AGREEMENT AND PLAN OF MERGER

                                      AMONG

                               TOYS "R" US, INC.,

                              BABY SUPERSTORE, INC.

                                       AND

                                  JACK P. TATE

                              Dated October 1, 1996






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                                TABLE OF CONTENTS
                                -----------------
                                                                       Page

                                    ARTICLE I

                       The Merger; Effective Time; Closing

           1.1.  The Merger  . . . . . . . . . . . . . . . . . . . . .    2
           1.2.  Effective Time  . . . . . . . . . . . . . . . . . . .    2
           1.3.  Closing . . . . . . . . . . . . . . . . . . . . . . .    2
           1.4.  Effects of the Merger . . . . . . . . . . . . . . . .    2


                                   ARTICLE II

                    Certificate of Incorporation and By-Laws
                          of the Surviving Corporation

           2.1.  Certificate of Incorporation  . . . . . . . . . . . .    3
           2.2.  The By-Laws . . . . . . . . . . . . . . . . . . . . .    3


                                   ARTICLE III

                             Directors and Officers
                          of the Surviving Corporation

           3.1.  Directors . . . . . . . . . . . . . . . . . . . . . .    3
           3.2.  Officers  . . . . . . . . . . . . . . . . . . . . . .    3


                                   ARTICLE IV

                        Merger Consideration; Conversion
                     or Cancellation of Shares in the Merger

           4.1.  Share Consideration for the Merger; Conversion or
                 Cancellation of Shares in the Merger  . . . . . . . .    3
           4.2.  Exchange Procedures.    . . . . . . . . . . . . . . .    6
           4.3.  Dividends, Fractional Shares, Etc . . . . . . . . . .    7
           4.4.  Dissenting Shares . . . . . . . . . . . . . . . . . .   10




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                                                                       Page

                                    ARTICLE V

                         Representations and Warranties

           5.1.  Representations and Warranties of the Company . . . .   11
                 (a)  Corporate Organization and Qualification . . . .   11
                 (b)  Capitalization . . . . . . . . . . . . . . . . .   11
                      (c)  Approvals; Fairness Opinion . . . . . . . .   12
                 (d)  Authority Relative to This Agreement . . . . . .   12
                 (e)  Consents and Approvals; No Violation . . . . . .   13
                 (f)  Litigation; Compliance with Laws . . . . . . . .   14
                 (g)  SEC Reports; Financial Statements  . . . . . . .   15
                 (h)  Undisclosed Liabilities; Absence of Certain
                 Changes or Events . . . . . . . . . . . . . . . . . .   16
                 (i)  Employment Agreements  . . . . . . . . . . . . .   17
                 (j)  Brokers and Finders  . . . . . . . . . . . . . .   17
                 (k)  S-4 Registration Statement and Proxy
                      Statement/Prospectus . . . . . . . . . . . . . .   17
                 (l)  Taxes  . . . . . . . . . . . . . . . . . . . . .   18
                 (m)  Employee Benefits  . . . . . . . . . . . . . . .   20
                 (n)   Title to Properties; Assets Other Than Real
                      Property Interests . . . . . . . . . . . . . . .   22
                 (o)  Intangible Property  . . . . . . . . . . . . . .   24
                 (p)  Certain Contracts  . . . . . . . . . . . . . . .   25
                 (q)  Insurance  . . . . . . . . . . . . . . . . . . .   26
                 (r)  Unlawful Payments and Contributions  . . . . . .   26
                 (s)  Listings . . . . . . . . . . . . . . . . . . . .   27
                 (t)  Environmental Matters  . . . . . . . . . . . . .   27
                 (u)  State Takeover Statutes  . . . . . . . . . . . .   28
                 (v)  Inventories; Receivables; Payables . . . . . . .   28
                 (x)  Disclosure . . . . . . . . . . . . . . . . . . .   29
           5.2.  Representations and Warranties of Acquiror  . . . . .   29
                 (a)  Corporate Organization and Qualification . . . .   29
                 (b)  Capitalization . . . . . . . . . . . . . . . . .   29
                 (c)  Authorization for Acquiror Common Shares . . . .   30
                 (d)  Authority Relative to This Agreement . . . . . .   30
                 (e)  Consents and Approvals; No Violation . . . . . .   31
                 (f)  SEC Reports; Financial Statements  . . . . . . .   32
                 (g)  Undisclosed Liabilities; Absence of Certain
                      Changes or Events  . . . . . . . . . . . . . . .   32
                 (h)  Litigation . . . . . . . . . . . . . . . . . . .   33
                 (i)  S-4 Registration Statement and Proxy
                      Statement/Prospectus . . . . . . . . . . . . . .   33
                 (j)  Brokers and Finders  . . . . . . . . . . . . . .   33
                 (k)  Ownership of Shares  . . . . . . . . . . . . . .   34
                 (l)  Disclosure . . . . . . . . . . . . . . . . . . .   34
           5.3.  Representations and Warranties of Tate  . . . . . . .   34
                 (a)  Authority Relative to This Agreement and




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                                                                       Page

                      Shareholders Agreement . . . . . . . . . . . . . . 34
                 (b)  The Tate Shares  . . . . . . . . . . . . . . . . . 34
                 (c)  Consents and Approvals; No Violation . . . . . . . 34
                 (d)  Certain Acknowledgements . . . . . . . . . . . . . 35



                                   ARTICLE VI

                       Additional Covenants and Agreements

           6.1.  Conduct of Business . . . . . . . . . . . . . . . . .   35
           6.2.  No Solicitation . . . . . . . . . . . . . . . . . . .   39
           6.3.  Meeting of Shareholders . . . . . . . . . . . . . . .   41
           6.4.  S-4 Registration Statement; Proxy Statement . . . . .   41
           6.5.  Access to Information . . . . . . . . . . . . . . . .   42
           6.6.  Publicity . . . . . . . . . . . . . . . . . . . . . .   43
           6.7.  Indemnification of Directors and Officers . . . . . .   43
           6.8.  Affiliates of the Company . . . . . . . . . . . . . .   44
           6.9.  Taxes . . . . . . . . . . . . . . . . . . . . . . . .   44
           6.10.  Maintenance of Insurance . . . . . . . . . . . . . .   44
           6.11.  Representations and Warranties . . . . . . . . . . .   44
           6.12.  Antitrust Notification . . . . . . . . . . . . . . .   45
           6.14.  Notification of Certain Matters  . . . . . . . . . .   46
           6.15.  Blue Sky Permits . . . . . . . . . . . . . . . . . .   47
           6.16.  NYSE Listing . . . . . . . . . . . . . . . . . . . .   47
           6.17.  Comfort Letter . . . . . . . . . . . . . . . . . . .   47
           6.18.  Benefit Matters  . . . . . . . . . . . . . . . . . .   47
           6.19.  Convertible Notes  . . . . . . . . . . . . . . . . .   47


                                   ARTICLE VII

                                   Conditions

           7.1.  Conditions to the Obligations of Acquiror . . . . . .   48
                 (a)  Certificate  . . . . . . . . . . . . . . . . . .   48
                 (b)  Company Shareholder Approval . . . . . . . . . .   48
                 (c)  No Litigation  . . . . . . . . . . . . . . . . .   48
                 (d)  S-4 Registration Statement . . . . . . . . . . .   49
                 (e)  Listing of Acquiror Common Shares  . . . . . . .   49
                 (f)  Governmental Filings and Consents; HSR Act . . .   49
                 (g)  Third-Party Consents . . . . . . . . . . . . . .   49
                 (h)  Delivery of Comfort Letter . . . . . . . . . . .   50
                 (i)  Affiliate Letters  . . . . . . . . . . . . . . .   50
                 (j)  Delivery of Tax Opinion  . . . . . . . . . . . .   50
           7.2.  Conditions to the Obligations of the Company  . . . .   50





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                                                                       Page

                 (a)  Certificate. . . . . . . . . . . . . . . . . . .   50
                 (b)  Company Shareholder Approval . . . . . . . . . .   51
                 (c)  Injunction . . . . . . . . . . . . . . . . . . .   51
                 (d)  S-4 Registration Statement . . . . . . . . . . .   51
                 (e)  Listing of Acquiror Common Shares  . . . . . . .   51
                 (f)  HSR Act  . . . . . . . . . . . . . . . . . . . .   51
                 (g)  Delivery of Tax Opinion  . . . . . . . . . . . .   51


                                  ARTICLE VIII

                                   Termination

           8.1.  Termination by Mutual Consent . . . . . . . . . . . .   52
           8.2.  Termination by Either Acquiror or the Company . . . .   52
           8.3.  Termination by Acquiror . . . . . . . . . . . . . . .   52
           8.4.  Termination by the Company  . . . . . . . . . . . . .   53
           8.5.  Effect of Termination and Abandonment . . . . . . . .   53


                                   ARTICLE IX

                            Miscellaneous and General

           9.1.  Payment of Expenses . . . . . . . . . . . . . . . . .   54
           9.2.  Survival of Representations and Warranties  . . . . .   54
           9.3.  Modification or Amendment . . . . . . . . . . . . . .   54
           9.4.  Waiver of Conditions  . . . . . . . . . . . . . . . .   55
           9.5.  Counterparts  . . . . . . . . . . . . . . . . . . . .   55
           9.6.  Governing Law . . . . . . . . . . . . . . . . . . . .   55
           9.7.  Notices . . . . . . . . . . . . . . . . . . . . . . .   55
           9.8.  Entire Agreement; Assignment  . . . . . . . . . . . .   56
           9.9.  Parties in Interest . . . . . . . . . . . . . . . . .   56
           9.10.  Certain Definitions  . . . . . . . . . . . . . . . .   56
                 (a)"Affiliate"  . . . . . . . . . . . . . . . . . . .   56
                 (b)  "subsidiary" . . . . . . . . . . . . . . . . . .   56
                 (c)  "Material Adverse Effect"  . . . . . . . . . . .   56
                 (d)  "Person" . . . . . . . . . . . . . . . . . . . .   57
           9.11.  Severability . . . . . . . . . . . . . . . . . . . .   57
           9.12.  Specific Performance . . . . . . . . . . . . . . . .   57
           9.13.  Captions . . . . . . . . . . . . . . . . . . . . . .   57


                                    EXHIBITS

     Shareholders Agreement  . . . . . . . . . . . . . . . . . .  Exhibit A
     Registration Rights Agreement . . . . . . . . . . . . . . .  Exhibit B
     Affiliate Letter  . . . . . . . . . . . . . . . . . . . . .  Exhibit C



<PAGE>


                          AGREEMENT AND PLAN OF MERGER

               AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
     October 1, 1996, among Toys "R" Us, Inc., a Delaware corporation
     ("Acquiror"), Baby Superstore, Inc., a South Carolina corporation (the
     "Company"), and Jack P. Tate ("Tate").

                              W I T N E S S E T H:
                              - - - - - - - - - -
               WHEREAS, the Boards of Directors of Acquiror and the Company
     each have determined that it is in the best interests of their
     respective stockholders for the Company to merge with and into the
     Acquiror upon the terms and subject to the conditions of this
     Agreement;

               WHEREAS, for federal income tax purposes, it is intended
     that the Merger (as defined in Section 1.1) shall qualify as a
     reorganization within the meaning of Section 368(a) of the Internal
     Revenue Code of 1986, as amended (the "Code");

               WHEREAS, Tate is the beneficial owner and holder of record
     of 9,000,000 shares of Common Stock, no par value, of the Company
     (collectively, the "Tate Shares").

               WHEREAS, concurrently with the execution hereof, certain
     holders (each, a "Shareholder" and, collectively, the "Shareholders")
     of Shares (as defined in Section 4.1(b)), including Tate, are entering
     into the Shareholders Agreement, a copy of which is attached as
     Exhibit A hereto (the "Shareholders Agreement") and the Registration
     Rights Agreement, a copy of which is attached as Exhibit B hereto (the
     "Registration Rights Agreement"); and

               WHEREAS, Acquiror and the Company desire to make certain
     representations, warranties, covenants and agreements in connection
     with the Merger.

               NOW, THEREFORE, in consideration of the mutual
     representations, warranties, covenants and agreements set forth
     herein, Acquiror and the Company hereby agree as follows:

<PAGE>


                                    ARTICLE I

                       The Merger; Effective Time; Closing

               1.1.  The Merger.  Upon the terms and subject to the
                     ----------
     conditions set forth in this Agreement, and in accordance with the
     General Corporation Law of the State of Delaware (the "DGCL") and the
     Business Corporation Act of the State of South Carolina (the "BCA"),
     at the Effective Time (as defined in Section 1.2 below), Acquiror and
     the Company shall consummate a merger (the "Merger") in which (a) the
     Company shall be merged with and into Acquiror and the separate
     corporate existence of the Company shall thereupon cease, and
     (b) Acquiror shall continue as the surviving corporation in the Merger
     ("Surviving Corporation") and shall succeed to and assume all of the
     rights, properties, liabilities and obligations of the Company.

               1.2.  Effective Time.  Subject to the provisions of this
                     --------------
     Agreement, Acquiror and the Company shall cause the Merger to be
     consummated by filing a Certificate of Merger (the "Certificate of
     Merger") with the Secretary of State of the State of Delaware and an
     Articles of Merger (the "Articles of Merger") with the Secretary of
     State of the State of South Carolina, in such form as required by, and
     executed in accordance with, the relevant provisions of the DGCL and
     the BCA, respectively, as soon as practicable on or after the Closing
     Date (as defined in Section 1.3).  The Merger shall become effective
     upon such filing or at such time thereafter as is provided in the
     Certificate of Merger and the Articles of Merger (the "Effective
     Time").

               1.3.  Closing.  Unless this Agreement shall have been
                     -------
     terminated and the transactions herein contemplated shall have been
     abandoned pursuant to Article VIII, and subject to the satisfaction or
     waiver of the conditions set forth in Article VII, the closing of the
     Merger (the "Closing") shall take place at 10:00 a.m., New York City
     time, on the second business day after satisfaction of the conditions
     set forth in Article VII (or as soon as practicable thereafter
     following satisfaction or waiver of the conditions set forth in
     Article VII) (the "Closing Date"), at the offices of Weil, Gotshal &
     Manges LLP, 767 Fifth Avenue, New York, New York 10153, unless another
     date, time or place is agreed to in writing by the parties hereto.

               1.4.  Effects of the Merger.  The Merger shall have the
                     ---------------------
     effects set forth in the applicable provisions of the DGCL and the
     BCA.

<PAGE>


                                   ARTICLE II

                    Certificate of Incorporation and By-Laws
                          of the Surviving Corporation

               2.1.  Certificate of Incorporation.  At the Effective Time,
                     ----------------------------
     the Restated Certificate of Incorporation of Acquiror as in effect
     immediately prior to the Effective Time shall become the Restated
     Certificate of Incorporation of the Surviving Corporation.

               2.2.  The By-Laws.  At the Effective Time, the Restated
                     -----------
     By-Laws of Acquiror as in effect immediately prior to the Effective
     Time shall become the Restated By-Laws of the Surviving Corporation.


                                   ARTICLE III

                             Directors and Officers
                          of the Surviving Corporation

               3.1.  Directors.  The directors of Acquiror at the Effective
                     ---------
     Time shall, from and after the Effective Time, be the directors of the
     Surviving Corporation until their successors have been duly elected or
     appointed and qualified or until their earlier death, resignation or
     removal in accordance with the Surviving Corporation's Restated
     Certificate of Incorporation and Restated By-Laws.

               3.2.  Officers.  The officers of Acquiror at the Effective
                     --------
     Time shall, from and after the Effective Time, be the officers of the
     Surviving Corporation until their successors have been duly elected or
     appointed and qualified or until their earlier death, resignation or
     removal in accordance with the Surviving Corporation's Restated
     Certificate of Incorporation and Restated By-Laws.


                                   ARTICLE IV

                        Merger Consideration; Conversion
                     or Cancellation of Shares in the Merger

               4.1.  Share Consideration for the Merger; Conversion or
                     -------------------------------------------------

     Cancellation of Shares in the Merger.  The manner of converting or
     ------------------------------------
     canceling shares of the Company in the Merger shall be as follows:

<PAGE>


               (a)  Subject to Section 4.4, at the Effective Time, each
     share of common stock, no par value, of the Company (the "Shares")
     issued and outstanding immediately prior to the Effective Time (other
     than Shares owned by Acquiror or any direct or indirect wholly owned
     subsidiary of Acquiror (collectively, "Acquiror Companies") or by the
     Company) shall, by virtue of the Merger and without any action on the
     part of the holder thereof, be converted into:  (i) for each Share
     other than the Tate Shares, the right to receive 0.8121 of a Share of
     Common Stock, par value $0.10 per share, of Acquiror ("Acquiror Common
     Shares") and (ii) for each Tate Share, the right to receive 0.5150 of
     an Acquiror Common Share (as applicable, the "Merger Consideration").
     If, prior to the Effective Time, Acquiror should split or combine the
     Acquiror Common Shares, or pay a stock dividend or other stock
     distribution in Acquiror Common Shares, then the Merger Consideration
     will be appropriately adjusted to reflect such split, combination,
     dividend or other distribution.

               (b)  Each Share that is directly owned by any of the
     Acquiror Companies and each Share that is directly owned by the
     Company shall be canceled and retired and shall cease to exist and no
     consideration shall be delivered or deliverable in exchange therefor.

               (c)  All Shares to be converted pursuant to this Section 4.1
     shall, by virtue of the Merger and without any action on the part of
     the holders thereof, cease to be outstanding, be canceled and retired
     and cease to exist, and each holder of a certificate representing any
     such Shares (a "Company Certificate") shall thereafter cease to have
     any rights with respect to such Shares, except the right to receive
     for each of the Shares, upon the surrender of such certificate in
     accordance with Section 4.2, the Merger Consideration and cash in lieu
     of fractional Acquiror Common Shares as contemplated by Section
     4.4(c).

               (d)  At the Effective Time, each share of capital stock of
     Acquiror issued and outstanding immediately prior to the Effective
     Time shall remain an issued and outstanding share of the same class of
     capital stock of the Surviving Corporation.

               (e)  Subject to Section 4.1(f), at the Effective Time, each
     outstanding option to purchase Shares (each, an "Option") issued
     pursuant to the 1988 non-qualified stock option plan and the 1988
     qualified stock option plan of the Company (collectively, the "1988
     Plans"), the 1994 Baby Superstore, Inc. Stock Incentive Plan (the
     "1994 Plan"), the 1995 Stock Option Plan for Outside Directors of the
     Company (the "1995 Plan") (collectively, the 1988 Plans, the 1994 Plan
     and the 1995 Plan

<PAGE>


     are referred to herein as the "Option Plans") whether vested or
     unvested, shall be assumed by Acquiror and shall constitute an option
     to acquire, on substantially the same terms and subject to
     substantially the same conditions as were applicable under such
     Option, including, without limitation, term, exercisability, vesting
     schedule, status as an "incentive stock option" under Section 422 of
     the Code, acceleration and termination provisions, the same number of
     Acquiror Common Shares, rounded down to the nearest whole share,
     determined by multiplying the number of Shares subject to such Option
     immediately prior to the Effective Time by 0.8121, at an exercise
     price per share of Acquiror Common Shares (increased to the nearest
     whole cent) equal to the exercise price per share of Shares
     immediately prior to the Effective Time divided by 0.8121; provided,
                                                                --------
      however, that in the case of any Option to which Section 421 of the
      -------
     Code applies by reason of its qualification as an incentive stock
     option under Section 422 of the Code, the conversion formula shall be
     adjusted if necessary to comply with Section 424(a) of the Code.
     Employment with the Company shall be credited to the optionees for
     purposes of determining the number of vested Acquiror Common Shares
     subject to exercise under converted Options after the Effective Time.
     Except as set forth in Section 5.1(m) of the Company Disclosure
     Schedule (as defined in Section 5.1), none of the Options that are
     unvested at the Effective Time shall become vested as a result of the
     execution and delivery of this Agreement or the consummation of the
     Merger.  As soon as practicable after the Effective Time, but no later
     than 30 days thereafter, Acquiror shall deliver to the holders of
     Options appropriate notices informing such holders that such Options
     have been assumed by Acquiror and will constitute options to purchase
     Acquiror Common Shares on substantially the same terms and conditions
     as their Options (subject to the adjustments required by this Section
     4.1 after giving effect to the Merger).

               (f)  On the date hereof, Tate is the holder of 202,500
     Options and Linda M. Robertson ("Robertson") is the holder of 67,500
     Options.  At the Effective Time, (i) each then outstanding vested
     Option held by Tate shall be settled by the Company in exchange for an
     amount of cash equal to the difference between (A) 0.5150 multiplied
     by the closing per share sales price of the Acquiror Common Shares on
     the NYSE composite tape on the Closing Date (the "Closing Price") and
     (B) the exercise price per share of such Option, subject to any
     required withholding of taxes and (ii) each then outstanding vested
     Option held by Robertson shall be settled by the Company in exchange
     for an amount of cash equal to the difference between (A) 0.8121
     multiplied by the Closing Price and (B) the exercise price per share
     of such Option, subject to any required withholding of taxes (each
     such amount being hereinafter referred to as, the "Option
     Consideration").  From and after the Effective Time, such Options
     shall represent

<PAGE>


     only the right of Tate and Robertson to receive the Option
     Consideration upon the surrender thereof.  Upon receipt of the Option
     Consideration, the corresponding Option shall be canceled.  The
     surrender by Tate and Robertson of such Options to the Company in
     exchange for the Option Consideration shall be deemed a release of any
     and all rights which Tate and Robertson had or may have had in respect
     of such Options.

               (g)  Acquiror shall use its best efforts to cause there to
     be effective as of a date as soon as practicable after the Effective
     Time a registration statement on Form S-8 (or any successor form) or
     another appropriate form, with respect to the Acquiror Common Shares
     subject to such Options, and shall use its best efforts to maintain
     the effectiveness of such registration statement or registration
     statements (and maintain the current status of the prospectus or
     prospectuses contained therein) for so long as such Options remain
     outstanding.

               (h)  At the Effective Time, the warrants to purchase Shares
     listed in Section 5.1(b)(2.) of the Company Disclosure Schedule (each,
     a "Warrant" and, collectively, the "Warrants") shall be assumed by
     Acquiror pursuant to the terms of the Warrants, and shall be deemed to
     constitute a warrant to acquire, on the terms and conditions as were
     applicable under such Warrant, the same number of Acquiror Common
     Shares as the holder of such Warrant would have been entitled to
     receive pursuant to the Merger had such holder exercised such Warrant
     in full immediately prior to the Effective Time (not taking into
     account whether such Warrant was in fact exercisable at such time), at
     a price per share equal to (x) the aggregate exercise price for the
     Shares subject to such Warrant divided by (y) the number of Acquiror
     Common Shares deemed purchasable pursuant to such Warrant; provided,
                                                                --------
      however, that the number of Acquiror Common Shares that may be
      -------
     purchased upon exercise of such Warrant shall not include any
     fractional share and, upon exercise of the Warrant, a cash payment
     shall be made for any fractional share based upon the closing price of
     an Acquiror Common Share on the NYSE on the trading day immediately
     preceding the date of exercise.

