means at any time with respect to any
          Notes being prepaid in whole or in part pursuant to Section 3.1
          during any of the periods set forth below, an amount equal to the
          percentage set forth opposite such period of the aggregate
          principal amount of the Notes being prepaid at such time:

                                               Percentage of Principal
                                               Amount Being Prepaid
          Period

          April 30, 1998 to and including      3%
          April 30, 2001
          May 1, 2001 to and including April   2%
          30, 2002
          May 1, 2002 to and including April   1%
          30, 2003
          May 1, 2003 and thereafter           0%

               "Property" with respect to any Person, means any interest in
          any kind of property or asset, whether real, personal or mixed,
          tangible or intangible, of such Person.

               "Put Subordination Agreement" means that certain Put
          Subordination Agreement by and among the Company, ING and the
          Purchaser dated as of the date hereof.

               "Registration Rights Agreement" means that certain
          Registration Rights Agreement, in the form attached as Exhibit D
          hereto, to be dated as of and entered into on the Closing Date,
          among the Company and each of the Persons who will be holders of


                                       - 14 -
          658180v11<PAGE>





          the Warrants, as from time to time amended, modified or
          supplemented in accordance with its terms.

               "Reportable Event" means any of the events set forth in
          Section 4043(b) of ERISA or the regulations thereunder for which
          the 30-day notice requirement applies.

               "Restricted Investment" means any Investment other than

                    (i)  any Investment in Cash Equivalents,

                    (ii) any Investment existing on the Closing Date and
               set forth in Schedule 4.10B,

                    (iii)     any loan or advance to or Guarantee of the
               obligations of any Subsidiary of the Company by the Company
               or any of its Subsidiaries; provided that the aggregate
               amount of such loans, investments or Guarantees in all
               Subsidiaries of the Company that are not Wholly-owned
               Subsidiaries shall not at any time exceed $500,000;

                    (iv) any Investment by the Company in the Capital Stock
               of any Subsidiary of the Company, and any Investment by any
               Subsidiary of the Company in the Capital Stock of any other
               Subsidiary of the Company; provided that (a) the aggregate
               amount of the Investments of the Company and its
               Subsidiaries in all Subsidiaries of the Company shall not at
               any time exceed 20% of the Company's consolidated assets and
               (b) the aggregate amount of such Investments of the Company
               and its Subsidiaries in all Subsidiaries of the Company that
               are not Wholly-owned Subsidiaries shall not at any time
               exceed the lesser of (x) $1,500,000 or (y) 10% of the
               consolidated net worth of the Company as determined in
               accordance with GAAP;

                    (v)  any Investment by the Company or any of its
               Subsidiaries in any Person which is a joint venture of the
               Company or any such Subsidiary with a Person that is not the
               Company or a Subsidiary of the Company, provided that (x)
               such joint venture is not a Subsidiary of the Company or any
               of its Subsidiaries and (y) the aggregate amount of all
               Investments of the Company and its Subsidiaries referred to
               in this subparagraph (iv) (excluding amounts referred to in
               subparagraph (v) of this definition) shall not at any time
               exceed $500,000, and

                    (vi) Guarantees by the Company or any of its
               Subsidiaries of the obligations of joint ventures referred
               to in the foregoing subparagraph (iv) with respect to
               accounts payable of such joint ventures included in current
               liabilities in accordance with GAAP and incurred in respect
               of Property or services purchased in the ordinary course of
               business, provided that the aggregate amount of such
               Guarantees shall at no time exceed $500,000.

                                       - 15 -
          658180v11<PAGE>






                    "Restricted Payment" means, with respect to any Person,

                    (i)  the declaration or payment of any dividend or
               other distribution on, or the incidence of any liability to
               make any other payment in respect of, Capital Stock of such
               Person (other than one payable solely in Capital Stock of
               such Person),

                    (ii) any payment or distribution by such Person on
               account of the purchase, redemption, defeasance (including
               in-substance or legal defeasance) or other retirement of any
               Capital Stock of such Person, or of any warrant, option or
               other right to acquire such Capital Stock (whether directly
               or indirectly, and including, without limitation, any
               purchase or other acquisition of such Capital Stock, or of
               any warrant, option or other right to acquire such Capital
               Stock, by any Subsidiary of such Person),

                    (iii)     any other payment or distribution by such
               Person in respect of its Capital Stock, whether directly or
               indirectly or through any Subsidiary of such Person, and

                    (iv) any payment or distribution by such Person on
               account of the principal of or prepayment charges, if any,
               or interest or other amounts, with respect to any
               Indebtedness of the Company or any of its Subsidiaries which
               is subordinated in right of payment to the prior payment of
               the Notes.

               The amount of any Restricted Payment made in the form of
          Property shall be deemed to be the greater of the Fair Market
          Value or the net book value of such Property. Notwithstanding
          anything to the contrary set forth in this definition, the term
          "Restricted Payment" shall not include (A) the declaration or
          payment of any dividend by, or any other payment or distribution
          in respect of the Capital Stock of, any Wholly-owned Subsidiary
          of the Company which is payable and paid solely to the Company
          and/or one or more other Wholly-owned Subsidiaries of the Company
          or (B) any payment or distribution permitted to be made by the
          Company pursuant to the terms and conditions of the Put
          Subordination Agreement.

               "SEC" means the United States Securities and Exchange
          Commission and any successor agency, authority, commission or
          Governmental Body.

               "Securities Act" means as of any date the Securities Act of
          1933, as amended, or any similar federal statute then in effect,
          and a reference to a particular section thereof shall include a
          reference to the comparable section, if any, of any such similar
          federal statute.



                                       - 16 -
          658180v11<PAGE>





               "Senior Indebtedness" means (i) the Existing Senior Debt and
          (ii) the principal amount of any and all extensions, renewals,
          refundings or refinancings, in whole or in part, of the Existing
          Senior Debt, interest accrued thereon (including, without
          limitation, interest accruing after the filing of any petition in
          bankruptcy, or the commencement of any insolvency, reorganization
          or like proceeding, relating to the Company or any of its
          Subsidiaries, whether or not a claim for post-filing or post-
          petition interest is allowed in such proceeding), prepayment
          premiums payable with respect thereto, and fees, costs, expenses,
          indemnities and other amounts payable with respect thereto.

               "Senior Loan Documents" has the meaning specified in the
          Subordination Agreement.

               "Solvent" means when used with respect to any Person, that
          (i) the fair value of the property of such Person is greater than
          the total amount of liabilities (including, without limitation,
          contingent liabilities) of such Person, (ii) the present fair
          salable value of the assets of such Person is not less than the
          amount that will be required to pay the probable liabilities of
          such Person on its debts as they become absolute and matured,
          (iii) such Person does not intend to, and does not believe that
          it will, incur debts or liabilities beyond such Person's ability
          to pay as such debts and liabilities mature, and (iv) such Person
          is not engaged in business or a transaction, and is not about to
          engage in business or a transaction, for which such Person's
          assets would constitute unreasonably small capital.  For such
          limitation, pending litigation, Guarantees and pension plan
          taxes, if any, are valued at the amount that, in light of all the
          facts and circumstances existing at such time, represents the
          amount that can reasonably be expected to become an actual or
          matured liability.

               "Specified IP Contracts" means (i) the License Agreement
          between University of Ulster and Nirad Limited dated December 11,
          1992 and (ii) the License Agreement between Survival Technology,
          Inc. and Becton, Dickinson and Company dated October 31, 1996.

               "Statute" means any statute, ordinance, code, treaty,
          directive, law, rule or regulation of any Governmental Body.

               "Subordinated Indebtedness" has the meaning specified in the
          Subordination Agreement.

               "Subordination Agreement" has the meaning specified in
          Section 6.8.

               "Subsidiary" shall mean, with respect to any Person, any
          corporation or other entity of which at least a majority of the
          outstanding Voting Stock is at the time directly or indirectly
          owned or controlled by such Person or by one or more of any
          entities directly or indirectly owned or controlled by such
          Person.

                                       - 17 -
          658180v11<PAGE>






               "Subsidiary Guarantee" means a Guarantee in the form of
          Exhibit B, to be executed and delivered pursuant to Section 9.5
          by any Person which thereafter becomes a Subsidiary of the
          Company organized under the laws of the United States of America.

               "Taxes" has the meaning specified in Section 3.5(a).

               "Total Debt Leverage Ratio" means, for any period, the ratio
          of (a) the aggregate outstanding principal amount of all
          Indebtedness of the Company and its Subsidiaries as of the last
          day of such period to (b) EBITDA for such period.

               "Total Debt Service" means, for any period, the sum of (a)
          Interest Expense with respect to all Indebtedness of the Company
          and its Subsidiaries during such period, plus (b) principal
          repayments, if any, of the Loans (as such term is defined in the
          Credit Agreement) during such period required to be made pursuant
          to clause (e) of Section 3.3.1 of the Credit Agreement, plus (c)
          principal repayments, if any, of all other Indebtedness of the
          Company and its Subsidiaries required to be made during such
          period.

               "Total Debt Service Ratio" means, for any period, the ratio
          of (a) EBITDA to (b) Total Debt Service.

               "Unaudited Financial Statements" has the meaning specified
          in Section 4.5(b).

               "Unfunded Current Liability" of any Pension Plan shall mean
          the amount, if any, by which the actuarial present value of the
          accumulated plan benefits under the Pension Plan as of the close
          of its most recent plan year, determined in accordance with
          Statement of Financial Accounting Standards No. 35, based upon
          the actuarial assumptions used by the Pension Plan's actuary in
          the most recent annual valuation of the Pension Plan, exceeds the
          fair market value of the assets allocable thereto, determined in
          accordance with Treasury Regulations Sections 1.412(c)(2)-
          1(c)(l).

               "U.S. Person" means a citizen or resident of the United
          States of America, a corporation, partnership or other entity
          created or organized in or under any laws of the United States of
          America or of any State thereof, or any estate or trust that is
          subject to federal income taxation regardless of the source of
          its income.

               "U.S. Taxes" has the meaning specified in Section 3.5(b).

               "Voting Stock" with respect to any Person shall mean Capital
          Stock of such Person of any class or classes, the holders of
          which are ordinarily, in the absence of contingencies, entitled
          to vote for the election of members of the Board of Directors (or
          Persons performing similar functions) of such Person.

                                       - 18 -
          658180v11<PAGE>






               "Warrant" and "Warrants" have the meanings specified in
          Section 2.1(b).

               "Wholly-owned Subsidiary" shall mean, with respect to any
          Person, any Subsidiary of such Person all of the shares of
          Capital Stock (and all rights and options to purchase such
          shares) of which, other than directors' qualifying shares, are
          owned, beneficially and of record, by such Person and/or one or
          more Wholly-owned Subsidiaries of such Person.

                    Section 1.2.   Accounting Terms{tc "Section 1.2.
               Accounting Terms" \f C \l 2}.  All accounting terms used in
          this Agreement shall be applied on a consolidated basis for the
          Company and its Subsidiaries, unless otherwise specifically
          indicated herein.  Any accounting terms not specifically defined
          herein shall have the meanings customarily given them in
          accordance with GAAP.

                    Section 1.3.   Rules of Construction{tc "Section 1.3.
               Rules of Construction" \f C \l 2}.  The words "herein,"
          "hereof" and "hereunder" and other words of similar import refer
          to this Agreement as a whole and not to any particular Section or
          subsection.  Reference herein to any Section or subsection refers
          to such Section or subsection (as the case may be) hereof.  Words
          in the singular include the plural, and words in the plural
          include the singular.  Each covenant or agreement contained
          herein shall be construed (absent express provision to the
          contrary) as being independent of each other covenant or
          agreement contained herein, so that compliance with any one
          covenant or agreement shall not (absent such an express contrary
          provision) be deemed to excuse compliance with any other covenant
          or agreement.  Where any provision herein refers to action to be
          taken by any Person, or which such Person is prohibited from
          taking, such provision shall be applicable whether such action is
          taken directly or indirectly by such Person.

                    Section 2.   Sale and Purchase of Notes and
          Warrants{tc "Section 2.Sale and Purchase of Notes and Warrants"
          \f C \l 1}.

                    Section 2.1.   Authorization of Notes and Warrants{tc
          "Section 2.1.  Authorization of Notes and Warrants" \f C \l 2}.
          The Company has duly authorized the issue, sale and delivery of:

                    (a)  its 12.0% Senior Subordinated Notes Due 2005 in
          the aggregate principal amount of $15,000,000, to be dated the
          date of issue thereof, (i) to bear interest (computed on the
          basis of a 360-day year and actual days elapsed) from such date
          at the rate of 12.0% per annum payable in cash quarterly in
          arrears on the first day of July, October, January and April in
          each year (commencing July 1, 1998) and at maturity, and to bear
          interest (so computed) payable in cash on demand at the rate of
          14.0% per annum (x) on any overdue principal and Prepayment

                                       - 19 -
          658180v11<PAGE>





          Premium, if any, and, to the extent permitted by applicable law,
          on any overdue interest, until the same shall be paid and (y)
          during the continuance of any Event of Default, (ii) to mature on
          April 30, 2005, and (iii) to be substantially in the form of
          Exhibit A hereto attached (all such Notes originally issued
          pursuant to this Agreement, or delivered in substitution or
          exchange for any thereof, being collectively called the "Notes"
          and individually a "Note").

                    (b)  its Warrants, initially exercisable to purchase an
          aggregate of 204,770 shares (subject to adjustment as therein
          provided) of its authorized but unissued Common Stock, at an
          initial exercise price of $11.988 per share (subject to
          adjustment as therein provided), to be exercisable during the
          period commencing on the Closing Date and ending on April 30,
          2005, and to be substantially in the form of Exhibit E hereto
          attached (all such Warrants originally issued pursuant to this
          Agreement, or delivered in substitution or exchange for any
          thereof, being collectively called the "Warrants" and
          individually a "Warrant").

                    Section 2.2.  Issuance and Sale of Notes and
          Warrants.{tc "Section 2.2.    Issuance and Sale of Notes and
          Warrants" \f C \l 2}

                    (a)  Subject to the terms and conditions herein set
          forth, the Company hereby agrees to sell to the Purchaser, and
          the Purchaser agrees to purchase from the Company, Notes in the
          aggregate principal amount of $15,000,000, at a purchase price of
          100% of the principal amount thereof.

                    (b)  Subject to the terms and conditions herein set
          forth, the Company hereby agrees to issue to the Purchaser, in
          consideration of its purchase of Notes hereunder and as
          additional interest on such Notes, Warrants initially exercisable
          to purchase an aggregate of 204,770 shares of Common Stock.


                    Section 2.3.   Closing{tc "Section 2.3. Closing" \f C
          \l 2}.  (a)  The initial closing of the sale and delivery of
          Notes and Warrants shall take place at the offices of Stroock &
          Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038 at
          10:00 a.m., New York time on May 1, 1998 or such other date as
          the parties shall agree (herein called the "Closing Date").

                    (b)  On the Closing Date, the Company will deliver to
          the Purchaser:

                         (i)  Notes registered in the name of the Purchaser
                    or its nominee, duly executed and dated the Closing
                    Date, in the aggregate principal amount of U.S.
                    $15,000,000, in such denominations as the Purchaser
                    shall specify, against the Purchaser's delivery to the


                                       - 20 -
          658180v11<PAGE>





                    Company of immediately available funds in the amount of
                    the aggregate purchase price of such Notes, and

                         (ii) Warrants initially exercisable to purchase an
                    aggregate of 204,770 shares of Common Stock, registered
                    in the name of the purchaser or its nominee, duly
                    executed and dated the Closing Date, in such
                    denominations as the Purchaser shall specify (or, in
                    the absence of such notice, one Warrant registered in
                    the Purchaser's name initially exercisable for such
                    aggregate number of shares of Common Stock).

                    Section 2.4.   Fees{tc "Section 2.4.    Fees" \f C \l
          2}.  (a)  On the Closing Date, the Company will pay to the
          Purchaser a non-refundable funding fee in an amount equal to
          $37,500.

                    (b)  On the Closing Date, the Company will pay to
          Nomura Securities International, Inc. a non-refundable
          structuring fee in an amount equal to $37,500.

                    Section 2.5.   Interest Rate Limitation{tc "Section 2.5
               Interest Rate Limitation" \f C \l 2}. Notwithstanding any
          provisions of this Agreement or the Notes, in no event shall the
          amount of interest paid or agreed to be paid by the Company
          exceed an amount computed at the highest rate of interest
          permissible under applicable law.  If, from any circumstances
          whatsoever, fulfillment of any provision of this Agreement or the
          Notes at the time performance of such provision shall be due,
          shall involve exceeding the interest rate limitation validly
          prescribed by law which a court of competent jurisdiction may
          deem applicable hereto, then, ipso facto, the obligations to be
          fulfilled shall be reduced to an amount computed at the highest
          rate of interest permissible under applicable law, and if for any
          reason whatsoever any Purchaser shall ever receive as interest an
          amount which would be deemed unlawful under such applicable law
          such interest shall be automatically applied to the payment of
          principal of the Notes outstanding hereunder (whether or not then
          due and payable), without prepayment charge, premium or penalty,
          and not to the payment of interest, or shall be refunded to the
          Company if such principal and all other obligations of the
          Company to such Purchaser have been paid in full.

                    Section 2.6.   Allocation of Purchase Price{tc "Section
          2.6. Allocation of Purchase Price" \f C \l 2}.  It is hereby
          agreed that, for purposes of Treasury Regulations S 1.1273-2(h),
          (i) the aggregate "issue price" of the investment unit consisting
          of the Notes and Warrants to be issued pursuant to this Agreement
          is $15,000,000, (ii) the aggregate fair market value and
          aggregate purchase price of the Notes is $14,070,344, and (iii)
          the aggregate fair market value and aggregate purchase price of
          the Warrants is $929,656.  The Company and the Purchaser agree to
          use the foregoing issue price, purchase prices and fair market
          values for U.S. federal income tax purposes with respect to this

                                       - 21 -
          658180v11<PAGE>





          transaction (unless otherwise required by a final determination
          by the Internal Revenue Service or a court of competent
          jurisdiction).

                    Section 2.7.   Reduced Return{tc "Section 2.7.
               Reduced Return" \f C \l 2}.  If the Purchaser shall have
          determined that the applicability of any law, rule, regulation or
          guideline adopted after the date hereof pursuant to or arising
          out of the July 1988 report of the Basle Committee on Banking
          Regulations and Supervisory Practices entitled "International
          Convergence of Capital Measurement and Capital Standards," or the
          adoption after the date hereof of any other law, rule, regulation
          or guideline regarding capital adequacy, or any change after the
          date hereof in any of the foregoing or in the enforcement or
          interpretation or administration of any of the foregoing by any
          court or any central bank or other Governmental Body, charged
          with the enforcement or interpretation or administration thereof,
          or compliance by the Purchaser (or any lending office of the
          Purchaser) or the Purchaser's holding company with any request or
          directive regarding capital adequacy (whether or not having the
          force of law) of any such Governmental Body, has or would have
          the effect of reducing the rate of return on the Purchaser's
          capital or on the capital of the Purchaser's holding company, if
          any, as a consequence of its purchasing any Notes or its
          obligations under this Agreement to a level below that which the
          Purchaser or the Purchaser's holding company could have achieved
          but for such applicability, adoption, change or compliance
          (taking into consideration the Purchaser's policies and the
          policies of the Purchaser's holding company with respect to
          capital adequacy) by an amount deemed by the Purchaser acting
          reasonably to be material, then, upon demand by the Purchaser,
          the Company shall pay to the Purchaser from time to time such
          additional amount or amounts as will compensate the Purchaser or
          the Purchaser's holding company for any such reduction suffered.
          The certificate of the Purchaser with respect to such additional
          amount or amounts shall be conclusive absent manifest error.

                    Section 3.     Payments and Prepayments of Notes{tc
          "Section 3.    Payments and Prepayments of Notes" \f C \l 1}.

                    Section 3.1.   Optional Prepayments of the Notes{tc
          "Section 3.1.  Optional Prepayments of the Notes" \f C \l 2}.
          (a) Upon notice given as provided in Section 3.2, the Company, at
          its option, may prepay at any time all or from time to time any
          part (in an aggregate amount of $1,000,000 or any greater amount
          which is an even multiple of $100,000, or, if the aggregate
          principal balance of the Notes shall be less than $1,000,000,
          then in an amount equal to such aggregate principal balance) of
          the principal amount of the Notes, together with accrued but
          unpaid interest on the principal amount being prepaid to the date
          of such prepayment, plus payment of the applicable Prepayment
          Premium.



                                       - 22 -
          658180v11<PAGE>





                    (b)  If, on or prior to the third Business Day after
          the date of the receipt by the Company of proceeds from a public
          offering of any of the Company's Capital Stock (other than
          issuances of Capital Stock to employees, officers and directors
          of the Company pursuant to stock option plans of the Company),
          the Company applies all or a portion of such proceeds from the
          offering of its Capital Stock as a prepayment pursuant to Section
          3.2(a) above, then the amount of the Prepayment Premium due in
          respect of such prepayment (to the extent attributable to such
          proceeds) shall be one-half of the amount specified in the
          definition thereof.

               Each prepayment made pursuant to this Section 3.1 shall be
          allocated as provided in Section 3.3.

                    Section 3.2.   Notice of Prepayment of the Notes{tc
          "Section 3.2.  Notice of Prepayment of the Notes" \f C \l 2}.
          The Company shall call Notes for prepayment pursuant to Section
          3.1 by giving written notice thereof to each holder of Notes not
          less than 15 nor more than 60 days prior to the date fixed for
          such prepayment.  Such notice shall specify (a) the date fixed
          for such prepayment, (b) the principal amount to be prepaid on
          such date, (c) the amount of accrued interest to be paid on such
          date and (d) the amount of the Prepayment Premium, if any, to be
          paid in connection therewith.  Notice of prepayment having been
          so given, the aggregate principal amount of the Notes so to be
          prepaid as specified in such notice, together with interest
          accrued thereon to such date fixed for prepayment, plus the
          applicable Prepayment Premium, if any, shall become due and
          payable on the specified prepayment date.

                    Section 3.3.   Allocation of Payments{tc "Section 3.3.
               Allocation of Payments" \f C \l 2}.  In the event of any
          payment or prepayment of less than the entire outstanding
          principal balance of the Notes pursuant to Section 3.1, the
          Company shall allocate the principal amount so to be paid or
          prepaid by it and the interest and Prepayment Premium, if any,
          among the Notes in proportion, as nearly as may be, to the
          respective unpaid principal amounts thereof.

                    Section 3.4.   Payments{tc "Section 3.4.     Payments"
          \f C \l 2}.  Each payment by the Company hereunder of the
          principal amount of the Notes, interest thereon, Prepayment
          Premium fees, costs, expenses, indemnities and other amounts due
          hereunder shall be made in Dollars by wire transfer of
          immediately available funds, without deduction (except as
          provided in Section 3.5), set-off or counterclaim, to each holder
          of Notes entitled to receive such payment at such office or bank
          account as shall be specified by such holder from time to time by
          written notice to the Company, not later than 1:00 p.m. (New York
          City time) on the date on which such payment shall become due
          (each such payment made after such time on such due date to be
          deemed to have been made on the next succeeding Business Day).
          Whenever any payment hereunder or under the Notes shall be stated

                                       - 23 -
          658180v11<PAGE>





          to be due on a day other than a Business Day, that payment shall
          be made on the next succeeding Business Day and the extension of
          time shall be included in the computation of interest due
          thereon.

                    Section 3.5.   Taxes{tc "Section 3.5.   Taxes" \f C \l
          2}.  (a)  All payments by the Company or other payor under this
          Agreement or with respect to the Notes shall be made free and
          clear of and without deduction for any and all present or future
          taxes, levies, imposts, deductions, charges or withholdings
          imposed on or with respect to such payments, and all interest,
          penalties and other liabilities with respect thereto (all such
          taxes, levies, imposts, deductions, charges, withholdings and
          liabilities being hereinafter referred to as "Taxes"), excluding
          (i) taxes on Purchaser's net income or capital or (ii) franchise
          taxes, in each case imposed on Purchaser by the jurisdiction
          under the laws of which it is organized or any subdivision
          thereof (all such nonexcluded Taxes being hereinafter referred to
          as "Covered Taxes").

                    (b)  If the Company shall be required by law to deduct
          any Covered Taxes imposed by the United States of America or any
          taxing authority thereof ("U.S. Taxes") from or in respect of any
          sum payable hereunder to any holder which is not a U.S.  Person,
          (i) except as provided in subsection (f) below, the sum payable
          shall be increased as may be necessary so that after making all
          required deductions (including deductions applicable to
          additional sums payable under this Section 3.5), such holder
          receives an amount equal to the sum it would have received had no
          such deductions been made, (ii) the Company shall make such
          deductions and (iii) the Company shall pay the full amount
          deducted to the relevant taxation authority or other authority in
          accordance with applicable law.  Upon the occurrence of any event
          giving rise to the operation of this Section 3.5(b) with respect
          to any holder, such holder shall, if requested by the Company,
          use reasonable efforts to designate another office of such holder
          through which its Notes are held, with the object of preventing
          the consequence of the event giving rise to the operation of this
          Section 3.5(b); provided that such designation would not result
          in the imposition of any U.S. Taxes or other taxes, levies,
          imposts, deductions, charges or withholdings by any jurisdiction
          on such holder or with respect to any amounts payable to such
          holder hereunder, or other material cost or expense to such
          holder, or violate any Statute or Order to which such holder or
          the Company is then subject.

                    (c)  In addition, the Company agrees to pay any present
          or future stamp or documentary taxes or any other excise or
          property taxes, charges or similar levies that arise from any
          payment made under this Agreement or the Notes or from the
          execution, delivery, enforcement or registration of, or otherwise
          with respect to, this Agreement or the Notes, other than any
          transfer taxes payable in connection with a change in the


                                       - 24 -
          658180v11<PAGE>





          registered holder of any Notes (hereinafter referred to as "Other
          Taxes").

                    (d)  The Company will indemnify each holder of Notes
          for the full amount of Covered Taxes, U.S. Taxes or Other Taxes
          imposed by any jurisdiction and paid by such holder with respect
          to any amounts payable pursuant to this Section 3.5, and any
          liability (including penalties, additions to tax, interest and
          expenses) arising therefrom or with respect thereto, whether or
          not such Covered Taxes, U.S. Taxes or Other Taxes were correctly
          asserted.  This indemnification shall be made within 30 days from
          the date such holder makes written demand therefor (which demand
          shall identify the nature and amount of Covered Taxes, U.S. Taxes
          or Other Taxes for which indemnification is being sought and
          shall include a copy of the relevant portion of any written
          assessment from the relevant taxing authority demanding payment
          of such Covered Taxes, U.S. Taxes or Other Taxes).

                    (e)  Within 30 days after the date of any payment of
          Covered Taxes, U.S. Taxes or Other Taxes, the Company will
          furnish to the holders of Notes the original or a certified copy
          of any receipt furnished by the relevant taxing authority
          evidencing payment thereof.

                    (f)  The Company shall have no obligation to pay
          additional amounts in respect of U.S. Taxes to any holder of
          Notes which is not a U.S. Person pursuant to subsection (b) of
          this Section 3.5, or to indemnify such holder in respect of such
          U.S. Taxes pursuant to subsection (d) of this Section 3.5, if
          such U.S. Taxes are imposed solely by reason of such holder's
          failure to comply with applicable certification, information,
          documentation or other reporting requirements concerning the
          nationality, residence, identity or connections with the United
          States of America of such holder.

                    (g)  Without prejudice to the survival of any other
          agreement contained herein, the agreements and obligations
          contained in this Section 3.5 shall survive the payment in
          full of principal, interest, fees and any other amounts
          payable hereunder (other than amounts payable pursuant to this
          Section 3.5).

                    Section 3.6.   Surrender of Notes; Notation Thereon{tc
          "Section 3.6.  Surrender of Notes; Notation Thereon " \f C \l 2}.
          The Company may, as a condition of payment of all or any part of
          the principal of, Prepayment Premium (if any) and interest on,
          any Note, require the holder of such Note to present such Note
          for notation of such payment and, if such Note be paid in full,
          require the surrender thereof.

                    Section 3.7.   Purchase of Notes{tc "Section 3.7.
               Purchase of Notes" \f C \l 2}.  The Company will not, nor
          will it permit any of its Subsidiaries or Affiliates to, acquire
          directly or indirectly by purchase or prepayment or otherwise any

                                       - 25 -
          658180v11<PAGE>





          of the outstanding Notes except by way of payment or prepayment
          in accordance with the provisions of such Notes and of this
          Agreement.  If the Company or any of its Subsidiaries or
          Affiliates acquires any Notes in violation of this Section 3.4 or
          in any other manner, such Notes shall thereafter be canceled and
          shall not be reissued, no Note shall be issued in substitution
          therefor, and such Notes shall not be deemed to be outstanding
          for any purpose under this Agreement.

                    Section 4.     Representations and Warranties of the
          Company{tc "Section 4.   Representations and Warranties of the
          Company" \f C \l 1}.  The Company represents and warrants to the
          Purchaser that:

                    Section 4.1.   Corporate Existence and Power{tc
          "Section 4.1.  Corporate Existence and Power" \f C \l 2}.  Each
          of the Company and its Subsidiaries is a corporation duly
          organized, validly existing and in good standing under the laws
          of their respective jurisdictions of incorporation and are duly
          qualified to do business in each additional jurisdiction where
          the failure to so qualify would have a Material Adverse Effect.
          The Company and each of its Subsidiaries have all requisite
          corporate power to own their respective Properties and to carry
          on their respective businesses as now being conducted and as
          proposed to be conducted, and in the case of the Company to
          execute, deliver and perform its obligations under this
          Agreement, the Notes, the Warrants and the Registration Rights
          Agreement.

                    Section 4.2.   Corporate Authority{tc "Section 4.2.
               Corporate Authority" \f C \l 2}. The execution, delivery and
          performance by the Company of this Agreement, the Notes, the
          Warrants and the Registration Rights Agreement are within the
          corporate powers of the Company and have been duly authorized by
          all necessary corporate action on the part of the Board of
          Directors of the Company and no action on the part of the
          stockholders of the Company is required in connection therewith.

                    Section 4.3.   Binding Effect{tc "Section 4.3.
               Binding Effect" \f C \l 2}.  This Agreement and the
          Registration Rights Agreement have been duly executed and
          delivered by the Company and are, and the Notes and Warrants when
          issued, executed and delivered as contemplated herein will be,
          the legal, valid and binding obligations of the Company, in each
          case enforceable against the Company in accordance with their
          respective terms, except, in each of the foregoing cases, as such
          enforceability may be limited by applicable bankruptcy,
          insolvency, reorganization, moratorium, or other laws relative to
          or affecting the enforcement of creditors' rights generally in
          effect from time to time and by general principles of equity.

                    Section 4.4.   Capital Stock{tc "Section 4.4.
               Capital Stock" \f C \l 2}.  (a)  Except as set forth on
          Schedule 4.4, there are no securities outstanding that are

                                       - 26 -
          658180v11<PAGE>





          convertible into or exchangeable for any shares of Capital Stock
          of the Company, nor, except as set forth on Schedule 4.4, are
          there outstanding any rights to subscribe for or purchase, or any
          options or warrants for the purchase of, or any agreements
          (contingent or otherwise) providing for the issuance of, or any
          calls, commitments or claims of any character relating to, any
          shares of Capital Stock of the Company, or any securities
          convertible into or exchangeable for any such shares.

                    (b)  The shares of Common Stock issuable upon exercise
          of the Warrants have been duly and validly reserved for issuance
          upon such exercise and, when issued and delivered against payment
          therefor as provided therein, will be duly authorized, validly
          issued, fully paid and non-assessable and subject to no Liens in
          respect of the issuance thereof.

                    Section 4.5.  Business Operations and Other
          Information; Financial Condition{tc "Section 4.5. Business
          Operations and Other Information; Financial Condition" \f C \l
          2}.  (a) The Company has delivered to the Purchaser copies of (i)
          the Company's Annual Report on Form 10-K for the fiscal year
          ended July 31, 1997, (ii) the Company's Annual Report to
          Stockholders for the fiscal year ended July 31, 1997, (iii) the
          Company's Quarterly Reports on Form 10-Q, as amended, for the
          fiscal quarters ended October 31, 1997 and January 31, 1998, and
          (iv) the Company's definitive Proxy Statement distributed to its
          stockholders in connection with its 1997 annual meeting of
          stockholders, each as filed with the SEC (collectively, the
          "Company Reports").  The Company Reports do not contain any
          misstatement of a material fact or omit to state any material
          fact necessary in order to make the statements therein, in light
          of the circumstances under which they were made, not misleading.
          The Company Reports, taken together, contain a true and correct
          description of the businesses, operations and principal
          Properties of the Company and its Subsidiaries as of the
          respective dates thereof.

                    (b)  Set forth in the Company Reports are (i) the
          audited consolidated balance sheets of the Company and its
          Subsidiaries as of July 31, 1997 and June 30, 1996, and the
          audited consolidated statements of operations, stockholders'
          equity and cash flows of the Company and its Subsidiaries for the
          fiscal years ended July 31, 1997, June 30, 1996 and June 30,
          1995, together with the notes thereto and the reports thereon of
          Ernst & Young LLP, Price Waterhouse LLP and Arthur Andersen LLP
          (the "Audited Financial Statements") and (ii) the unaudited
          consolidated balance sheets of the Company and its Subsidiaries
          as of October 31, 1997 and January 31, 1998, and the related
          unaudited consolidated statements of operations and cash flows
          for each of the three-month and six-month periods then ended,
          together with the notes thereto (the financial statements
          referred to in clause (ii) are herein collectively called the
          "Unaudited Financial Statements"; the Audited Financial
          Statements and the Unaudited Financial Statements are sometimes

                                       - 27 -
          658180v11<PAGE>





          hereinafter collectively referred to as the "Financial
          Statements").  The Audited Financial Statements have been
          prepared in accordance with GAAP consistently applied throughout
          the periods involved, and present fairly, in all material
          respects, the consolidated financial position and related
          consolidated results of operations, stockholders' equity and cash
          flows of the Company and its Subsidiaries as at each of the dates
          and for each of the periods covered thereby, subject, in the case
          of the Unaudited Financial Statements, to non-material year-end
          audit adjustments, absence of certain of the notes required by
          GAAP and absence of statements of stockholders' equity.

                    (c)  As of the date of each of the balance sheets
          included in the Audited Financial Statements and the Unaudited
          Financial Statements, neither the Company nor any of its
          Subsidiaries had any material Indebtedness or material liability,
          absolute or contingent, liquidated or unliquidated, except
          Indebtedness and liabilities reflected or reserved against on
          such respective balance sheets or described in the notes thereto.
          Since July 31, 1997, no Material Adverse Effect has occurred.

                    Section 4.6.   Subsidiaries{tc "Section 4.6.
               Subsidiaries" \f C \l 2}. Set forth in Schedule 4.6 attached
          hereto is a true and complete list of all Subsidiaries of the
          Company, setting forth as to each such Subsidiary its
          jurisdiction of incorporation and the percentage of each class of
          Capital Stock of such Subsidiary owned by the Company or a
          Subsidiary of the Company. Except as set forth in Schedule 4.6,
          the Company does not own any shares of Capital Stock of, and has
          no direct or indirect equity interest in, any Person other than
          the Subsidiaries listed in Schedule 4.6. Except as set forth in
          Schedule 4.6, the Company has good title to all of the shares of
          Capital Stock it owns of each of its Subsidiaries, free and clear
          in each case of any Lien. All such shares of Capital Stock of
          each Subsidiary have been duly and validly issued, and are fully
          paid and non-assessable and owned of record and beneficially by
          the Company and/or one or more of its Subsidiaries.  There are no
          securities outstanding that are convertible into or exchangeable
          for any shares of Capital Stock of the Company's Subsidiaries,
          nor are there outstanding any rights to subscribe for or
          purchase, or any options or warrants for the purchase of, or any
          agreements (contingent or otherwise) providing for the issuance
          of, or any calls, commitments or claims of any character relating
          to, any shares of Capital Stock of the Company's Subsidiaries or
          any securities convertible into or exchangeable for any such
          shares.

                    Section 4.7.   Litigation; No Violation of Governmental
          Orders or Laws{tc "Section 4.7.    Litigation; No Violation of
          Governmental Orders or Laws" \f C \l 2}.  (a)  Except as set
          forth on Schedule 4.7, there are no judicial, administrative,
          arbitral or other actions, suits or proceedings pending or, to
          the knowledge of the Company after due inquiry, threatened
          against or affecting the Company or any of its Subsidiaries, or

                                       - 28 -
          658180v11<PAGE>





          any Properties or rights of any of them which, if adversely
          determined, individually or in the aggregate, would have a
          Material Adverse Effect.

                    (b)  There are no judicial, administrative, arbitral or
          other actions, suits or proceedings pending or, to the knowledge
          of the Company after due inquiry, threatened against or affecting
          the Company or any of its Subsidiaries which seek to enjoin, or
          otherwise prevent the consummation of, the transactions
          contemplated herein or to recover any damages or obtain any
          relief as a result of any of the transactions contemplated herein
          in any court or before any arbitrator of any kind or before or by
          any Governmental Body.

                    (c)  Neither the Company nor any of its Subsidiaries is
          subject to any Order of any Court, arbitrator or Governmental
          Body which individually or in the aggregate, would have a
          Material Adverse Effect.

                    (d)  Neither of the Company nor any of its Subsidiaries
          is, or will be after giving effect to the consummation of the
          transactions contemplated hereby, in default under or in
          violation of any federal, state, local and foreign Statute or
          Order, which default or violation, individually or in the
          aggregate together with all other such defaults and violations,
          has had or is reasonably likely to have a Material Adverse
          Effect.

                    Section 4.8.   No Conflicts with Agreements, Statutes,
          Orders, Etc{tc "Section 4.8.  No Conflicts with Agreements,
          Statutes, Orders, Etc" \f C \l 2}.  Neither the execution and
          delivery by the Company of this Agreement, the Notes, the
          Warrants and the Registration Rights Agreement, nor the offering,
          issuance or sale of the Notes or the Warrants, nor the
          fulfillment of or compliance with the terms and provisions hereof
          or thereof, will conflict with, or result in a breach or
          violation of the terms, conditions or provisions of, or
          constitute a default under, or result in the creation of, any
          Lien (other than Permitted Liens) on any Properties or assets of
          the Company or its Subsidiaries pursuant to, the charter or by-
          laws of the Company or its Subsidiaries, or any contract,
          agreement, mortgage, indenture, lease or instrument to which any
          of them is a party or by which any of them is bound or to which
          or any of their respective assets are subject, or any Order or
          Statute to which any of them or any of their respective assets
          are subject.

                    Section 4.9.   Consents, Etc.{tc "Section 4.9.
               Consent, Etc." \f C \l 2}  Except as set forth in Schedule
          4.9, no consent, approval or authorization of or declaration,
          registration or filing with any Governmental Body or any
          nongovernmental Person, including, without limitation, any
          creditor or stockholder of the Company or any of its
          Subsidiaries, is required in connection with the execution or

                                       - 29 -
          658180v11<PAGE>





          delivery by the Company of this Agreement, the Notes, the
          Warrants or the Registration Rights Agreement, or the performance
          by the Company of its obligations hereunder or thereunder, or as
          a condition to the legality, validity or enforceability of this
          Agreement, the Notes, the Warrants or the Registration Rights
          Agreement, except for such consents, approvals, authorizations,
          declarations, registrations or filings as are listed in Schedule
          4.9, all of which have been obtained or will be obtained on or
          prior to the Closing Date and are or will then be in full force
          and effect.

                    Section 4.10.  Outstanding Indebtedness;
          Investments{tc "Section 4.10. Outstanding Indebtedness;
          Investments" \f C \l 2}.