               4.2.  Exchange Procedures.  (a)  Prior to the Effective
                     -------------------
     Time, Acquiror shall designate a bank or trust company to act as
     exchange agent in the Merger (the "Exchange Agent"), and Acquiror
     shall deposit with the Exchange Agent as of the Effective Time (or
     otherwise when requested by the Exchange Agent from time to time in
     order to effect any exchange pursuant to this Section 4.2) for the
     benefit of the holders of the Shares for exchange in accordance with
     this Article IV, through the Exchange Agent, certificates evidencing
     the Acquiror Common Shares issuable pursuant to Section 4.1 in
     exchange for outstanding Shares.  Such

<PAGE>


     Acquiror Common Shares, together with any dividends or distributions
     with respect thereto with a record date after the Effective Time,
     shall hereinafter be referred to as the "Exchange Fund."  The Exchange
     Agent shall, pursuant to irrevocable instructions, deliver the
     Acquiror Common Shares pursuant to Section 4.1 out of the Exchange
     Fund.

               (b)  As soon as reasonably practicable after the Effective
     Time, the Exchange Agent shall mail to each holder of record of Shares
     immediately prior to the Effective Time (excluding any Shares which
     will be canceled pursuant to Section 4.1(b) or which are subject to
     Section 4.4) (i) a letter of transmittal (the "Letter of Transmittal")
     (which shall specify that delivery shall be effected, and risk of loss
     and title to the Company Certificates shall pass, only upon delivery
     of such Company Certificates to the Exchange Agent and shall be in
     such form and have such other provisions as Acquiror shall specify)
     and (ii) instructions for use in effecting the surrender of the
     Company Certificates in exchange for the Merger Consideration with
     respect to the Shares formerly represented thereby.

               (c)  Upon surrender of a Company Certificate for
     cancellation to the Exchange Agent, together with the Letter of
     Transmittal, duly executed, and such other documents as Acquiror or
     the Exchange Agent shall reasonably request, the holder of such
     Company Certificate shall be entitled to receive in exchange therefor
     (i) Acquiror Certificates representing that number of Acquiror Common
     Shares, if any, which such holder has the right to receive pursuant to
     this Article IV and (ii) a certified or bank cashier's check in the
     amount equal to any cash in lieu of fractional shares which such
     holder is entitled to receive pursuant to Section 4.3(c) (in each case
     less the amount of any required withholding taxes, if any, determined
     in accordance with Section 4.4(g)), and the Company Certificate so
     surrendered shall forthwith be canceled.  Until surrendered as
     contemplated by this Section 4.2, each Company Certificate shall be
     deemed at any time after the Effective Time to represent only the
     right to receive the Merger Consideration with respect to the Shares
     formerly represented thereby.

               4.3.  Dividends, Fractional Shares, Etc.
                     ---------------------------------
               (a)  Notwithstanding any other provisions of this Agreement,
     no dividends or other distributions declared after the Effective Time
     on Acquiror Common Shares shall be paid with respect to any whole
     Acquiror Common Shares represented by a Company Certificate until such
     Company Certificate is surrendered for exchange as provided herein.
     Subject to the effect of applicable laws, following surrender of any
     such Company Certificate, there shall be paid to the holder of the
     Acquiror
<PAGE>


     Certificates issued in exchange therefor, without interest, (i) at the
     time of such surrender, the amount of dividends or other distributions
     with a record date after the Effective Time theretofore payable with
     respect to such whole Acquiror Common Shares and not paid, less the
     amount of any withholding taxes which may be required thereon, and
     (ii) at the appropriate payment date, the amount of dividends or other
     distributions with a record date after the Effective Time but prior to
     surrender and a payment date subsequent to surrender payable with
     respect to such whole Acquiror Common Shares, less the amount of any
     withholding taxes which may be required thereon.

               (b)  At or after the Effective Time, there shall be no
     transfers on the stock transfer books of the Company of the Shares
     which were outstanding immediately prior to the Effective Time.  If,
     after the Effective Time, Company Certificates representing any such
     shares are presented to the Surviving Corporation, they shall be
     canceled and exchanged for certificates for the Merger Consideration
     deliverable in respect thereof pursuant to this Agreement in
     accordance with the procedures set forth in this Article IV.  Company
     Certificates surrendered for exchange by any Person constituting an
     "affiliate" of the Company for purposes of Rule 145(c) under the
     Securities Act shall not be exchanged until Acquiror has received a
     written agreement from such Person as provided in Section 6.8.

               (c)  (i)  No certificates or scrip evidencing
     fractional Acquiror Common Shares shall be issued upon the
     surrender for exchange of Company Certificates, and such
     fractional share interests will not entitle the owner
     thereof to vote or to any rights of a stockholder of
     Acquiror.  In lieu of any such fractional shares, the
     Exchange Agent shall, on behalf of all holders of fractional
     Acquiror Common Shares, as soon as practicable after the
     Effective Time, aggregate all such fractional interests
     (collectively, the "Fractional Shares") and, at Acquiror's
     option, such Fractional Shares shall be purchased by
     Acquiror or otherwise sold by the Exchange Agent as agent for
     the holders of such Fractional Shares, in either case at
     the then prevailing price on the NYSE, all in the manner
     provided hereinafter.  Until the net proceeds of such sale or
     sales have been distributed to the holders of Fractional
     Shares, the Exchange Agent shall retain such proceeds in trust
     for the benefit of such holders.  Acquiror shall pay
     all commissions, transfer taxes and other out-of-pocket
     transaction costs, including expenses and compensation of the
     Exchange Agent, incurred in connection with such sale of
     the Fractional Shares.
<PAGE>


               (ii)  To the extent not purchased by Acquiror, the sale of
          the Fractional Shares by the Exchange Agent shall be executed on
          the NYSE or through one or more member firms of the NYSE and will
          be executed in round lots to the extent practicable.  In either
          case, the Exchange Agent will determine the portion, if any, of
          the net proceeds of such sale to which each holder of Fractional
          Shares is entitled, by multiplying the amount of the aggregate
          net proceeds of the sale of the Fractional Shares by a fraction,
          the numerator of which is the amount of Fractional Shares to
          which such holder is entitled and the denominator of which is the
          aggregate amount of Fractional Shares to which all holders of
          Fractional Shares are entitled.

               (iii)  As soon as practicable after the determination of the
          amount of cash, if any, to be paid to holders of Fractional
          Shares in lieu of such Fractional Shares, the Exchange Agent
          shall mail such amounts, without interest, to such holders;
          provided, however, that no such amount will be paid to any holder
          --------  -------
          of such Fractional Shares prior to the surrender by such holder
          of the Company Certificates formerly representing such holder's
          Shares.

               (d)  Any portion of the Exchange Fund that remains
     undistributed to the holders of Shares for six months after the
     Effective Time shall be delivered to Acquiror, upon demand, and any
     holders of Shares who have not theretofore complied with this Article
     IV shall thereafter look only to Acquiror for the Merger
     Consideration, net cash proceeds from the sale of Fractional Shares
     and unpaid dividends and distributions on the Acquiror Common Shares
     to which they are entitled.  All interest accrued in respect of the
     Exchange Fund shall inure to the benefit of and be paid to Acquiror.

               (e)  None of Acquiror, the Company or the Exchange Agent
     shall be liable to any holder of Shares for any Acquiror Common
     Shares, net cash proceeds from the sale of Fractional Shares or unpaid
     dividends or distributions with respect to Acquiror Common Shares from
     the Exchange Fund delivered to a public official pursuant to any
     applicable abandoned property, escheat or similar law.  If any Company
     Certificates shall not have been surrendered prior to seven years
     after the Effective Time (or immediately prior to such earlier date on
     which any Acquiror Common Shares, net cash proceeds from the sale of
     Fractional Shares or unpaid dividends or distributions with respect to
     Acquiror Common Shares in respect of such Company Certificates would
     otherwise escheat to or become the property of any governmental
     authority), any such Acquiror Common Shares, cash or unpaid dividends
     or distributions in respect of such

<PAGE>


     Company Certificates shall, to the extent permitted by applicable
     laws, become the property of the Surviving Corporation.

               (f)  In the event that any Company Certificate shall have
     been lost, stolen or destroyed, upon the making of an affidavit of
     that fact by the Person claiming such Company Certificate to be lost,
     stolen or destroyed and, if required by Acquiror, the posting by such
     Person of a bond in such reasonable amount as Acquiror may direct as
     indemnity against any claim that may be made against it with respect
     to such Company Certificate, the Exchange Agent (or Acquiror, as the
     case may be) will issue in exchange for such lost, stolen or destroyed
     Company Certificate the Merger Consideration, cash in lieu of
     fractional shares, and unpaid dividends and distributions on Acquiror
     Common Shares deliverable in respect thereof pursuant to this
     Agreement.

               (g)  Acquiror shall be entitled to, or shall be entitled to
     cause the Exchange Agent to, deduct and withhold from the
     consideration otherwise payable pursuant to this Agreement to any
     holder of Shares such amounts as are required to be deducted and
     withheld with respect to the making of such payment under the Code, or
     any provision of state, local or foreign tax law.  To the extent that
     amounts are so withheld by Acquiror or the Exchange Agent, as the case
     may be, such withheld amounts shall be treated for all purposes of
     this Agreement as having been paid to the holder of the Shares in
     respect of which such deduction and withholding was made by Acquiror
     or the Exchange Agent.

               4.4.  Dissenting Shares.  Notwithstanding any other
                     -----------------
     provisions of this Agreement to the contrary, Shares that are
     outstanding immediately prior to the Effective Time and which are held
     by shareholders who shall have not voted in favor of the Merger or
     consented thereto in writing and who shall have demanded properly in
     writing appraisal for such shares in accordance with Article XIII of
     the BCA (collectively, the "Dissenting Shares") shall not be converted
     into or represent the right to receive the Merger Consideration.  Such
     shareholders instead shall be entitled to receive payment of the
     appraised value of such Shares held by them in accordance with the
     provisions of Article III of the BCA, except that all Dissenting
     Shares held by shareholders who shall have failed to perfect or who
     effectively shall have withdrawn or lost their rights to appraisal of
     such Shares under Article III of the BCA shall thereupon be deemed to
     have been converted into and to have become exchangeable, as of the
     Effective Time, for the right to receive, without any interest
     thereon, the Merger Consideration upon surrender in the manner
     provided in Section 4.1, of the Company Certificate or Certificates
     that, immediately prior to the Effective Time, evidenced such Shares.

<PAGE>


                                    ARTICLE V

                         Representations and Warranties

               5.1.  Representations and Warranties of the Company.  The
                     ---------------------------------------------
     Company hereby represents and warrants to Acquiror that (except to the
     extent set forth on the Disclosure Schedule previously delivered by
     the Company to Acquiror (the "Company Disclosure Schedule")):

               (a)  Corporate Organization and Qualification.  Each of the
                    ----------------------------------------
     Company and its subsidiaries is a corporation duly organized, validly
     existing and in good standing under the laws of its respective
     jurisdiction of incorporation and is qualified and in good standing as
     a foreign corporation in each jurisdiction where the properties owned,
     leased or operated, or the business conducted, by it require such
     qualification, except where failure to so qualify or be in good
     standing would not have a Material Adverse Effect (as defined in
     Section 9.10) with respect to the Company and its subsidiaries.  Each
     of the Company and its subsidiaries has all requisite power and
     authority (corporate or otherwise) to own its properties and to carry
     on its business as it is now being conducted.  All of the subsidiaries
     of the Company, together with an organizational chart, are set forth
     in Section 5.1(a) of the Company Disclosure Schedule.  The Company has
     heretofore made available to Acquiror complete and correct copies of
     its Amended and Restated Articles of Incorporation and By-Laws.

               (b)  Capitalization.  The authorized capital stock of the
                    --------------
     Company consists of (i) 50,000,000 Shares, of which, as of October 1,
     1996, 19,235,533 Shares were issued and outstanding and no Shares were
     held in treasury, and (ii) 10,000,000 shares of preferred stock, none
     of which are issued or outstanding.  All of the outstanding shares of
     capital stock of the Company have been duly authorized and validly
     issued and are fully paid and nonassessable.  The Company has no
     outstanding stock appreciation rights.  Except as set forth in Section
     5.1(b) of the Company Disclosure Schedule, no Shares are owned by any
     subsidiary of the Company.  Except as set forth in Section 5.1(b) of
     the Company Disclosure Schedule, all outstanding shares of capital
     stock or other equity interests of the subsidiaries of the Company are
     owned by the Company or a direct or indirect wholly owned subsidiary
     of the Company, free and clear of all liens, charges, encumbrances,
     claims and options of any nature.  Except for (i) options outstanding
     on the date hereof to purchase 1,125,625 Shares under the Option
     Plans, (ii) 146,357 Shares issuable under the Baby Superstore, Inc.
     Employee Stock Purchase Plan, a true, complete and correct copy of
     which the Company has delivered to Acquiror prior to the date hereof,
     (iii) the Warrants, true,

<PAGE>


     complete and correct copies of which have been delivered to Acquiror
     prior to the date hereof, (iv) $115,000,000 aggregate outstanding
     principal amount of the Company's 4-7/8% Convertible Subordinated
     Notes due October 1, 2000 (the "Convertible Notes") which are
     convertible into Shares at a conversion price of $53.875 per share,
     and (iv) as set forth in Section 5.1(b) of the Company Disclosure
     Schedule, there are not as of the date hereof and there will not be at
     the Effective Time any outstanding or authorized options, warrants,
     calls, rights (including preemptive rights), commitments or any other
     agreements of any character to which the Company or any of its
     subsidiaries is a party, or by which it may be bound, requiring it to
     issue, transfer, sell, purchase, redeem or acquire any shares of
     capital stock or any securities or rights convertible into,
     exchangeable for, or evidencing the right to subscribe for, any shares
     of capital stock of the Company or any of its subsidiaries.  There are
     not as of the date hereof and there will not be at the Effective Time
     any shareholder agreements (other than the Shareholders Agreement),
     voting trusts or other agreements or understandings to which the
     Company is a party or to which it is bound relating to the voting of
     any shares of the capital stock of the Company.

               (c)  Approvals; Fairness Opinion.
                    ---------------------------
               (i)  The Board of Directors at a meeting duly called and
          held, has (i) determined that this Agreement and the transactions
          contemplated hereby, including the Merger are fair to and in the
          best interests of the shareholders of the Company and has
          approved the same, and (ii) resolved to recommend that the
          holders of the Shares approve this Agreement and the transactions
          contemplated hereby, including the Merger.  Except for the
          approval of the holders of a majority of the outstanding Shares
          required by the BCA and the Company's Articles of Incorporation,
          no other approval of the stockholders of the Company is required
          in order to consummate the transactions contemplated by this
          Agreement.

               (ii)  The Board of Directors of the Company has received an
          opinion from CS First Boston Corporation to the effect that the
          exchange ratio to be offered to the holders of Shares (other than
          Tate) in the Merger is fair to such holders from a financial
          point of view.  As of the date hereof, such opinion has not been
          withdrawn, revoked or modified.

               (d)  Authority Relative to This Agreement.  The Company has
                    ------------------------------------
     the requisite corporate power and authority to approve, authorize,
     execute and deliver this Agreement and to consummate the transactions
     contemplated hereby (subject to the approval of

<PAGE>


     the Merger by the affirmative vote of the holders of a majority of the
     votes entitled to be cast by the holders of Shares in accordance with
     the BCA and the Company's Articles of Incorporation).  This Agreement
     and the consummation by the Company of the transactions contemplated
     hereby have been duly and validly authorized by the Board of Directors
     of the Company and no other corporate proceedings on the part of the
     Company are necessary to authorize this Agreement or to consummate the
     transactions contemplated hereby (other than the approval of the
     Merger by the affirmative vote of the holders of a majority of the
     votes entitled to be cast by the holders of Shares in accordance with
     the BCA and the Company's Articles of Incorporation).  This Agreement
     has been duly and validly executed and delivered by the Company and,
     assuming this Agreement constitutes the valid and binding agreement of
     Acquiror, constitutes the valid and binding agreement of the Company,
     enforceable against the Company in accordance with its terms, subject,
     as to enforceability, to bankruptcy, insolvency, reorganization and
     other laws of general applicability relating to or affecting
     creditors' rights and to general principles of equity.

               (e)  Consents and Approvals; No Violation.  Neither the
                    ------------------------------------
     execution and delivery of this Agreement by the Company nor the
     consummation by the Company of the transactions contemplated hereby
     will (i) conflict with or result in any breach of any provision of the
     respective Articles of Incorporation (or other similar documents) or
     By-Laws (or other similar documents) of the Company or any of its
     subsidiaries; (ii) require any consent, approval, authorization or
     permit of, or filing with or notification to, any governmental or
     regulatory authority or any other Person, except (A) in connection
     with the applicable requirements, if any, of the Hart-Scott-Rodino
     Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (B)
     pursuant to the applicable requirements of the Securities Act of 1933,
     as amended (the "Securities Act"), and the rules and regulations
     promulgated thereunder, and the Securities Exchange Act of 1934, as
     amended (the "Exchange Act"), and the rules and regulations
     promulgated thereunder, (C) the filing of the Certificate of Merger
     and the Articles of Merger pursuant to the DGCL and the BCA,
     respectively, and appropriate documents with the relevant authorities
     of other states in which the Company is authorized to do business,
     (D) such filings and consents as may be required under any
     environmental, health or safety law or regulation pertaining to any
     notification, disclosure or required approval triggered by the Merger
     or the transactions contemplated by this Agreement, as set forth in
     Section 5.1(e) of the Company Disclosure Schedule, (E) the consents,
     approvals, orders, authorizations, registrations, declarations and
     filings required under the laws of foreign countries, as set forth in
     Section

<PAGE>


     5.1(e) of the Company Disclosure Schedule, (F) the approval of the
     holders of a majority of the outstanding Shares required by the BCA
     and the Company's Articles of Incorporation, (G) such filings as may
     be required with the NASDAQ National Market or (H) where the failure
     to obtain such consent, approval, authorization or permit, or to make
     such filing or notification, would not in the aggregate have a
     Material Adverse Effect with respect to the Company and its
     subsidiaries or adversely affect the ability of the Company to
     consummate the transactions contemplated hereby; (iii) except as set
     forth in Section 5.1(e) of the Company Disclosure Schedule, result in
     a violation or breach of, or constitute (with or without notice or
     lapse of time or both) a default (or give rise to any right of
     termination, cancellation or acceleration or result in the creation of
     any lien or other charge or encumbrance) under any of the terms,
     conditions or provisions of any note, license, agreement or other
     instrument or obligation to which the Company or any of its
     subsidiaries or any of their assets may be bound, except for such
     violations, breaches and defaults (or rights of termination,
     cancellation or acceleration or creations of lien or other charge or
     encumbrance) as to which requisite waivers or consents have been
     obtained or which, in the aggregate, would not have a Material Adverse
     Effect with respect to the Company and its subsidiaries or adversely
     affect the ability of the Company to consummate the transactions
     contemplated hereby; or (iv) assuming the consents, approvals,
     authorizations or permits and filings or notifications referred to in
     this Section 5.1(e) are duly and timely obtained or made and the
     approval of the Merger and the approval of this Agreement by the
     Company's stockholders has been obtained, violate any order, writ,
     injunction, decree, statute, rule or regulation applicable to the
     Company or any of its subsidiaries or to any of their respective
     assets, except for violations which would not in the aggregate have a
     Material Adverse Effect with respect to the Company and its
     subsidiaries or adversely affect the ability of the Company to
     consummate the transactions contemplated hereby.  Except as set forth
     in Section 5.1(e) of the Company Disclosure Schedule, the Company does
     not know of any pending or proposed legislation, regulation or order
     (other than those affecting businesses such as the Company's
     generally) applicable to the Company or any of its subsidiaries or to
     the conduct of the business or operations of the Company or any of its
     subsidiaries which, if enacted or adopted, could have a Material
     Adverse Effect with respect to the Company and its subsidiaries.

               (f)  Litigation; Compliance with Laws.  Except as disclosed
                    --------------------------------
     in the Company SEC Reports (as defined in Section 5.1(g)) filed and
     publicly available prior to the date of this Agreement or as disclosed
     in Section 5.1(f) of the Company Disclosure Schedule, there are no
     actions, suits, or proceedings


<PAGE>


     pending or, to the best knowledge of the Company, threatened against
     the Company or any of its subsidiaries which could, individually or in
     the aggregate, if adversely determined, reasonably be expected to have
     a Material Adverse Effect with respect to the Company and its
     subsidiaries, nor is there any judgment, decree, injunction, rule or
     order of any governmental or regulatory authority or arbitrator
     outstanding against the Company or any of its subsidiaries, which
     could, individually or in the aggregate, reasonably be expected to
     have a Material Adverse Effect with respect to the Company and its
     subsidiaries.  Except as set forth in Section 5.1(f) of the Company
     Disclosure Schedule, as of the date of this Agreement, no
     investigation or review by any governmental or regulatory authority
     with respect to the Company or any of its subsidiaries is to the
     knowledge of the Company, pending or threatened, nor has the Company
     received any notice from any governmental or regulatory authority
     indicating an intention to conduct the same.  Neither the Company nor
     any of its subsidiaries has violated or failed to comply with any
     statute, law, ordinance, regulation, rule, judgment, decree or order
     of any governmental authority or regulatory agency applicable to its
     business or operations, except for violations and failures to comply
     that could not, individually or in the aggregate, reasonably be
     expected to result in a Material Adverse Effect with respect to the
     Company and its subsidiaries.

               (g)  SEC Reports; Financial Statements.
                    ---------------------------------
               (i)  Since September 27, 1994, the Company has filed all
          forms, reports and documents with the Securities and Exchange
          Commission (the "SEC")  required to be filed by it pursuant to
          the federal securities laws and the SEC rules and regulations
          thereunder, all of which complied in all material respects with
          all applicable requirements of the Securities Act and the
          Exchange Act and the rules and regulations promulgated thereunder
          (collectively, the "Company SEC Reports").  None of the Company
          SEC Reports, including, without limitation, any financial
          statements or schedules included therein, at the time filed
          contained any untrue statement of a material fact or omitted to
          state a material fact required to be stated therein or necessary
          in order to make the statements therein, in light of the
          circumstances under which they were made, not misleading.

               (ii)  The consolidated balance sheets and the related
          consolidated statements of income, stockholders' equity (deficit)
          and cash flows (including the related notes thereto) of the
          Company included in the Company SEC Reports complied as to form
          in all material respects with applicable accounting requirements
          and the published rules and regulations of the SEC with respect
          thereto, have been

<PAGE>


          prepared in accordance with generally accepted accounting
          principles ("GAAP") applied on a basis consistent with prior
          periods (except as otherwise noted therein), and present fairly
          the consolidated financial position of the Company and its
          consolidated subsidiaries as of their respective dates, and the
          consolidated results of their operations and their cash flows for
          the periods presented therein (subject, in the case of the
          unaudited interim financial statements, to normal year-end
          adjustments).  Except as set forth in Section 5.1(g) of the
          Company Disclosure Schedule, since January 1, 1993, there has not
          been any material change, or any application or request for any
          material change, by the Company or any of its subsidiaries in
          accounting principles, methods or policies for financial
          accounting purposes that have affected or will affect the
          Company's consolidated financial statements included in the
          Company SEC Reports or for tax purposes, except as required by
          concurrent changes in GAAP.