                    (a)  Schedule 4.10A sets forth a correct and complete
          list and brief description of all Indebtedness for borrowed money
          of the Company and all Liens securing such Indebtedness
          (excluding any Indebtedness evidenced by the Notes), indicating
          which such Indebtedness will be discharged and paid in full on
          the Closing Date (the "Non-Continuing Indebtedness") and which
          such Indebtedness will be continuing after giving effect to the
          transactions contemplated herein (the "Continuing Indebtedness").
          There exists no breach or default under the terms and provisions
          of any instrument, agreement or contract pertaining to any such
          Indebtedness and no event or condition which, with due notice or
          lapse of time or both, would constitute such a breach or default.

                    (b)  Schedule 4.10B sets forth a correct and complete
          list and brief description of all Investments of the Company and
          its Subsidiaries.

                    Section 4.11.  Assets and Properties{tc "Section 4.11.
               Assets and Properties" \f C \l 2}.  (a)  Schedule 4.11 sets
          forth a true and complete list of all fee interests in real
          Property and leases of real Property of the Company or its
          Subsidiaries.

                    (b)  Each of the Company and its Subsidiaries has good
          and marketable title to all of its respective Properties (other
          than Properties leased from others), subject to no Lien of any
          kind except Permitted Liens.

                    (c)  The Properties owned by, leased to or used by the
          Company and its Subsidiaries, taken as a whole, are in good
          operating condition and repair, ordinary wear and tear excepted,
          are free and clear of any known defects except such defects as do
          not materially interfere with the continued use thereof in the
          conduct of normal operations of the Company and its Subsidiaries
          and are able to serve the function for which they are currently
          being used in all material respects, in each case except as
          disclosed in Schedule 4.11.



                                       - 30 -
          658180v11<PAGE>





                    (d)  The Company has furnished or made available to the
          Purchaser or its representatives true and complete copies of all
          leases of real Property leased by the Company or any of its
          Subsidiaries from others, together with all amendments,
          modifications and supplements thereto to the date hereof.  Each
          of the Company and its Subsidiaries enjoys peaceful and
          undisturbed possession under all leases, whether of realty or
          personalty, to which it respectively is a party, and all such
          leases are valid and subsisting and in full force and effect.
          None of the Company or any of its Subsidiaries is in breach or
          violation of the terms of any such lease, and the Company does
          not know of any breach or violation of any of such leases by any
          third party, except, in each case, for such breaches and
          institutions thereof as in the aggregate do not and will not have
          a Material Adverse Effect.

                    Section 4.12.  Taxes{tc "Section 4.12.  Taxes" \f C \l
          2}.  Each of the Company and its Subsidiaries has filed, or on
          behalf of each of them there have been filed, all federal, state,
          local and foreign tax returns, informational returns and excise
          tax returns which are required to have been filed by or on behalf
          of such Persons, and there have been paid all taxes shown to be
          due and payable on such returns and all other material taxes and
          assessments payable by any of them, unless any tax liability is
          being diligently contested in good faith and the Company or any
          of its Subsidiaries, as the case may be, has adequately reserved
          against such tax liability on its books and financial statements
          in accordance with GAAP.  No tax liens have been filed and no
          claims are being asserted with respect to any such taxes as of
          the date hereof.  No tax assessment against the Company or any of
          its Subsidiaries has been proposed and all of their respective
          tax liabilities are adequately provided for on their respective
          books and financial statements in accordance with GAAP.  The
          federal income tax returns of the Company and its Subsidiaries
          have been audited by the Internal Revenue Service, and such
          audits have been completed, or the statute of limitations has
          run, for all tax years of the Company through and including the
          year ended July 31, 1992, and all deficiencies, assessments,
          interest and penalties proposed as a result of any such audit
          have been paid in full.  No issue has been raised in any such
          examination that, by application of similar principles, may
          reasonably be expected to result in the assertion of a material
          deficiency for any other taxable year not so examined.

                    Section 4.13.  Disclosure{tc "Section 4.13.
               Disclosure" \f C \l 2}.  This Agreement and the documents,
          certificates or other writings delivered to the Purchaser by or
          on behalf of the Company in connection with the transactions
          contemplated hereby, taken as a whole, do not contain any untrue
          statement of material fact or omit to state a material fact
          necessary to make the statements therein not misleading in light
          of the circumstances under which they were made.  There is no
          fact known to the Company that could reasonably be expected to
          have a Material Adverse Effect that has not been set forth herein

                                       - 31 -
          658180v11<PAGE>





          or in the other documents, certificates or other writings
          delivered to the Purchaser by or on behalf of the Company
          specifically for use in connection with the transactions
          contemplated hereby.

                    Section 4.14.  Offering of Securities{tc "Section 4.14.
               Offering of Securities" \f C \l 2}.  None of the  Company,
          any of its Subsidiaries or their respective representatives has,
          directly or indirectly, offered any of the Notes or the Warrants
          or any security similar to any of them for sale to, or solicited
          any offers to buy any of the Notes or the Warrants or any
          security similar to any of them from, or otherwise approached or
          negotiated with respect thereto with, more than 60 Persons
          excluding the Purchaser, and none of the Company, any of its
          Subsidiaries or their respective representatives has taken or
          will take any action which would subject the issuance or sale of
          any of the Notes or Warrants to the provisions of Section 5 of
          the Securities Act or violate the provisions of any securities or
          Blue Sky laws of any applicable jurisdiction.

                    Section 4.15.  Broker's or Finder's Commissions{tc
          "Section 4.15. Broker's or Finder's Commissions" \f C \l 2}.
          Except for the structuring fee of Nomura Securities
          International, Inc. and fees of ING Baring (U.S.) Securities,
          Inc., no broker's or finder's fee or commission will be payable
          by the Company with respect to the issuance and sale of the Notes
          or the Warrants.  The Company agrees to indemnify the Purchaser
          and hold it harmless against any loss, cost, claim or liability
          (including, without limitation, reasonable attorneys' fees and
          disbursements for the investigation and defense of claims)
          asserted against Purchaser arising out of or relating to any such
          actual or alleged fee or commission.

                    Section 4.16.  Labor Matters{tc "Section 4.16.    Labor
          Matters" \f C \l 2}.  Except as set forth in Schedule 4.16,
          during the three years preceding the Closing Date, there has been
          no strike, work stoppage, slowdown or other labor dispute or
          grievance involving the Company or any of its Subsidiaries, or
          employees of any such Person, nor is any such action, dispute or
          grievance pending or, to the knowledge of the Company, after due
          inquiry, threatened against the Company or any of its
          Subsidiaries that could have a Material Adverse Effect.  Except
          as set forth in Schedule 4.16, none of the Company or any of its
          Subsidiaries is a party to any collective bargaining agreement
          and none of them has any knowledge after due inquiry of any
          pending or threatened effort to organize any of its employees.
          Except as set forth in Schedule 4.16, there are no pending
          retaliatory or wrongful discharge claims or employment
          discrimination charges or complaints or administrative or
          judicial complaints arising therefrom pending against the Company
          or any of its Subsidiaries or against any of their respective
          employees before any Governmental Body, which have had or could
          reasonably be expected to have a Material Adverse Effect, nor to
          the knowledge of the Company after due inquiry are any such

                                       - 32 -
          658180v11<PAGE>





          charges or complaints threatened against the Company or any of
          its Subsidiaries.  The Company and its Subsidiaries are in
          compliance with all applicable Statutes and Orders relating to
          the employment of labor, including, without limitation, any
          provisions thereof relating to wages, bonuses, collective
          bargaining agreements, equal pay, occupational safety and health,
          equal employment opportunity and wrongful or retaliatory
          termination of employment, except for such noncompliance as in
          the aggregate would not result in a Material Adverse Effect.

                    Section 4.17.  Environmental Matters{tc "Section 4.17.
               Environmental Matters" \f C \l 2}.  Except as set forth in
          Schedule 4.17:

                    (a)  there is no pending or, to the knowledge of the
          Company, threatened Environmental Matter relating to the Company
          or any of its Subsidiaries, any of their respective Properties or
          the use thereof, and the Company is aware of no facts that could
          result in any such Environmental Matter.  Neither the Company nor
          any of its Subsidiaries has agreed to assume by contract or
          otherwise any liability of any other Person for cleanup,
          compliance, or required Consolidated Capital Expenditures in
          connection with any Environmental Matter arising prior to the
          date hereof;

                    (b)  To the knowledge of the Company, the Properties
          used, owned, leased, operated, managed or controlled at any time
          by the Company or any of its Subsidiaries are and were free of
          air, soil, groundwater, or surface water contamination resulting
          from the spill, discharge, or release of Hazardous Materials by
          the Company or any of its Subsidiaries (other than any such
          spill, release, or discharge that is permitted under any
          Environmental Law or that would not require investigation,
          reporting, or remediation under any Environmental Law).  To the
          knowledge of the Company, the Properties used, owned, leased,
          operated, managed, or controlled at any time by the Company or
          any of its Subsidiaries are and were free of any other harmful
          chemical or physical conditions;

                    (c)  the Company and its Subsidiaries are currently in
          compliance with all applicable Environmental Laws, except for
          such non-compliance as in the aggregate would not have a Material
          Adverse Effect, are not currently in receipt of any notice of
          violation of any Environmental Law or of any potential liability
          for cleanup of Hazardous Materials, have cured any past
          violations or alleged violations of Environmental Laws asserted
          against the Company or any of the Subsidiaries to the
          satisfaction of all Governmental Bodies having jurisdiction
          thereof and are not now subject to any investigation by a
          Governmental Body concerning Hazardous Materials or any
          Environmental Laws.  The Company and its Subsidiaries hold and
          are in compliance with all governmental permits, licenses, and
          authorizations necessary under Environmental Laws to operate
          their businesses including those that relate to siting, air

                                       - 33 -
          658180v11<PAGE>





          emissions, discharges to surface or ground water, discharges to
          any sewer or septic system, noise emissions, solid waste disposal
          or the generation, use, transportation or other management of
          Hazardous Materials, except for such permits, licenses and
          authorizations, the absence of which or non-compliance with which
          in the aggregate would not have a Material Adverse Effect.  To
          the Company's knowledge, the Company and its Subsidiaries have
          not at any time generated, manufactured, refined, recycled,
          discharged, emitted, released, buried, processed, produced,
          reclaimed, stored, treated, transported, or disposed of any
          Hazardous Materials except in compliance with all applicable
          Statutes and Orders, including permit requirements;

                    (d)  no Properties of the Company or its Subsidiaries
          are subject to any Lien or claim that might lead to a Lien in
          favor of any Person as a result of any Environmental Matter or
          response thereto;

                    (e)  neither the Company nor any of its Subsidiaries
          has any material liabilities, absolute or contingent, on the date
          hereof with respect to Hazardous Materials, except for such
          liabilities as are not in the aggregate reasonably likely to have
          a Material Adverse Effect; and

                    Section 4.18.  Margin Regulations; Use of Proceeds{tc
          "Section 4.18. Margin Regulations; Use of Proceeds" \f C \l 2}.
          None of the Company or any of its Subsidiaries owns or intends to
          acquire any "margin stock" as defined in Regulation U of the
          Board of Governors of the Federal Reserve System of the United
          States (12 CFR S 221).  No part of the proceeds from the sale of
          the Notes will be used, and no part of the proceeds of any loans
          repaid with the proceeds from the sale of the Notes was used,
          directly or indirectly, for the purpose of buying or carrying any
          margin stock within the meaning of Regulation U of the Board of
          Governors of the Federal Reserve System of the United States (12
          CFR S 221), or for the purpose of buying or carrying or trading
          in any securities under such circumstances as to involve the
          Company or of its Subsidiaries in a violation of Regulation X of
          said Board (12 CFR S 224) or to involve any broker or dealer in a
          violation of Regulation of said Board (12 CFR S 220).  Neither
          the Company nor any of its Subsidiaries, or any agent acting on
          behalf of the Company or its Subsidiaries, has taken or will take
          any action which might cause this Agreement or the Notes to
          violate Regulation U, Regulation X, Regulation T or any other
          regulation of the Board of Governors of the Federal Reserve
          System or to violate the Exchange Act, in each case as in effect
          now or as the same may hereafter be in effect.  As used in this
          Section, the term "purpose of buying or carrying" has the meaning
          assigned thereto in the aforesaid Regulation U.

                    Section 4.19.  Compliance with ERISA{tc "Section 4.19.
               Compliance with ERISA" \f C \l 2}.  The Company has
          furnished or made available to the Purchaser copies of each
          material bonus, deferred compensation, incentive compensation,

                                       - 34 -
          658180v11<PAGE>





          stock purchase, stock option, severance or termination pay,
          hospitalization or other medical, life or other insurance, or
          retirement plan, program, agreement or arrangement or other Plan
          maintained as of the Closing Date by the Company or any of its
          Subsidiaries or ERISA Affiliates with respect to employees of the
          Company or any of its Subsidiaries or ERISA Affiliates, and each
          material employment, consulting, severance or similar agreement
          between the Company or any of its Subsidiaries and their
          respective officers and managerial employees.  Except as set
          forth on Schedule 4.19:

                    (a)  no Pension Plan which is subject to Part 3 of
          Subtitle B of Title 1 of ERISA or Section 412 of the Code had an
          accumulated funding deficiency (as such term is defined in
          Section 302 of ERISA or Section 412 of the Code), whether or not
          waived, as of the last day of the most recent fiscal year of such
          Pension Plan heretofore ended;

                    (b)  no liability to the PBGC (other than required
          insurance premiums, all of which have been paid) has been
          incurred and is outstanding with respect to any Pension Plan, and
          there has not been any Reportable Event, or any other event or
          condition, which presents a material risk of involuntary
          termination of any Pension Plan by the PBGC;

                    (c)  neither any Plan nor any trust created thereunder,
          nor, to the Company's knowledge, any trustee or administrator
          thereof, has engaged in a prohibited transaction (as such term is
          defined in Section 4975 of the Code or Section 406 of ERISA) that
          could reasonably be expected to subject the Company or any of its
          Subsidiaries or ERISA Affiliates to any tax or penalty imposed
          under Section 4975 of the Code or Section 502(i) of ERISA which
          would have a Material Adverse Effect; and neither the Company nor
          any of its Subsidiaries or ERISA Affiliates has received a notice
          that a Multiemployer Plan or trust created thereunder, or any
          trustee or administrator thereof, has engaged in any such
          prohibited transaction under circumstances which would have a
          Material Adverse Effect;

                    (d)  no liability under Title IV of ERISA which would
          have a Material Adverse Effect has been incurred and is
          outstanding with respect to any Multiemployer Plan as a result of
          the complete or partial withdrawal by the Company or any of its
          Subsidiaries or ERISA Affiliates from such Multiemployer Plan,
          nor has the Company or any of its Subsidiaries or ERISA
          Affiliates been notified by any Multiemployer Plan that such
          Multiemployer Plan is currently in reorganization or insolvency
          under and within the meaning of Section 4241 or 4245 of ERISA or
          that such Multiemployer Plan intends to terminate or has been
          terminated under Section 4041A of ERISA;

                    (e)  the Company and its Subsidiaries and ERISA
          Affiliates are in compliance in all respects with all applicable
          provisions of ERISA and the Code and the regulations and

                                       - 35 -
          658180v11<PAGE>





          published interpretations thereunder with respect to all Plans
          and Multiemployer Plans, except where non-compliance would not
          have a Material Adverse Effect;

                    (f)  no Pension Plan has an Unfunded Current Liability
          in excess of $750,000 and presents a material risk of termination
          by the PBGC or by the Company or any of its Subsidiaries or ERISA
          Affiliates;

                    (g)  as of the Closing Date, neither the Company nor
          any of its Subsidiaries or ERISA Affiliates has received a notice
          within the past two years to the effect that a Multiemployer Plan
          has any unfunded vested benefits within the meaning of Section
          4213(c) of ERISA;

                    (h)  no event has occurred with respect to any Plan
          subject to Title IV of ERISA or with respect to any other
          employee benefit pension plan (as defined in Section 3(2) of
          ERISA) subject to Title IV of ERISA established or maintained at
          any time during the five-year period immediately preceding the
          Closing Date for the benefit of employees of the Company or any
          of its Subsidiaries or ERISA Affiliates which presents a risk of
          material liability of the Company or any of its Subsidiaries or
          ERISA Affiliates under Section 4069 of ERISA;

                    (i)  any Plan which provides for continued medical,
          health, life or other welfare benefits for employees after they
          leave the employment of the Company or any of its Subsidiaries or
          ERISA Affiliates (other than any such welfare benefits required
          to be provided under the Consolidated Omnibus Budget
          Reconciliation Act or other similar law) may be terminated at any
          time without the incurrence of any liability which would have a
          Material Adverse Effect; and

                    (j)  neither the Company nor any of its Subsidiaries or
          ERISA Affiliates is a party in interest (as defined in Section
          3(14) of ERISA) with respect to any employee benefit plan (as
          defined in Section 3(3) of ERISA), other than the Plans and any
          Multiemployer Plans or any other employee benefit plan that would
          not cause the purchase or holding of the Notes and Warrants by
          the Purchaser or any other holder thereof to be a prohibited
          transaction under Section 406(a) of ERISA and Section 4975(c) of
          the Code.

                    Section 4.20.  Material Contracts{tc "Section 4.20.
               Material Contracts" \f C \l 2}.  (a)  Schedule 4.20A
          contains a list of all Material Contracts to which the Company
          and its Subsidiaries are a party.  True and complete copies of
          each of the Material Contracts to which the Company and its
          Subsidiaries are a party, with all amendments, modifications and
          supplements thereto to the date hereof, have previously been
          furnished or made available to Purchaser or its representatives
          by the Company.  Each of such Material Contracts is valid,
          subsisting and in full force and effect.  Neither the Company nor

                                       - 36 -
          658180v11<PAGE>





          any of its Subsidiaries is in breach or violation of any of the
          terms, conditions or provisions of any of the Material Contracts
          and, to the best knowledge of the Company, no other party to any
          of the Material Contracts is in breach or violation of any of the
          terms, conditions or provisions thereof, except for such breaches
          and violations as in the aggregate do not and would not result in
          a Material Adverse Effect.  Neither the Company nor any of its
          Subsidiaries has transferred or subordinated any of its rights or
          interests in any of the Material Contracts, and such rights and
          interests are subject to no Liens except Permitted Liens.
          Neither the Company nor any of its Subsidiaries is a party to any
          Material Contract or is subject to any restriction contained in
          its charter or by-laws which individually or in the aggregate has
          had or is reasonably likely to have a Material Adverse Effect.

                    (b)  Except as set forth in Schedule 4.20B, neither the
          Company nor any of its Subsidiaries has during the past 10 years
          been debarred or suspended from contracting (as a first tier
          contractor or any level of subcontractor) for or bidding on any
          Government Contract.  Neither the Company nor any of its
          Subsidiaries is currently debarred or suspended from (or has
          received written notice that it is under investigation with
          respect to a possible debarment or suspension from) bidding on or
          entering into any Government Contract.  Except as set forth in
          Schedule 4.20b, neither the Company nor any of its Subsidiaries
          has received written notice (i) that any Government Contract may
          be or will be terminated for the convenience of a Governmental
          Body or by reason of a default or alleged default by the Company
          or any of its Subsidiaries, (ii) that a Government Contract or
          governmental program involving the Company or any of its
          Subsidiaries will be eliminated or substantially reduced or
          suspended or (iii) requiring or resulting in loss of use or
          substantial impairment or interference of use by the Company or
          any of its Subsidiaries of any facilities owned by a Governmental
          Body.

                    (c)  Final audits of all of the Government Contracts of
          the Company and its Subsidiaries with the United States of
          America and its departments, commissions, agencies and
          instrumentalities have been completed by the Defense Contract
          Audit Agency for all fiscal years of the Company through and
          including its fiscal year ended July 31, 1993.  No issue has been
          raised in any such audit or in any pending audit covering
          subsequent years that could reasonably be expected to result in
          the suspension or debarment of the Company or any of its
          Subsidiaries from bidding on or entering into any Government
          Contract.

                    (d)  There are no renegotiations of, attempts to
          renegotiate, or outstanding rights to renegotiate any material
          amounts paid or payable to the Company or any of its Subsidiaries
          under, or any other material term of, any Material Contract with
          any Person and, to the knowledge of the Company, no such Person
          has made written demand for such renegotiation.

                                       - 37 -
          658180v11<PAGE>






                    Section 4.21.  Insurance{tc "Section 4.21.   Insurance"
          \f C \l 2}.  Schedule 4.21 sets forth a true and complete list
          and brief descriptions of all policies of workers compensation,
          general liability, fire, property, casualty, marine, business
          interruption, errors and omissions, flood, earthquake and other
          insurance carried by the Company as of the Closing Date, true and
          complete copies of which policies have previously been delivered
          to the Purchaser.  Such policies are in full force and effect,
          and neither the Company nor any of its Subsidiaries has received
          notice of cancellation with respect to any such policy.  All
          premiums payable with respect to such policies have been or will
          then have been paid in respect of the coverage periods specified
          in Schedule 4.21 and all premiums payable with respect to such
          policies on or before the Closing Date will have been paid as and
          when due on or before the Closing Date.

                    Section 4.22.  Possession of Franchises, Licenses,
          Etc{tc "Section 4.22.    Possession of Franchises, Licenses, Etc"
          \f C \l 2}.  Each of the Company and its Subsidiaries possesses
          all franchises, certificates, licenses (including FDA licenses),
          permits, registrations, security clearances and other
          authorizations from Governmental Bodies that are necessary for
          the ownership, maintenance and operation of its Properties and
          assets, and for the conduct of their respective businesses as now
          conducted, and none of the Company or any of its Subsidiaries is
          in violation of any thereof, except, in each case, for such
          matters as in the aggregate do not and will not result in a
          Material Adverse Effect.

                    Section 4.23.  Intellectual Property{tc "Section 4.23.
               Intellectual Property" \f C \l 2}.  (a)  Set forth in
          Schedule 4.23 is an accurate and complete list of all patents,
          trademarks, trade names, service marks and copyrights owned by
          the Company and its Subsidiaries and all applications therefor,
          and all license agreements with respect to Intellectual Property
          used in the business of the Company, specifying with respect to
          each such item the owner thereof, the registration or application
          number thereof, the jurisdiction by or in which such item has
          been issued or registered or in which an application therefor has
          been filed, if any, the date of such issuance, registration or
          application, and the expiration date thereof.

                    (b)  The Company and its Subsidiaries own and have good
          title to, or possess the right to use pursuant to binding and
          enforceable agreements, all items of Intellectual Property, free
          from Liens, except Permitted Liens, which are necessary for the
          present and planned future conduct of their respective
          businesses.  Except as set forth in Schedule 4.23, (i) to the
          best knowledge of the Company, none of the present or
          contemplated products or operations of the Company or any of its
          Subsidiaries, infringes or otherwise violates, or will then
          infringe or otherwise violate, any Intellectual Property owned by
          any other Person, and (ii) there is no pending or, to the best

                                       - 38 -
          658180v11<PAGE>





          knowledge of the Company, threatened claim, demand, litigation,
          investigation, arbitration or other proceeding against or
          affecting the Company or any of its Subsidiaries contesting the
          right of any of them to manufacture, distribute or sell any such
          product or to engage in any such operation, or to use any of such
          Intellectual Property.

                    (c)  Set forth in Schedule 4.23 is an accurate and
          complete list and summary description, including any royalties
          paid or received by the Company and its Subsidiaries, of all
          Contracts relating to any Intellectual Property to which the
          Company or any Subsidiary is a party or by which the Company or
          any Subsidiary is bound (the "IP Contracts"), except for any
          license implied by the sale of a product and perpetual, paid-up
          licenses for commonly available software programs with a value of
          less than $1,000 under which the Company or any Subsidiary is a
          licensee. There are no outstanding and, to the Company's
          knowledge, no threatened disputes or disagreements with respect
          to any such agreement.

                    Section 4.24.  Customers and Suppliers{tc "Section
          4.24.     Customers and Suppliers" \f C \l 2}.  Schedule 4.24
          sets forth the principal suppliers and the principal customers of
          the Company and its Subsidiaries (being the 10 largest suppliers
          and the 10 largest customers of the Company and its Subsidiaries
          and any predecessor corporations for the period from August 1,
          1997 to March 31, 1998) and since March 31, 1998 there has been
          no termination or cancellation of, and no modification or change
          in, the Company's and its Subsidiaries' business relationships
          with any principal supplier, principal customer or group of
          principal customers or suppliers.  Except as described in
          Schedule 4.24, the Company has no reason to believe that the
          benefits of any relationship with any of the principal customers
          or suppliers of the Company or any of its Subsidiaries will not
          continue after the Closing Date in substantially the same manner
          as prior to the date of this Agreement.

                    Section 4.25.  Status under Certain Laws{tc "Section
          4.25.     Status under Certain Laws" \f C \l 2}.  Neither the
          Company nor any of its Subsidiaries is an "investment company" or
          a "person directly or indirectly controlled by or acting on
          behalf of an investment company" within the meaning of the
          Investment Company Act of 1940, as amended, or a "holding
          company," or a "subsidiary company" of a "holding company," or an
          "affiliate" of a "holding company" or of a "subsidiary company"
          of a "holding company," within the meaning of the Public Utility
          Holding Company Act of 1935, as amended.  Neither the Company nor
          any of its Subsidiaries is subject to regulation as a "common
          carrier" or "contract carrier" or any similar classification by
          the Interstate Commerce Commission or under the laws of any
          state, or is subject to regulation under any other Statute which
          limits its ability to incur indebtedness.



                                       - 39 -
          658180v11<PAGE>





                    Section 4.26.  Certain Transactions{tc "Section 4.26.
               Certain Transactions" \f C \l 2}.  Except as set forth on
          Schedule 4.26 hereto, neither the Company nor any of its
          Subsidiaries is indebted, directly or indirectly, to any of their
          respective officers, directors or stockholders or to any of the
          respective spouses or children of any of such Persons, except
          with respect to salaries and related employee compensation and
          expense reimbursement, and except as set forth on Schedule 4.26,
          none of such officers, directors or stockholders, or any member
          of their immediate families, is indebted to the Company or any of
          its Subsidiaries in any amount whatsoever.  Except as set forth
          on Schedule 4.26 hereto, no officer, director or shareholder of
          the Company or any of its Subsidiaries, or any member of their
          immediate families, is, directly or indirectly, interested in any
          Material Contract with the Company or nor any of its
          Subsidiaries.

                    Section 4.27.  Solvency{tc "Section 4.27.    Solvency"
          \f C \l 2}.  The Company and its Subsidiaries are Solvent on the
          Closing Date both before and after giving effect to the
          application of the net proceeds of the issuance and sale of the
          Notes and the Warrants to be issued on the Closing Date.

                    Section 4.28.  Use of Proceeds{tc "Section 4.28.  Use
          of Proceeds" \f C \l 2}.  The proceeds from the sale and issuance
          of the Notes will be used to repay existing Indebtedness of the
          Company and its Subsidiaries.

                    Section 4.29.  Ranking of Notes{tc "Section 4.29.
               Ranking of Notes" \f C \l 2}.  The Indebtedness represented
          by the Notes is intended to constitute senior subordinated
          Indebtedness, and accordingly is, and shall be at all times while
          the Notes remain outstanding, senior in right of payment to, or
          pari passu with, all other Indebtedness (except for Designated
          Senior Indebtedness) of the Company and its Subsidiaries;
          provided, however, if any of such other Indebtedness is
          subordinate to Designated Senior Indebtedness such subordination
          shall be on terms substantially similar to the terms of the
          Subordination Agreement attached hereto as Exhibit C.

                    Section 5.  Representations of the Purchaser{tc
          "Section 5.    Representations of the Purchaser" \f C \l 1}.  The
          Purchaser represents to the Company that (a) it is an "accredited
          investor," within the meaning of Rule 501 promulgated by the SEC
          under the Securities Act, and (b) it is acquiring the Notes and
          the Warrants to be purchased by it hereunder for its own account,
          for investment, and not with a view to or for sale in connection
          with any distribution thereof in violation of the registration
          provisions of the Securities Act or the rules and regulations
          promulgated thereunder, and (c) its purchase of the Notes and the
          Warrants will not constitute a "prohibited transaction" under
          Section 406 of ERISA and Section 4975 of the Code.  The Purchaser
          acknowledges that the Notes and the Warrants have not been
          registered under the Securities Act and may not be sold except

                                       - 40 -
          658180v11<PAGE>





          pursuant to an effective registration statement thereunder or an
          exemption from registration under the Securities Act and
          applicable state securities laws.

                    Section 6.  Closing Conditions{tc "Section 6.
               Closing Conditions" \f C \l 1}.  The Purchaser's obligation
          to purchase and pay for the Notes to be purchased by it hereunder
          on the Closing Date shall be subject to the satisfaction, on or
          before the Closing Date, of the following conditions:

                    Section 6.1.  Proceedings Satisfactory{tc "Section 6.1.
               Proceedings Satisfactory" \f C \l 2}.  All corporate and
          other proceedings taken or to be taken in connection with the
          transactions contemplated to occur on the Closing Date and all
          documents incident thereto shall be reasonably satisfactory in
          form and substance to the Purchaser and its special counsel, and
          the Purchaser and its special counsel shall have received all
          such counterpart originals or certified or other copies of such
          documents as they may reasonably request, including, without
          limitation:

                         (i)       certificates dated as of a recent date
                    prior to the Closing Date as to the corporate status of
                    each of the Company and each of its Subsidiaries in
                    each jurisdiction where each of the Company and each of
                    its Subsidiaries is organized or is authorized to do
                    business as a foreign corporation;

                         (ii)      certified copies of the certificate or
                    articles of incorporation (or other comparable
                    constituting document) of each of the Company and each
                    of its Subsidiaries with all amendments thereto to the
                    Closing Date;

                         (iii)     certified copies of the by-laws (or
                    other comparable constituting document) of each of the
                    Company and each of its Subsidiaries with all
                    amendments thereto to the Closing Date;

                         (iv)      certified copies of resolutions of the
                    Board of Directors of the Company authorizing the
                    execution, delivery and performance of this Agreement,
                    the Notes, the Warrants and the Registration Rights
                    Agreement; and

                         (v)       certificates as to the incumbency and
                    signatures of each of the officers of the Company who
                    shall execute this Agreement or any Note, Warrant or
                    Registration Rights Agreement on behalf the Company.

                    Section 6.2.  Opinion of Purchaser's Special Counsel{tc
          "Section 6.2.  Opinion of Purchaser's Special Counsel" \f C \l
          2}.  The Purchaser shall have received from Stroock & Stroock &
          Lavan LLP, who are acting as special counsel for the Purchaser in

                                       - 41 -
          658180v11<PAGE>





          connection with this transaction, a favorable legal opinion dated
          the Closing Date and addressed to the Purchaser, covering such
          matters as the Purchaser may reasonably request.

                    Section 6.3.  Opinions of Counsel to the Company{tc
          "Section 6.3.  Opinions of Counsel to the Company" \f C \l 2}.
          The Purchaser shall have received from Arnold & Porter, counsel
          to the Company in connection with the transactions contemplated
          by this Agreement, favorable legal opinions (which may include
          opinions of local counsel), dated the Closing Date and addressed
          to the Purchaser covering the matters specified in Exhibit F.

                    Section 6.4.   Representations and Warranties True,
          Etc.; Certificates{tc "Section 6.4.     Representations and
          Warranties True, Etc.; Certificates" \f C \l 2}.  The
          representations and warranties of the Company contained in
          Section 4 and elsewhere in this Agreement shall be true on and as
          of the Closing Date with the same effect as if such
          representations and warranties had been made on and as of the
          Closing Date.  The Company shall have performed all agreements on
          its part required to be performed under this Agreement on or
          prior to the Closing Date, and there shall exist no Default or
          Event of Default on the Closing Date.  The Company shall have
          delivered to the Purchaser an Officer's Certificate, dated the
          Closing Date, to the effect of the matters stated in the
          foregoing sentences of this Section 6.4 and in Sections 6.5, 6.6,
          6.7 and 6.9.

                    Section 6.5.  Absence of Material Adverse Change,
          Etc{tc "Section 6.5.     Absence of Material Adverse Change, Etc"
          \f C \l 2}.  Since July 31, 1997, no Material Adverse Effect
          shall have occurred.

                    Section 6.6.  Consents and Approvals{tc "Section 6.6.
               Consents and Approvals" \f C \l 2}.  All necessary consents,
          waivers, approvals and authorizations of, and declarations,
          registrations and filings with, Governmental Bodies and
          nongovernmental Persons required in order to issue and sell the
          Notes and the Warrants as contemplated hereby and to consummate
          the other transactions contemplated hereby shall have been
          obtained or made and shall be in full force and effect,
          including, without limitation, all required consents and waivers
          of the holders of Senior Indebtedness and of any agent or
          representative thereof.

                    Section 6.7.  Absence of Litigation, Orders, Etc{tc
          "Section 6.7.  Absence of Litigation, Orders, Etc" \f C \l 2}.
          There shall not be pending or, to the knowledge of the Company
          after due inquiry, threatened, any action, suit, proceeding,
          governmental investigation or arbitration against or affecting
          either of the Company or its Subsidiaries or their respective
          Property and assets (and, as to any action, suit, proceeding,
          governmental investigation or arbitration so disclosed, there
          shall not have occurred since the date of this Agreement any

                                       - 42 -
          658180v11<PAGE>





          development) which seeks to enjoin or restrain any of the
          transactions contemplated herein or which has had or is
          reasonably likely to have a Material Adverse Effect.  No Order of
          any court, arbitrator or Governmental Body shall be in effect
          which purports to enjoin or restrain any of the transactions
          contemplated herein or which has had or will have a Material
          Adverse Effect.

                    Section 6.8.   Subordination Agreement{tc "Section 6.8.
               Subordination Agreement" \f C \l 2}.  The Company, each
          Subsidiary of the Company and ING, as lender and agent under the
          Credit Agreement, shall have executed and delivered a
          Subordination Agreement in the form of Exhibit C hereto (as from
          time to time amended, modified or supplemented in accordance with
          its terms, the "Subordination Agreement").

                    Section 6.9.   Total Indebtedness under Credit
          Agreement{tc "Section 6.9.    Total Indebtedness under Credit
          Agreement" \f C \l 2}.  The aggregate Indebtedness of the Company
          under the Credit Agreement on the Closing Date (after giving
          effect to the transactions contemplated hereby) shall not exceed
          $23,000,000 and the excess availability under the Credit
          Agreement on the Closing Date (after giving effect to the
          transactions contemplated hereby) shall be at least $1,000,000.

                    Section 6.10.  Fees.{tc "Section 6.10.  Fees." \f C \l
          2}  The fees required to be paid on the Closing Date pursuant to
          Section 2.4 shall be paid concurrently with the issuance and sale
          of Notes to be sold on the Closing Date.  The fees and expenses
          incurred by Stroock & Stroock & Lavan LLP and any local or
          special counsel to the Purchaser in connection with the
          preparation of this Agreement, the Notes, the Warrants and the
          Registration Rights Agreement and the transactions contemplated
          hereby shall be paid by the Company on the Closing Date.

                    Section 6.11.  Wire Instructions.{tc "Section 6.11.
               Wire Instructions." \f C \l 2}  The Purchaser shall have
          received not less than two Business Days prior to the Closing
          Date wire instructions prepared by the Company as to all wire
          transfers or other payments to be effected on the Closing Date in
          connection with the transactions to be consummated on the Closing
          Date pursuant to this Agreement or the other Transaction
          Documents, which wire instructions shall identify the payor and
          payee of each such wire transfer or payment, shall describe the
          manner of transfer or payment, shall direct that all funds be
          transferred to a bank chartered under the laws of the United
          States of America or any state thereof located within the United
          States of America, and shall otherwise be satisfactory in form
          and substance to the Purchaser.

                    Section 6.12.  Put Subordination Agreement{tc "Section
          6.12.     Put Subordination Agreement" \f C \l 2}.  The Company,
          ING and the Purchaser shall have executed and delivered the Put
          Subordination Agreement.

                                       - 43 -
          658180v11<PAGE>






                    Section 7.  Financial Statements and Information{tc
          "Section 7.    Financial Statements and Information" \f C \l 1}.
          The Company will furnish to the Purchaser and any other holder of
          Notes, so long as any Notes shall be outstanding:

                    (a)  Monthly Financial Statements.  As soon as
          available and in any event within 45 days after the end of each
          month, copies of the consolidated and consolidating balance
          sheets of the Company and its Subsidiaries as of the end of such
          month and the related consolidated and consolidating statements
          of operations and cash flows for such month and for the portion
          of the fiscal year ended with the last day of such month, and
          stating in comparative form the corresponding figures from the
          consolidated budget of the Company and its Subsidiaries for such
          period and for the portion of the previous fiscal year ended with
          the last day of such period, all Certified by the Chief Financial
          Officer of the Company;

                    (b)  Quarterly Financial Statements; Compliance
          Certificates.  As soon as available and in any event within 45
          days after the end of each quarterly accounting period (other
          than the fourth quarterly accounting period) in each fiscal year
          of the Company,

                         (i)  copies of the Company's Quarterly Report on
                    Form 10-Q promulgated by the SEC, or any successor form
                    thereto, and

                         (ii) an Officer's Certificate of the Chief
                    Financial Officer of the Company setting forth
                    computations in reasonable detail showing whether or
                    not as at the end of such fiscal quarter there existed
                    any breach or violation of the provisions of Section
                    10.1, 10.7, 10.11, 10.12 or 10.16 hereof;

                    (c)  Annual Financial Statements; Compliance
          Certificates.  As soon as available and in any event within 90
          days after the end of each fiscal year of the Company,

                         (i)  copies of the audited consolidated and
                    unaudited consolidating balance sheets of the Company
                    and its Subsidiaries, in each case as of the end of
                    such fiscal year, together with, in each case, the
                    related audited consolidated and unaudited
                    consolidating statements of operations, stockholders'
                    equity and cash flows for such fiscal year, and the
                    notes thereto, all in reasonable detail and stating in
                    comparative form (A) the respective audited
                    consolidated and unaudited consolidating figures as of
                    the end of and for the previous fiscal year and (B) the
                    corresponding figures from the consolidated budget of
                    the Company and its Subsidiaries for such fiscal year,
                    (x) in the case of each of such audited consolidated

                                       - 44 -
          658180v11<PAGE>





                    financial statements, accompanied by a report thereon
                    of Ernst & Young LLP, or other independent public
                    accountants of recognized national standing selected by
                    the Company and reasonably acceptable to the Majority
                    Holders (the "Accountants"), which report shall be
                    unqualified as to going concern and scope of audit and
                    shall state that such consolidated financial statements
                    present fairly, in all material respects, the
                    consolidated financial position of the Company and its
                    Subsidiaries as at the end of such fiscal year and
                    their consolidated results of operations, stockholders'
                    equity and cash flows for such fiscal year in
                    conformity with GAAP and that the examination by the
                    Accountants in connection with such consolidated
                    financial statements has been  made in accordance with
                    generally accepted auditing standards, and (y) in the
                    case of such unaudited consolidating financial
                    statements, Certified by the Chief  Financial Officer
                    of the Company; and

                         (ii) a written statement of the Accountants (x)
                    setting forth computations in reasonable detail showing
                    whether or not as at the end of such fiscal year there
                    existed any breach or violation of the provisions of
                    Section 10.1, 10.7, 10.10, 10.11 or 10.16 hereof, and
                    (y) stating that in making the  examination necessary
                    for their report on such financial statements they
                    obtained no knowledge of any event or condition
                    constituting a Default or Event  of Default, or if such
                    Accountants shall have obtained such knowledge,
                    specifying the nature and status thereof;