               (h)  Undisclosed Liabilities; Absence of Certain Changes or
                    ------------------------------------------------------
     Events.  Neither the Company nor any of its subsidiaries has any
     ------
     material indebtedness, obligations or liabilities of any kind (whether
     accrued, absolute, contingent or otherwise, and whether due or to
     become due or asserted or unasserted), and, to the best knowledge of
     the Company, there is no basis for the assertion of any claim or
     liability of any nature against the Company or any of its
     subsidiaries, which is not fully reflected in, reserved against or
     otherwise described in the financial statements included in the
     Company SEC Reports filed and publicly available prior to the date of
     this Agreement.  Except as disclosed in the Company SEC Reports filed
     and publicly available prior to the date of this Agreement or in
     Section 5.1(h) of the Company Disclosure Schedule, or as contemplated
     by this Agreement, since January 1, 1996, the business of the Company
     and its subsidiaries has been carried on only in the ordinary and
     usual course and there has not been (i) any damage, destruction or
     loss, whether covered by insurance or not, which has, or insofar as
     reasonably can be foreseen in the future is reasonably likely to have,
     individually or in the aggregate, a Material Adverse Effect with
     respect to the Company and its subsidiaries; (ii) any declaration,
     setting aside or payment of any dividend or other distribution
     (whether in cash, stock or property) with respect to the Shares or any
     redemption, purchase or other acquisition of the Shares; (iii) any
     change, occurrence or circumstance in the business, results of
     operations, properties, assets, liabilities, prospects or condition
     (financial or otherwise) of any character (whether or not in the
     ordinary course of business) which, individually or in the aggregate,
     has had or is reasonably likely to have, a Material Adverse Effect
     with respect to the Company and its subsidiaries;

<PAGE>


     or (iv) other than in the ordinary course of business consistent with
     past practice, any increase in the benefits payable under or
     establishment of any bonus, insurance, severance, deferred
     compensation, pension, retirement, profit sharing, stock option
     (including without limitation the granting of stock options, stock
     appreciation rights, performance awards or restricted stock awards),
     stock purchase or other employee benefit plan, or any other increase
     in the compensation payable or to become payable to any officers or
     key employees of the Company or any of its subsidiaries.

               (i)  Employment Agreements.  Except as set forth in Section
                    ---------------------
     5.1(i) of the Company Disclosure Schedule, the Company is not a party
     to any employment, consulting, non-competition, severance, golden
     parachute, indemnification agreement or any other agreement providing
     for payments or benefits or the acceleration of payments or benefits
     upon the change of control of the Company (including, without
     limitation, any contract to which the Company is a party involving
     employees of the Company).

               (j)  Brokers and Finders.  Except for the fees and expenses
                    -------------------
     payable to CS First Boston Corporation and Invemed Associates, Inc.,
     which fees and expenses are reflected in its agreement with the
     Company, a true and complete copy of which (including all amendments)
     has been furnished to Acquiror, the Company has not employed any
     investment banker, broker, finder, consultant or intermediary in
     connection with the transactions contemplated by this Agreement which
     would be entitled to any investment banking, brokerage, finder's or
     similar fee or commission in connection with this Agreement or the
     transactions contemplated hereby.

               (k)  S-4 Registration Statement and Proxy Statement/
                    -----------------------------------------------
     Prospectus.  None of the information supplied or to be supplied by the
     ----------
     Company for inclusion or incorporation by reference in the S-4
     Registration Statement or the Proxy Statement (as such terms are
     defined in Section 6.4) will (i) in the case of the S-4 Registration
     Statement, at the time it becomes effective or at the Effective Time,
     contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary in order to
     make the statements therein not misleading, or (ii) in the case of the
     Proxy Statement, at the time of the mailing of the Proxy Statement and
     at the time of the Shareholder Meeting (as such term is defined in
     Section 6.3), contain any untrue statement of a material fact or omit
     to state any material fact required to be stated therein or necessary
     in order to make the statements therein, in light of the circumstances
     under which they are made, not misleading.  If at any time prior to
     the Effective Time any event with respect to the Company, its officers
     and directors or any of its

<PAGE>


     subsidiaries should occur which is required to be described in a
     supplement to the S-4 Registration Statement or the Proxy Statement
     such event shall be so described, and such supplement shall be
     promptly filed with the SEC and, as required by law, disseminated to
     the stockholders of the Company.  The Proxy Statement will (only with
     respect to the Company) comply as to form in all material respects
     with the requirements of the Exchange Act and the rules and
     regulations promulgated thereunder.

               (l)  Taxes.  (i)  The Company and each of its
                    -----
          subsidiaries, and each affiliated group (within the meaning of
          Section 1504 of the Code) of which the Company or any of its
          subsidiaries is or has ever been a member, has timely
          filed all Federal income Tax Returns (as defined below) and
          all other material Tax Returns and reports required to be
          filed by it.  All such Tax Returns are complete and correct in
          all material respects.  The Company and each of its subsidiaries
          has paid (or the Company has paid on its subsidiaries' behalf)
          all Taxes (as defined below) shown due on such Tax Returns.
          The most recent consolidated financial statements contained
          in the SEC Reports reflect an adequate reserve for all Taxes
          payable by the Company and its subsidiaries for all taxable
          periods and portions thereof through the date of such financial
          statements.

               (ii)  Except as disclosed on Section 5.1(l)of the Company
          Disclosure Schedule, no material deficiencies for any Taxes have
          been proposed, asserted or assessed against the Company or any of
          its subsidiaries that have not been fully paid or adequately
          provided for in the appropriate financial statements of the
          Company and its subsidiaries, no requests for waivers of the time
          to assess any Taxes are pending, and no power of attorney with
          respect to any Taxes has been executed or filed with any taxing
          authority.  No material issues relating to Taxes have been raised
          in writing by the relevant taxing authority during any presently
          pending audit or examination.

               (iii)  No material liens for Taxes exist with respect to any
          assets or properties of the Company or any of its subsidiaries,
          except for statutory liens for Taxes not yet due.

               (iv)  Except as disclosed on Section 5.1(l) of the Company
          Disclosure Schedule and other than with respect to contractual
          tax indemnity obligations of the Company and its subsidiaries
          involving claims for state and local Taxes which are not material
          in amount, none of the Company or any of its subsidiaries is a
          party to or is bound by any tax

<PAGE>


          sharing agreement, tax indemnity obligation or similar agreement,
          arrangement or practice with respect to Taxes (including any
          advance pricing agreement, closing agreement or other agreement
          relating to Taxes with any taxing authority).

               (v)  None of the Company or any of its subsidiaries has
          taken or agreed to take any action that would prevent the Merger
          from constituting a reorganization qualifying under the
          provisions of Section 368(a)(1) of the Code.

               (vi)  The Company and its subsidiaries have complied in all
          material respects with all applicable laws, rules and regulations
          relating to the payment and withholding of Taxes.

               (vii)  Except as disclosed in Section 5.1(l) of the Company
          Disclosure Schedule, no Federal, state, local or foreign audits
          or other administrative proceedings or court proceedings are
          presently pending with regard to any Federal income or material
          state, local or foreign Taxes or Tax Returns of the Company or
          its subsidiaries and neither the Company nor any of its
          subsidiaries has received a written notice of any pending audit
          or proceeding.

               (viii) Neither the Company nor any of its subsidiaries has
          agreed to or is required to make any adjustment under Section
          481(a) of the Code.

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

               (x)  No property owned by the Company or any of its
          subsidiaries (i) is property required to be treated as being
          owned by another Person pursuant to the provisions of Section
          168(f)(8) of the Internal Revenue Code of 1954, as amended and in
          effect immediately prior to the enactment of the Tax Reform Act
          of 1986; (ii) constitutes "tax exempt use property" within the
          meaning of Section 168(h)(1) of the Code; or (iii) is tax exempt
          bond financed property within the meaning of Section 168(g) of
          the Code.  The Company and each of its subsidiaries are not
          currently, have not been within the past five years, and do not
          anticipate becoming a

<PAGE>


          "United States real property holding corporation" within the
          meaning of Section 897(c) of the Code.

               (xi) For purpose of the Agreement, (A) the terms "Tax" or
          "Taxes" shall mean all taxes, charges, fees, imposts, levies,
          gaming or other assessments, including, without limitation, all
          net income, gross receipts, capital, sales, use, ad valorem,
          value added, transfer, franchise, profits, inventory, capital
          stock, license, withholding, payroll, employment, social
          security, unemployment, excise, severance, stamp, occupation,
          property and estimated taxes, customs duties, fees, assessments
          and charges of any kind whatsoever, together with any interest
          and any penalties, fines, additions to tax or additional amounts
          imposed by any taxing authority (domestic or foreign) and shall
          include any transferee liability in respect of Taxes, any
          liability in respect of Taxes imposed by contract, tax sharing
          agreement, tax indemnity agreement or any similar agreement and
          (B) the term "Tax Return" shall mean any report, return,
          document, declaration or any other information or filing required
          to be supplied to any taxing authority or jurisdiction (foreign
          or domestic) with respect to Taxes, including, without
          limitation, information returns, any document with respect to or
          accompanying payments or estimated Taxes, or with respect to or
          accompanying requests for the extension of time in which to file
          any such report, return document, declaration or other
          information.

               (m)  Employee Benefits.  Section 5.1(m) of the Company
                    -----------------
     Disclosure Schedule contains an accurate and complete list of all
     Company Benefit Plans (as defined below).  None of the Company Benefit
     Plans is a "multiemployer plan" as defined in Section 3(37) of ERISA
     or a multiple employer plan covered by Section 4063 or 4064 of ERISA.

               (i)  Except as disclosed in Section 5.1(m) of the Company
          Disclosure Schedule, each Company Benefit Plan intended to
          qualify under Section 401 of the Code does so qualify and the
          trust maintained pursuant thereto is exempt from federal income
          taxation under Section 501 of the Code.  Nothing has occurred
          with respect to the operation of such plans which could cause the
          loss of such qualification or exemption or the imposition of any
          liability, penalty, or tax under ERISA or the Code.

               (ii)  True and correct copies of the following documents
          with respect to each Company Benefit Plans have been made
          available or delivered to Acquiror by the Company:  (A) any
          plans, and amendments thereto, (B) the most recent forms 5500 and
          any financial statements attached thereto,


<PAGE>


          (C) the last Internal Revenue Service determination letter (if
          any), (D) summary plan descriptions, (E) the two most recent
          actuarial reports, including any such reports for purposes of
          FASB 87, 106 and 112, and (F) written descriptions of all
          material, non-written agreements relating to the Company Benefit
          Plans.

               (iii)  The Company Benefit Plans have been maintained in
          accordance with their terms and with all provisions of ERISA and
          other applicable law.  Neither the Company nor any of its
          subsidiaries has any liability with respect to a non-exempt
          prohibited transaction within the meaning of Section 4975 of the
          Code or Section 406 of ERISA.

               (iv)  Neither the Company nor any ERISA Affiliate maintains
          any Company Benefit Plan subject to Title IV of ERISA has
          unfunded benefit liabilities, as defined in Section 4001(a)(18)
          of ERISA.

               (v)  Except as disclosed in Section 5.1(m) of the Company
          Disclosure Schedule, neither the Company nor any of its
          subsidiaries maintains retiree life insurance or retiree health
          plans which are "welfare benefit plans" within the meaning of
          Section 3(1) of ERISA and which provide for continuing benefits
          or coverage for any participant or any beneficiary of a
          participant after such participant's termination of employment
          where such participant was an employee of the Company or any
          subsidiary of the Company, other than as required by Part 6 of
          Title I of ERISA.

               (vi)  Except as disclosed in Section 5.1(m) of the Company
          Disclosure Schedule, neither the execution and delivery of this
          Agreement nor the consummation of the transactions contemplated
          hereby will (A) result in any payment (including, without
          limitation, bonus or other compensation severance, unemployment
          compensation, golden parachute or otherwise) becoming due to any
          employee of the Company under any Company Benefit Plan, any
          individual agreement or otherwise, (B) increase any benefits
          otherwise payable under any Company Benefit Plan, or (C) result
          in the acceleration of the time of payment or vesting of any such
          benefits.

               (vii)  (A) None of the employees of the Company or any of
          its subsidiaries is represented in his or her capacity as an
          employee of such company by any labor organization; (B) neither
          the Company nor any of its subsidiaries has recognized any labor
          organization nor has any labor organization been elected as the
          collective bargaining agent of any of their employees, nor has
          the Company or any of its


<PAGE>


          subsidiaries signed any collective bargaining agreement or union
          contract recognizing any labor organization as the bargaining
          agent of any of their employees; and (C) to the best knowledge of
          the Company, there is no active or current union organization
          activity involving the employees of the Company or any subsidiary
          of the Company, nor has there ever been union representation
          involving employees of the Company and/or its subsidiaries.

               (viii)  For the purposes of this Agreement:  (A) the term
          "Company Benefit Plan" shall include all employee benefit plans
          (as defined in Section 3(3) of ERISA) and all other employee
          benefit plans, arrangements or payroll practices, including,
          without limitation, severance pay, sick leave, vacation pay,
          salary continuation for disability, scholarship programs,
          deferred compensation, incentive compensation, stock option or
          restricted stock plans maintained by the Company or any ERISA
          Affiliate of the Company (whether formal or informal, whether for
          the benefit of a single individual or for more than one
          individual and whether for the benefit of current or former
          employees or their beneficiaries) on behalf of the Company or any
          of the employees of the Company or any of its subsidiaries or to
          which or under which or pursuant to which the Company or any
          ERISA Affiliate of the Company has contributed or is obligated to
          make contributions on behalf of the Company or any employees of
          the Company or any of its subsidiaries; (B) the term "ERISA"
          shall refer to the Employee Retirement Income Security Act of
          1974, as amended; and (C) the term "ERISA Affiliate" shall refer
          to any trade or business (whether or not incorporated) under
          common control or treated as a single employer with the Company
          within the meaning of Section 414(b), (c), (m) or (o) of the
          Code.

               (n)   Title to Properties; Assets Other Than Real Property
                     ----------------------------------------------------
         Interests.  (i)  Section 5.1(n) of the Company    Disclosure Schedule
         ---------
         Disclosure Schedule sets forth a complete list of all real
         property and interests in real property owned or leased by the
         Company or any of its subsidiaries, and indicates whether such
         property is owned or leased (each such owned property, an
         "Owned Property" and each such leased property, a "Leased
         Property", and collectively "Real Property").  Except
         as set forth in Section 5.1(n) of the Company Disclosure Schedule,
         each of the Company or one of its subsidiaries has good and
         marketable title to each Owned Property, or a valid leasehold
         interest in each Leased Property, in each case free and clear
         of all liens and except for easements, restrictive covenants and
         similar encumbrances of record that, individually or in the

<PAGE>


          aggregate, do not and will not materially interfere with its
          ability to conduct its business as currently conducted.  Except
          as set forth in Section 5.1(n) of the Company Disclosure
          Schedule, each of the Company and each of its subsidiaries has
          complied in all material respects with the terms of all material
          leases to which it is a party, and all such leases are in full
          force and effect.  Each of the Company and each of its
          subsidiaries enjoys peaceful and undisturbed possession under all
          such material leases.

               (ii)  The Company or one of its subsidiaries has good and
          valid title to all its properties and assets, in each case free
          and clear of all liens, except (A) such as are set forth in
          Section 5.1(n) of the Company Disclosure Schedule, (B)
          mechanics', carriers', workmen's, repairmen's or other similar
          liens arising or incurred in the ordinary course of business, (C)
          liens arising under conditional sales contracts and equipment
          leases with third parties entered into in the ordinary course of
          business, (D) liens for Taxes which are not due and payable or
          which may thereafter be paid without penalty, (E) liens which
          secure debt that is reflected as a liability on the most recent
          financial statement included in the Company SEC Reports filed and
          publicly available prior to the date of this Agreement and the
          existence of which is indicated in the notes thereto and (F)
          other imperfections of title or encumbrances, if any, which do
          not, individually or in the aggregate, materially impair the
          continued use and operation of the assets to which they relate in
          the business of the Company and its subsidiaries.  This paragraph
          (ii) does not relate to Real Property or interests in Real
          Property, such items being the subject of paragraph (i) above.

               (iii) The occupancies and uses of the Real Property, as well
          as the development, construction, management, maintenance,
          servicing and operation of the Real Property, comply in all
          material respects with all applicable laws, ordinances, rules,
          regulations, orders and requirements of all governmental
          authorities having jurisdiction and are not in material violation
          of any thereof; and the certificate(s) of occupancy and all other
          licenses and permits required by law for the proper use and
          operation of the Real Property are in full force and effect.  All
          approvals, consents, permits, utility installations and
          connections, curb cuts and street openings required for the
          development, construction, maintenance, operation and servicing
          of the Real Property have been granted, effected, or performed
          and completed (as the case may be), and all fees and charges
          therefor have been fully paid.  The Company has not received
          written notice of, and does not otherwise have knowledge of,

<PAGE>


          any material violations, suits, orders, decrees or judgments
          relating to zoning, building use and occupancy, traffic, fire,
          health, sanitation, air pollution, ecological, environmental or
          other laws or regulations, against, or with respect to, the Real
          Property.

               (iv)  There is adequate access between each Owned Property
          or Leased Property and public roads and there are no pending or
          threatened proceedings that could have the effect of impairing or
          restricting such access.  There are sufficient parking spaces on
          material Owned Property or Leased Property to comply with all
          applicable provisions of any agreements to which such Real
          Property is subject, local zoning requirements and all other
          applicable laws and governmental requirements.  The material
          improvements upon the Real Property contain no asbestos and there
          are no material defects in the roof, foundation, sprinkler mains,
          structural, mechanical and HVAC systems and masonry walls in any
          of the material improvements upon the Real Property and no
          significant repairs thereof are required, and all periodic
          maintenance has been done and is being done which is consistent
          with first class maintenance standard for Real Property of
          similar size and age in the vicinity of such Real Property.

               (o)  Intangible Property.  (i) Section 5.1(o) of the Company
                    -------------------
          Disclosure Statement sets forth a list of each patent, trademark,
          trade name, service mark, brand mark, brand name, industrial
          design and copyright owned or used in business by the Company and
          its subsidiaries, as well as all registrations thereof and
          pending applications therefor, and each license or other contract
          relating thereto (collectively with any other intellectual
          property owned or used in the business by the Company and its
          subsidiaries, and all of the goodwill associated therewith, the
          "Intangible Property") and indicates, with respect to each item
          of Intangible Property listed thereon, the owner thereof and, if
          applicable, the name of the licensor and licensee thereof and the
          terms of such license or other contract relating thereto.  Except
          as set forth in Section 5.1(o) of the Company Disclosure
          Schedule, each of the foregoing is owned free and clear of any
          and all liens, mortgages, pledges, security interests, levies,
          charges, options or any other encumbrances, restrictions or
          limitations of any kind whatsoever and none of the Company or any
          of its subsidiaries has received any notice to the effect that
          any other entity has any claim of ownership with respect thereto.
          To the best knowledge of the Company, the use of the foregoing by
          the Company and its subsidiaries does not conflict with, infringe
          upon, violate or interfere

<PAGE>


          with or constitute an appropriation of any right, title, interest
          or goodwill, including, without limitation, any intellectual
          property right, patent, trademark, trade name, service mark,
          brand mark, brand name, computer program, industrial design,
          copyright or any pending application therefor of any other
          entity.  Except as set forth in Section 5.1(o) of the Company
          Disclosure Schedule, no claims have been made, and none of the
          Company or any of its subsidiaries has received any notice, that
          any of the foregoing is invalid, conflicts with the asserted
          rights of other entities, or has not been used or enforced (or
          has failed to be used or enforced) in a manner that would result
          in the abandonment, cancellation or unenforceability of any item
          of the Intangible Property.

               (ii) The Company and its subsidiaries possess all Intangible
          Property, including, without limitation, all know-how, formulae
          and other proprietary and trade rights necessary for the conduct
          of their businesses as now conducted.  None of the Company or any
          of its subsidiaries has taken or failed to take any action that
          would result in the forfeiture or relinquishment of any such
          Intangible Property used in the conduct of their respective
          businesses as now conducted.

               (p)  Certain Contracts.  Section 5.1(p) of the Company
                    -----------------
     Disclosure Schedule lists all of the following contracts to which the
     Company or a subsidiary is a party or by which any one of them or any
     of their properties or assets may be bound ("Listed Agreements"):  (i)
     all employment or other contracts with any employee, consultant,
     officer or director of the Company or any subsidiary of the Company
     (or any company which is controlled by any such individual) whose
     total rate of annual remuneration is estimated to exceed $100,000 in
     1996; (ii) union, guild or collective bargaining contracts relating to
     employees of the Company or any subsidiary; (iii) instruments for
     money borrowed (including, without limitation, any indentures,
     guarantees, loan agreements, sale and leaseback agreements, or
     purchase money obligations incurred in connection with the acquisition
     of property other than in the ordinary course of business) in excess
     of $500,000; (iv) underwriting, purchase or similar agreements entered
     into in connection with the Company's or any of its subsidiaries'
     currently existing indebtedness; (v) agreements for acquisitions or
     dispositions (by merger, purchase or sale of assets or stock or
     otherwise) of material assets entered into within the last two years,
     as to which the transactions contemplated have been consummated or are
     currently pending; (vi) joint venture or partnership agreements
     entered into; (vii) material licensing, merchandising and distribution
     contracts; (viii) contracts granting any person or other entity

<PAGE>


     registration rights; (ix) guarantees, suretyships, indemnification and
     contribution agreements, in excess of $500,000; and (x) other
     contracts which materially affect the business, properties or assets
     of the Company and its subsidiaries taken as a whole, and are not
     otherwise disclosed in this Agreement or were entered into other than
     in the ordinary course of business.  A true and complete copy
     (including all amendments) of each Listed Agreement has been made
     available to Acquiror.  Neither the Company nor any subsidiary (i) is
     in breach or default under any of the Listed Agreements or (ii) has
     any knowledge of any other breach or default under any Listed
     Agreement by any other party thereto or by any other person or entity
     bound thereby, except in the case of (i) or (ii) breaches or defaults
     which would not, individually or in the aggregate, have a Material
     Adverse Effect with respect to the Company and its subsidiaries.  At
     the Effective Time, no person will have the right, by contract or
     otherwise, to become, nor does any entity have the right to designate
     or cause the Company to appoint a person as, a director of the
     Company.

               (q)  Insurance.  The Company and its subsidiaries have
                    ---------
     obtained and maintained in full force and effect insurance with
     responsible and reputable insurance companies or associations in such
     amounts, on such terms and covering such risks, including fire and
     other risks insured against by extended coverage, as is usually
     carried by companies engaged in similar businesses and owning similar
     properties similarly situated or otherwise required by law, and each
     has maintained in full force and effect public liability insurance,
     insurance against claims for personal injury or death or property
     damage occurring in connection with any of the activities of the
     Company or its subsidiaries or any of the properties owned, occupied
     or controlled by the Company or its subsidiaries, in such amount as
     reasonably deemed necessary by the Company or its subsidiaries.  To
     the extent the Company self-insures against such risks or damages, the
     liabilities reflected or reserved against in the Company's most recent
     financial statements (or the notes thereto) included in the Company
     SEC Reports filed and publicly available prior to the date of this
     Agreement are adequate to cover against such risks and damages.

               (r)  Unlawful Payments and Contributions.  None of the
                    -----------------------------------
     Company, any subsidiary of the Company or, to the knowledge of the
     Company, any of their respective directors, officers or any of their
     respective employees or agents has, with respect to the businesses of
     the Company and its subsidiaries, (i) used any funds for any unlawful
     contribution, endorsement, gift, entertainment or other unlawful
     expense relating to political activity; (ii) made any direct or
     indirect unlawful payment to any foreign or domestic government
     official or employee; (iii)

<PAGE>


     violated or is in violation of any provision of the Foreign Corrupt
     Practices Act of 1977, as amended; or (iv) made any bribe, rebate,
     payoff, influence payment, kickback or other unlawful payment to any
     person or entity.