                    (d)  Officer's Compliance Certificates.  Concurrently
          with the reports or  financial statements furnished pursuant to
          subsections (b) and (c) of this Section 7 an Officer's
          Certificate of the Chief Financial Officer of the Company stating
          that, based  upon such examination or investigation and review of
          this Agreement as in the opinion  of the signer is necessary to
          enable the signer to express an informed opinion with  respect
          thereto, no Default or Event of Default exists or has existed
          during such period  or, if such a Default or Event of Default
          shall exist or have existed, the nature and  period of existence
          thereof and what action the Company has taken, is taking or
          proposes to take with respect thereto;

                    (e)  Stockholder Reports; SEC Filings.  Promptly after
          the same are available  and in any event within 10 days thereof,
          copies of all such proxy statements, financial  statements,
          notices and other reports as the Company shall send or make
          available  generally to its stockholders, and copies of all
          regular and periodic reports, registration  statements and other
          documents which the Company shall file with the SEC;



                                       - 45 -
          658180v11<PAGE>





                    (f)  Management Letters.  Promptly after the receipt
          thereof by the Company, and in any event within 10 days thereof,
          copies of any management letters and any reports as to material
          inadequacies in accounting controls (including reports as to the
          absence of any such inadequacies) submitted to the Company by the
          Accountants in  connection with any audit of the Company and its
          Subsidiaries made by the  Accountants;

                    (g)  Events of Default.  Promptly (and in any event
          within 5 days) after  becoming aware of (i) the existence of any
          Default or Event of Default on the part of the  Company, an
          Officer's Certificate of the Company specifying the nature and
          period of  existence thereof and what action the Company is
          taking or proposes to take with  respect thereto; or (ii) any
          Indebtedness of the Company or any of its Subsidiaries  being
          declared due and payable before its expressed maturity, or any
          holder of such Indebtedness having the right to declare such
          Indebtedness due and payable before its expressed maturity,
          because of the occurrence of any default (or any event which,
          with notice and/or the lapse of time, shall constitute any such
          default) under such Indebtedness, an Officer's Certificate of the
          Company describing the nature and status of such matters and what
          action the Company or such Subsidiary is taking or proposes to
          take with respect thereto;

                    (h)  ERISA Matters.  Promptly and in any event within
          15 days after the Company knows or, in the case of a Pension Plan
          has reason to know, that a Reportable Event with respect to any
          Pension Plan has occurred, that any Pension Plan or that any
          Multiemployer Plan is or may be terminated, reorganized,
          partitioned or declared insolvent under Title IV of ERISA or has
          any unfunded vested benefits within the meaning of Section
          4213(c) of ERISA, or that the Company or any of its Subsidiaries
          or ERISA Affiliates will or may incur any material liability to
          or on account of a Pension Plan or Multiemployer Plan under Title
          IV of ERISA or any other material liability under ERISA has been
          asserted against the Company or any of its Subsidiaries or ERISA
          Affiliates, or that any Pension Plan has an Unfunded Current
          Liability in excess of $500,000, an Officer's Certificate of the
          Company setting forth information as to such occurrence and what
          action, if any, the Company or such Subsidiary or ERISA Affiliate
          is required or proposes to take with respect thereto, together
          with any notices concerning such occurrences which are (a)
          required to be filed by the Company or such Subsidiary or ERISA
          Affiliate with the Internal Revenue Service or the PBGC, or (b)
          received by the Company or such Subsidiary or ERISA Affiliate
          from any Multiemployer Plan;

                    (i)  Material Adverse Effect.  Promptly after becoming
          aware of any Material Adverse Effect with respect to which notice
          is not otherwise required to be given pursuant to this Section 7,
          an Officer's Certificate of the Company setting forth the details
          of such Material Adverse Effect and stating what action the


                                       - 46 -
          658180v11<PAGE>





          Company or any of its Subsidiaries has taken or proposes to take
          with respect thereto;

                    (j)  Litigation and Proceedings.  Promptly (and in any
          event within 15 days) after the Company knows of (i) the
          institution of, or threat of, any action, suit, proceeding,
          governmental investigation or arbitration against or affecting
          the Company or any of its Subsidiaries or any Property of any of
          them, or (ii) any material development in any such action, suit,
          proceeding, governmental investigation or arbitration, which, in
          either case, if adversely determined, is likely to have a
          Material Adverse Effect, an Officer's Certificate of the Company
          describing the nature and status of such matter in reasonable
          detail;

                    (k)  Annual Budget.  Not later than 30 days prior to
          the beginning of each fiscal year of the Company, a copy of a
          consolidated and consolidating budget of the Company and its
          Subsidiaries prepared by the Company for such fiscal year, which
          shall include at minimum a projected balance sheet and a
          projected statement of operations for each month in such fiscal
          year;

                    (l)  Notices to Senior Lenders.  Copies of all notices,
          reports, certificates and other information furnished to the
          holders of Senior Indebtedness or to any agent or representative
          of such holders, in each case promptly after the same are so
          furnished; and

                    (m)  Other Information.  Any other information,
          including financial statements and computations, relating to the
          performance of obligations arising under this Agreement and/or
          the affairs of the Company or any of its Subsidiaries that the
          Purchaser or any other holder of Notes may from time to time
          reasonably request and which is capable of being obtained,
          produced or generated by the Company or such Subsidiary; provided
          that nothing in this subsection (m) shall be construed to require
          the Company or its Subsidiaries to disclose any documents or
          information in violation of any Statute or Government Contract
          restricting such disclosure for reasons of national security.

                    It is further understood and agreed that, for the
          purpose of effecting compliance with Rule 144A promulgated by the
          SEC in connection with any resales of Notes or Warrants that may
          hereafter be effected pursuant to the provisions of such Rule, at
          any time when the Company shall not be subject to the
          requirements of Section 13 or 15(d) of the Exchange Act, (i) each
          prospective purchaser of Notes or Warrants designated by a holder
          thereof shall have the right to obtain from the Company, upon the
          written request of such holder, copies of (A) the consolidated
          balance sheet of the Company and its Subsidiaries as of the end
          of then most recently completed fiscal year of the Company (or,
          if such fiscal year shall have ended within the preceding 90
          days, as of the end of the next preceding fiscal year), together

                                       - 47 -
          658180v11<PAGE>





          with the related consolidated statements of operations,
          stockholders' equity and cash flows for the fiscal year then
          ended, (B) similar financial statements for the two preceding
          fiscal years (which financial statements, and the financial
          statements referred to in clause (A) of this paragraph, shall be
          audited if audited financial statements are available at such
          time), (C) a consolidated balance sheet of the Company and its
          Subsidiaries as of the end of then most recently completed fiscal
          quarter of the Company (or, if such fiscal quarter shall have
          ended within the preceding 60 days, as of the end of the next
          preceding fiscal quarter), together with the related consolidated
          statements of operations, stockholders' equity and cash flows for
          the portion of the current fiscal year then ended, and (D) any
          other information that is necessary to comply with such Rule, and
          (ii) each such holder and each such prospective purchaser shall
          have the right to obtain from the Company, upon the written
          request of such holder, a very brief statement of the nature of
          the business of the Company and the products and services it
          offers, dated as of a date within 12 months prior to the date of
          such request.

                    The Company will keep at its principal executive office
          a true copy of this Agreement, and cause the same to be available
          for inspection at said office during normal business hours by any
          holder of Notes or by any prospective purchaser of Notes
          designated in writing by the holder thereof.

                    Section 8.  Inspection of Properties and Books{tc
          "Section 8.    Inspection of Properties and Books" \f C \l 1}.
          The Purchaser and each other holder of Notes, so long as any
          Notes shall be outstanding, shall have the right to visit and
          inspect any of the Properties of the Company and its
          Subsidiaries, to examine their books of account and records, to
          make copies and extracts therefrom at the expense of the Company
          or a Subsidiary, as the case may be, and to discuss their
          affairs, finances and accounts with, and to be advised as to the
          same by, their officers and management and their independent
          public accountants (and by this provision the Company authorizes
          the Accountants to discuss their affairs, finances and accounts
          and those of its Subsidiaries and agrees to make such Accountants
          available to the Purchaser and such other holders for such
          discussions together with such officers of the Company and the
          Subsidiaries as the Purchaser or any such other holders may
          desire to be present), all at such reasonable time and intervals
          during normal business hours as the Purchaser and such other
          holders may desire and upon reasonable prior notice.  The Company
          agrees to pay all reasonable out-of-pocket expenses incurred by
          the Purchaser and such other holders in connection with the
          exercise of their rights under this Section 8 at any time when a
          Default or Event of Default shall have occurred and be
          continuing. The Purchaser and such holders, through their
          representatives, shall be entitled to meet with the senior
          management of the Company at least once during each fiscal
          quarter of the Company to discuss the Company's and its

                                       - 48 -
          658180v11<PAGE>





          Subsidiaries' financial statements, business, assets, operations
          and prospects.

                    Section 9.  Affirmative Covenants{tc "Section 9.
               Affirmative Covenants" \f C \l 1}.  The Company covenants
          and agrees that, so long as any of the Notes shall be
          outstanding:

                    Section 9.1.  Payment of Principal and Interest{tc
          "Section 9.1.  Payment of Principal and Interest" \f C \l 2}.
          The Company will duly and punctually pay the principal of and
          interest on the Notes, and will timely pay and perform all of its
          other Obligations in accordance with the terms of such Notes and
          this Agreement.  The Company will comply with all of the
          covenants, agreements and conditions contained in this Agreement.

                    Section 9.2.  Payment of Taxes and Claims{tc "Section
          9.2. Payment of Taxes and Claims" \f C \l 2}.  The Company will,
          and will cause each of its Subsidiaries to, pay before they
          become delinquent:

                    (a)  all taxes, assessments and governmental charges or
          levies imposed upon the Company or any of its Subsidiaries (or
          any other Subsidiaries of the Company which are part of any
          affiliated group, within the meaning of Section 1504(a)(1) of the
          Code, with the Company or any of its Subsidiaries) or their
          income or profits or upon their Property, real, personal or
          mixed, or upon any part thereof;

                    (b)  all claims for labor, materials and supplies
          which, if unpaid, would result in the creation of a Lien upon
          Property of the Company or any of its Subsidiaries; and

                    (c)  all claims, contributions, assessments or levies
          required to be paid by the Company or any of its Subsidiaries
          pursuant to any Plan or any agreement, contract, Statute or Order
          governing or relating to any Plan;

          provided, that the taxes, assessments, claims, charges and levies
          described in Section 9.2(a), (b) and (c) need not be paid while
          being diligently contested in good faith and by appropriate
          proceedings so long as (i) adequate book reserves have been
          established with respect thereto in accordance with GAAP and (ii)
          neither the Company's nor any such Subsidiary's title to and
          right to use its Property is materially adversely affected by
          such non-payment.  The Company will timely file, and will cause
          its Subsidiaries to file, all tax returns required to be filed in
          connection with the payment of taxes required by this Section
          9.2.  If an Event of Default shall have occurred and be
          continuing and any such contested items shall have resulted in a
          Lien or claim upon any of the Company's or any of its
          Subsidiaries' Property, the Majority Holders may, at their
          election (but shall not be obligated to), (a) procure the release
          and discharge of any such Lien or claim and any judgment or

                                       - 49 -
          658180v11<PAGE>





          decree thereon, without inquiring into or investigating the
          amount, validity or enforceability of such Lien or claim and (b)
          effect any settlement or compromise of the same, and any amounts
          expended by the Majority Holders in connection therewith
          including premiums paid or security furnished in connection with
          the issuance of any surety company bonds, shall be reimbursed by
          the Company within five Business Days of demand therefor by the
          Purchaser.

                    Section 9.3.  Maintenance of Properties, Records and
          Corporate Existence{tc "Section 9.3.    Maintenance of
          Properties, Records and Corporate Existence" \f C \l 2}.  The
          Company will, and will cause each of its Subsidiaries to:

                    (a)  maintain their respective Properties in good
          condition, reasonable wear and tear excepted, and make all
          renewals, repairs, replacements, additions, betterments, and
          improvements, except where the failure to do so would not have a
          Material Adverse Effect;

                    (b)  keep books of records and accounts in which full
          and correct entries will be made of all their respective business
          transactions and will reflect in their financial statements
          adequate accruals and appropriations to reserves, all in
          accordance with GAAP at the time in effect and consistently
          applied;

                    (c)  maintain the same fiscal year during and after the
          current fiscal year ending July 31, 1998, provided, however, that
          the Company shall be able to change its fiscal year with the
          written consent of the Purchaser, which consent shall not be
          unreasonably withheld;

                    (d)  except as permitted by Section 10.4(a), do or
          cause to be done all things necessary to preserve and keep in
          full force and effect their respective corporate existence,
          rights, powers and franchises including, without limitation, any
          necessary qualification or licensing in any foreign jurisdiction,
          except where the failure to do so would not have a Material
          Adverse Effect;

                    (e)  comply with all applicable Statutes, Orders,
          franchises, authorizations, licenses and permits of, and all
          applicable restrictions imposed by, any Governmental Body, in
          respect of the conduct of its business and the ownership of its
          Properties (including, without limitation, all Environmental Laws
          and all applicable Statutes, Orders, franchises, authorizations,
          licenses and permits relating to fair labor standards, equal
          employment opportunities and occupational health and safety),
          except for such matters as in the aggregate would not have a
          Material Adverse Effect; and

                    (f)  keep any Property owned or operated by it free of
          Hazardous Materials and any other potentially materially harmful

                                       - 50 -
          658180v11<PAGE>





          chemical or physical conditions. If the Company or any of its
          Subsidiaries receives notice or becomes aware of any
          Environmental Matter or contamination with Hazardous Materials
          that relates to any of them or their respective Properties, then
          the Company shall promptly provide written notice thereof to the
          Purchaser and, upon written request from the Majority Holders,
          shall provide the Purchaser with such reports, certificates,
          engineering studies or other written material or data as the
          Majority Holders may request so as to satisfy the Purchaser that
          the Company and its Subsidiaries are in compliance with their
          obligations under this subsection (f) and subsection (e) of this
          Section 9.3.  The Majority Holders shall also have the right, at
          any time and from time to time after receipt of notice or
          knowledge of any such Environmental Matter or contamination, to
          require the Company at its expense to employ a qualified
          environmental consultant acceptable to the Majority Holders to
          conduct an environmental review, audit, assessment or report with
          respect thereto concerning the Company's and its Subsidiaries'
          operations and Property unless the Company has theretofore
          employed a qualified environmental consultant acceptable to the
          Majority Holders to conduct such an environmental review, audit,
          assessment or report in scope and methodology satisfactory to the
          Majority Holders.  The Company agrees to cooperate fully with
          such consultant in connection with any such review, audit,
          assessment or report, including, without limitation, by providing
          such access to the Company's and its Subsidiaries' books,
          records, Properties, employees and agents and by furnishing such
          written and oral information as such consultant may reasonably
          request in connection with any such review, audit, assessment or
          report.

                    Section 9.4.  Insurance{tc "Section 9.4.     Insurance"
          \f C \l 2}.  (a)  Subject to the last sentence of this Section
          9.4(a), the Company will, and will cause each of its Subsidiaries
          to, carry and maintain in full force and effect at all times,
          with financially sound and reputable insurance companies or
          associations rated A- (Class 12) or better by A.M. Best & Co.
          (or, as to workers' compensation or similar insurance, in an
          insurance fund or by self-insurance authorized by the
          jurisdiction in which its operations are carried on):  (i)
          insurance against loss or damage to the tangible real and
          personal Property of the Company and its Subsidiaries by fire,
          theft, explosion, spoilage and all other hazards and risks
          ordinarily insured against by other owners or users of such
          Property in similar businesses, (ii) all workers' compensation or
          similar insurance as may be required under the laws of any
          jurisdiction, (iii) public liability insurance against claims for
          personal injury, property damage suffered upon, in or about any
          premises occupied by them or occurring as a result of the
          ownership, maintenance or operation by them of any automobile,
          truck or other vehicle or as a result of the use of products
          manufactured, constructed or sold by them, or services rendered
          by them, (iv) business interruption insurance covering risk of
          loss as a result of the cessation of any substantial part of the

                                       - 51 -
          658180v11<PAGE>





          business conducted by them, consistent with past practice, (v)
          product liability insurance with coverage and (vi) insurance
          against such other risks as are usually insured against by
          corporations of established reputation engaged in the same or
          similar businesses and similarly situated.  If the Company
          maintains after the Closing Date any insurance policies with
          insurance companies or associations that do not meet the
          foregoing standards, the Company shall within 60 days of the
          Closing Date obtain replacement policies with insurance companies
          or associations that meet the foregoing standards.

                    (b)  Insurance specified in clause (a) of this Section
          9.4, shall be maintained in such types, with such coverage and in
          such amounts (and with co-insurance, deductibles and self-insured
          retention, if any) as are from time to time hereafter customary
          for corporations of established reputation engaged in the same or
          similar businesses and similarly situated;  provided, that in no
          event shall the insurance specified in clause (a) be for amounts
          lower than, or coverage less than, that currently provided
          without the prior written consent of the Majority Holders.

                    (c)  If the Company or any of its Subsidiaries shall
          fail to obtain, maintain or renew any insurance required pursuant
          to this Section 9.4, or to pay the premiums therefor, or to
          deliver to the Purchaser proper evidence thereof beyond any
          applicable notice and cure period, if any, for the performance of
          such actions, the Majority Holders, at their sole option and
          without any obligation to do so, may procure and pay for such
          insurance, and any sums expended by it to procure any such
          insurance shall be repaid by the Company, together with any late
          charge imposed by any such insurer, if applicable, within five
          Business Days after receipt of bills therefor from the Majority
          Holders.

                    Section 9.5.   Subsidiary Guarantors{tc "Section 9.5.
               Subsidiary Guarantors" \f C \l 2}.

                    (a)  (i) STI International Limited, a United Kingdom
          corporation ("STI"), a Subsidiary of the Company, shall not be
          required to execute a Subsidiary Guarantee if the following
          conditions are complied with: STI is (A) dissolved no later than
          June 30, 1999 and (B) from the date of this Agreement until June
          30, 1999 there is no material change in the assets held by STI.

                         (ii) MTEC, Inc., (formerly known as Brunswick
          Biomedical Technologies, Inc.) a Massachusetts corporation
          ("MTEC"), a Subsidiary of the Company, shall not be required to
          execute a Subsidiary Guarantee if the total fair market value of
          the assets of MTEC do not, at any time, exceed $1,000,000 in the
          aggregate.

          In the event that any of the foregoing conditions is not
          satisfied, the appropriate Subsidiary shall execute a Subsidiary
          Guarantee in the form attached as Exhibit B hereto.

                                       - 52 -
          658180v11<PAGE>






                    (b) Promptly upon any Person becoming a Subsidiary of
          the Company organized under the laws of the United States of
          America or any State thereof, the Company shall provide written
          notice thereof to each holder of Notes, and at any time the total
          fair market value of the assets of such Subsidiary exceed
          $1,000,000, the Company shall cause such Subsidiary to execute
          and deliver a Subsidiary Guarantee (in the form attached as
          Exhibit B hereto) to the holders of Notes, together with
          certified resolutions and other customary documentation relating
          to the execution of such a guaranty as Purchaser may reasonably
          request.

                    (c) Promptly upon any Person becoming a Subsidiary of
          the Company (other than a Subsidiary referred to in clause (b)
          above), the Company shall provide written notice thereof to each
          holder of Notes, and at any time the total fair market value of
          the assets of such Subsidiary exceed $1,000,000, the Company
          shall (i) cause each such Subsidiary to enter into a pledge
          agreement reasonably satisfactory to ING and the Majority Holders
          providing for a pledge in favor of ING and the Purchaser of two-
          thirds of the outstanding Capital Stock of each such Subsidiary
          with the Lien to secure the Company's obligations under the
          Senior Loan Documents granted to ING being prior to the Lien
          granted to the Purchaser hereunder; provided that the Purchaser
          shall execute and deliver to ING, any other Senior Lender (as
          defined in the Subordination Agreement) and any holder of
          Designated Senior Indebtedness who has a security interest in
          such pledged Capital Stock an intercreditor agreement
          satisfactory to ING and (ii) provide in favor of ING and the
          Purchaser, in such form as ING and the Majority Holders shall
          reasonably request, a negative pledge with respect to the portion
          of outstanding Capital Stock of such Subsidiary not pledged
          pursuant to clause (i) above; provided that with respect to
          Meridian Medical Technologies Limited, there shall be no default
          under this Section 9.5(c) so long as the Company complies with
          the terms of this provision within 180 days after the Closing
          Date.