               (s)  Listings.  The Company's securities are not listed or
                    --------
     quoted for trading on any U.S. domestic or foreign securities
     exchange, except as set forth in Section 5.1(s) of the Company
     Disclosure Schedule.

               (t)  Environmental Matters.  Except as disclosed in Section
                    ---------------------
     5.1(t) of the Company Disclosure Schedule or in the Company SEC
     Reports filed and publicly available prior to the date of this
     Agreement, (i) the Company and its subsidiaries and the operations
     thereof are in material compliance with all Environmental Laws (as
     defined below); (ii) there are no judicial or administrative actions,
     suits or proceedings pending or, to the knowledge of the Company,
     threatened and, to the knowledge of the Company, there are no
     investigations pending or threatened against the Company or any
     subsidiary of the Company alleging the violation of any Environmental
     Law and neither the Company nor any subsidiary of the Company has
     received notice from any governmental body or person alleging any
     violation of or liability under any Environmental Laws, in either case
     which could reasonably be expected to result in material Environmental
     Costs and Liabilities; and (iii) to the knowledge of the Company,
     there are no facts, circumstances or conditions relating to, arising
     from, associated with or attributable to the Company or its
     subsidiaries or any real property currently or previously owned,
     operated or leased by the Company or its subsidiaries that could
     reasonably be expected to result in material Environmental Costs and
     Liabilities.  For the purpose of this Section 5.1(t), the following
     terms have the following definitions:  (A) "Environmental Costs and
     Liabilities" means any losses, liabilities, obligations, damages,
     fines, penalties, judgments, actions, claims, costs and expenses
     (including, without limitation, fees, disbursements and expenses of
     legal counsel, experts, engineers and consultants and the costs of
     investigation and feasibility studies, remedial or removal actions and
     cleanup activities) arising from or under any Environmental Law; (B)
     "Environmental Laws" means any applicable federal, state, local, or
     foreign law (including common law), statute, code, ordinance, rule,
     regulation or other requirement relating to the environment, natural
     resources, or public or employee health and safety; (C) "Hazardous
     Material" means any substance, material or waste regulated by federal,
     state or local government, including, without limitation, any
     substance, material or waste which is defined as a "hazardous waste,"
     "hazardous material," "hazardous substance," "toxic waste" or "toxic
     substance" under any

<PAGE>


     provision of Environmental Law and including but not limited to
     petroleum and petroleum products.

               (u)  State Takeover Statutes.  Neither the South Carolina
                    -----------------------
     Control Share Acquisition Statute (Sections 35-2-101 et seq. of the
                                                          -- ----
     BCA) nor the South Carolina Business Combination Statute (Sections 35-
     2-201 et seq. of the BCA), nor, to the Company's knowledge, any other
           -- ----
     state takeover statute or similar statute or regulation, is applicable
     to the Merger and the other transactions contemplated by this
     Agreement.

               (v)  Inventories; Receivables; Payables.  (i)  The
                    ----------------------------------
          inventories of the Company and its subsidiaries are in good and
          marketable condition, and are saleable in the ordinary course of
          business.  Adequate reserves have been reflected on the most
          recent balance sheet included in the Company SEC Documents and,
          after the date of the most recent balance sheet included in the
          Company SEC Documents, will be reflected on the books of the
          Company, for shorts, drops, off-cuts, obsolete or otherwise
          unusable inventory, which reserves were calculated in accordance
          with GAAP consistently applied.

               (ii)  All accounts receivable of the Company and its
          subsidiaries have arisen from bona fide transactions in the
          ordinary course of business.  All accounts receivable of the
          Company and its subsidiaries reflected on the most recent balance
          sheet included in the Company SEC Documents are good and
          collectible at the aggregate recorded amounts thereof, net of any
          applicable reserve for returns or doubtful accounts reflected
          thereon, which reserves are adequate and were calculated in
          accordance with GAAP consistently applied.  All accounts
          receivable arising after the date of the most recent balance
          sheet included in the Company SEC Documents are good and
          collectible at the aggregate recorded amounts thereof, net of any
          applicable reserve for returns or doubtful accounts, which
          reserves are adequate and were calculated in accordance with GAAP
          consistently applied.

               (iii)  All accounts payable of the Company and its
          subsidiaries reflected on the most recent balance sheet included
          in the Company SEC Documents or arising after the date thereof
          are the result of bona fide transactions in the ordinary course
          of business and have been paid or are not yet due and payable.

               (w)  Transactions With Affiliates.  Other than the
                    ----------------------------
     transactions contemplated by this Agreement and except to the extent
     disclosed in the Company SEC Reports filed and publicly available
     prior to the date of this Agreement, or as set forth in


<PAGE>


     Section 5.1(w) of the Company Disclosure Schedule, since January 1,
     1994, there have been no transactions, agreements, arrangements or
     understandings between the Company or its subsidiaries, on the one
     hand, and the Company's Affiliates (other than wholly owned
     subsidiaries of the Company) or other Persons, on the other hand, that
     would be required to be disclosed under Item 404 of Regulation S-K
     under the Securities Act.

               (x)  Disclosure.  No representation or warranty by the
                    ----------
     Company in this Agreement and no statement contained in the Company
     Disclosure Schedules or any certificate delivered by the Company to
     Acquiror pursuant to this Agreement, contains any untrue statement of
     a material fact or omits any material fact necessary to make the
     statements herein or therein not misleading when taken together in
     light of the circumstances in which they were made, it being
     understood that as used in this Section 5.1(x) "material" means
     material to the Company and its subsidiaries taken as a whole.

               5.2.  Representations and Warranties of Acquiror.  Acquiror
                     ------------------------------------------
     represents and warrants to the Company that:

               (a)  Corporate Organization and Qualification.  Each of
                    ----------------------------------------
     Acquiror and its Significant Subsidiaries (within the meaning of Rule
     1-02 of Regulation S-X promulgated by the SEC) is a corporation duly
     organized, validly existing and in good standing under the laws of its
     respective jurisdiction of incorporation and is qualified and in good
     standing as a foreign corporation in each jurisdiction where the
     properties owned, leased or operated, or the business conducted, by it
     require such qualification, except where the failure to so qualify or
     be in such good standing would not have a Material Adverse Effect with
     respect to Acquiror and its subsidiaries.  Each of Acquiror and its
     Significant Subsidiaries has all requisite power and authority
     (corporate or otherwise) to own its properties and to carry on its
     business as it is now being conducted.

               (b)  Capitalization.  The authorized capital stock of
                    --------------
     Acquiror consists of 650,000,000 Acquiror Common Shares of which, as
     of August 3, 1996, approximately 274,235,794 Acquiror Common Shares
     were issued and outstanding.  All of the outstanding shares of capital
     stock of Acquiror have been duly authorized and validly issued and are
     fully paid and nonassessable.  All outstanding shares of capital stock
     or other equity interests of the subsidiaries of Acquiror are owned by
     Acquiror or a direct or indirect wholly owned subsidiary of Acquiror,
     free and clear of all liens, charges, encumbrances, claims and options
     of any nature.  Except as set forth in the Acquiror SEC Reports (as
     defined in Section 5.2(f)) or as contemplated by this Agreement,

<PAGE>


     there are not, as of the date hereof, any outstanding or authorized
     options, warrants, calls, rights (including preemptive rights),
     commitments or any other agreements of any character which Acquiror or
     any of its subsidiaries is a party to, or may be bound by, requiring
     it to issue, transfer, sell, purchase, redeem or acquire any Acquiror
     Common Shares or any shares of capital stock or any of its securities
     or rights convertible into, exchangeable for, or evidencing the right
     to subscribe for, any shares of capital stock of Acquiror or any of
     its subsidiaries.  There are not as of the date hereof and there will
     not be at the Effective Time any stockholder agreements, voting trusts
     or other agreements or understandings to which Acquiror is a party or
     to which it is bound relating to the voting of any shares of the
     capital stock of Acquiror.  Acquiror has reserved for issuance under a
     stock option plan or plans of Acquiror a sufficient number of Acquiror
     Common Shares to cover the exercise of the Options and Warrants to be
     assumed by Acquiror in accordance with Section 4.1(d).

               (c)  Authorization for Acquiror Common Shares.  Acquiror has
                    ----------------------------------------
     taken all necessary action to permit it to issue the number of
     Acquiror Common Shares required to be issued pursuant to the Merger.
     The Acquiror Common Shares issued pursuant to Article IV will, when
     issued, be validly issued, fully paid and nonassessable and no person
     will have any preemptive right of subscription or purchase in respect
     thereof.  The Acquiror Common Shares issued pursuant to the Merger
     will, when issued, be registered under the Securities Act and the
     Exchange Act and registered or exempt from registration under any
     applicable state securities laws and will, when issued, be listed on
     the NYSE, subject to official notice of issuance.

               (d)  Authority Relative to This Agreement.  Acquiror has the
                    ------------------------------------
     requisite corporate power and authority to approve, authorize, execute
     and deliver this Agreement and to consummate the transactions
     contemplated hereby.  This Agreement and the consummation by Acquiror
     of the transactions contemplated hereby have been duly and validly
     authorized by the Board of Directors of Acquiror, and no other
     corporate proceedings on the part of Acquiror are necessary to
     authorize this Agreement or to consummate the transactions
     contemplated hereby.  This Agreement has been duly and validly
     executed and delivered by Acquiror and, assuming this Agreement
     constitutes the valid and binding agreement of the Company,
     constitutes a valid and binding agreement of Acquiror, enforceable
     against it in accordance with its terms, subject, as to
     enforceability, to bankruptcy, insolvency, reorganization and other
     laws of general applicability relating to or affecting creditors'
     rights and to general principles of equity.

<PAGE>


               (e)  Consents and Approvals; No Violation.  Neither the
                    ------------------------------------
     execution and delivery of this Agreement by Acquiror nor the
     consummation by Acquiror of the transactions contemplated hereby will
     (i) conflict with or result in any breach of any provision of the
     Restated Certificate of Incorporation and the Restated By-Laws of
     Acquiror; (ii) require any consent, approval, authorization or permit
     of, or filing with or notification to, any governmental or regulatory
     authority or any other Person, except (A) in connection with the
     applicable requirements, if any, of the HSR Act, (B) pursuant to the
     applicable requirements of the Securities Act and the Exchange Act,
     (C) the filing of the Certificate of Merger and the Articles of Merger
     pursuant to the DGCL and the BCA, respectively, and appropriate
     documents with the relevant authorities of other states in which
     Acquiror is authorized to do business, (D) as may be required by any
     applicable state securities or takeover laws, (E) such filings and
     consents as may be required under any environmental, health or safety
     law or regulation pertaining to any notification, disclosure or
     required approval triggered by the Merger or the transactions
     contemplated by this Agreement, (F) such filings, consents, approvals,
     orders, authorizations, registrations, declarations and filings as may
     be required under the laws of any foreign country, (G) filings with,
     and approval of, the NYSE or, (H) where the failure to obtain such
     consent, approval, authorization or permit, or to make such filing or
     notification, would not in the aggregate have a Material Adverse
     Effect with respect to Acquiror and its subsidiaries or adversely
     affect the ability of Acquiror to consummate the transactions
     contemplated hereby; (iii) result in a violation or breach of, or
     constitute (with or without due notice or lapse of time or both) a
     default (or give rise to any right of termination, cancellation or
     acceleration or result in the creation of any lien or other charge or
     encumbrance) under any of the terms, conditions or provisions of any
     note, license, agreement or other instrument or obligation to which
     Acquiror or any of its subsidiaries or any of their assets may be
     bound, except for such violations, breaches and defaults (or rights of
     termination, cancellation, or acceleration or creations of lien or
     other charge or encumbrance) as to which requisite waivers or consents
     have been obtained or which, in the aggregate, would not have a
     Material Adverse Effect with respect to Acquiror and its subsidiaries
     or adversely affect the ability of Acquiror to consummate the
     transactions contemplated hereby; or (iv) assuming the consents,
     approvals, authorizations or permits and filings or notifications
     referred to in this Section 5.2(e) are duly and timely obtained or
     made, violate any order, writ, injunction, decree, statute, rule or
     regulation applicable to Acquiror or any of its subsidiaries or to any
     of their respective assets, except for violations which would not in
     the aggregate have a Material Adverse Effect with respect to Acquiror
     and its subsidiaries or adversely affect the

<PAGE>


     ability of Acquiror to consummate the transactions contemplated
     hereby.

               (f)  SEC Reports; Financial Statements.
                    ---------------------------------
               (i)  Since January 1, 1993, Acquiror has filed all forms,
          reports and documents with the SEC required to be filed by it
          pursuant to the federal securities laws and the SEC rules and
          regulations thereunder, all of which complied in all material
          respects with all applicable requirements of the Securities Act
          and the Exchange Act (the "Acquiror SEC Reports").  None of
          Acquiror SEC Reports, including, without limitation, any
          financial statements or schedules included therein, at the time
          filed contained any untrue statement of a material fact or
          omitted to state a material fact required to be stated therein or
          necessary in order to make the statements therein, in light of
          the circumstances under which they were made, not misleading.

               (ii)  The consolidated balance sheets and the related
          statements of income, stockholders' equity and cash flow
          (including the related notes thereto) of Acquiror included in the
          Acquiror SEC Reports comply as to form in all material respects
          with applicable accounting requirements and the published rules
          and regulations of the SEC with respect thereto, have been
          prepared in accordance with GAAP applied on a basis consistent
          with prior periods (except as otherwise noted therein), and
          present fairly the consolidated financial position of Acquiror
          and its consolidated subsidiaries as of their respective dates,
          and the results of its operations and its cash flow for the
          periods presented therein (subject, in the case of the unaudited
          interim financial statements, to normal year-end adjustments).

               (g)  Undisclosed Liabilities; Absence of Certain Changes or
                    ------------------------------------------------------
     Events.  Neither Acquiror nor any of its subsidiaries has any material
     ------
     indebtedness, obligations or liabilities of any kind (whether accrued,
     absolute, contingent or otherwise, and whether due or to become due or
     asserted or unasserted), and, to the best knowledge of Acquiror, there
     is no basis for the assertion of any claim or liability of any nature
     against Acquiror or any of its subsidiaries, which is not fully
     reflected in, reserved against or otherwise described in the financial
     statements included in the Acquiror SEC Reports filed and publicly
     available prior the date of this Agreement.  Except as disclosed in
     Acquiror SEC Reports filed and publicly available prior to the date of
     this Agreement or as contemplated by this Agreement, since January 1,
     1996, the business of Acquiror and its subsidiaries has been carried
     on only in the ordinary and

<PAGE>


     usual course and there has not been any adverse change in its
     business, properties, operations or financial condition and no event
     has occurred and no fact or set of circumstances has arisen which has
     resulted in or could reasonably be expected to result in a Material
     Adverse Effect with respect to Acquiror and its subsidiaries.

               (h)  Litigation.  Except as disclosed in the Acquiror SEC
                    ----------
     Reports filed and publicly available prior to the date of this
     Agreement, there are no actions, suits or proceedings pending or, to
     the best knowledge of Acquiror threatened (or to the best knowledge of
     Acquiror any investigation pending or threatened) against Acquiror or
     any of its subsidiaries which could, individually or in the aggregate,
     if adversely determined, reasonably be expected to have a Material
     Adverse Effect with respect to Acquiror and its subsidiaries, nor is
     there any judgment, decree, injunction, rule or order of any
     governmental or regulatory authority or arbitration outstanding
     against Acquiror or any of its subsidiaries, which could, individually
     or in the aggregate, reasonably be expected to have a Material Adverse
     Effect with respect to Acquiror and its subsidiaries.

               (i)  S-4 Registration Statement and Proxy Statement/
                    -----------------------------------------------
     Prospectus.  None of the information to be supplied by Acquiror for
     ----------
     inclusion or incorporation by reference in the S-4 Registration
     Statement or the Proxy Statement will, (i) in the case of the S-4
     Registration Statement, at the time it becomes effective and at the
     Effective Time, contain any untrue statement of a material fact or
     omit to state any material fact required to be stated therein or
     necessary in order to make the statements therein not misleading, or
     (ii) in the case of the Proxy Statement, at the time of the mailing of
     the Proxy Statement and at the time of the Shareholder Meeting,
     contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary in order to
     make the statements therein, in light of the circumstances under which
     they are made, not misleading.  If at any time prior to the Effective
     Time any event with respect to Acquiror, its officers and directors or
     any of its subsidiaries shall occur which is required to be described
     in the S-4 Registration Statement, such event shall be so described,
     and an amendment or supplement shall be promptly filed with the SEC
     and, as required by law, disseminated to the shareholders of the
     Company.  The S-4 Registration Statement will comply (only with
     respect to Acquiror) as to form in all material respects with the
     provisions of the Securities Act and the rules and regulations
     promulgated thereunder.

               (j)  Brokers and Finders.  Except for Goldman, Sachs & Co.,
                    -------------------
     Acquiror has not employed any investment banker, broker,


<PAGE>


     finder, consultant or intermediary in connection with the transactions
     contemplated by this Agreement which would be entitled to any
     investment banking, brokerage, finder's or similar fee or commission
     in connection with this Agreement or the transactions contemplated
     hereby.

               (k)  Ownership of Shares.  As of the date hereof, none of
                    -------------------
     the Acquiror Companies owns any Shares.

               (l)  Disclosure.  No representation or warranty by Acquiror
                    ----------
     in this Agreement and no statement contained in the Acquiror
     Disclosure Schedules or any certificate delivered by Acquiror to the
     Company pursuant to this Agreement, contains any untrue statement of a
     material fact or omits any material fact necessary to make the
     statements herein or therein not misleading when taken together in
     light of the circumstances in which they were made, it being
     understood that as used in this Section 5.2(l) "material" means
     material to Acquiror and its subsidiaries taken as a whole.

               5.3. Representations and Warranties of Tate.  Tate hereby
                    --------------------------------------
     represents and warrants to Acquiror:

               (a)  Authority Relative to This Agreement and Shareholders'
                    ------------------------------------------------------
     Agreement.  Tate has the requisite power and authority to enter into,
     ---------
     execute and deliver this Agreement and the Shareholders Agreement and
     to perform fully his obligations hereunder and thereunder.  Each of
     this Agreement and the Shareholders Agreement has been duly executed
     and delivered by Tate and constitutes the valid and binding agreement
     of Tate, enforceable against Tate in accordance with its terms.

               (b)  The Tate Shares.  All of the Tate Shares are owned of
                    ---------------
     record and beneficially by Tate, free and clear of all liens, charges,
     encumbrances, claims and options of any nature.

               (c)  Consents and Approvals; No Violation.  The execution
                    ------------------------------------
     and delivery of this Agreement will not (i) require any consent,
     approval, authorization or permit of, or filing with or notification
     to, any governmental or regulatory authority or any other Person,
     except in connection with  the applicable requirements, if any, of the
     HSR Act pursuant to the applicable requirements of the Securities Act
     and the rules and regulations promulgated thereunder, and the Exchange
     Act and the rules and regulations promulgated thereunder; or
     (ii) result in a violation or breach of, or default (or give rise to
     any right of termination, cancellation or acceleration or result in
     the creation of any lien or other charges or encumbrance) under any of
     the terms, conditions or provision of any note, license, agreement or
     other instrument or obligation to which Tate may be


<PAGE>


     bound, except for such violations, breaches and defaults (or rights of
     termination, cancellation or acceleration or creations of liens or
     other charges or encumbrances) as to which requisite waivers or
     consents have been obtained or which, in the aggregate, would not
     adversely affect the ability of Acquiror to consummate the Merger.

               (d)  Certain Acknowledgements.  Tate acknowledges that he is
                    ------------------------
     an informed and sophisticated investor and, together with his
     advisors, has undertaken such investigation as he has deemed
     necessary, including the review of this Agreement and the Shareholders
     Agreement, to enable him to make an informed and intelligent decision
     with respect to the Agreement and the Shareholders Agreement and the
     transactions contemplated hereby and thereby, including the Merger.
     Tate acknowledges that pursuant to the Merger he will receive less
     consideration per Share than will other holders of Shares.


                                   ARTICLE VI

                       Additional Covenants and Agreements

               6.1.  Conduct of Business.
                     -------------------
               (a)  The Company covenants and agrees that, during the
     period from the date of this Agreement to the Effective Time (unless
     Acquiror shall otherwise agree in writing, which agreement shall not
     be unreasonably withheld, and except as otherwise contemplated by this
     Agreement), the Company will, and will cause each of its subsidiaries
     to, conduct its operations according to its ordinary and usual course
     of business consistent with past practice and, to the extent
     consistent therewith, with no less diligence and effort than would be
     applied in the absence of this Agreement, seek to preserve intact its
     current business organizations, keep available the service of its
     current officers and employees and preserve its relationships with
     customers, suppliers and others having business dealings with it to
     the end that goodwill and ongoing businesses shall be unimpaired at
     the Effective Time.  Without limiting the generality of the foregoing,
     and except as otherwise permitted in this Agreement or disclosed in
     Section 6.1 of the Company Disclosure Schedule, prior to the Effective
     Time, neither the Company nor any of its subsidiaries will, without
     the prior written consent of Acquiror, which consent shall not be
     unreasonably withheld:

               (i)  (A) declare, set aside or pay any dividends on, or make
          any other distributions in respect of, any of its capital stock,
          other than dividends and distributions by any direct or indirect
          wholly owned subsidiary of the Company to

<PAGE>


          its parent, (B) split, combine or reclassify any of its capital
          stock or, except pursuant to the exercise of options, warrants,
          conversion rights, exchange rights and other contractual rights
          existing on the date hereof, issue or authorize the issuance of
          any other securities in respect of, in lieu of or in substitution
          for shares of its capital stock or other equity interests or
          (C) purchase, redeem or otherwise acquire or amend any shares of
          capital stock or other equity interests of the Company or any of
          its subsidiaries or any other securities thereof or any rights,
          warrants or options to acquire any such shares, interests or
          other securities;

               (ii)  issue, deliver, sell, pledge or otherwise encumber or
          amend any shares of its capital stock, any other voting
          securities or any securities convertible into, or any rights,
          warrants or options to acquire, any such shares, interests,
          voting securities or convertible securities, including pursuant
          to the Option Plans, other than (A) the issuance of Shares upon
          the conversion of Convertible Notes outstanding on the date of
          this Agreement in accordance with their present terms, (B) the
          issuance of Shares upon the exercise of Options outstanding on
          the date of this Agreement in accordance with their present terms
          and (C) the issuance of Shares upon the exchange of the Warrants
          outstanding on the date of this Agreement in accordance with
          their present terms;

               (iii)  amend its Articles of Incorporation, By-Laws or other
          comparable charter or organizational documents;

               (iv)  acquire or agree to acquire (A) by merging or
          consolidating with, or by purchasing a substantial portion of the
          assets of, or by any other manner, any business or any
          corporation, partnership, joint venture, association or other
          business organization or division thereof or (B) any asset
          requiring or involving an expenditure or purchase price in excess
          of $100,000, except (x) mergers and consolidations between or
          among one or more wholly owned subsidiaries of the Company that
          will not create adverse tax consequences to the Company or its
          subsidiaries, and (y) purchases of inventory in the ordinary
          course of business consistent with past practice;

               (v)  sell, lease, license, mortgage or otherwise encumber or
          subject to any lien or otherwise dispose of any of its properties
          or assets, except in the ordinary course of business consistent
          with past practice;

<PAGE>


               (vi)  (A) other than incurrences of indebtedness (which term
          shall be deemed not to include trade payables incurred in the
          ordinary course of business) in the ordinary course of business
          which, in the aggregate, do not exceed $50,000, incur any
          indebtedness for borrowed money or guarantee any such
          indebtedness of another person, issue or sell any debt securities
          or warrants or other rights to acquire any debt securities of the
          Company or any of its subsidiaries, guarantee any debt securities
          of another person, enter into any "keep well" or other agreement
          to maintain any financial statement condition of another person
          or enter into any arrangement having the economic effect of any
          of the foregoing or (B) make any loans, advances or capital
          contributions to, or investments in, any other person other than
          to the Company or any direct or indirect wholly owned subsidiary
          of the Company;

               (vii)  pay, discharge, settle or satisfy any claims,
          liabilities or obligations (absolute, accrued, asserted or
          unasserted, contingent or otherwise), other than the payment,
          discharge, settlement or satisfaction, in accordance with their
          terms of liabilities reflected or reserved against in the most
          recent consolidated financial statements (or the notes thereto)
          of the Company included in the Company SEC Reports filed and
          publicly available prior to the date of this Agreement or
          incurred in the ordinary course of business consistent with past
          practice since the date of such financial statements, or waive
          the benefits of, or agree to modify in any manner, any
          confidentiality, standstill or similar agreement to which the
          Company or any of its subsidiaries is a party;

               (viii)  (A) adopt, enter into, terminate or amend any
          Company Benefit Plan or other arrangement for the benefit or
          welfare of any director, officer or current or former employee of
          the Company or any of its subsidiaries, (B) increase in any
          manner the compensation or fringe benefits of, or pay any bonus
          to, any such director, officer or employee (except for normal
          increases or bonuses as contractually required pursuant to
          agreements disclosed in the Company SEC Reports filed and
          publicly available prior to the date of this Agreement or in the
          ordinary course of business consistent with past practice to
          employees other than directors and executive officers of the
          Company and that, in the aggregate, do not result in any material
          increase in benefits or compensation expense to the Company and
          its subsidiaries relative to the level in effect prior to such
          action (but in no event shall the aggregate amount of the
          increases granted to any such director, officer or employee
          exceed 5% of the aggregate annualized compensation

<PAGE>


          of such director, officer or employee and in no event shall the
          aggregate amount of all such increases exceed 1% of the aggregate
          annualized compensation expense of the Company and its
          subsidiaries reported in the most recent consolidated financial
          statements of the Company included in the Company SEC Reports
          filed and publicly available prior to the date of this Agreement)
          and except as contractually required pursuant to agreements
          included as part of a Company SEC Reports filed and publicly
          available prior to the date of this Agreement), (C) pay any
          benefit not provided for under any Company Benefit Plan,
          (D) except for payments or awards in cash permitted by clause
          (B), grant any awards under any bonus, incentive, performance or
          other compensation plan or arrangement or Company Benefit Plan
          (including the grant of stock options, stock appreciation rights,
          stock-based or stock-related awards, performance units or
          restricted stock, or the removal of existing restrictions in any
          Company Benefit Plans or agreements or awards made thereunder) or
          (E) take any action to fund or in any other way secure the
          payment of compensation or benefits under any employee plan,
          agreement, contract or arrangement or Company Benefit Plan;

               (ix)  make or agree to make any capital expenditure or
          expenditures other than for maintenance purposes;

               (x)  modify, amend or terminate any contract or agreement
          set forth in the Company SEC Reports or any real property lease
          to which the Company or any of its subsidiaries is a party, or
          waive, release or assign any material rights or claims
          thereunder;

               (xi)  take or agree to take any action that would prevent
          the Merger from constituting a reorganization qualifying under
          the provisions of Section 368(a)(1) of the Code;

               (xii)  conduct its business in a manner or take, or cause to
          be taken, any other action that would or might reasonably be
          expected to prevent or materially delay the Company or Acquiror
          from consummating the transactions contemplated hereby in
          accordance with the terms of this Agreement (regardless of
          whether such action would otherwise be permitted or not
          prohibited hereunder), including, without limitation, any action
          which may materially limit the ability of the Company or Acquiror
          to consummate the transactions contemplated hereby as a result of
          antitrust or other regulatory concerns; or

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

<PAGE>


               (b)  Acquiror covenants and agrees that, during the period
          from the date of this Agreement to the Effective Time, neither
          Acquiror or any of its subsidiaries will, without the prior written
          consent of the Company, which consent shall not be unreasonably
          withheld:

               (i)  take or agree to take any action that would prevent the
          Merger from constituting a reorganization qualifying under the
          provisions of Section 368(a)(1) of the Code;

               (ii)  conduct its business in a manner or take, or cause to
          be taken, any other action that would or might reasonably be
          expected to prevent or materially delay Acquiror or the Company
          from consummating the transactions contemplated hereby in
          accordance with the terms of this Agreement (regardless of
          whether such action would otherwise be permitted or not
          prohibited hereunder), including, without limitation, any action
          which may materially limit the ability of Acquiror or the Company
          to consummate the transactions contemplated hereby as a result of
          antitrust or other regulatory concerns; or

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

               6.2.  No Solicitation.  (a)  The Company, its subsidiaries
                     ---------------
     and their respective officers, directors, employees, representatives,
     agents or affiliates (including, without limitation, any investment
     banker, attorney or accountant retained by the Company or any of its
     subsidiaries) (collectively, the "Company's Representatives") shall
     immediately cease any discussions or negotiations with any party that
     may be ongoing with respect to a Competing Transaction (as defined
     below).  From and after the date hereof until the termination of this
     Agreement, neither the Company nor any of its subsidiaries will, nor
     will the Company authorize or permit any of its subsidiaries or any of
     the Company Representatives to, directly or indirectly, initiate,
     solicit or knowingly encourage (including by way of furnishing non-
     public information), or take any other action to facilitate, any
     inquiries or the making of any proposal that constitutes, or may
     reasonably be expected to lead to, any Competing Transaction, or
     participate in any discussions or negotiations regarding any Competing
     Transaction or agree to or endorse any Competing Transaction, and the
     Company shall notify Acquiror orally (within one business day) and in
     writing (as promptly as practicable) of all of the relevant details
     relating to all inquiries and proposals which it or any of its
     subsidiaries or any such Company Representative may receive relating
     to any of such matters and, if such inquiry or


<PAGE>


     proposal is in writing, the Company shall deliver to Acquiror a copy
     of such inquiry or proposal promptly; provided, however, that nothing
                                           --------  -------
     contained in this Section 6.2 shall prohibit the Company or its Board
     of Directors from (i) taking and disclosing to its stockholders a
     position contemplated by Exchange Act Rule 14e-2 or (ii) making any
     disclosure to its stockholders that, in the good faith judgment of its
     Board of Directors, after consultation with and based upon the advice
     of independent legal counsel (who may be the Company's regularly
     engaged independent legal counsel), is required under applicable law;
     provided further, that nothing contained in this Section 6.2 shall
     -------- -------
     prohibit the Company from furnishing information to, or entering into
     discussions or negotiations with, any person or entity that after the
     date hereof states in an unsolicited writing that it has a bona fide
     serious interest to make a Superior Proposal (as defined below) if
     (1) (x) the Board of Directors of the Company, after consultation with
     and based upon the advice of independent legal counsel (who may be the
     Company's regularly engaged independent legal counsel), determines in
     good faith that such action is necessary for the Board of Directors of
     the Company to comply with its fiduciary duties to stockholders under
     applicable law and (y) after consultation with and based upon the
     advice of an independent financial advisor (who may be the Company's
     regularly engaged independent financial advisor) determines in good
     faith that such person or entity is capable of making, financing and
     consummating a Superior Proposal and (2) prior to taking such action,
     the Company (x) provides at least two business days' notice to
     Acquiror to the effect that it is taking such action and (y) receives
     from such person or entity an executed confidentiality agreement on
     terms no less restrictive than the Confidentiality Agreement (as
     defined below).  For purposes of this Agreement, "Competing
     Transaction" shall mean any of the following (other than the
     transactions between the Company Acquiror contemplated hereunder)
     involving the Company:  (i) any merger, consolidation, share exchange,
     recapitalization, business combination, or other similar transaction;
     (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
     disposition of all or a substantial portion of the assets of the
     Company and its subsidiaries, taken as a whole, or of more than 25% of
     the equity securities of the Company or any of its subsidiaries, in
     any case in a single transaction or series of transactions; (iii) any
     tender offer or exchange offer for 25% or more of the outstanding
     shares of capital stock of the Company or the filing of a registration
     statement under the Securities Act in connection therewith; or (iv)
     any public announcement of a proposal, plan or intention to do any of
     the foregoing or any agreement to engage in any of the foregoing.

               (b)  Except as set forth in this Section 6.2, the Board of
     Directors of the Company shall not (i) withdraw or modify, or

<PAGE>


     propose to withdraw or modify, in a manner adverse to Acquiror, the
     approval or recommendation by such Board of Directors of this
     Agreement or the Merger, or (ii) approve or recommend, or cause the
     Company to enter into any agreement with respect to, any Competing
     Transaction.  Notwithstanding the foregoing, if the Board of Directors
     of the Company, after consultation with and based upon the advice of
     independent legal counsel (who may be the Company's regularly engaged
     independent legal counsel), determines in good faith that it is
     necessary to do so in order to comply with its fiduciary duties to
     stockholders under applicable law, the Board of Directors of the
     Company may modify or withdraw its approval or recommendation of this
     Agreement and the Merger, approve or recommend a Superior Proposal (as
     defined below) or cause the Company to enter into an agreement with
     respect to a Superior Proposal, but in each case only after providing
     at least two business days' written notice to Acquiror (a "Notice of
     Superior Proposal") advising Acquiror that the Board of Directors of
     the Company has received a Superior Proposal, specifying the material
     terms and conditions of such Superior Proposal and identifying the
     person making such Superior Proposal.  In addition, if the Company
     proposes to enter into an agreement with respect to any Competing
     Transaction, it shall concurrently with entering into such an
     agreement pay, or cause to be paid, to Acquiror the fee required by
     Section 8.5(a) hereof.  For purposes of this Agreement, a "Superior
     Proposal" means any bona fide proposal to acquire, directly or
     indirectly, for consideration consisting of cash and/or securities,
     all or substantially all the Shares then outstanding or all or
     substantially all the assets of the Company and otherwise on terms
     which the Board of Directors of the Company determines in its good
     faith judgment (based on the advice of a financial advisor of
     nationally recognized reputation) to be more favorable to the
     Company's shareholders than the Merger.

               6.3.  Meeting of Shareholders.  The Company will take all
                     -----------------------
     action necessary in accordance with applicable law and its Articles of
     Incorporation and By-Laws to convene a meeting of its shareholders
     (the "Shareholder Meeting") as promptly as practicable to consider and
     vote upon the approval of this Agreement.  Subject to the fiduciary
     duties of the Company's Board of Directors under applicable law after
     consultation with and based upon the advice of independent legal
     counsel, except as otherwise provided in Section 6.2, the Board of
     Directors of the Company shall recommend and declare advisable such
     approval and the Company shall use its best efforts to solicit, and
     use its best efforts to obtain, such approval.

               6.4.  S-4 Registration Statement; Proxy Statement.  Acquiror
                     -------------------------------------------
     will, as promptly as practicable, prepare and file with the SEC a
     registration statement on Form S-4 (the "S-4

<PAGE>


     Registration Statement"), containing a proxy statement/prospectus and
     a form of proxy, in connection with the registration under the
     Securities Act of Acquiror Common Shares issuable pursuant to the
     Merger.  The Company will, as promptly as practicable, prepare and
     file with the SEC a proxy statement that will be the same proxy
     statement/prospectus contained in the S-4 Registration Statement and a
     form of proxy, in connection with the vote of the Company's
     stockholders with respect to this Agreement (such proxy
     statement/prospectus, together with any amendments thereof or
     supplements thereto, in each case in the form or forms mailed to the
     Company's stockholders, is herein called the "Proxy Statement").
     Acquiror and the Company will, and will cause their accountants and
     lawyers to, use their best efforts to have or cause the S-4
     Registration Statement declared effective as promptly as practicable,
     including, without limitation, causing their accountants to deliver
     necessary or required instruments such as opinions and certificates,
     and will take any other action required or necessary to be taken under
     federal or state securities laws or otherwise in connection with the
     registration process.  The Company will cause the Proxy Statement to
     be mailed to stockholders of the Company at the earliest practicable
     date and will coordinate and cooperate with Acquiror with respect to
     the timing of the Shareholder Meeting and shall hold such Shareholder
     Meeting as soon as practicable after the date hereof.
               6.5.  Access to Information.  Upon reasonable notice, the
                     ---------------------
     Company shall (and shall cause each of its subsidiaries to) afford to
     officers, employees, counsel, accountants and other authorized
     representatives of Acquiror ("Acquiror's Representatives") reasonable
     access, during normal business hours throughout the period prior to
     the Effective Time, to its properties, books and records and, during
     such period, shall (and shall cause each of its subsidiaries to)
     furnish promptly to Acquiror's Representatives all information
     concerning the business, properties and personnel of the Company and
     its subsidiaries as may reasonably be requested, including the
     opportunity to observe the full physical chain-wide inventory count of
     the Company and its subsidiaries to be taken in October 1996 (which
     inventory count shall be completed no later than October 31, 1996),
     provided that no investigation pursuant to this Section 6.5 shall
     affect or be deemed to modify any of the representations or warranties
     made by the Company.  Acquiror agrees that it will not, and will cause
     Acquiror's Representatives not to, use any information obtained
     pursuant to this Section 6.5 for any purpose unrelated to the
     consummation of the transactions contemplated by this Agreement.  In
     connection with the foregoing, the Company agrees to cause the
     Company's independent accountants to provide their workpapers to
     Acquiror upon the terms and subject to the conditions on which such
     workpapers have previously been provided to Acquiror.  The

<PAGE>


     Confidentiality Agreement, dated July 16, 1996 (the "Confidentiality
     Agreement"), between Acquiror and the Company shall apply with respect
     to the information furnished hereunder and survive any termination of
     this Agreement, subject to the terms and conditions set forth in such
     Confidentiality Agreement.

               6.6.  Publicity.  The parties hereto agree that they will
                     ---------
     consult with each other concerning any proposed press release or
     public announcement pertaining to the Merger and the other
     transactions contemplated hereby in order to seek to agree upon the
     text of any such press release or the making of such public
     announcement.

               6.7.  Indemnification of Directors and Officers.
                     -----------------------------------------
               (a)  From and after the Effective Time and for a period of
     six years thereafter, the Surviving Corporation shall indemnify,
     defend and hold harmless each person who is now, or has been at any
     time prior to the date hereof or who becomes prior to the Effective
     Time, an officer or director of the Company or any of its subsidiaries
     (the "Indemnified Parties") against all losses, claims, damages,
     costs, expenses (including attorneys' fees and expenses), liabilities
     or judgments or amounts that are paid in settlement of or in
     connection with any threatened or actual claim, action, suit,
     proceeding or investigation based in whole or in part on or arising in
     whole or in part out of the fact that such person is or was a director
     or officer of the Company or any of its subsidiaries, whether
     pertaining to any matter existing or occurring at or prior to the
     Effective Time and whether asserted or claimed prior to, or at or
     after, the Effective Time ("Indemnified Liabilities"), including,
     without limitation, all Indemnified Liabilities based in whole or in
     part on, or arising in whole or in part out of, or pertaining to this
     Agreement or the transactions contemplated hereby, in each case to the
     fullest extent a corporation is permitted under the BCA to indemnify
     its own directors or officers, as the case may be; provided, however,
                                                        --------  -------
      that all right to indemnification in respect of any claim asserted or
     made within such period shall continue until the disposition of such
     claim.  In the event of an Indemnified Liability, (i) Acquiror shall
     pay the reasonable fees and expenses of counsel selected by the
     Indemnified Parties, which counsel shall be reasonably satisfactory to
     Acquiror, promptly after statements therefor are received and
     otherwise advance to such Indemnified Party upon request reimbursement
     of documented expenses reasonably incurred, in either case to the
     extent not prohibited by the BCA and upon receipt of any affirmation
     and undertaking required by the BCA, (ii) Acquiror will cooperate in
     the defense of any such matter and (iii) any determination required to
     be made with respect to whether an Indemnified Party's conduct
     complies with the standards set forth


<PAGE>


     under the BCA shall be made by independent counsel mutually acceptable
     to Acquiror and the Indemnified Party; provided, however, that
                                            --------  -------
     Acquiror shall not be liable for any settlement effected without its
     written consent (which consent shall not be reasonably withheld).  The
     Indemnified Parties as a group may retain only one law firm with
     respect to each related matter except to the extent there is, in the
     opinion of counsel to an Indemnified Party, under applicable standards
     of professional conduct, a conflict on any significant issue between
     positions of any two or more Indemnified Parties.

               (b)  This Section 6.7 is intended to benefit the Indemnified
     Parties and shall be binding on all successors and assigns of
     Acquiror, the Company and the Surviving Corporation.

               6.8.  Affiliates of the Company.  Prior to the Closing Date,
                     -------------------------
     the Company shall identify to Acquiror all persons (each, a "Company
     Affiliate") who may be deemed to be "affiliates" of the Company for
     purposes of Rule 145 under the Securities Act.  The Company shall use
     its best reasonable efforts to cause each Company Affiliate to deliver
     to Acquiror, on or prior to the Closing Date, a written agreement
     substantially in the form attached hereto as Exhibit C.

               6.9.  Taxes.  In respect of Tax Returns of the Company or
                     -----
     any subsidiary not required to be filed prior to the date hereof, the
     Company shall, to the extent permitted by law without any penalty,
     delay (or cause such subsidiary to delay) the filing of any such Tax
     Returns until after the Effective Time; provided, however, that the
                                             --------  -------
     Company shall notify Acquiror of its intention to delay (or cause such
     subsidiary to delay) any such filing and shall not so delay the filing
     of a Tax Return if Acquiror and the Company agree that so delaying the
     filing of such Tax Return is not in the best interests of either the
     Company or Acquiror.  If any such Tax Return is required to be filed
     on or prior to the Effective Time, the Company or its subsidiaries, as
     the case may be, shall prepare and timely file such Tax Return in a
     manner consistent with prior years and all applicable laws and
     regulations; provided, however, that Acquiror shall be notified and
                  --------  -------
     given an opportunity to review and to comment, prior to the filing
     thereof, on any such Tax Return.

               6.10.  Maintenance of Insurance.  Between the date hereof
                      ------------------------
     and through the Effective Time the Company will maintain in full force
     and effect all of its presently existing policies of insurance or
     insurance comparable to the coverage afforded by such policies.

               6.11.  Representations and Warranties.  None of the Company,
                      ------------------------------
     Acquiror or Tate will take any action that would cause


<PAGE>


     any of the representations and warranties set forth in Section 5.1,
     5.2 or 5.3, as the case may be, not to be true and correct (subject to
     the standard set forth in the proviso of Section 7.1(a) or 7.2(a),
     respectively) at and as of the Effective Time.

               6.12.  Antitrust Notification.  The Company and Acquiror
                      ----------------------
     shall as promptly as practicable, but in no event later than ten
     Business Days following the execution and delivery of this Agreement,
     file with the United States Federal Trade Commission (the "FTC") and
     the United States Department of Justice (the "DOJ") the notification
     and report form required for the transactions contemplated hereby and
     any supplemental information requested in connection therewith
     pursuant to the HSR Act.  Any such notification and report form and
     supplemental information shall be in substantial compliance with the
     requirements of the HSR Act.  The Company and Acquiror shall furnish
     to each other such necessary information and reasonable assistance as
     the other may request in connection with its preparation of any filing
     or submission which is necessary under the HSR Act.  The Company and
     Acquiror shall keep each other apprised of the status of any
     communications with, and any inquiries or requests for additional
     information from, the FTC and the DOJ and shall comply promptly with
     any such inquiry or request.  The Company and Acquiror shall use
     reasonable efforts to obtain any clearance required under the HSR Act
     for the completion of the Merger, which efforts for purposes of this
     Section 6.12 shall not require Acquiror to agree to any prohibition,
     limitation or other requirement of the type set forth in clauses (B),
     (C) and (D) of Section 7.1(c).

               6.13.  Reasonable Best Efforts; Other Action.  (a) Upon the
                      -------------------------------------
     terms and subject to the conditions set forth in this Agreement, each
     of the parties agrees to use all reasonable best efforts to take, or
     cause to be taken, all actions, and to do, or cause to be done, and to
     assist and cooperate with the other parties in doing, all things
     necessary, proper or advisable to consummate and make effective, in
     the most expeditious manner practicable, the Merger and the other
     transactions contemplated by this Agreement, including (i) the
     obtaining of all necessary actions or nonactions, waivers, consents
     and approvals from all applicable governmental and regulatory
     authorities and the making of all necessary registrations and filings
     (including filings with governmental and regulatory authorities, if
     any) and the taking of all reasonable steps as may be necessary to
     obtain an approval or waiver from, or to avoid an action or proceeding
     by, any governmental and regulatory authority, (ii) the obtaining of
     all necessary consents, approvals or waivers from all other Persons,
     (iii) the defending of any lawsuits or other legal proceedings,
     whether judicial or administrative, challenging this Agreement or the
     consummation of any of the transactions

<PAGE>


     contemplated by this Agreement, including seeking to have any stay or
     temporary restraining order entered by any court or other governmental
     or regulatory authority vacated or reversed and (iv) the execution and
     delivery of any additional instruments necessary to consummate the
     transactions contemplated by, and to fully carry out the purposes of,
     this Agreement.  Each party hereto will notify the other party
     promptly of the receipt of any comments from the SEC or its staff and
     of any other governmental officials for amendments or supplements to
     the S-4 Registration Statement, the Proxy Statement or any other
     filing described in or made pursuant to Section 6.12 or this Section
     6.13 hereof and will supply the other with copies of all
     correspondence between such party or any of its representatives, on
     the one hand, and the SEC, its staff or any other governmental
     officials, on the other hand, with respect to the S-4 Registration
     Statement, the Proxy Statement or such other filings.

               6.14.  Notification of Certain Matters.  Each of the Company
                      -------------------------------
     and Acquiror shall give prompt notice to the other of (a) any notice
     of, or other communication relating to, a default or event which, with
     notice or lapse of time or both, would become a default, received by
     it or any of its subsidiaries subsequent to the date of this Agreement
     and prior to the Effective Time, under any contract material to the
     financial condition, properties, businesses or results of operations
     of it and its subsidiaries taken as a whole to which it or any of its
     subsidiaries is a party or is subject, (b) any notice or other
     communication from any third party alleging that the consent of such
     third party is or may be required in connection with the transactions
     contemplated by this Agreement, (c) any material adverse change in
     their respective (together with their respective subsidiaries taken as
     a whole) businesses, results of operations, properties, assets,
     liabilities, prospects or condition (financial or otherwise), other
     than changes resulting from general economic conditions, (d) any
     representation or warranty made by it contained in this Agreement
     becoming untrue or inaccurate in any material respect (including in
     the case of representations or warranties by the Company or Acquiror,
     as applicable, such party's receiving knowledge of any fact, event or
     circumstance which may cause any representation qualified as to the
     knowledge of such party to be or become untrue or inaccurate in any
     material respect) or (e) the failure by it to comply with or satisfy
     in any material respect any covenant, condition or agreement to be
     complied with or satisfied by it under this Agreement; provided,
                                                            --------
      however, that no such notification shall affect the representations,
      -------
     warranties, covenants or agreements of the parties or the conditions
     to the obligations of the parties under this Agreement.
<PAGE>


               6.15.  Blue Sky Permits.  Acquiror shall use its best
                      ----------------
     efforts to obtain, prior to the effective date of the S-4 Registration
     Statement, all necessary state securities laws or "blue sky" permits
     and approvals required to carry out the transactions contemplated by
     this Agreement, and will pay all expenses incident thereto.