                    Section 9.6.   Pension and Benefit Plan Covenants{tc
          "Section 9.6.  Pension and Benefit Plan Covenants" \f C \l 2}.
          The Company will:

                    (a)  take or cause to be taken all necessary steps to
          ensure that the representations and warranties set forth under
          Section 4.19 of this Agreement continue to be true and correct in
          all material respects, as if the same were made on a continuing
          basis, on and with effect as of each date while any of the Notes
          are outstanding, except to the extent permitted in writing by the
          Majority Holders, and

                    (b)  not, and will ensure that its Subsidiaries will
          not, amend any Plan or establish or adopt any Plan that would
          have the effect of materially adversely affecting the financial

                                       - 53 -
          658180v11<PAGE>





          condition of such Plan or of causing a Material Adverse Effect,
          without the written consent of the Purchaser, except for such
          amendments as may be required by applicable law or any
          Governmental Authority.

                    Section 9.7.   Notice of Default{tc "Section 9.7.
          Notice of Default" \f C \l 2}.  Upon the chief executive officer,
          the chief operating officer or the chief financial officer of the
          Company learning thereof, the Company will give prompt written
          notice (with a description in reasonable detail) to the Purchaser
          of the occurrence of any Default or Event of Default.

                    Section 10.  Negative and Maintenance Covenants{tc
          "Section 10.   Negative and Maintenance Covenants" \f C \l 1}.
          The Company covenants and agrees that so long as any of the Notes
          shall be outstanding, the Company shall comply with the
          provisions set forth in Sections 10.1 through 10.17 hereof,
          inclusive.

                    Section 10.1.  Restrictions on Indebtedness{tc "Section
          10.1.     Restrictions on Indebtedness" \f C \l 2}.  The Company
          will not, and will not permit any of its Subsidiaries to, incur,
          create, assume, guarantee or in any way become liable for, or
          permit to exist, Indebtedness other than:

                    (a)  Indebtedness incurred pursuant to this Agreement
          and the Notes;

                    (b)  Senior Indebtedness, provided that the aggregate
          outstanding principal amount of such Indebtedness (including the
          maximum aggregate amount of all commitments to extend any
          revolving credit, working capital, letter of credit or similar
          credit facility in connection therewith, and including the face
          amount of all letters of credit and other contingent obligations
          (whether issued or guaranteed by the holders of such
          Indebtedness) from time to time outstanding in connection
          therewith) shall not at any time exceed the Maximum Commitment;

                    (c)  Indebtedness of the Company and its Subsidiaries
          existing on the Closing Date and described on Schedule 4.10A
          hereto;

                    (d)  Additional Permitted Indebtedness;

                    (e)  Indebtedness of any Wholly-owned Subsidiary of the
          Company to the Company or to another Wholly-owned Subsidiary of
          the Company;

                    (f)  Indebtedness secured by Liens permitted by
          subsections (a) through (h), inclusive, of Section 10.2;

                    (g)  Guarantees by the Company or any of its
          Subsidiaries of other Indebtedness permitted by this Section
          10.1; and

                                       - 54 -
          658180v11<PAGE>






                    (h)  Indebtedness secured by Liens permitted by Section
          10.2(m) hereof, provided that the aggregate outstanding principal
          amount of Indebtedness incurred pursuant to this subsection (h)
          shall not at any time exceed the equivalent of U.S. $500,000.

                    Notwithstanding the foregoing, the Company and its
          Subsidiaries will not at any time create or incur any
          Indebtedness other than Designated Senior Indebtedness which,
          under the terms of the documentation pursuant to which such
          Indebtedness is created or incurred, is subordinated in right of
          payment to any other Indebtedness of the Company or any of its
          Subsidiaries, unless such Indebtedness is also subordinated in
          right of payment, in the same manner and to the same extent, to
          the Indebtedness represented by the Notes.

                    Section 10.2.  Restrictions on Liens{tc "Section 10.2. 
               Restrictions on Liens" \f C \l 2}. The Company will not, and
          will not permit any of its Subsidiaries directly or indirectly,
          to create, assume or suffer to exist any Lien upon any of their
          respective Properties whether now owned or hereafter acquired,
          except for:

                    (a)  Liens for taxes, assessments or governmental
          charges or claims the payment of which is not at the time
          required by Section 9.2;

                    (b)  statutory Liens of landlords and Liens of
          carriers, warehousemen, mechanics, materialmen and other Liens
          imposed by law incurred in the ordinary course of business, in
          each case for sums the payment of which is not at the time
          required by Section 9.2;

                    (c)  Liens (other than any Lien imposed by ERISA and
          other than any Lien securing an obligation for the payment of
          borrowed money) incurred or deposits made in the ordinary course
          of business in connection with obligations not due or delinquent
          with respect to workers' compensation, unemployment insurance and
          other types of social security, or to secure the performance of
          tenders, statutory obligations, surety and appeal bonds, bids,
          leases, government contracts, performance and return-of-money
          bonds and other similar obligations; provided, that no such Lien
          shall be permitted to the extent it encumbers any real Property
          of the Company or its Subsidiaries;

                    (d)  any attachment or judgment Lien (including
          judgment or appeal bonds) which shall, within 30 days after the
          entry thereof, have been discharged or execution thereof stayed
          pending appeal, or shall have been discharged within 30 days
          after the expiration of any such stay; provided that such Liens
          shall not in any event exceed the equivalent of U.S. $750,000 in
          the aggregate at any time outstanding;



                                       - 55 -
          658180v11<PAGE>





                    (e)  normal and customary rights of set-off upon
          deposits of cash in favor of banks or other depositary
          institutions;

                    (f)  zoning restrictions, easements, rights-of-way,
          servitudes or other similar rights in land (including, without
          restriction, rights-of-way and servitudes for railways, sewers,
          drains, gas and oil pipelines, gas and water mains, electric
          light and power and telephone or telegraph or cable television
          conduits, poles, wires and cables) granted to or reserved by
          other Persons, and the defects or irregularities of which are of
          a minor nature, none of which individually or in the aggregate
          materially and adversely impair the usefulness in the operation
          of the business of the Company or any of its Subsidiaries or the
          value of the property subject to such restrictions, easements,
          rights-of-way, servitudes or other similar rights in land granted
          to or reserved by other Persons, or title defect;

                    (g)  the right reserved to or vested in any
          municipality or governmental or other public authority by the
          terms of any lease, license, franchise, grant or permit acquired
          by the Company or any of its Subsidiaries or by any statutory
          provision, to terminate any such lease, license, franchise, grant
          or permit, or to require annual or other payments as a condition
          to the continuance thereof;

                    (h)  Liens given to a public utility or any
          municipality or governmental or other public authority when
          required by such utility, municipality or other authority in
          connection with the operations of the Company all in the ordinary
          course of its business;

                    (i)  Liens securing Indebtedness of a Wholly-owned
          Subsidiary of the Company to the Company or to another Wholly-
          owned Subsidiary of the Company;

                    (j)  Liens (including Liens created pursuant to
          capitalized leases) existing on the date hereof and described in
          Schedule 4.10A hereto;

                    (k)  Liens securing Designated Senior Indebtedness and
          incurred pursuant to the Credit Agreement or the other Senior
          Loan Documents;

                    (l)  Liens securing Additional Permitted Indebtedness
          that is not Designated Senior Indebtedness; provided that the
          aggregate principal amount of such Indebtedness secured by such
          Liens shall not exceed $5,000,000 in the aggregate.

                    (m)  Liens (including Liens created pursuant to
          capitalized leases) in respect of Property acquired, constructed
          or improved by the Company or any of its Subsidiaries after the
          Closing Date, which Liens exist or are created at the time of
          acquisition or completion of construction or improvement of such

                                       - 56 -
          658180v11<PAGE>





          Property or within six months thereafter, to secure Indebtedness
          which is assumed or incurred to finance all or any part of the
          purchase price or cost of acquisition or construction or
          improvement of such Property, but any such Lien shall cover only
          the Property so acquired or constructed and any improvements
          thereto (and any real Property on which such Property is located,
          if such Property is a building, improvement or fixture), and may
          not exceed the lesser of (x) the Fair Market Value of such
          Property or (y) the purchase price or cost of such acquisition,
          construction or improvement;

                    (n)  the extension, renewal or replacement of any Lien
          permitted by this Section 10.2, but only if the extension,
          renewal or replacement of the Indebtedness secured thereby is not
          prohibited under Section 10.1 hereof and the principal amount of
          the Indebtedness secured by such Lien immediately prior to such
          extension, renewal or replacement is not increased and the Lien
          is not extended to other Property.

                    (o)       Liens which arise by operation of law under
          Article 2 of the Uniform Commercial Code in favor of unpaid
          sellers of goods, or liens in any items or any accompanying
          documents or proceeds of either arising by operation of law under
          Article 4 of the Uniform Commercial Code in favor of a collecting
          bank.

                    (p)  Liens consisting of precautionary UCC-1 filings in
          respect of operating leases.

                    Section 10.3.  Limitation on Sale and Leasebacks{tc
          "Section 10.3. Limitation on Sale and Leasebacks" \f C \l 2}.
          The Company will not, and will not permit any of its Subsidiaries
          to, enter into any arrangement whereby the Company or any such
          Subsidiary shall sell or transfer any Property owned by the
          Company or any of its Subsidiaries to any Person other than the
          Company or a Subsidiary of the Company and thereupon the Company
          or such Subsidiary shall lease or intend to lease, as lessee, the
          same Property.

                    Section 10.4.  Consolidation, Merger or Disposition of
          Assets; Acquisitions{tc "Section 10.4.  Consolidation. Merger or
          Disposition of Assets; Acquisitions" \f C \l 2}.  The Company
          will not, and will not permit any of its Subsidiaries to,
          (i) consolidate or amalgamate with or be a party to a merger with
          any other Person, (ii) liquidate, wind up or dissolve itself (or
          suffer any liquidation or dissolution), (iii) convey, sell,
          lease, license, transfer or otherwise dispose of, in one
          transaction or a series of transactions, all or any part of the
          business or Property (tangible or intangible) of the Company or
          any such Subsidiary, whether now owned or hereafter acquired, or
          (iv) acquire by purchase or otherwise any of the outstanding
          Capital Stock of, or all or substantially all of the business,
          operating assets and Property of, any Person or of any operating
          division or unit of any Person, provided, however, that:

                                       - 57 -
          658180v11<PAGE>






                    (a)  any Wholly-owned Subsidiary of the Company may
          merge or consolidate with or into, or be dissolved or liquidated
          into, the Company or any other Wholly-owned Subsidiary of the
          Company so long as (x) in any merger or consolidation involving
          the Company, the Company shall be the surviving or continuing
          corporation, and (y) in any merger or consolidation involving one
          or more Wholly-owned Subsidiaries of the Company and one or more
          Subsidiaries of the Company that are not Wholly-owned
          Subsidiaries, the surviving or continuing corporation shall be
          one of such Wholly-owned Subsidiaries;

                    (b)  any Wholly-owned Subsidiary of the Company may
          sell, lease or otherwise dispose of all or any part of its assets
          to the Company or to any other Wholly-owned Subsidiary of the
          Company;

                    (c)  the Company and any of its Subsidiaries may in the
          ordinary course of its business sell or otherwise dispose of
          Inventory owned by the Company or such Subsidiary;

                    (d)  the Company and any of its Subsidiaries may in the
          ordinary course of its business sell or otherwise dispose of
          equipment and other Property which is obsolete or no longer used
          in the business of the Company and its Subsidiaries;

                    (e)  to the extent such transfers are in the aggregate
          permitted under clause (iv) of the definition of Restricted
          Investment, the Company and its Subsidiaries may transfer assets
          to any Subsidiary of the Company; and

                    (f)  the Company and its Subsidiaries may sell, lease
          or otherwise dispose of assets other than in the ordinary course
          of business to any Person other than a Subsidiary of the Company,
          provided that (i) the Fair Market Value of the assets sold,
          leased or otherwise disposed of with respect to each such
          transaction shall not exceed $250,000 and (ii) the aggregate Fair
          Market Value of all assets sold, leased or otherwise disposed of
          pursuant to this subsection (e) in each fiscal year of the
          Company shall not exceed $750,000.

                    Section 10.5.  Sale or Discount of Receivables{tc
          "Section 10.5. Sale or Discount of Receivables" \f C \l 2}.  The
          Company will not, and will not permit any of its Subsidiaries to,
          directly or indirectly, sell with recourse, or discount or
          otherwise sell for less than the face value thereof, any of its
          respective Accounts or notes receivable.

                    Section 10.6.  Conduct of Permitted Business{tc
          "Section 10.6. Conduct of Business" \f C \l 2}.  The Company will
          not, and will not permit any of its Subsidiaries to, engage in
          any business other than the business of the general character
          engaged in by each of them on the date hereof as described in the


                                       - 58 -
          658180v11<PAGE>





          Company Reports and any businesses or activities reasonably
          related thereto.

                    Section 10.7.  Restricted Payments and Restricted
          Investments{tc "Section 10.7. Restricted Payments and Restricted
          Investments" \f C \l 2}.  (a)  The Company will not, and will not
          permit any of its Subsidiaries to, directly or indirectly, make
          any Restricted Payment, except the declaration and payment of
          dividends and distributions by a Wholly-owned Subsidiary of the
          Company on its Capital Stock to the Company or to another Wholly-
          owned Subsidiary of the Company.

                    (b)  The Company will not, and will not permit any of
          its Subsidiaries to, make any Restricted Investment.

                    Section 10.8.  Issuance of Capital Stock{tc "Section
          10.8.     Issuance of Capital Stock" \f C \l 2}.  The Company
          will not permit any Subsidiary of the Company to issue, sell or
          otherwise dispose of any shares of its Capital Stock, or any
          warrants, options, conversion rights, exchange rights or other
          rights to subscribe for, purchase or acquire such Capital Stock,
          except to the Company or to a Wholly-owned Subsidiary of the
          Company (except for directors' qualifying shares).

                    Section 10.9.  Transactions with Affiliates{tc "Section
          10.9.     Transactions with Affiliates" \f C \l 2}.  Except in
          the case of transactions between or among the Company and its
          Wholly-owned Subsidiaries, the Company will not, and will not
          permit any of their Subsidiaries to, directly or indirectly,
          enter into or permit to exist any transaction (including, without
          limitation, the purchase, sale, lease or exchange of any Property
          or the rendering of any service), with any Affiliate of the
          Company or such Subsidiary unless such transaction is otherwise
          not prohibited under this Agreement, is in the ordinary course of
          the Company's or such Subsidiary's business and is on fair and
          reasonable terms that are not less favorable to the Company or
          such Subsidiary, as the case may be, than those that would
          obtainable at the time in any arm's length transaction with a
          Person who is not such an Affiliate.

                    Section 10.10.  Termination of Pension Plans{tc
          "Section 10.10.     Termination of Pension Plans" \f C \l 2}.
          The Company will not, and will not permit any of its Subsidiaries
          or ERISA Affiliates to, permit any Plan maintained by the Company
          or any such Subsidiary or ERISA Affiliate to be terminated in a
          manner which could reasonably be expected to result in the
          imposition of a Lien on any Property of the Company or any
          Subsidiary of the Company pursuant to Section 4068 of ERISA.

                    Section 10.11.  Maintenance of Capital Expenditures{tc
          "Section 10.11.     Maintenance of Capital Expenditures" \f C \l
          2}.  The Company will not, and will not permit any of its
          Subsidiaries to make or commit to make any Consolidated Capital
          Expenditures, except the Company and its Subsidiaries may make

                                       - 59 -
          658180v11<PAGE>





          Consolidated Capital Expenditures during any fiscal year provided
          (a) no Default or Event of Default has occurred and is
          continuing, and (b) the aggregate amount of Consolidated Capital
          Expenditures made during such fiscal year (including the amount
          of Capital Lease Liabilities incurred during such fiscal year
          that in accordance to GAAP is attributable to principal) does not
          exceed the amount set forth below opposite such fiscal year:


          Fiscal Year Ended               Permitted Amount

          1998                            4,200,000
          1999                            6,800,000
          2000                            6,600,000
          2001                            6,600,000
          2002                            6,600,000
          2003                            6,600,000
          2004                            6,600,000
          2005                            6,600,000

          ; provided that to the extent in any fiscal year the Permitted
          Amount for such year exceeds the Company's Capital Expenditures
          for such year, the Permitted Amount for the following fiscal year
          shall be increased by the lesser of such excess or $500,000.

                    Section 10.12.  Certain Contracts{tc "Section 10.12.
               Certain Contracts" \f C \l 2}.  The Company will not, and
          will not permit any of its Subsidiaries to, enter into or be a
          party to:

                    (a)  any contract providing for the making of loans
          (other than Cash Equivalents), advances or capital contributions
          to any Person other than the Company or a Wholly-owned Subsidiary
          of the Company, or for the purchase of any Property from any
          Person, in each case primarily in order to enable such Person to
          maintain working capital, net worth or any other balance sheet
          condition or to pay debts, dividends or expenses, or

                    (b)  any contract for the purchase of materials,
          supplies or other Property or services if such contract (or any
          related document) requires that payment for such materials,
          supplies or other Property or services shall be made regardless
          of whether or not delivery of such materials, supplies or other
          Property or services is ever made or tendered, or

                    (c)  any contract to rent or lease (as lessee) any real
          or personal Property if such contract (or any related document)
          provides that the obligation to make payments thereunder is
          absolute and unconditional under conditions not customarily found
          in commercial leases then in general use or requires that the
          lessee purchase or otherwise acquire securities or obligations of
          the lessor (provided, that this subsection (c) shall not be
          construed to prevent the Company or any of its Subsidiaries from


                                       - 60 -
          658180v11<PAGE>





          being a party to or complying with any provision of any lease to
          which any of them is a party on the date hereof), or

                    (d)  any contract for the sale or use of materials,
          supplies or other Property, or the rendering of services, if such
          contract (or any related document) requires that payment for such
          materials, supplies or other Property, or the use thereof, or
          payment for such services, shall be subordinated to any
          Indebtedness (of the purchaser or user of such materials,
          supplies or other Property or the Person entitled to the benefit
          of such services) owed or to be owed to any Person, or

                    (e)  except as permitted by Section 10.1, and except
          for Investments which are not Restricted Investments, any other
          contract which, in economic effect, is substantially equivalent
          to a Guarantee.

                    Section 10.13.  Limitation on Dividend Restrictions
          Affecting Subsidiaries{tc "Section 10.13.    Limitation on
          Dividend Restrictions Affecting Subsidiaries" \f C \l 2}.  Except
          pursuant to this Agreement, the Company will not permit any of
          its Subsidiaries directly or indirectly to create or otherwise
          cause or suffer to exist or become effective any consensual
          encumbrance or restriction which by its terms restricts the
          ability of any such Subsidiary to (a) pay dividends or make any
          other distributions on such Subsidiary's Capital Stock, (b) pay
          any Indebtedness owed to the Company or any other Subsidiary of
          the Company, (c) make any loans or advances to the Company or any
          other Subsidiary of the Company or (d) transfer any of its
          Property or assets to the Company or any other Subsidiary of the
          Company.

                    Section 10.14.  No Amendment of Charter, By-Laws{tc
          "Section 10.14.     No Amendment of Charter, By-Laws" \f C \l 2}.
          The Company will not effect any amendment to or modification of
          its charter documents or by-laws, and will not permit any of its
          Subsidiaries to effect any amendment to or modification of their
          charter documents or by-laws, if any such amendment or
          modification would adversely affect the rights or remedies of the
          Purchaser under this Agreement and the Notes.