               6.16.  NYSE Listing.  Acquiror shall use its best efforts to
                      ------------
     cause the Acquiror Common Shares to be issued pursuant to the Merger
     to be listed, prior to the Effective Time, on the NYSE, subject to
     notice of official issuance thereof.

               6.17.  Comfort Letter.  The Company shall cause to be
                      --------------
     delivered to Acquiror a letter of Deloitte & Touche LLP, independent
     public accountants to the Company, dated a date within two business
     days before the date on which the S-4 Registration Statement shall
     become effective and addressed to Acquiror, in form and substance
     reasonably satisfactory to Acquiror and customary in scope and
     substance for letters delivered by independent public accountants in
     connection with registration statements similar to the S-4
     Registration Statement.

               6.18.  Benefit Matters.  The employees of the Company and
                      ---------------
     its subsidiaries shall be eligible to participate in the Acquiror
     401(k), profit sharing, stock option and stock purchase plans and
     Acquiror medical, life insurance, disability insurance and vacation
     plans (the "Plans") effective (a) February 2, 1997 or (b) if the
     Effective Time is after February 2, 1997, the first day of the month
     following the Effective Time (the "Eligibility Date").  Participation
     in the Plans shall be subject to the eligibility requirements and the
     terms and conditions of each of the Plans.  For purposes of the
     eligibility and vesting requirements of the Plans, service credit will
     be given for employment with the Company and its Subsidiaries prior to
     the Effective Time.  The medical plan of the Acquiror shall not
     include pre-existing condition exclusions with respect to employees of
     the Company and its subsidiaries as of the Effective Time, except to
     the extent such exclusions were applicable under the medical plan of
     the Company on the Effective Time.  Effective as of the Eligibility
     Date, all welfare benefit plans and the vacation plan of the Company
     and its subsidiaries will be terminated.  Acquiror shall cause the
     Company to perform the Company's obligations under all employment,
     consulting and other compensation arrangements disclosed in Sections
     5.1(i) and (m) of the Company Disclosure Schedule.

               6.19.  Convertible Notes.  Following the Effective Time,
                      -----------------
     pursuant to the terms of Article Eight of the Indenture, dated as of
     October 3, 1995, between the Company and Nationsbank

<PAGE>


     Georgia, National Association, as trustee, Acquiror shall assume the
     Convertible Notes and comply with the other provisions set forth
     therein.


                                   ARTICLE VII

                                   Conditions

               7.1.  Conditions to the Obligations of Acquiror.  The
                     -----------------------------------------
     obligations of Acquiror to consummate the Merger are subject to the
     fulfillment at or prior to the Effective Time of the following
     conditions, any or all of which may be waived in whole or in part by
     Acquiror to the extent permitted by applicable law.

               (a)  Certificate.  The representations and warranties of the
                    -----------
     Company and Tate set forth in this Agreement shall be true and correct
     in all material respects on and as of the Effective Time with the same
     force and effect as though the same had been made on and as of the
     Effective Time (except to the extent they relate to a particular
     date), the Company and Tate shall have performed in all material
     respects all of its material obligations under this Agreement
     theretofore to be performed, and Acquiror shall have received at the
     Effective Time a certificate to that effect dated the Effective Time
     and executed by the Chief Executive Officer or President of the
     Company, provided, however, that no representation or warranty of the
              --------  -------
     Company contained in Section 5.1 hereof shall be deemed untrue or
     incorrect as a consequence of the existence of any fact, circumstance
     or event unless such fact, circumstance or event, individually or
     taken together with all other facts circumstances or events
     inconsistent with any paragraph of Section 5.1 has had or is expected
     to have a Material Adverse Effect with respect to the Company and its
     subsidiaries.

                (b)  Company Shareholder Approval.  This Agreement shall
                     ----------------------------
     have been duly approved by the holders of a majority of the votes
     entitled to be cast by the holders of Shares at the Shareholder
     meeting, in accordance with applicable law and the Articles of
     Incorporation and By-Laws of the Company.

               (c)  No Litigation.  There shall not be pending or
                    -------------
     threatened by any governmental authority or regulatory agency, any
     suit, action or proceeding, (A) challenging or seeking to restrain or
     prohibit the Merger or any of the other transactions contemplated by
     this Agreement or seeking to obtain from Acquiror or the Company or
     any of their respective subsidiaries in connection with the Merger any
     material damages, (B) seeking to prohibit or limit the ownership or
     operation by Acquiror or the Company or any of their respective
     subsidiaries of any material


<PAGE>


     portion of the business or assets of Acquiror or the Company or any of
     their respective subsidiaries, or to compel Acquiror, the Company or
     any of their respective subsidiaries to dispose of or hold separate
     any material portion of the business or assets of Acquiror, the
     Company or any of their respective subsidiaries in each case as a
     result of the Merger or any of the other transactions contemplated by
     this Agreement, (C) seeking to impose limitations on the ability of
     Acquiror to acquire or hold, or exercise full rights of ownership of,
     the Shares, including the right to vote the Shares on all matters
     properly presented to the stockholders of the Company, (D) seeking to
     prohibit Acquiror or any of its subsidiaries from effectively
     controlling in any material respect the business or operations of the
     Company or any of its subsidiaries or (E) which otherwise is
     reasonably likely to have a Material Adverse Effect with respect to
     the Company and its subsidiaries or Acquiror and its subsidiaries.
     There shall be in effect no preliminary or permanent injunction or
     other order of a court or governmental or regulatory agency of
     competent jurisdiction directing that the transactions contemplated
     herein not be consummated.

               (d)  S-4 Registration Statement.  The S-4 Registration
                    --------------------------
     Statement shall have become effective and no stop order suspending the
     effectiveness of the S-4 Registration Statement shall have been issued
     and no proceedings for such purpose shall have been initiated and be
     continuing or threatened by the SEC.

               (e)  Listing of Acquiror Common Shares.  The Acquiror Common
                    ---------------------------------
     Shares to be issued pursuant to the Merger and the Share Exchange and
     the other such shares required to be reserved for issuance in
     connection with the Merger shall have been authorized for listing on
     the NYSE, subject to notice of official issuance.

               (f)  Governmental Filings and Consents; HSR Act.  Subject in
                    ------------------------------------------
     each case to the provisions of Section 7.1(c), (i) all governmental
     filings required to be made prior to the Effective Time by the Company
     with, and all governmental consents required to be obtained prior to
     the Effective Time from, governmental and regulatory authorities in
     connection with the execution and delivery of this Agreement and the
     consummation of the transactions contemplated hereby shall have been
     made or obtained, except where the failure to make such filing or
     obtain such consent would not reasonably be expected to have a
     Material Adverse Effect with respect to Acquiror (assuming the Merger
     had taken place) and (ii) the waiting periods under the HSR Act shall
     have expired or been terminated.

               (g)  Third-Party Consents.  All required authorizations,
                    --------------------
     consents and approvals of any Person (other than a governmental
     authority), the failure to obtain which would have

<PAGE>


     a Material Adverse Effect with respect to Acquiror (assuming the
     Merger had taken place), shall have been obtained.

               (h)  Delivery of Comfort Letter.  Deloitte & Touche LLP
                    --------------------------
     shall have delivered to the Company, for delivery by it to Acquiror,
     one or more letters with respect to the financial information
     contained in the Proxy Statement as contemplated by Section 6.17.

               (i)  Affiliate Letters.  Acquiror shall have used its
                    -----------------
     reasonable best efforts to obtain from each Company Affiliate an
     executed copy of an agreement substantially in the form of Exhibit C.

               (j)  Delivery of Tax Opinion.  Acquiror shall have received
                    -----------------------
     from Weil, Gotshal & Manges LLP, counsel to Acquiror, an opinion
     addressed to Acquiror, substantially to the effect that (i) the Merger
     will be treated for federal income tax purposes as a reorganization
     within the meaning of Section 368(a) of the Code; (ii) each of
     Acquiror and the Company will be a party to the reorganization within
     the meaning of Section 368(b) of the Code; and (iii) no gain or loss
     will be recognized by Acquiror or the Company as a result of the
     Merger, dated the Closing Date, and such opinion shall not have been
     withdrawn or modified in any material respect.  In rendering such
     opinion, Weil, Gotshal & Manges LLP may receive and rely upon
     representations contained in certificates and agreements of the
     Company, Acquiror and certain shareholders of the Company.

               7.2.  Conditions to the Obligations of the Company.  The
                     --------------------------------------------
     obligation of the Company to consummate the Merger is subject to the
     fulfillment at or prior to the Effective Time of the following
     conditions, any or all of which may be waived in whole or in part by
     the Company to the extent permitted by applicable law.

               (a)  Certificate.  The representations and warranties of
                    -----------
     Acquiror set forth in this Agreement shall be true and correct in all
     material respects on and as of the Effective Time with the same force
     and effect as though the same had been made on and as of the Effective
     Time (except to the extent they relate to a particular date), Acquiror
     shall have performed in all material respects all of its obligations
     under this Agreement theretofore to be performed, and the Company
     shall have received at the Effective Time a certificate to that effect
     dated the Effective Time and executed by the Chief Executive Officer
     or President of Acquiror, provided, however, that no representation or
                               --------  -------
     warranty of Acquiror contained in Section 5.2 hereof shall be deemed
     untrue or incorrect as a consequence of the existence of any fact,
     circumstance or event unless such fact, circumstance or


<PAGE>


     event, individually or taken together with all other facts
     circumstances or events inconsistent with any paragraph of Section 5.2
     has had or is expected to have a Material Adverse Effect with respect
     to Acquiror and its subsidiaries.

               (b)  Company Shareholder Approval.  This Agreement shall
                    ----------------------------
     have been duly approved by the holders of a majority of the votes
     entitled to be cast by the holders of Shares at the Shareholder
     Meeting, in accordance with applicable law and the Articles of
     Incorporation and By-Laws of the Company.

               (c)  Injunction.  There shall be in effect no preliminary or
                    ----------
     permanent injunction or other order of a court or governmental or
     regulatory agency of competent jurisdiction directing that the
     transactions contemplated herein not be consummated; provided,
                                                          --------
     however, that prior to invoking this condition the Company shall use
     -------
     its best efforts to have such injunction or order vacated.

               (d)  S-4 Registration Statement.  The S-4 Registration
                    --------------------------
     Statement shall have become effective and no stop order suspending the
     effectiveness of the S-4 Registration Statement shall have been issued
     and no proceedings for such purpose shall have been initiated and be
     continuing or threatened by the SEC.

               (e)  Listing of Acquiror Common Shares.  The Acquiror Common
                    ---------------------------------
     Shares to be issued pursuant to the Merger and such other shares
     required to be reserved for issuance in connection with the Merger
     shall have been authorized for listing on the NYSE, subject to
     official notice of issuance.

               (f)  HSR Act.  The waiting periods under the HSR Act shall
                    -------
     have expired or been terminated.

               (g)  Delivery of Tax Opinion.  The Company shall have
                    -----------------------
     received from Wachtell, Lipton, Rosen & Katz, counsel to the Company,
     an opinion addressed to the Company substantially to the effect that
     (i) the Merger will be treated for federal income tax purposes as a
     reorganization within the meaning of Section 368(a) of the Code; (ii)
     each of Acquiror and the Company will be a party to the reorganization
     within the meaning of Section 368(b) of the Code; and (iii) no gain or
     loss will be recognized by a shareholder of the Company as a result of
     the Merger except (x) with respect to cash received by such
     shareholder in lieu of fractional shares or pursuant to the exercise
     of appraisal rights and (y) except to the extent a shareholder
     receives consideration different in amount from other shareholders,
     dated the Closing Date, and such opinion shall not have been withdrawn
     or modified in any material respect.  In rendering such opinion,
     Wachtell, Lipton, Rosen & Katz may receive and rely upon representa-
     tions
<PAGE>


     contained in certificates of Acquiror, the Company and certain
     shareholders of the Company.


                                  ARTICLE VIII

                                   Termination

               8.1.  Termination by Mutual Consent.  This Agreement may be
                     -----------------------------
     terminated and the Merger may be abandoned at any time prior to the
     Effective Time, before or after the approval by holders of Shares,
     either by the mutual written consent of Acquiror and the Company, or
     by mutual action of their respective Boards of Directors.

               8.2.  Termination by Either Acquiror or the Company.  This
                     ---------------------------------------------
     Agreement may be terminated and the Merger may be abandoned by action
     of the Board of Directors of either Acquiror or the Company if (i) the
     Merger shall not have been consummated by May 31, 1997 (provided that
     the right to terminate this Agreement under this Section 8.2(i) shall
     not be available to any party whose failure to fulfill any obligation
     under this Agreement has been the cause of or resulted in the failure
     of the Merger to occur on or before such date); (ii) any court of
     competent jurisdiction in the United States or some other governmental
     body or regulatory authority shall have issued an order, decree or
     ruling or taken any other action permanently restraining, enjoining or
     otherwise prohibiting the Merger and such order, decree, ruling or
     other action shall have become final and nonappealable; or (iii) the
     Merger shall have been voted on by shareholders of the Company at a
     meeting duly convened therefor and the vote shall not have been
     sufficient to satisfy the conditions set forth in Sections 7.1(b) and
     7.2(b).

               8.3.  Termination by Acquiror.  This Agreement may be
                     -----------------------
     terminated and the Merger may be abandoned at any time prior to the
     Effective Time, before or after the approval by holders of Shares, by
     action of the Board of Directors of Acquiror, if (i) the Company shall
     have failed to comply in any material respect with any of the
     covenants or agreements contained in this Agreement to be complied
     with or performed or fulfilled by the Company at or prior to such date
     of termination, which failure to comply has not been cured within
     fifteen business days following receipt by the Company of notice of
     such failure to comply, (ii) any representation or warranty of the
     Company contained in the Agreement shall not be true in all material
     respects when made (provided such breach has not been cured within
     fifteen business days following receipt by the Company of notice of
     the breach) or (except to the extent they relate to a particular date)
     on and as of the Effective Time as if made on and as of the

<PAGE>


     Effective Time (in each case subject to the standard set forth in the
     proviso of Section 7.1(a)), or (iii) (A) the Board of Directors of the
     Company shall withdraw, modify or change its recommendation of this
     Agreement or the Merger in a manner adverse to Acquiror, or shall have
     approved or recommended to the stockholders of the Company any
     Competing Transaction or (B) the Company shall have entered into any
     agreement with respect to any Competing Transaction or (C) the Board
     of Directors of the Company shall resolve to do any of the foregoing.

               8.4.  Termination by the Company.  This Agreement may be
                     --------------------------
     terminated and the Merger may be abandoned at any time prior to the
     Effective Time, before or after the approval by holders of Shares, by
     action of the Board of Directors of the Company, if (i) Acquiror shall
     have failed to comply in any material respect with any of the
     covenants or agreements contained in this Agreement to be complied
     with or performed or fulfilled by Acquiror at or prior to such date of
     termination, which failure to comply has not been cured within fifteen
     business days following receipt by the breaching party of notice of
     such failure to comply, (ii) any representation or warranty of
     Acquiror contained in this Agreement shall not be true in all material
     respects when made (provided such breach has not been cured within
     fifteen business days following receipt by the breaching party of
     notice of the breach) or (except to the extent they relate to a
     particular date) on and as of the Effective Time as if made on and as
     of the Effective Time (in each case subject to the standard set forth
     in the proviso of Section 7.2(a)) or (iii) the Company enters into a
     definitive agreement relating to a Superior Proposal in accordance
     with Section 6.2(b), provided it has complied with all of the
     provisions thereof and has made payment of the fees required by
     Section 8.5 hereof.

               8.5.  Effect of Termination and Abandonment.  (a) In the
                     -------------------------------------
     event of termination of this Agreement by either the Company or
     Acquiror as provided in this Article VIII, this Agreement shall
     forthwith become void and there shall be no liability or obligation on
     the part of Acquiror or the Company or their respective affiliates,
     officers, directors or stockholders except (x) with respect to this
     Section 8.5 and Section 9.1 and (y) to the extent that such
     termination results from the breach of a party hereto or any of its
     representations or warranties, or any of its covenants or agreements,
     in each case, as set forth in this Agreement; provided, however, that
                                                   --------  -------
     the Company agrees that if this Agreement shall be terminated pursuant
     to (i) Section 8.2(iii), if at or prior to the time of the Shareholder
     Meeting (x) a Competing Transaction shall have been commenced,
     publicly proposed or publicly disclosed and (y) the Company has not
     rejected such Competing Transaction, (ii) Section 8.3(iii), or
     (iii) Section 8.4(iii), then the Company shall pay to Acquiror an


<PAGE>


     amount equal to $12 million; and provided, further, that Acquiror
                                      --------  -------
     agrees that if this Agreement shall be terminated pursuant to Section
     8.4(i) or 8.4(ii), then Acquiror shall pay to the Company an amount
     equal to $20 million.

               (b)  Any payment required to be made pursuant to Section
     8.5(a) shall be made as promptly as practicable but not later than two
     business days after the occurrence of the event giving rise to such
     payment and shall be made by wire transfer of immediately available
     funds to an account designated by Acquiror or the Company, as the case
     may be, except that any payment to be made pursuant to clause (iii) of
     the first proviso of Section 8.5(a) shall be made not later than the
     termination of this Agreement by the Company pursuant to
     Section 8.4(iii).


                                   ARTICLE IX

                            Miscellaneous and General

               9.1.  Payment of Expenses.  Whether or not the Merger shall
                     -------------------
     be consummated, except as otherwise provided in Section 8.5, each
     party hereto and the shareholders of the Company shall pay their own
     expenses incident to preparing for, entering into and carrying out
     this Agreement and the consummation of the transactions contemplated
     hereby, provided that the Surviving Corporation shall pay, with funds
     of the Company and not with funds provided by any of Acquiror
     Companies, any and all property or transfer taxes imposed on the
     Surviving Corporation.  The cost of printing the S-4 Registration
     Statement and the Proxy Statement shall be borne equally by the
     Company and the Acquiror.

               9.2.  Survival of Representations and Warranties.  The
                     ------------------------------------------
      representations and warranties made herein shall not survive beyond
     the Effective Time or a termination of this Agreement.  This Section
     9.2 shall not limit any covenant or agreement of the parties hereto
     which by its terms contemplates performance after the Effective Time.

               9.3.  Modification or Amendment.  Subject to the applicable
                     -------------------------
     provisions of the BCA, at any time prior to the Effective Time,
     Acquiror and the Company may modify or amend this Agreement, by
     written agreement executed and delivered by duly authorized officers
     of Acquiror and the Company; provided, however, that after approval of
                                  --------  -------
     this Agreement by the shareholders of the Company, no amendment shall
     be made which changes the consideration payable in the Merger or
     adversely affects the rights of the Company's shareholders hereunder
     without the approval of such shareholders.

<PAGE>


               9.4.  Waiver of Conditions.  The conditions to each of the
                     --------------------
     parties' obligations to consummate the Merger are for the sole benefit
     of such party and may be waived by such party in whole or in part to
     the extent permitted by applicable law.

               9.5.  Counterparts.  For the convenience of the parties
                     ------------
     hereto, this Agreement may be executed in any number of counterparts,
     each such counterpart being deemed to be an original instrument, and
     all such counterparts shall together constitute the same agreement.

               9.6.  Governing Law.  This Agreement shall be governed by
                     -------------
     and construed in accordance with the laws of the State of New York,
     without regard to any applicable conflicts of law, except that matters
     relating to the Merger shall be governed by and construed in
     accordance with the laws of Delaware and South Carolina to the extent
     applicable.

               9.7.  Notices.  Any notice, request, instruction or other
                     -------
     document to be given hereunder by any party to the other parties shall
     be in writing and delivered personally or sent by registered or
     certified mail, postage prepaid, or by facsimile transmission (with a
     confirming copy sent by overnight courier), as follows:

               (a)  if to the Company or Tate, to

                    Baby Superstore, Inc.
                    1201 Woods Chapel Road
                    Duncan, South Carolina  29334
                    Attention:  Jodi Taylor
                    Telephone:  (800) 324-1340
                    Facsimile:  Call to arrange facsimile.

                    with a copy to:

                    Wachtell, Lipton, Rosen & Katz
                    51 West 52nd Street
                    New York, New York  10019
                    Attention:  Edward Herlihy, Esq.
                    Telephone:  (212) 403-1000
                    Facsimile:  (212) 403-2000

<PAGE>


               (b)  if to Acquiror, to

                    TOYS "R" US, Inc.
                    462 From Road
                    Paramus, New Jersey  07652
                    Attention:  Michael Goldstein
                    Telephone:  (201) 262-7800
                    Facsimile:  (201) 262-8919

                    with a copy to:

                    Weil, Gotshal & Manges LLP
                    767 Fifth Avenue
                    New York, New York  10153
                    Attention:  Dennis J. Block, Esq.
                    Telephone:  (212) 310-8000
                    Facsimile:  (212) 310-8007

     or to such other persons or addresses as may be designated in writing
     by the party to receive such notice.

               9.8.  Entire Agreement; Assignment.  This Agreement,
                     ----------------------------
     including the Disclosure Schedules and Exhibits, and the
     Confidentiality Agreement, (i) constitutes the entire agreement among
     the parties with respect to the subject matter hereof and supersedes
     all other prior agreements and understandings, both written and oral,
     among the parties or any of them with respect to the subject matter
     hereof, and (ii) shall not be assigned by operation of law or
     otherwise.

               9.9.  Parties in Interest.  This Agreement shall be binding
                     -------------------
     upon and inure solely to the benefit of each party hereto and their
     respective successors and assigns; provided, however, that Tate shall
                                        --------  -------
     only have the right to receive Acquiror Common Shares pursuant to
     Article IV and shall not have the right to enforce any other provision
     of this Agreement.  Nothing in this Agreement, express or implied,
     other than the right to receive the consideration payable in the
     Merger pursuant to Article IV hereof, is intended to or shall confer
     upon any other person any rights, benefits or remedies of any nature
     whatsoever under or by reason of this Agreement; provided, however,
                                                      --------  -------
     that the provisions of Section 6.7 shall inure to the benefit of and
     be enforceable by the Indemnified Parties.

               9.10.  Certain Definitions.  As used herein:
                      -------------------
                 (a)"Affiliate" shall mean, with respect to any Person, any
     other Person directly or indirectly controlling, controlled by or
     under common control with such other Person.


<PAGE>


               (b)  "subsidiary" shall mean, when used with reference to
     any entity, any entity fifty percent (50%) or more of the outstanding
     voting securities or interests of which are owned directly or
     indirectly by such former entity.

               (c)  "Material Adverse Effect" shall mean, with respect to
     any person, any change or effect (or any development that, insofar as
     can reasonably be foreseen, is likely to result in any change or
     effect) that is materially adverse to the business, properties,
     assets, condition (financial or otherwise), results of operations or
     prospects of such party and its subsidiaries taken as a whole, other
     than changes or effects which result from the execution and delivery
     of this Agreement or the consummation of any transactions contemplated
     hereby.

               (d)  "Person" shall mean an individual, corporation,
     partnership, trust or unincorporated organization or a government or
     any agency or political subdivision thereof.

               9.11.  Severability.  If any term or other provision of this
                      ------------
     Agreement is invalid, illegal or unenforceable, all other provisions
     of this Agreement shall remain in full force and effect so long as the
     economic or legal substance of the transactions contemplated hereby is
     not affected in any manner materially adverse to any party.

               9.12.  Specific Performance.  The parties hereto acknowledge
                      --------------------
     that irreparable damage would result if this Agreement were not
     specifically enforced, and they therefore consent that the rights and
     obligations of the parties under this Agreement may be enforced by a
     decree of specific performance issued by a court of competent
     jurisdiction.  Such remedy shall, however, not be exclusive and shall
     be in addition to any other remedies, including arbitration, which any
     party may have under this Agreement or otherwise.

               9.13.  Captions.  The Article, Section and paragraph
                      --------
     captions herein are for convenience of reference only, do not
     constitute part of this Agreement and shall not be deemed to limit or
     otherwise affect any of the provisions hereof.


<PAGE>


               IN WITNESS WHEREOF, this Agreement has been duly executed
     and delivered by the duly authorized officers of the parties hereto
     and shall be effective as of the date first hereinabove written.

                                   TOYS "R" US, INC.


                                   By: /S/ Michael Goldstein
                                       ---------------------
                                      Name:  Michael Goldstein
                                      Title: Vice Chairman and
                                             Chief Executive Officer


                                   BABY SUPERSTORE, INC.


                                   By: /S/ Jack P. Tate
                                       ----------------
                                      Name:  Jack P. Tate
                                      Title: Chief Executive Officer



                                   /S/ Jack P. Tate
                                   ----------------
                                   Jack P. Tate








<PAGE>



                           SHAREHOLDERS AGREEMENT

               AGREEMENT, dated October 1, 1996 (this "Agreement"), by
     and among TOYS "R" US, Inc., a Delaware corporation ("Acquiror"),
     and Jack P. Tate ("Tate") and Linda M. Robertson ("Robertson")
     (each, a "Shareholder", and collectively, the "Shareholders").

                            W I T N E S S E T H:
                            ----------- -------
               WHEREAS, concurrently herewith, Acquiror and Diaper,
     Inc., a South Carolina corporation (the "Company"), and Tate are
     entering into an Agreement and Plan of Merger (as such agreement
     may hereafter be amended from time to time, the "Merger
     Agreement"; capitalized terms used and not defined herein have
     the respective meanings ascribed to them in the Merger Agreement)
     pursuant to which the Company will be merged with and into
     Acquiror (the "Merger");

               WHEREAS, Tate owns 9 million shares (the "Shares"), no
     par value, of common stock of the Company ("Common Stock"); and

               WHEREAS, as an inducement and a condition to entering
     into the Merger Agreement, Acquiror has required that the
     Shareholders agree, and the Shareholders have agreed, to enter
     into this Agreement.

               NOW, THEREFORE, in consideration of the foregoing and
     the mutual premises, representations, warranties, covenants and
     agreements contained herein, the parties hereto hereby agree as
     follows:

               1.   Provisions Concerning Shares.  (a)  Tate hereby
                    ----------------------------
     agrees that during the period commencing on the date hereof and
     continuing until this provision terminates pursuant to Section 5
     hereof, at any meeting of the holders of shares of Common Stock,
     however called, or in connection with any written consent of the
     holders of shares of Common Stock, he shall vote (or cause to be
     voted) the Shares held of record or Beneficially Owned (as
     defined below) by him, whether heretofore owned or hereafter
     acquired, (i) in favor of the adoption of the Merger Agreement
     and any actions required in furtherance thereof and hereof;
     (ii) against any action or agreement that would result in a
     breach in any respect of any covenant, representation or warranty
     or any other obligation or agreement of the Company under the
     Merger Agreement (after giving effect to any materiality or
     similar qualifications contained therein); and (iii) except as
     otherwise agreed to in writing in advance by Acquiror, against
     the following actions (other than the Merger and the transactions


<PAGE>


     contemplated by the Merger Agreement):  (A) any extraordinary
     corporate transaction, such as a merger, consolidation or other
     business combination involving the Company; (B) a sale, lease or
     transfer of a material amount of assets of the Company, or a
     reorganization, recapitalization, dissolution or liquidation of
     the Company; (C) (1) any change in a majority of the persons who
     constitute the board of directors of the Company; (2) any change
     in the present capitalization of the Company or any amendment of
     the Company's Articles of Incorporation or By-Laws; (3) any other
     material change in the Company's corporate structure or business;
     or (4) any other action which, in the case of each of the matters
     referred to in clauses C (1), (2), (3) or (4), is intended, or
     could reasonably be expected, to impede, interfere with, delay,
     postpone, or materially adversely affect the Merger and the
     transactions contemplated by this Agreement and the Merger
     Agreement.  Tate shall not enter into any agreement or
     understanding with any Person (as defined below) the effect of
     which would be inconsistent or violative of the provisions and
     agreements contained in Section 1 or 2 hereof.  For purposes of
     this Agreement, "Beneficially Own" or "Beneficial Ownership" with
     respect to any securities shall mean having "beneficial
     ownership" of such securities (as determined pursuant to Rule
     13d-3 under the Securities Exchange Act of 1934, as amended (the
     "Exchange Act")), including pursuant to any agreement,
     arrangement or understanding, whether or not in writing.  Without
     duplicative counting of the same securities by the same holder,
     securities Beneficially Owned by a Person shall include
     securities Beneficially Owned by all other Persons with whom such
     Person would constitute a "group" as within the meanings of
     Section 13(d)(3) of the Exchange Act.  For purposes of this
     Agreement, "Person" shall mean an individual, corporation,
     partnership, joint venture, association, trust, unincorporated
     organization or other entity.

               (b)  In furtherance of the foregoing, (i) Tate hereby
     appoints Acquiror and the proper officers of Acquiror, and each
     of them, with full power of substitution in the premises, its
     proxies to vote all Shares at any meeting, general or special, of
     the shareholders of the Company, and to execute one or more
     written consents or other instruments from time to time in order
     to take such action without the necessity of a meeting of the
     shareholders of the Company, in accordance with the provisions of
     the preceding paragraph and (ii) Acquiror hereby agrees to vote
     such Shares or execute written consents or other instruments in
     accordance with the provisions of the preceding paragraph.  The
     proxy and power of attorney granted herein shall be irrevocable
     during the term specified in Section 5 hereof, shall be deemed to
     be coupled with an interest and shall revoke all prior proxies


<PAGE>


     granted by Tate.  Tate shall not grant any proxy to any person
     which conflicts with the proxy granted herein, and any attempt to
     do so shall be void.  The power of attorney granted herein is a
     durable power of attorney and shall survive the disability or
     incompetence of such Shareholder.

               (c)  Notwithstanding anything to the contrary in this
     Agreement, in no event shall the number of Shares subject to the
     agreement to vote provided for in Section 1(a) or the proxy
     provided for in Section 1(b) be greater than 49% of the total
     voting power of all shares of capital stock of the Company
     entitled to vote in ordinary circumstances in an election of
     directors.

               (d)  Tate hereby waives his dissenter's rights under
     Chapter 13 of the BCA with respect to the Shares in connection
     with the transactions contemplated by the Merger Agreement.

               2.   Other Covenants, Representations and Warranties.
                    -----------------------------------------------
     Each Shareholder hereby agrees, represents and warrants as to
     itself to Acquiror as follows:

               (a)  Ownership of Shares.  Tate is the Beneficial Owner
                    -------------------
     of 9 million Shares.  On the date hereof, such Shares constitute
     all of the shares of Common Stock owned of record or Beneficially
     Owned by him.  Tate has sole voting power and sole power to issue
     instructions with respect to the matters set forth in Section 1
     hereof, sole power of disposition, sole power of conversion, sole
     power to demand appraisal rights and sole power to agree to all
     of the matters set forth in this Agreement, in each case with
     respect to all such Shares, with no limitations, qualifications
     or restrictions on such rights.

               (b)  Power; Binding Agreement.  Such Shareholder has
                    ------------------------
     the legal capacity, power and authority to enter into and perform
     all of such Shareholder's obligations under this Agreement.  The
     execution, delivery and performance of this Agreement by such
     Shareholder will not violate any other agreement to which such
     Shareholder is a party including, without limitation, any voting
     agreement, shareholders agreement or voting trust.  This
     Agreement has been duly and validly executed and delivered by
     such Shareholder and constitutes a valid and binding agreement of
     such Shareholder, enforceable against such Shareholder in
     accordance with its terms.  In the case of Tate, there is no
     beneficiary or holder of a voting trust certificate or other
     interest of any trust of which such Shareholder is trustee whose
     consent is required for the execution and delivery of this
     Agreement or the consummation by such shareholder of the


<PAGE>


     transactions contemplated hereby.  If Tate is married and the
     Shares constitute community property, this Agreement has been
     duly authorized, executed and delivered by, and constitutes a
     valid and binding agreement of, Tate's spouse, enforceable
     against such person in accordance with its terms.

               (c)  No Conflicts.  (A) No filing with, and no permit,
                    ------------
     authorization, consent or approval of, any state or federal
     public body or authority is necessary for the execution of this
     Agreement by Tate and the consummation by him of the transactions
     contemplated hereby and (B) none of the execution and delivery of
     this Agreement by Tate, the consummation by him of the
     transactions contemplated hereby or compliance by him with any of
     the provisions hereof shall (1) result in a violation or breach
     of, or constitute (with or without notice or lapse of time or
     both) a default (or give rise to any third party right of
     termination, cancellation, material modification or acceleration)
     under any of the terms, conditions or provisions of any note,
     bond, mortgage, indenture, license, contract, commitment,
     arrangement, understanding, agreement or other instrument or
     obligation of any kind to which Tate is a party or by which he or
     any of his properties or assets may be bound, or (2) violate any
     order, writ, injunction, decree, judgment, order, statute, rule
     or regulation applicable to him or any of his properties or
     assets.

               (d)  No Finder's Fees.  Other than existing financial
                    ----------------
     advisory and investment banking arrangements and agreements
     between the Company and CS First Boston Corporation and Invemed
     Associates, Inc., no broker, investment banker, financial adviser
     or other person is entitled to any broker's, finder's, financial
     adviser's or other similar fee or commission in connection with
     the transactions contemplated by the Merger Agreement based upon
     arrangements made by or on behalf of such Shareholder.

               (e)  No Solicitation.  Notwithstanding the provisions
                    ---------------
     of Section 6.2 of the Merger Agreement, from and after the date
     hereof and continuing until this provision terminates pursuant to
     Section 5 hereof, Tate shall not, in his capacity as such,
     directly or indirectly, initiate, solicit or encourage (including
     by way of furnishing non-public information or assistance), or
     take any other action to facilitate, any inquiries or the making
     of any proposal that constitutes, or may reasonably be expected
     to lead to, any Competing Transaction, or enter into or maintain
     or continue discussions or negotiate with any person or entity in
     furtherance of such inquiries or to obtain a Competing
     Transaction or agree to or endorse any Competing Transaction, or
     authorize or permit any of his agents, and Tate shall promptly


<PAGE>


     notify Acquiror orally (in all events within two business days)
     and in writing (as promptly thereafter as practicable) of the
     material terms and status of all inquiries and proposals which he
     or any such agent may receive after the date hereof relating to
     any of such matters and, if such inquiry or proposal is in
     writing, Tate shall deliver to Acquiror a copy of such inquiry or
     proposal promptly; provided, however, that, notwithstanding any
                        --------  -------
     other provision of this Agreement, Tate, as a member of the Board
     of Directors of the Company, may take any action in his capacity
     as a director that the Board of Directors of the Company would be
     permitted to take in accordance with Section 6.2 of the Merger
     Agreement.  Tate will immediately cease and cause to be
     terminated any existing activities, discussions or negotiations,
     with any parties conducted heretofore with respect to any of the
     foregoing.

               (f)  Restriction on Transfer, Proxies and Non-
                    ----------------------------------------
     Interference.  Tate shall not, directly or indirectly, during the
     ------------
     period commencing on the date hereof and continuing until this
     provision terminates pursuant to Section 5 hereof:  (i) except as
     contemplated by the Merger Agreement, offer for sale, sell,
     transfer, tender, pledge, encumber, assign or otherwise dispose
     of, or enter into any contract, option or other arrangement or
     understanding with respect to or consent to the offer for sale,
     sale, transfer, tender, pledge, encumbrance, assignment or other
     disposition of, any or all of his Shares or any interest therein;
     (ii) except as contemplated by this Agreement, grant any proxies
     or powers of attorney, deposit any Shares into a voting trust or
     enter into a voting agreement with respect to any Shares; or
     (iii) take any action that would make any of his representation
     or warranty contained herein untrue or incorrect or have the
     effect of preventing or disabling him from performing his
     obligations under this Agreement.

               (g)  Disposition of Acquiror Common Shares.  Tate has
                    -------------------------------------
     no plan or intention to sell, exchange, or otherwise dispose of,
     reduce the risk of loss by short sale or other use, enter into
     any contract or arrangement with respect to, or consent to the
     sale, exchange or other disposition of any interest in any
     Acquiror Common Shares received in the Merger by such
     Shareholder.

               (h)  Reliance by Acquiror.  Such Shareholder
                    --------------------
     understands and acknowledges that Acquiror is entering into the
     Merger Agreement in reliance upon such Shareholder's execution
     and delivery of this Agreement.


<PAGE>


               (i)  Certain Acknowledgements by Tate.  Tate
                    --------------------------------
     acknowledges that he is an informed and sophisticated investor
     and, together with his advisor, has undertaken such investigation
     as he has deemed necessary, including the review of the Merger
     Agreement and this Agreement, to enable him to make an informed
     and intelligent decision with respect to the Merger Agreement and
     this Agreement and the transactions contemplated thereby and
     hereby.  Tate acknowledges that pursuant to the Merger he will
     receive less consideration per Share than will other holders of
     shares of Common Stock.

               3.   Further Assurances.  From time to time, at the
                    ------------------
     other party's request and without further consideration, Tate and
     Acquiror shall execute and deliver such additional documents and
     take all such further lawful action as may be necessary or
     desirable to consummate and make effective, in the most
     expeditious manner practicable, the transactions contemplated by
     this Agreement.

               4.   Stop Transfer.  Tate agrees with, and covenants
                    -------------
     to, Acquiror that he shall not request that the Company register
     the transfer (book-entry or otherwise) of any certificate or
     uncertificated interest representing the Shares, unless such
     transfer is made in compliance with this Agreement.  In the event
     of a stock dividend or distribution, or any change in the Company
     Common Stock by reason of any stock dividend, split-up,
     recapitalization, combination, exchange of shares or the like,
     the term "Shares" shall be deemed to refer to and include the
     Shares as well as all such stock dividends and distributions and
     any shares into which or for which any or all of the Shares may
     be changed or exchanged.

               5.   Termination.  Except as otherwise provided herein,
                    -----------
     the covenants and agreements contained in Sections 1, 2(e), 2(f)
     and 4 hereof with respect to the Shares shall terminate (a) in
     the event the Merger Agreement is terminated pursuant to any
     other provision, upon such termination, and (b) in the event the
     Merger is consummated, upon the Effective Time.

               6.   Shareholder Capacity.  No person executing this
                    --------------------
     Agreement who is or becomes during the term hereof a director of
     the Company makes any agreement or understanding herein in his or
     her capacity as such director.  Tate is executing this Agreement
     solely in his capacity as the record and beneficial owner of all
     of his Shares.

               7.   Confidentiality.  The Shareholders recognize that
                    ---------------
     successful consummation of the transactions contemplated by this



<PAGE>


     Agreement may be dependent upon confidentiality with respect to
     the matters referred to herein.  In this connection, pending
     public disclosure thereof, each Shareholder hereby agrees not to
     disclose or discuss such matters with anyone not a party to this
     Agreement (other than such Shareholder's counsel and advisors, if
     any) without the prior written consent of Acquiror, except for
     disclosures such Shareholder's counsel advises are necessary in
     order to fulfill such Shareholder's obligations imposed by law,
     in which event such Shareholder shall give notice of such
     disclosure to Acquiror as promptly as practicable so as to enable
     Acquiror to seek a protective order from a court of competent
     jurisdiction with respect thereto.

               8.   Release.  Each of the Shareholders, solely in such
                    -------
     person's capacity as a shareholder of the Company, hereby
     releases and discharges the Company and the Surviving Corporation
     and their respective officers, directors, shareholders,
     employees, agents, attorneys, representatives, successors and
     assigns (and the respective heirs, executors, administrators,
     representatives, successors and assigns of such officers,
     directors, shareholders, employees, agents, attorneys and
     representatives) from any and all claims, actions, causes of
     action, suits, debts, sums of money, controversies, agreements,
     promises, damages, judgments, claims and demands whatsoever, at
     law or in equity, which any of the Shareholders, as a result of
     such person's status as a shareholder of the Company, had, now
     have or hereafter can, shall or may have for, upon, or by reason
     of any matter, cause or thing whatsoever relating, directly or
     indirectly, to the Company or the Surviving Corporation and any
     of their respective subsidiaries, as the case may be; provided,
                                                           --------
      however, that nothing contained in this Section 8 shall be
      -------
     construed as a release of the Acquiror for any such claims such
     Shareholder may have, as a shareholder of Acquiror, for
     obligations Acquiror may have to such Shareholder following the
     Merger.

               9.   Non-Competition.  (a)  Except as otherwise
                    ---------------
     provided in Section 9(b), each Shareholder shall not, until the
     third anniversary of the Effective Date (the "Termination Date"):

               (i)  engage in any activity in the juvenile retail
     business, directly or indirectly (whether as an employee,
     officer, director, agent, consultant, proprietor, partner,
     principal shareholder of otherwise), anywhere in the United
     States of America and in foreign countries where the Company
     currently has operations; or


<PAGE>


               (ii)  engage in any action, activity or course of
     conduct which is detrimental to the business or business
     reputation of the Company or any of its Subsidiaries, including
     (A) recruiting any employees of the Company (or the Surviving
     Corporation) or any of its subsidiaries and (B) soliciting or
     encouraging any employee of the Company (or the Surviving
     Corporation) or any of its subsidiaries to leave the employment
     of the Company or any of its subsidiaries and (C) disclosing or
     furnishing to anyone any confidential information relating to the
     Company or any of its subsidiaries or otherwise using such
     confidential information for its own benefit or the benefit of
     any other person.

               (b)  Nothing contained in Section 9(a) shall prohibit
     or otherwise restrict any Shareholder from acquiring or owning,
     directly or indirectly, for investment or other legitimate
     business purposes not intended to circumvent this Agreement,
     securities of any entity engaged, directly or indirectly, in the
     juvenile retail business if either (i) such entity is a public
     entity and (A) is not a Controlling Person of, or a member of a
     group which Controls, such entity and (B) owns, directly or
     indirectly, no more than 5% of any class of equity securities of
     such entity or (ii) such entity is not a public entity and such
     Shareholder (X) is not a Controlling Person of, or a member of a
     group that Controls, such entity and (Y) owns, directly or
     indirectly, no more than 10% of any class of equity securities of
     such entity.

               (c)  Each Shareholder acknowledges and agrees that the
     covenants and restrictions contained in this Section 9 are
     reasonable and that they shall not in any way challenge the
     reasonableness or the enforceability of this Section 9 or any
     covenant or restriction contained herein.

               (d)  As used herein, "Control" shall mean, as to any
     Person, the power to direct or cause the direction of the
     management and policies of such Person, whether through the
     ownership of voting securities, by contract or otherwise.  The
     term "Controlling Person" shall have a correlative meaning.

               10.  Miscellaneous.
                    -------------
               (a)  Entire Agreement.  This Agreement and in the case
                    ----------------
     of Tate, the Merger Agreement, constitute the entire agreement
     between the parties with respect to the subject matter hereof and
     supersede all other prior agreements and understandings, both
     written and oral, between the parties with respect to the subject
     matter hereof.

<PAGE>


               (b)  Certain Events.  Tate agrees that this Agreement
                    --------------
     and the obligations hereunder shall attach to the Shares and
     shall be binding upon any person or entity to which legal or
     beneficial ownership of such Shares shall pass, whether by
     operation of law or otherwise, including, without limitation,
     Tate's heirs, guardians, administrators or successors.
     Notwithstanding any transfer of Shares, the transferor shall
     remain liable for the performance of all obligations under this
     Agreement of the transferor.

               (c)  Assignment.  This Agreement shall not be assigned
                    ----------
     by operation of law or otherwise without the prior written
     consent of the other party, provided that Acquiror may assign, in
     its sole discretion, its rights and obligations hereunder to any
     direct or indirect wholly owned subsidiary of Acquiror, but no
     such assignment shall relieve Acquiror of its obligations
     hereunder if such assignee does not perform such obligations.

               (d)  Amendments, Waivers, Etc.  This Agreement may not
                    ------------------------
     be amended, changed, supplemented, waived or otherwise modified
     or terminated, with respect to any one or more Shareholders,
     except upon the execution and delivery of a written agreement
     executed by the relevant parties hereto.

               (e)  Notices.  All notices, requests, claims, demands
                    -------
     and other communications hereunder shall be in writing and shall
     be given (and shall be deemed to have been duly received if so
     given) by hand delivery, telegram, telex or telecopy, or by mail
     (registered or certified mail, postage prepaid, return receipt
     requested) or by any courier service, such as Federal Express,
     providing proof of delivery.  All communications hereunder shall
     be delivered to the respective parties at the following
     addresses:

     If to any Shareholder:        c/o Baby Superstore, Inc.
                                   1201 Woods Chapel Road
                                   Duncan, South Carolina  29334
                                   Telephone:  (800) 324-1340
                                   Facsimile:  Call to arrange
                                               facsimile.
                                   Attention:  Linda M. Robertson


<PAGE>


     If to Acquiror:               Toys "R" Us, Inc.
                                   461 From Road
                                   Paramus, New Jersey  07652
                                   Telephone:  201-262-7800
                                   Facsimile:  201-262-8919
                                   Attention:  Michael Goldstein


     or to such other address as the person to whom notice is given
     may have previously furnished to the others in writing in the
     manner set forth above.

               (f)  Severability.  Whenever possible, each provision
                    ------------
     or portion of any provision of this Agreement will be interpreted
     in such manner as to be effective and valid under applicable law
     but if any provision or portion of any provision of this
     Agreement is held to be invalid, illegal or unenforceable in any
     respect under any applicable law or rule in any jurisdiction,
     such invalidity, illegality or unenforceability will not affect
     any other provision or portion of any provision in such
     jurisdiction, and this Agreement will be reformed, construed and
     enforced in such jurisdiction as if such invalid, illegal or
     unenforceable provision or portion of any provision had never
     been contained herein.