                    Section 10.15.  Acquisition of Margin Securities{tc
          "Section 10.15.     Acquisition of Margin Securities" \f C \l 2}.
          The Company will not, and will not permit any of its Subsidiaries
          to, own, purchase or acquire (or enter into any contract to
          purchase or acquire) any "margin security" as defined by any
          regulation of the Board of Governors of the United States Federal
          Reserve System as now in effect or as the same may hereafter be
          in effect unless, prior to any such purchase or acquisition or
          entering into any such contract, the Purchaser shall have
          received an opinion of counsel satisfactory to the Purchaser to
          the effect that such purchase or acquisition will not cause this
          Agreement or the Notes to be in violation of Regulation U or any
          other regulation of such Board then in effect.

                                       - 61 -
          658180v11<PAGE>






                    Section 10.16.  Financial Covenants.{tc "Section 10.16.
               Financial Covenants" \f C \l 2}   (a) Minimum Net Worth.
          The Company shall not permit its net worth determined in
          accordance with GAAP as of the last day of any fiscal quarter,
          (i) commencing with the fiscal quarter ending on July 31, 1997
          and continuing thereafter through and including July 31, 1998 to
          be less than $12,000,000 and (ii) commencing with the fiscal
          quarter ending on October 31, 1998 and continuing thereafter, to
          be less than (A) $12,000,000 plus (B) 50% of Net Income (but not
          loss) of the Company for each fiscal quarter of the Company
          ending after July 31, 1997 through and including the last day of
          the fiscal quarter in which this covenant is being tested;
          provided, however, that any calculation of net worth and Net
          Income (and loss) shall exclude the after-tax effect of any
          extraordinary item associated with the extinguishment of
          Indebtedness as a result of any partial refinancing of the Senior
          Indebtedness and shall also exclude any increase in net worth
          resulting from the issuance of the Warrants.

                    (b)  Total Debt Leverage Ratio.  The Company shall not
          permit its Total Debt Leverage Ratio with respect to the 12-month
          period ending on the last day of any fiscal quarter of the
          Company to be greater than the ratio set forth opposite such
          fiscal quarter:

                     Fiscal Quarter Ended        Ratio

                     April 30, 1998              4.25:1.00
                     July 31, 1998               4.25:1.00
                     October 31, 1998            4.25:1.00
                     January 31, 1999            4.25:1.00
                     April 30, 1999              4.25:1.00
                     July 31, 1999 and the last
                     day of    any subsequent
                     fiscal quarter of the       4.00:1.00
                     Company

                    (c)  Total Debt Service Ratio.  The Company will not
          permit its Total Debt Service Ratio with respect to the 12-month
          period ending on the last day of any fiscal quarter of the
          Company to be less than the ratio set forth below opposite such
          fiscal quarter:

                          Fiscal Quarter Ending       Ratio

                     April 30, 1998                  1.60:1.0
                                                 0
                     July 31, 1998                   1.60:1.0
                                                 0
                     October 31, 1998                1.70:1.0
                                                 0
                     January 31, 1999                1.80:1.0
                                                 0

                                       - 62 -
          658180v11<PAGE>





                     April 30, 1999                  1.90:1.0
                                                 0
                     July 31, 1999                   2.00:1.0
                                                 0
                     October 31, 1999                2.05:1.0
                                                 0
                     January 31, 2000                2.10:1.0
                                                 0
                     April 30, 2000                  2.15:1.0
                                                 0
                     July 31, 2000                   2.20:1.0
                     October 31, 2000 and the    0
                     last day of any subsequent
                     fiscal quarter of the
                     Company                         2.25:1.0
                                                 0

                    (d)  Interest Coverage Ratio.  The Company will not
          permit its Interest Coverage Ratio with respect to the 12-month
          period ending on the last day of any fiscal quarter to be less
          than the ratio set forth opposite such fiscal quarter:

                     Fiscal Quarter Ending           Ratio

                     April 30, 1998                  2.50:1.0
                                                 0
                     July 31, 1998                   2.50:1.0
                                                 0
                     October 31, 1998                2.50:1.0
                                                 0
                     January 31, 1999                2.50:1.0
                                                 0
                     April 30, 1999                  2:50:1.0
                                                 0
                     July 31, 1999                   2.60:1.0
                                                 0
                     October 31, 1999                2.60:1.0
                                                 0
                     January 31, 2000                2.70:1.0
                                                 0
                     April 30, 2000                  2.70:1.0
                                                 0
                     July 31, 2000                   2.75:1.0
                                                 0
                     and the last day of any
                     subsequent fiscal quarter
                     of the Company

                    (e)  EBITDA.  The Company will not permit EBITDA for
          the 12-month period ending on the last day of any fiscal quarter
          of the Company to be less than the amount set forth opposite such
          date:



                                       - 63 -
          658180v11<PAGE>





                     Fiscal Quarter Ended       Amount

                     April 30, 1998             $7,000,000
                     July 31, 1998              $7,000,000
                     October 31, 1998           $7,360,000
                     January 31, 1999           $7,625,000
                     April 30, 1999             $8,000,000
                     July 31, 1999              $8,250,000
                     October 31, 1999           $8,500,000
                     January 31, 2000           $9,000,000
                     April 30, 2000             $9,500,000
                     July 31, 2000 and the
                     last day of any
                     subsequent fiscal quarter  $10,000,000
                     of the Company

               Section 10.17.  Certificate Regarding Additional Permitted
          Indebtedness{tc "Section 10.17     Certificate Regarding
          Additional Permitted Indebtedness" \f C \l 2}.  In connection
          with the incurrence of any indebtedness that constitutes
          Designated Senior Indebtedness or has an aggregate principal
          amount (including the maximum amount of all commitments to extend
          any revolving credit, working capital, letter of credit or
          similar credit facility in connection therewith and including the
          face amount of all letters of credit and other contingent
          obligations (whether issued or guaranteed by the holders of such
          indebtedness) from time to time outstanding in connection
          therewith) of at least $1,000,000 ("Threshold Debt"), the Company
          shall provide to the Purchaser, at least three Business Days
          prior to the incurrence of such indebtedness, with respect to
          Designated Senior Indebtedness, a copy of any certificate to be
          provided pursuant to the terms of the Subordination Agreement, or
          with respect to Threshold Debt, a certificate, signed by the
          chief executive officer or chief financial officer of the
          Company, to the effect that such indebtedness constitutes
          Additional Permitted Indebtedness under the Note Purchase
          Agreement as in effect on the date hereof, such certificate to
          set forth, in reasonable detail, the calculations used for the
          calculation of the Pro Forma Interest Coverage Ratio and the Pro
          Forma Leverage Ratio.

                    Section 11.  Events of Default{tc "Section 11.
               Events of Default" \f C \l 1}.

                    Section 11.1.  Events of Default; Remedies{tc "Section
          11.1.     Events of Default; Remedies" \f C \l 2}.  If any of the
          following events (herein called "Events of Default") shall have
          occurred and be continuing (whatever the reason for such Event of
          Default and whether it shall be voluntary or involuntary or by
          operation of law or otherwise):

                    (a)  the Company shall default in the due and punctual
          payment or prepayment of all or any part of the principal of, or
          Prepayment Premium (if any) on, any Note when and as the same

                                       - 64 -
          658180v11<PAGE>





          shall become due and payable, whether at stated maturity, by
          acceleration, by notice of prepayment or otherwise;

                    (b)  the Company shall default in the due and punctual
          payment or prepayment of any interest on any Note when and as
          such interest shall become due and payable, and such default
          shall continue for a period of five days;

                    (c)  the Company shall default in the performance or
          observance of any of the covenants, agreements or conditions
          contained in Sections 10.1 through 10.17, inclusive, of this
          Agreement;

                    (d)  the Company shall default in the performance or
          observance of any of the covenants, agreements or conditions
          contained in this Agreement (other than those referred to in any
          subsection of this Section 11.1 other than this subsection (d)),
          and such default shall continue for a period of 10 days after a
          notice thereof shall have been given to the Company by the
          Purchaser (or if such default is not reasonably susceptible to
          cure within 10 days, such longer period as is reasonably needed
          to effect such cure, but in no event longer than 30 days from the
          date notice is given, so long as the Company promptly commences
          and diligently  pursues such cure);

                    (e)  (i) any of the Designated Senior Indebtedness
          shall be declared to be due and payable or required to be
          prepaid, redeemed, purchased or defeased, or an offer to prepay,
          redeem, purchase or defease such Indebtedness shall be required
          to be made, in each case prior to the stated maturity thereof, or
          the maturity of any or all of such Designated Senior Indebtedness
          is otherwise accelerated, or (ii) the Company or any of its
          Subsidiaries shall fail to pay all or any portion of the
          Designated Senior Indebtedness in full upon the final stated
          maturity of such respective Indebtedness (including any extension
          thereof);

                    (f)  (i) the Company or any of its Subsidiaries shall
          fail to pay any principal of, premium or interest on or any other
          amount payable in respect of Indebtedness of such Person that is
          outstanding in a principal amount of at least $250,000 in the
          aggregate (excluding Designated Senior Indebtedness and excluding
          Indebtedness represented by the Notes) when the same becomes due
          and payable (whether at scheduled maturity, or by required
          prepayment, acceleration, demand or otherwise), and such failure
          shall continue after the applicable grace period, if any,
          specified in the agreement or instrument relating to such
          Indebtedness; or (ii) any other event shall occur or condition
          shall exist under any agreement or instrument relating to any
          such Indebtedness (excluding Designated Senior Indebtedness and
          excluding Indebtedness represented by the Notes) that is
          outstanding in the principal amount of at least $500,000 and
          shall continue after the applicable grace period, if any,
          specified in such agreement or instrument, if the effect of such

                                       - 65 -
          658180v11<PAGE>





          event or condition is to permit the acceleration of the maturity
          of such Indebtedness (whether or not such acceleration occurs);
          provided that if any event specified in clause (i) or (ii) above
          occurs as a result of a default under an agreement or instrument
          that exclusively provides for or evidences purchase money
          indebtedness or Capitalized Lease Obligations (or, if such
          agreement or instrument is part of a facility, such facility
          exclusively provides for purchase money indebtedness or
          Capitalized Lease Obligations) and the maximum principal amount
          of indebtedness (including any unused commitments) under such
          agreement or instrument (or, if such agreement or instrument is
          part of a facility, then the maximum principal amount of
          indebtedness (including unused commitments) under such facility)
          does not exceed $5,000,000, then no Event of Default shall be
          deemed to have occurred as a result of such default unless such
          default has resulted in Indebtedness under such agreement or
          instrument being declared to be due and payable or required to be
          prepaid, redeemed, purchased or defeased, or an offer to prepay,
          redeem, purchase or defease such Indebtedness shall be required
          to be made, in each case prior to the stated maturity thereof, or
          the maturity of any or all of such Indebtedness is otherwise
          accelerated.

                    (g)  (i) a notice of debarment or notice of suspension
          shall have been issued under any United States Government
          Contract, (ii) the Company or any Subsidiary of the Company shall
          be barred or suspended from contracting with any United States
          Governmental Body or (iii) any United States Government Contract
          shall be terminated due to alleged fraud, willful misconduct,
          gross negligence or any intentional wrongdoing by the Company or
          any of its Subsidiaries;

                    (h)  the Company or any of its Subsidiaries shall (i)
          apply for or consent to the appointment of, or the taking of
          possession by, a receiver, custodian, trustee or liquidator of
          itself or of all or a substantial part of its Property, (ii) be
          generally unable to pay its debts as such debts become due, (iii)
          make a general assignment for the benefit of its creditors, (iv)
          commence a voluntary case under the Bankruptcy Code or the
          foreign equivalent thereof, (v) file a petition seeking to take
          advantage of any other law providing for the relief of debtors,
          (vi) fail to controvert in a timely or appropriate manner, or
          acquiesce in writing to, any petition filed against it in an
          involuntary case under the Bankruptcy Code or the foreign
          equivalent thereof, (vii) admit in writing its inability to pay
          its debts generally as such debts become due, (viii) take any
          action under the laws of its jurisdiction of organization
          analogous to any of the foregoing, or (ix) take any requisite
          action for the purpose of effecting any of the foregoing;

                    (i)  a proceeding or case shall be commenced, without
          the application or consent of the Company or its Subsidiaries in
          any court of competent jurisdiction, seeking (i) the liquidation,
          reorganization, dissolution, winding up of the Company or any of

                                       - 66 -
          658180v11<PAGE>





          its Subsidiaries or composition or readjustment of the
          Indebtedness of any of them, (ii) the appointment of a trustee,
          receiver, custodian, liquidator or the like of the Company or any
          of its Subsidiaries or of all or any substantial part of the
          assets of any of them, or (iii) similar relief in respect of the
          Company or any of its Subsidiaries under any law providing for
          the relief of debtors, and such proceeding or case shall continue
          undismissed, or unstayed and in effect, for a period of 60 days;
          or an order for relief shall be entered in an involuntary case
          under the Bankruptcy Code, against the Company or any of its
          Subsidiaries; or action under the laws of the jurisdiction of
          organization of any of the Company or any of its Subsidiaries
          analogous to any of the foregoing shall be taken with respect to
          any of the Company or any of its Subsidiaries and shall continue
          undismissed, or unstayed and in effect, for a period of 60 days;

                    (j)  final judgment for the payment of money shall be
          rendered by a court of competent jurisdiction against the Company
          or any of its Subsidiaries, and the Company or such Subsidiary,
          as the case may be, shall not discharge or bond the same or
          provide for its discharge or bonding in accordance with its
          terms, or procure a stay of execution thereof, within 45 days
          from the date of entry thereof and within said period of 45 days,
          or such longer period during which execution of such judgment
          shall have been stayed, appeal therefrom and cause the execution
          thereof to be stayed during such appeal, and such judgment
          together with all other such judgments shall exceed in the
          aggregate $750,000;

                    (k)  any representation or warranty made by or on
          behalf of the Company in this Agreement or any Officer's
          Certificate or other certificate or notice now or hereafter
          delivered pursuant to or in connection with any provision of this
          Agreement (including, without limitation, any Officer's
          Certificate or other certification delivered pursuant to Section
          7 hereof), shall prove to be false, incorrect or breached in any
          material respect on the date as of which made;

                    (l)  there shall be a Change of Control of the Company;
          or

                    (m)  the Company, any Subsidiary Guarantor or ING shall
          default in the performance or observance of any of the covenants,
          agreements or conditions contained in the Put Subordination
          Agreement; provided, however, that failure of a Put Holder (as
          defined in the Put Subordination Agreement) to provide notice
          pursuant to Section 6 of the Put Subordination Agreement shall
          not be deemed to be an Event of Default under this Agreement;

          then (i) upon the occurrence of any Event of Default described in
          subsection (h) or (i), the unpaid principal amount of all Notes,
          together with all interest accrued thereon and all fees, costs,
          expenses, indemnities and other amounts payable under this
          Agreement or the Notes, shall automatically become immediately

                                       - 67 -
          658180v11<PAGE>





          due and payable, without presentment, demand, notice,
          declaration, protest or other requirements of any kind, all of
          which are hereby expressly waived, or (ii) upon the occurrence of
          any other Event of Default, the Majority Holders may, by written
          notice to the Company, declare the unpaid principal amount of all
          Notes to be, and the same shall forthwith become, immediately due
          and payable, together with the interest accrued thereon, and all
          fees, costs, expenses, indemnities and other amounts payable
          under this Agreement or the Notes, all without presentment,
          demand, notice, protest or other requirements of any kind, all of
          which are hereby expressly waived.  The provisions of this
          Section 11.1 are subject, however, to the condition that if, at
          any time after any Note shall have so become due and payable, the
          Company shall pay all arrears of interest on the Notes and all
          payments on account of the principal of and, to the extent
          permitted by law, prepayment charge (if any) on the Notes which
          shall have become due otherwise than by acceleration (with
          interest on all such overdue principal and prepayment charge, if
          any, and, to the extent permitted by law, on overdue payments of
          interest, at the applicable rate per annum provided for in the
          Notes or this Agreement in respect of overdue amounts of
          principal, prepayment charge and interest), and all Events of
          Default (other than nonpayment of principal of, Prepayment
          Premium (if any) and accrued interest on the Notes, due and
          payable solely by virtue of acceleration) shall be remedied or
          waived pursuant to Section 14.1, then, and in every such case,
          the Majority Holders, by written notice to the Company, may
          rescind and annul any such acceleration and its consequences with
          respect to the Notes; but no such action shall affect any
          subsequent Default or Event of Default or impair any right
          consequent thereon.

                    Section 11.2.  Suits for Enforcement {tc "Section 11.2.
               Suits for Enforcement" \f C \l 2}.  If any Event of Default
          shall have occurred and be continuing, the Purchaser may, with
          respect to the Notes, proceed to protect and enforce the
          respective rights of the holders of such Notes, either by suit in
          equity or by action at law, or both, whether for the specific
          performance of any covenant or agreement contained in this
          Agreement or in aid of the exercise of any power granted in this
          Agreement, and may proceed to enforce the payment of all sums due
          upon such Notes, and such further amounts as shall be sufficient
          to cover the costs and expenses of collection (including, without
          limitation, reasonable counsel fees and disbursements), or to
          enforce any other legal or equitable right of the holder of such
          Notes.

                    Section 11.3.  Remedies Cumulative{tc "Section 11.3.
               Remedies Cumulative" \f C \l 2}.  No remedy conferred in
          this Agreement or the Notes upon the Purchaser, is intended to be
          exclusive of any other remedy and each and every such remedy
          shall be cumulative and shall be in addition to every other
          remedy given hereunder or now or hereafter existing at law or in
          equity or otherwise.

                                       - 68 -
          658180v11<PAGE>






                    Section 11.4.  Remedies Not Waived{tc "Section 11.4.
               Remedies Not Waived" \f C \l 2}.  No course of dealing
          between the Company and no delay or failure in exercising any
          rights hereunder or under such Note, shall operate as a waiver of
          any of the rights of the Purchaser or of the holder of any Note.

                    Section 12.  Registration, Exchange, and Transfer of
          Notes{tc "Section 12.    Registration, Exchange, and Transfer of
          Notes" \f C \l 1}.  The Company will keep at its principal
          executive office a register, in which, subject to such reasonable
          regulations as it may prescribe, but at its expense (other than
          transfer taxes, if any), the Company will provide for the
          registration and transfer of Notes.  Whenever any Note or Notes
          shall be surrendered either at the principal executive office of
          the Company, or at the place of payment named in the Note, for
          transfer or exchange, accompanied (if so required by the Company)
          by a written instrument of transfer in form reasonably
          satisfactory to the Company duly executed by the holder thereof
          or by such holder's attorney duly authorized in writing, and such
          other documentation and information as the Company shall
          reasonably request as necessary in connection with such transfer
          or exchange, the Company will execute and deliver in exchange
          therefor a new Note or Notes in such denominations as may be
          requested by such holder, of like tenor and in the same aggregate
          unpaid principal amount as the aggregate unpaid principal amount
          of the Note or Notes so surrendered.  Any Note issued in exchange
          for any other Note or upon transfer thereof shall carry the
          rights to unpaid interest and interest to accrue which were
          carried by the Note so exchanged or transferred, and neither gain
          nor loss of interest shall result from any such transfer or
          exchange.  Any transfer tax or governmental charge relating to
          such transaction shall be paid by the holder requesting the
          exchange.  The Company and any of its agents may treat the Person
          in whose name any Note is registered as the sole and exclusive
          record and beneficial holder and owner of such Note for the
          purpose of receiving payment of the principal of, prepayment
          charge (if any) and interest and other amounts on such Note and
          for all other purposes whatsoever, whether or not such Note be
          overdue.

                    Section 13.  Lost, Stolen, Damaged and Destroyed
          Notes{tc "Section 13.    Lost, Stolen, Damaged and Destroyed
          Notes" \f C \l 1}.  At the request of any holder of any Note, the
          Company will issue and deliver at its expense, in replacement of
          any Note or Notes lost, stolen, damaged or destroyed, upon
          surrender thereof, if mutilated, a new Note or Notes in the same
          aggregate unpaid principal amount, and otherwise of the same
          tenor, as the Note or Notes so lost, stolen, damaged or
          destroyed, duly executed by the Company.  The Company may
          condition the replacement of a Note or Notes reported by the
          holder thereof as lost, stolen, damaged or destroyed, upon the
          receipt from such holder of an indemnity and/or security
          reasonably satisfactory to the Company; provided that if such

                                       - 69 -
          658180v11<PAGE>





          holder shall be the Purchaser or its nominee, the Purchaser's
          unsecured agreement of indemnity shall be sufficient for purposes
          of this Section.

                    Section 14.  Miscellaneous{tc "Section 14.
               Miscellaneous" \f C \l 1}.

                    Section 14.1.  Amendment and Waiver{tc "Section 14.1.
               Amendment and Waiver" \f C \l 2}.  (a)  Any term, covenant,
          agreement or condition of this Agreement or of the Notes may,
          with the written consent of the Company, be amended, or
          compliance therewith may be waived (either generally or in a
          particular instance and either retroactively or prospectively),
          by one or more substantially concurrent written instruments
          signed by the Majority Holders, except that

                         (i)  without the specific prior written consent of
                    the holders of all of the Notes at the time
                    outstanding, no such amendment or waiver shall (A)
                    reduce the principal of, or the rate of interest on, or
                    the amount of any applicable Prepayment Premium with
                    respect to, any of the Notes, (B) subject to the
                    provisions of the last paragraph of Section 11.1,
                    extend the time of payment of all or any portion of the
                    principal of or interest on or any Prepayment Premium
                    payable with respect to any of the Notes, (C) modify
                    any of the provisions of this Agreement or of the Notes
                    with respect to the payment or prepayment (whether
                    mandatory or optional) of the principal thereof,
                    interest thereon, or Prepayment Premium with respect
                    thereto, (D) reduce the percentage of Notes required
                    with respect to any such amendment or to effectuate any
                    such waiver, (E) alter the definition of the term
                    "Majority Holders" or (F) modify any provision of this
                    Section; and

                         (ii) no such waiver shall extend to or affect any
                    obligation not expressly waived or impair any right
                    consequent thereon.

                    (b)  Any amendment or waiver pursuant to subsection (a)
          of this Section 14.1 shall apply equally to all holders of the
          Notes at the time outstanding and shall be binding upon them,
          upon each future holder of any Note, and upon the Company, in
          each case whether or not a notation thereof shall have been
          placed on any Note.

                    (c)  Notwithstanding any other provision contained in
          this Section 14.1 or elsewhere in this Agreement to the contrary,
          Notes which at any time are held by the Company or by any
          Subsidiary or Affiliate of the Company shall not be deemed
          outstanding for purposes of any vote, consent, approval, waiver
          or other action required or permitted to be taken by the holders
          of Notes, or by any of them, under the provisions of this Section

                                       - 70 -
          658180v11<PAGE>





          14.1 or Section 11 of this Agreement, and neither the Company nor
          any such Subsidiary or Affiliate shall be entitled to exercise
          any right as a holder of Notes with respect to any such vote,
          consent, approval or waiver or to take or participate in taking
          any such action at any time.

                    (d)  So long as any Notes remain outstanding, the
          Company will not solicit, request or negotiate for or with
          respect to any proposed consent with respect to, or waiver or
          amendment of, any of the provisions of this Agreement or the
          Notes unless each holder of Notes (irrespective of the amount of
          Notes then owned by it) shall be informed thereof by the Company
          and shall be afforded the opportunity of considering the same and
          shall be supplied by the Company with sufficient information to
          enable it to make an informed decision with respect thereto.  The
          Company will not, directly or indirectly, pay or cause to be paid
          any remuneration, whether by way of supplemental or additional
          interest, fee or otherwise, to any holder of Notes as
          consideration for or as an inducement to the entering into by any
          holder of Notes of any amendment, waiver or consent with respect
          to any of the terms and provisions of this Agreement or the Notes
          unless such remuneration is currently paid, on the same terms,
          ratably to the holders of all Notes then outstanding.

                    Section 14.2.  Expenses{tc "Section 14.2.    Expenses"
          \f C \l 2}.  The Company agrees, whether or not the transactions
          hereby contemplated shall be consummated, to pay and save the
          Purchaser and any other holder of Notes harmless against any and
          all liability for the payment of all reasonable out-of-pocket
          expenses arising in connection with this Agreement, the Notes,
          the Warrants, the Registration Rights Agreement, any other
          agreements, instruments or documents executed pursuant thereto or
          in connection therewith, and the transactions hereby
          contemplated, including without limitation all such expenses
          incurred with respect to the enforcement of any provision of any
          such agreement, instrument or document, all expenses incurred in
          connection with the reproduction of such agreements, instruments
          and documents and all stamp and other similar taxes (together in
          each case with interest and penalties, if any) which may be
          payable in respect of the execution and delivery of such
          agreements, instruments and documents, or the issuance, delivery
          or acquisition by the Purchaser of any Note or Warrant or
          otherwise pursuant to this Agreement, the fees and disbursements
          of Stroock & Stroock & Lavan LLP and of any special or local
          counsel in connection with the preparation of such agreements and
          instruments and the transactions hereby and thereby contemplated,
          and the fees and disbursements of the Accountants.  The Company
          also agrees to pay all expenses incurred by the Purchaser or any
          other holder of Notes or Warrants (including reasonable counsel
          fees and disbursements) in connection with any amendment or
          requested amendment of, or waiver or consent or requested waiver
          or consent under or with respect to, this Agreement, the Notes,
          the Warrants, the Registration Rights Agreement, or any of such
          other agreements, instruments or documents, whether or not the

                                       - 71 -
          658180v11<PAGE>





          same shall become effective, and all expenses incurred by the
          Purchaser or any other holder of Notes or Warrants (including
          reasonable counsel fees and disbursements and the reasonable
          fees, expenses and disbursements of an investment bank or other
          firm acting as financial advisor to the holders of Notes or
          Warrants) following the occurrence and during the continuance of
          any Default or Event of Default or incident to the negotiation of
          any workout, restructuring or similar arrangement relating to the
          Company or its Subsidiaries.  The obligations of the Company
          under this Section 14.2 shall survive the payment or transfer of
          any Note or Warrant (including, without limitation, the payment
          or prepayment of the Notes in full and the exercise of the
          Warrants), the enforcement of any provision hereof or thereof,
          any such amendments, waivers or consents, any such Default or
          Event of Default, and any such workout, restructuring or similar
          arrangement.

                    Section 14.3.  Survival of Representations and
          Warranties{tc "Section 14.3.  Survival of Representations and
          Warranties" \f C \l 2}.  All representations and warranties
          contained herein or made in writing by or on behalf of any party
          to this Agreement or otherwise in connection herewith, shall (i)
          survive the execution and delivery of this Agreement and the
          Registration Rights Agreement and the delivery of the Notes and
          Warrants to the Purchaser and shall continue in effect as long as
          any of the Notes or Warrants is outstanding, and thereafter as
          provided in Sections 14.2 and 14.6 with respect to the
          obligations imposed thereunder, and (ii) be deemed to be material
          and to have been relied upon by the Purchaser, regardless of any
          investigation made by the Purchaser or on its behalf.

                    Section 14.4.  Successors and Assigns; Limitation on
          Transfer{tc "Section 14.4.    Successors and Assigns; Limitation
          on Transfer" \f C \l 2}.  (a)  All representations, warranties,
          covenants and agreements in this Agreement made by or on behalf
          of any of the parties hereto shall bind and inure to the benefit
          of the respective successors and assigns of the parties hereto
          whether so expressed or not, except that the Purchaser shall not
          be obligated to purchase any Note or Warrant from any issuer
          other than the Company.  The provisions of this Agreement are
          intended to be for the benefit of all holders, from time to time,
          of any Notes or Warrants purchased pursuant hereto, and shall be
          enforceable by any such holder, whether or not an express
          assignment to such holder of rights under this Agreement has been
          made by the Purchaser or any of its successors or assigns.

                    (b)  Notwithstanding any other provision of this
          Agreement to the contrary, without the prior written consent of
          the Company, neither the Purchaser nor any other holder of Notes
          shall transfer any Notes to any Person unless the aggregate
          principal amount of Notes concurrently transferred to such Person
          (taken together with any concurrent transfers of Notes by the
          transferor or its Control Affiliates to the transferee or its
          Control Affiliates) shall be not less than the lesser of (i)

                                       - 72 -
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          $1,000,000, or (ii) the entire remaining principal balance of the
          Notes held by such transferor; provided that nothing in this
          subsection (b) shall be deemed to prohibit any transfer of Notes
          by any Person to (x) any Control Affiliate of such Person or (y)
          any Person who immediately prior to such transfer is a holder of
          Notes or a Control Affiliate of a holder of Notes; provided,
          further, that no transfer of Notes shall be permitted if,
          immediately after giving effect to such transfer, there would be
          more than five holders of Notes (provided that, solely for the
          purposes hereof, a Person and all of such Person's Control
          Affiliates shall be counted as a single holder of Notes).

                    Section 14.5.  Notices{tc "Section 14.5.     Notices"
          \f C \l 2}.  All notices hereunder shall be in writing and shall
          be conclusively deemed to have been received and shall be
          effective (a) on the day on which delivered if delivered
          personally or transmitted by telecopier, (b) one Business Day
          after the date on which the same is delivered to a nationally
          recognized overnight courier service, or (c) three Business Days
          after being sent by registered or certified United States mail,
          return receipt requested, and shall be addressed:

                         (i)  in the case of the Company, to:

                              Meridian Medical Technologies, Inc.
                              10240  Old Columbia Road
                              Columbia, MD  21046
                              Attention:  James H. Miller
                              Telecopy No.: (410) 309-1691;

                              with a copy (which shall not constitute
                              notice) to:

                              Arnold & Porter
                              555 Twelfth Street N.W.
                              Washington, D.C. 20004
                              Attention:  Steven Kaplan, Esq.
                              Telecopy No.: (202) 942-5999;


                         (ii) in the case of the Purchaser, to:

                              Nomura Holding America Inc.
                              2 World Financial Center, Building B
                              New York, NY 10281-1198
                              Attention:  Howard Gellis, or his authorized
                              representative
                              Telecopy No.: (212) 667-1029

                              with a copy to:

                              Nomura Holding America Inc.
                              2 World Financial Center, Bldg. B
                              New York, NY 10281-1198

                                       - 73 -
          658180v11<PAGE>





                              Attention:  Michael Goldberg, Esq.
                              Telecopy No.: (212) 667-1024;

          or at such other address and/or telecopy number and/or to the
          attention of such other Person as any of such Persons shall have
          advised the others by notice in the manner herein specified.

                    Section 14.6.  Indemnification{tc "Section 14.6.
               Indemnification" \f C \l 2}.  In consideration of the
          execution and delivery of this Agreement by the Purchaser, the
          Company hereby agrees to defend, indemnify, exonerate and hold
          harmless the Purchaser, each holder of Notes, and each of their
          respective officers, directors, stockholders, affiliates,
          trustees, employees and agents, and each other Person, if any,
          controlling such Purchaser or holder of Notes or any of its
          respective Affiliates (herein collectively called the
          "Indemnitees") from and against any and all liabilities,
          obligations, losses, damages, claims, actions, suits,
          proceedings, judgments, costs and expenses, including, without
          limitation, legal fees and other expenses incurred in the
          investigation, defense, appeal and settlement of claims, actions,
          suits and proceedings (herein collectively called the
          "Indemnified Liabilities"), incurred by the Indemnitees or any of
          them as a result of, or arising out of or relating to:

                         (i)  the execution, delivery, performance or
                    enforcement of this Agreement, the Notes, the Warrants,
                    the Registration Rights Agreement or any other
                    instrument or document contemplated hereby or thereby
                    by any of the Indemnitees, or any act, event or
                    transaction related or attendant thereto or
                    contemplated hereby or thereby, or any action or
                    inaction by any Indemnitee under or in connection
                    therewith, or

                         (ii) any Environmental Matter, any violation or
                    alleged violation by the Company or any of its
                    Subsidiaries of any Environmental Law or the actual or
                    alleged existence, or release by the Company or any of
                    its Subsidiaries, of any Hazardous Material that
                    affects the Company, any of its Subsidiaries, or their
                    respective operations or Properties,

          except for any such Indemnified Liabilities that are finally
          judicially determined (or acknowledged by the respective
          Indemnitee in writing) to have resulted from the respective
          Indemnitee's gross negligence or willful misconduct, and if and
          to the extent that the foregoing undertaking may be unenforceable
          for any reason, the Company hereby agrees to make the maximum
          contribution to the payment and satisfaction of each of the
          Indemnified Liabilities which is permissible under applicable
          law.  The obligations of the Company under this Section 14.6
          shall be in addition to any liability that the Company may
          otherwise have and shall survive the payment or prepayment in

                                       - 74 -
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          full or transfer of any Note or Warrant and the enforcement of
          any provision hereof or thereof.

                    Section 14.7.  Public Announcements{tc "Section 14.7.
               Public Announcements" \f C \l 2}.  The Company agrees that
          it will not issue any press release or make any other public
          announcement, statement or filing with regard to this Agreement,
          the Notes, the Warrants, the Registration Rights Agreement or the
          transactions hereby or thereby contemplated without the prior
          approval of the Majority Holders, which approval shall not be
          unreasonably withheld and shall in no event be withheld in any
          case where such press release, public announcement, statement or
          filing is required by applicable law (including applicable rules
          and regulations of the SEC).

                    Section 14.8.    No Fiduciary Relationship{tc "Section
          14.8.     No Fiduciary Relationship" \f C \l 2}.  The Purchaser
          shall not, by reason of its purchase or holding of Notes or
          Warrants pursuant to this Agreement, be deemed to have any
          fiduciary or other special relationship with the Company or any
          of its Subsidiaries.  No provision of this Agreement, the Notes,
          the Warrants, the Registration Rights Agreement or any of the
          other documents executed and delivered in connection herewith
          shall be construed to create a fiduciary duty on the part of the
          Purchaser, any holder of Notes or any trustee or agent therefor
          in favor of the Company, any of its Subsidiaries or Affiliates,
          or their respective directors, officers, employees, agents,
          stockholders or creditors.

                    Section 14.9.  Confidentiality{tc "Section 14.9.
               Confidentiality" \f C \l 2}.  Each holder of Notes agrees to
          use reasonable efforts (in accordance with its customary
          procedures with respect to the treatment of confidential
          information) not to disclose, or use for any purpose other than
          in connection with its investment in the Notes or the Warrants,
          without the prior written consent of the Company, any information
          with respect to the Company or any of its Subsidiaries which is
          furnished by the Company pursuant to or in connection with the
          transactions contemplated by this Agreement, provided that such
          holder may disclose any such information (a) as has become
          generally available to the public (other than through disclosure
          by such holder in contravention of this Agreement), (b) to such
          holder's directors, trustees, partners, officers, employees,
          agents and professional consultants, (c) to any other holder of
          Notes, (d) to any Person to which such holder offers to sell or
          transfer any Note or any part thereof or participation therein,
          provided that the prospective transferee shall agree to be bound
          by the provisions of this Section 14.9, (e) in any report,
          statement, testimony or other submission to any Governmental Body
          having or claiming to have jurisdiction over such holder, and (f)
          in order to comply with any Statute or Order applicable to such
          holder, or in response to any summons, subpoena or other legal
          process or formal or informal investigative demand issued to such


                                       - 75 -
          658180v11<PAGE>





          holder in the course of any litigation, investigation or
          administrative proceeding.

                    Section 14.10.  Integration and Severability{tc
          "Section 14.10.     Integration and Severability" \f C \l 2}.
          This Agreement (including the schedules and exhibits thereto),
          the Notes, the Warrants, the Registration Rights Agreement and
          the other documents executed pursuant to this Agreement embody
          the entire agreement and understanding between the Purchaser and
          the Company, and supersede all prior agreements and
          understandings relating to the subject matter hereof.  In case
          any one or more of the provisions contained in this Agreement,
          the Notes, the Warrants, the Registration Rights Agreement or any
          other agreement, instrument or document executed in connection
          therewith, or any application thereof, shall be invalid, illegal
          or unenforceable in any respect, the validity, legality and
          enforceability of the remaining provisions contained herein and
          therein, and any other application thereof, shall not in any way
          be affected or impaired thereby.

                    Section 14.11.  Counterparts{tc "Section 14.11.
               Counterparts" \f C \l 2}.  This Agreement may be executed in
          two or more counterparts, each of which shall be deemed an
          original but all of which shall together constitute one and the
          same instrument.

                    Section 14.12.  Governing Law{tc "Section 14.12.
               Governing Law" \f C \l 2}.  THIS AGREEMENT SHALL BE GOVERNED
          BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
          THE STATE OF NEW YORK.

                    Section 14.13.  Submission to Jurisdiction; Waiver of
          Service and Venue{tc "Section 14.13.    Submission to
          Jurisdiction: Waiver of Service and Venue" \f C \l 2}.  (a)  EACH
          OF THE COMPANY, THE PURCHASER AND EACH OTHER HOLDER OF NOTES
          CONSENTS AND AGREES TO THE JURISDICTION OF ANY STATE OR FEDERAL
          COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK,
          WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
          OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO
          ANY ACTION INSTITUTED THEREIN, AND AGREES THAT, EXCEPT UPON THE
          WRITTEN CONSENT OF THE MAJORITY HOLDERS, ANY DISPUTE CONCERNING
          THE RELATIONSHIP BETWEEN THE PURCHASER OR ANY OTHER HOLDER OF
          NOTES, ON THE ONE HAND, AND THE COMPANY, ON THE OTHER HAND, OR
          THE CONDUCT OF ANY PARTY IN CONNECTION WITH THIS AGREEMENT OR
          OTHERWISE, SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.

                    (b)  THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY
          AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
          PROCESS MAY BE MADE BY HAND DELIVERY TO THE COMPANY AT ITS
          ADDRESS SET FORTH ABOVE IN SECTION 14.5, OR, AT THE OPTION OF THE
          MAJORITY HOLDERS, BY SERVICE UPON CT CORPORATION, WHICH THE
          COMPANY IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF
          ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF NEW YORK.  IN
          ADDITION, THE PURCHASER AND EACH OTHER HOLDER OF NOTES AGREES TO

                                       - 76 -
          658180v11<PAGE>





          PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON
          SAID AGENT TO THE COMPANY AT ITS ADDRESS SET FORTH ABOVE IN
          SECTION 14.5.  THE COMPANY HEREBY CONSENTS TO SERVICE OF PROCESS
          AS AFORESAID.

                    (c)  NOTHING IN THIS SECTION 14.13 SHALL AFFECT THE
          RIGHT OF THE PURCHASER OR ANY OTHER HOLDER OF NOTES TO SERVE
          LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
          RIGHT OF THE PURCHASER OR ANY OTHER HOLDER OF NOTES (UPON THE
          CONSENT OF THE MAJORITY HOLDERS AS PROVIDED IN SECTION 14.13(a))
          TO BRING ANY ACTION OR PROCEEDING AGAINST THE COMPANY OR ITS
          PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

                    Section 14.14. Waiver of Right to Trial by Jury{tc
          "Section 14.14.     Waiver of Right to Trial by Jury" \f C \l 2}.
          EACH OF THE COMPANY AND THE PURCHASER HEREBY WAIVES ANY RIGHT TO
          TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I)
          ARISING UNDER THIS AGREEMENT, ANY NOTE OR ANY OTHER INSTRUMENT,
          DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
          HEREWITH OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR
          INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
          IN RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
          AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
          TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
          HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
          OTHERWISE.  THE COMPANY AND THE PURCHASER HEREBY AGREE AND
          CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
          SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY
          MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
          ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
          HERETO TO THE WAIVER OF THEIR RIGHTS TO TRIAL BY JURY.


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                                       - 77 -
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                    IN WITNESS WHEREOF, the Company and the Purchaser have
          executed this Agreement by their duly authorized officers as of
          the date first written above.


                                        MERIDIAN MEDICAL TECHNOLOGIES, INC.


                                        By:
                                             Its:



                                        NOMURA HOLDING AMERICA INC.


                                        By:
                                             Its:





































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