               (g)  Specific Performance.  Each of the parties hereto
                    --------------------
     recognizes and acknowledges that a breach by it of any covenants
     or agreements contained in this Agreement will cause the other
     party to sustain damages for which it would not have an adequate
     remedy at law for money damages, and therefore each of the
     parties hereto agrees that in the event of any such breach the
     aggrieved party shall be entitled to the remedy of specific
     performance of such covenants and agreements and injunctive and
     other equitable relief in addition to any other remedy to which
     it may be entitled, at law or in equity.

               (h)  Remedies Cumulative.  All rights, powers and
                    -------------------
     remedies provided under this Agreement or otherwise available in
     respect hereof at law or in equity shall be cumulative and not
     alternative, and the exercise of any thereof by any party shall
     not preclude the simultaneous or later exercise of any other such
     right, power or remedy by such party.

               (i)  No Waiver.  The failure of any party hereto to
                    ---------
     exercise any right, power or remedy provided under this Agreement
     or otherwise available in respect hereof at law or in equity, or
     to insist upon compliance by any other party hereto with its
     obligations hereunder, and any custom or practice of the parties


<PAGE>


     at variance with the terms hereof, shall not constitute a waiver
     by such party of its right to exercise any such or other right,
     power or remedy or to demand such compliance.

               (j)  No Third Party Beneficiaries.  This Agreement is
                    ----------------------------
     not intended to be for the benefit of, and shall not be
     enforceable by, any person or entity who or which is not a party
     hereto.

               (k)  Governing Law.  This Agreement shall be governed
                    -------------
     and construed in accordance with the laws of the State of New
     York, without giving effect to the principles of conflicts of law
     thereof.

               (l)  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY
                    --------------------
     WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH
     ACTION, SUIT OR PROCEEDING.

               (m)  Descriptive Headings.  The descriptive headings
                    --------------------
     used herein are inserted for convenience of reference only and
     are not intended to be part of or to affect the meaning or
     interpretation of this Agreement.

               (n)  Counterparts.  This Agreement may be executed in
                    ------------
     counterparts, each of which shall be deemed to be an original,
     but all of which, taken together, shall constitute one and the
     same Agreement.


<PAGE>


               IN WITNESS WHEREOF, Acquiror and each Shareholder have
     caused this Agreement to be duly executed as of the day and year
     first above written.


                                       TOYS "R" US, INC.


                                       By: /S/ Michael Goldstein
                                          --------------------------
                                          Name:  Michael Goldstein
                                          Title: Vice Chairman and
                                              Chief Executive Officer


                                       By: /S/ Jack P. Tate
                                          --------------------------
                                          Jack P. Tate


                                       By: /S/ Linda M. Robertson
                                          --------------------------
                                          Linda M. Robertson






     AGREED TO AND ACKNOWLEDGED
     (with respect to Sections 2, 4 and 8):


     BABY SUPERSTORE, INC.


     By: /S/ Jack P. Tate
        ---------------------------
       Name:  Jack P. Tate
        Title: Chief Executive Officer




<PAGE>
                                                      [EXECUTION COPY]


                       REGISTRATION RIGHTS AGREEMENT


               AGREEMENT, dated as of October 1, 1996, between Toys
     "R" Us, Inc., a Delaware corporation ("Acquiror"), and Jack P.
     Tate ("Tate") and Linda M. Robertson ("Robertson" and together
     with Tate, the "Shareholders").


                            W I T N E S S E T H:
                            -------------------
               WHEREAS, Acquiror, Baby Superstore, Inc., a South
     Carolina corporation (the "Company"), and Tate are parties to an
     Agreement and Plan of Merger, dated as of October 1, 1996 (the
     "Merger Agreement"), pursuant to which the Company will merge
     with and into Acquiror, with Acquiror continuing as the surviving
     corporation; and

               WHEREAS,  Acquiror has agreed to provide registration
     rights to the Shareholders with respect to the stock to be
     received in connection with the Merger, subject to the terms and
     conditions set forth herein.

               NOW, THEREFORE, the parties hereby agree as follows:

               1.  Definitions.  Capitalized terms used but not
                   -----------
     defined shall have the meanings assigned to such terms in the
     Merger Agreement.  For purposes of this Agreement, the following
     terms shall have the following meanings:

               "Blackout Period" means any Section 6(a) Period and any
                ---------------
     Section 6(b) Period.

               "Common Stock" means the common stock, par value $0.10
                ------------
     per share, of Acquiror.

               "Effective Period" means the period commencing on the
                ----------------
     180th day following the Effective Time and ending on the earliest
     of (i) the first date as of which all Registrable Securities
     cease to be Registrable Securities and (ii) the second
     anniversary of the Effective Time.

               "Holder" means each Shareholder and each Permitted
                ------
     Assignee that becomes a holder of Registrable Securities,
     provided that such Permitted Assignee has agreed in writing to
     become a Holder hereunder and to be bound by the terms and
     conditions of this Agreement.


<PAGE>
     

               "NASD" means the National Association of Securities
                ----
     Dealers, Inc.

               "Permitted Assignee" shall mean, with respect to any
                ------------------
     Shareholder, (i) such Shareholder's lineal descendants, (ii) a
     trust for the benefit of, the estate of, executors, personal
     representatives, administrators, guardians or conservators of
     such Shareholder or any of the individuals referred to in the
     foregoing clause (i) (but only in their capacity as such) and
     (iii) charitable trusts and charitable foundations formed by such
     Shareholder.

               "Prospectus" means the prospectus included in any
                ----------
     Registration Statement, as amended or supplemented by any
     prospectus supplement with respect to the terms of the offering
     of any portion of the Registrable Securities covered by any
     Registration Statement and by all other amendments and
     supplements to the prospectus, including post-effective
     amendments and all material incorporated by reference in such
     prospectus.

               "Registrable Securities" means (i) the shares of Common
                ----------------------
     Stock issued pursuant to the Merger to the Shareholders, and
     (ii) any securities issued or distributed in respect of any such
     shares of Common Stock by way of stock dividend or stock split or
     in connection with a combination of shares, recapitalization,
     reorganization, merger, consolidation or otherwise.  Securities
     will cease to be Registrable Securities in accordance with
     Section 2 hereof.

               "Registration Expenses" means any and all expenses
                ---------------------
     incident to performance of or compliance with this Agreement,
     including, without limitation, (i) all SEC, NASD and securities
     exchange registration and filing fees, (ii) all fees and expenses
     of complying with state securities or blue sky laws (including
     fees and disbursements of counsel for any underwriters in
     connection with blue sky qualifications of the Registrable
     Securities), (iii) all printing, messenger and delivery expenses,
     (iv) all fees and expenses incurred in connection with the
     listing of the Registrable Securities on any securities exchange
     pursuant to Section 7(h), and (v) the fees and disbursements of
     counsel for Acquiror and of its independent public accountants,
     but excluding (x) underwriting discounts and commissions and
     transfer taxes, if any, and (y) any fees or disbursements of
     counsel to the Holders or any Holder.

               "Registration Statement" means any registration
                ----------------------
     statement (including a Shelf Registration) of Acquiror referred

<PAGE>
     

     to in Section 3 or 4, including any Prospectus, amendments and
     supplements to any such registration statement, including post-
     effective amendments, and all exhibits and all material
     incorporated by reference in any such registration statement.

               "Related Securities" means any securities of Acquiror
                ------------------
     similar or identical to any of the Registrable Securities,
     including, without limitation, any class of capital stock of
     Acquiror and all options, warrants, rights and other securities
     convertible into, or exchangeable or exercisable for, any class
     of capital stock of Acquiror.

               "Section 6(a) Period" has the meaning specified in
                -------------------
     Section 6(a).

               "Section 6(b) Period" has the meaning specified in
                -------------------
     Section 6(b).

               "Shelf Registration" means a "shelf" registration
                ------------------
     statement on an appropriate form pursuant to Rule 415 under the
     Securities Act (or any successor rule that may be adopted by the
     SEC).

               "Underwritten Registration or Underwritten Offering"
                --------------------------------------------------
      shall mean an underwritten offering in which securities of
     Acquiror are sold to an underwriter for reoffering to the public.

               2.  Securities Subject to this Agreement.  The
                   ------------------------------------
     securities entitled to the benefits of this Agreement are the
     Registrable Securities.  For the purposes of this Agreement,
     Registrable Securities shall cease to be Registrable Securities
     when and to the extent that (i) a Registration Statement covering
     Registrable Securities has been declared effective under the
     Securities Act and Registerable Securities have been disposed of
     pursuant to such effective Registration Statement, (ii)
     Registrable Securities are distributed to the public pursuant to
     Rule 144 (or any similar provision then in force) under the
     Securities Act, (iii) Registrable Securities have been otherwise
     transferred to a party that is not an Affiliate of the Holder and
     new certificates for such Registrable Securities not bearing a
     legend restricting further transfer shall have been delivered by
     Acquiror, (iv) the Effective Period ends or (v) Registrable
     Securities have ceased to be outstanding.

               3.  Piggy-Back Registration Rights.     (a)  Whenever
                   ------------------------------
     Acquiror shall propose to file a Registration Statement under the
     Securities Act relating to the public offering of Common Stock
     for cash pursuant to a firm commitment underwriting (other than

<PAGE>
     

     pursuant to a Registration Statement on Form S-4 or Form S-8 or
     any successor forms, or filed in connection with an exchange
     offer or an offering of securities solely to existing
     shareholders or employees of Acquiror and other than pursuant to
     a Registration Statement filed in connection with an offering by
     Acquiror of securities convertible into or exchangeable for
     Common Stock) for sale for its own account, Acquiror shall
     (i) give written notice at least ten Business Days prior to the
     filing thereof to each Holder then outstanding, specifying the
     approximate date on which Acquiror proposes to file such
     Registration Statement and advising such Holder of such Holder's
     right to have any or all of the Registrable Securities then held
     by such Holder included among the securities to be covered
     thereby and (ii) at the written request of any such Holder given
     to Acquiror at least five Business Days prior to the proposed
     filing date, include among the securities covered by such
     Registration Statement the number of Registrable Securities that
     such Holder shall have requested be so included (subject,
     however, to reduction in accordance with paragraph (b) of this
     Section 3).  Acquiror shall use its commercially reasonable
     efforts to cause the managing underwriter of the proposed
     underwritten offering to permit the Holders of Registrable
     Securities requested to be included in the Registration Statement
     for such offering to include such securities in such offering on
     the same terms and conditions as the Shares of Acquiror capital
     stock included therein.

               (b)  Each Holder desiring to participate in an offering
     pursuant to Section 3(a) may include Registrable Securities in
     any Registration Statement relating to such offering to the
     extent that the inclusion of such Registrable Securities shall
     not reduce the number of shares of Common Stock to be offered and
     sold by Acquiror pursuant thereto.  If the lead managing
     underwriter selected by Acquiror for an underwritten offering
     pursuant to Section 3(a) or any financial advisor to Acquiror
     determines that marketing factors require a limitation on the
     number of shares of Common Stock to be offered and sold by
     shareholders of Acquiror in such offering, there shall be
     included in the offering only that number of shares of Common
     Stock, that such lead managing underwriter or financial advisor,
     as the case may be, reasonably and in good faith believes will
     not jeopardize the success of the offering of all the shares of
     Common Stock that the Company desires to sell for its own
     account.  In such event and provided the managing underwriter or
     financial advisor, as the case may be, has so notified Acquiror
     in writing, the number of shares of Common Stock to be offered
     and sold by shareholders of Acquiror, including Holders of
     Registrable Securities, desiring to participate in such offering


<PAGE>
     

     shall be allocated among such shareholders of Acquiror on a pro
     rata basis based on their holdings of Common Stock, subject to
     any written agreements requiring a different priority.

               (c)  Nothing in this Section 3 shall create any
     liability on the part of Acquiror to the Holders of Registrable
     Securities if Acquiror for any reason should decide not to file a
     Registration Statement proposed to be filed under Section 3(a) or
     to withdraw such Registration Statement subsequent to its filing,
     regardless of any action whatsoever that a Holder may have taken,
     whether as a result of the issuance by Acquiror of any notice
     hereunder or otherwise.

               (d)  A request by Holders to include Registrable
     Securities in a proposed underwritten offering pursuant to
     Section 3(a) shall not be deemed to be a request for a demand
     registration pursuant to Section 4.

               4.    Demand Registration Right.  (a)  Upon the written
                     -------------------------
     request of Holders of at least a majority in number of the
     Registrable Securities that Acquiror effect the registration with
     the SEC under and in accordance with the provisions of the
     Securities Act of all or part of such Holder's or Holders'
     Registrable Securities and specifying the aggregate number of
     shares of Registrable Securities requested to be registered,
     Acquiror shall use all commercially reasonable efforts to file a
     Registration Statement within 45 days after receipt of such
     request for disposition pursuant to an underwritten offering (the
     terms of such underwritten offering or other distribution to be
     determined by the Holders of a majority of the Registrable
     Securities so requested to be registered); provided, however,
                                                --------  -------
     that Acquiror shall not be required to take any action pursuant
     to this Section 4:

               (i)  if prior to the date of such request Acquiror
          shall have effected one (1) registration pursuant to this
          Section 4;

               (ii) if Acquiror has effected a registration pursuant
          to this Section 4 within the 120-day period (if at the time
          Acquiror qualifies to use Form S-3) or 365-day period (in
          all other cases) next preceding such request;

               (iii)  if Acquiror shall at the time have effective a
          Shelf Registration pursuant to which the Holder or Holders
          that requested registration could effect the disposition of
          such Registrable Securities in the manner requested;

<PAGE>
     

               (iv) if the Registrable Securities that Acquiror shall
          have been requested to register shall have a then current
          market value of less than $50,000,000, unless such
          registration request is for all remaining Registrable
          Securities; or

               (v)  during the pendency of any Blackout Period;

     and provided, further, that Acquiror shall be permitted to
         --------  -------
     satisfy its obligations under this Section 4(a) by amending (to
     the extent permitted by applicable law) any Registration
     Statement (including any Shelf Registration) previously filed by
     Acquiror under the Securities Act so that such Registration
     Statement (as amended) shall permit the disposition (in
     accordance with the intended methods of disposition specified as
     aforesaid) of all of the Registrable Securities for which a
     demand for registration has been made under this Section 4(a). 
     If Acquiror shall so amend a previously filed Registration
     Statement, it shall be deemed to have effected a registration for
     purposes of this Section 4.

               (b)  A registration requested pursuant to this Section
     4 shall not be deemed to be effected for purposes of this Section
     4 if it has not been declared effective by the SEC or become
     effective in accordance with the Securities Act.

               (c)  Holders of a majority in number of the Registrable
     Securities to be included in a Registration Statement pursuant to
     this Section 4 may, at any time prior to the effective date of
     the Registration Statement relating to such registration, revoke
     such request by providing a written notice to Acquiror revoking
     such request.  The Holders of Registrable Securities who revoke
     such request shall reimburse Acquiror for all its out-of-pocket
     expenses incurred in the preparation, filing and processing of
     the Registration Statement.  If such reimbursement is made within
     10 Business Days following a request therefor, such registration
     shall not be deemed to have been effected for purposes of this
     Section 4.  If such reimbursement is not so received within such
     time (i) such registration shall be deemed to have been effected
     for purposes of this Section 4 and (ii) Acquiror shall have no
     further obligations to such Holders with respect to piggy-back
     registrations pursuant to Section 3 or demand registrations
     pursuant to this Section 4 until such reimbursement is made.

               (d)  Acquiror will not include any securities that are
     not Registrable Securities in any Registration Statement filed
     pursuant to a demand made under this Section 4 without the prior

<PAGE>
     

     written consent of the Holders of a majority in number of the
     Registrable Securities covered by such Registration Statement.

               5.  Selection of Underwriters.  In connection with any
                   -------------------------
     offering pursuant to a Registration Statement filed pursuant to a
     demand made in accordance with Section 4, the managing
     underwriter or underwriters to administer the offering shall be a
     nationally recognized banking firm, which shall include Goldman
     Sachs & Co., CS First Boston Corporation and Invemed Associates
     Inc., to be selected jointly by Acquiror and the Holders of a
     majority in number of the Registrable Securities to be included
     in the Registration Statement.

               6.  Blackout Periods for Holders.  (a)  If Acquiror
                   ----------------------------
     determines in good faith that the registration and distribution
     of Registrable Securities (or the use of the Registration
     Statement or related Prospectus) would interfere with any pending
     financing, acquisition, corporate reorganization or any other
     corporate development involving Acquiror or any of its
     subsidiaries (or would require premature disclosure thereof) and
     promptly gives the Holders of Registrable Securities written
     notice of such determination, Acquiror shall be entitled to (i)
     postpone the filing of the Registration Statement otherwise
     required to be prepared and filed by Acquiror pursuant to Section
     3 or 4, or (ii) elect that the Registration Statement not be
     used, in either case for a reasonable period of time, but not to
     exceed 120 days (a "Section 6(a) Period").  Any such written
     notice shall contain a general statement of the reasons for such
     postponement or restriction on use and an estimate of the
     anticipated delay. Acquiror shall promptly notify each Holder of
     the expiration or earlier termination of a Section 6(a) Period.

               (b)  If (i) during the Effective Period, Acquiror shall
     file a registration statement (other than in connection with the
     registration of securities issuable pursuant to an employee stock
     option, stock purchase or similar plan on Form S-8 or pursuant to
     a merger, exchange offer or a transaction of the type specified
     in Rule 145(a) under the Securities Act) with respect to any
     Related Securities and (ii) with reasonable prior notice, (A)
     Acquiror (in the case of a non-underwritten offering pursuant to
     such registration statement) advises the Holders in writing that
     a sale or distribution of Registrable Securities would adversely
     affect such offering or (B) the managing underwriter or
     underwriters (in the case of an underwritten offering) advise
     Acquiror in writing (in which case Acquiror shall notify the
     Holders), that a sale or distribution of Registrable Securities
     would adversely impact such offering, then each Holder shall, to
     the extent not inconsistent with Applicable Law, refrain from


<PAGE>
     

     effecting any sale or distribution of Registrable Securities,
     including sales pursuant to Rule 144 under the Securities Act,
     during the 10-day period prior to, and during the 90-day period
     beginning on, the effective date of such registration statement
     (a "Section 6(b) Period").

               (c)  The Effective Period and, in the case where the
     use of an effective Registration Statement is prohibited under
     Section 6(a), the period for which a Registration Statement shall
     be kept effective pursuant to Section 7(b), as the case may be,
     shall be extended by a number of days equal to the number of days
     of any Blackout Period occurring during such period.  Except as
     provided below, the beginning of any Blackout Period shall be at
     least 120 days after the end of any prior Blackout Period and the
     aggregate number of days included in all Blackout Periods during
     any consecutive 12 months during the Effective period shall not
     exceed 180 days; provided, however, that once during any
                      --------  -------
     consecutive 12 months during the Effective Period a Section 6(b)
     Period may begin on or within five days of the last day of a
     Section 6(a) Period.

               7.  Registration Procedures.  If and whenever Acquiror
                   -----------------------
     is required to use its commercially reasonable efforts to effect
     or cause the registration of any Registrable Securities under the
     Securities Act as provided in this Agreement, Acquiror shall, as
     expeditiously as possible:

               (a)  prepare and file with the SEC a Registration
          Statement with respect to such Registrable Securities on any
          form for which Acquiror then qualifies or that counsel for
          Acquiror shall deem appropriate, and which form shall be
          available for the sale of the Registrable Securities in
          accordance with the intended methods of distribution
          thereof, and use its reasonable best efforts to cause such
          Registration Statement to become and remain effective;

               (b)  prepare and file with the SEC amendments and post-
          effective amendments to such Registration Statement and such
          amendments and supplements to the Prospectus used in
          connection therewith as may be necessary to maintain the
          effectiveness of such registration or as may be required by
          the rules, regulations or instructions applicable to the
          registration form utilized by Acquiror or by the Securities
          Act for shelf registration or otherwise necessary to keep
          such Registration Statement effective for up to 90 days and
          cause the Prospectus as so supplemented to be filed pursuant
          to Rule 424 under the Securities Act, and to otherwise
          comply with the provisions of the Securities Act with

<PAGE>
     

          respect to the disposition of all securities covered by such
          Registration Statement until the earlier of (x) such 90th
          day and (y) such time as all Registrable Securities covered
          by such Registration Statement have ceased to be Registrable
          Securities (it being understood that Acquiror at its option
          may determine to maintain such effectiveness for a longer
          period, whether pursuant to a Shelf Registration or
          otherwise); provided, however, that a reasonable time before
                      --------  -------
          filing a Registration Statement or Prospectus, or any
          amendments or supplements thereto (other than reports
          required to be filed by it under the Exchange Act), Acquiror
          shall furnish to the Holders, the managing underwriter and
          their respective counsel for review and comment, copies of
          all documents proposed to be filed and shall not file any
          such documents (other than as aforesaid) to which any of
          them reasonably object prior to the filing thereof;

               (c)  furnish to each Holder of such Registrable
          Securities such number of conformed copies of such
          Registration Statement and of each amendment and post-
          effective amendment thereto (in each case including all
          exhibits) and such number of copies of any Prospectus or
          Prospectus supplement and such other documents as such
          Holder may reasonably request in order to facilitate the
          disposition of the Registrable Securities by such Holder
          (Acquiror hereby consenting to the use (subject to the
          limitations set forth in the last paragraph of this Section
          7) of the Prospectus or any amendment or supplement thereto
          in connection with such disposition);

               (d)  use its reasonable best efforts to register or
          qualify such Registrable Securities covered by such
          Registration Statement under such other securities or blue
          sky laws of such jurisdictions as each Holder shall
          reasonably request, except that Acquiror shall not for any
          such purpose be required to qualify generally to do business
          as a foreign corporation in any jurisdiction where, but for
          the requirements of this Section 7(d), it would not be
          obligated to be so qualified, to subject itself to taxation
          in any such jurisdiction, or to consent to general service
          of process in any such jurisdiction;

               (e)  notify each Holder of any such Registrable
          Securities covered by such Registration Statement, at any
          time when a Prospectus relating thereto is required to be
          delivered under the Securities Act within the appropriate
          period mentioned in Section 7(b), of Acquiror's becoming
          aware that the Prospectus included in such Registration

<PAGE>
     

          Statement, as then in effect, includes an untrue statement
          of a material fact or omits to state a material fact
          required to be stated therein or necessary to make the
          statements therein not misleading in light of the
          circumstances then existing, and at the request of any such
          Holder, prepare and furnish to such Holder a reasonable
          number of copies of an amendment or supplement to such
          Registration Statement or related Prospectus as may be
          necessary so that, as thereafter delivered to the purchasers
          of such Registrable Securities, such Prospectus shall not
          include an untrue statement of a material fact or omit to
          state a material fact required to be stated therein or
          necessary to make the statements therein not misleading in
          light of the circumstances then existing;

               (f)  notify each Holder covered by such Registration
          Statement at any time:

                    (i)  when the Prospectus or any Prospectus
               supplement or post-effective amendment has been filed,
               and, with respect to the Registration Statement or any
               post-effective amendment, when the same has become
               effective;

                    (ii) of any request by the SEC for amendments or
               supplements to the Registration Statement or the
               Prospectus or for additional information;

                    (iii)  of the issuance by the SEC of any stop
               order suspending the effectiveness of the Registration
               Statement or any order preventing the use of a related
               Prospectus, or the initiation (or any overt threats) of
               any proceedings for such purposes;

                    (iv) of the receipt by Acquiror of any written
               notification of the suspension of the qualification of
               any of the Registrable Securities for sale in any
               jurisdiction or the initiation (or overt threats) of
               any proceeding for that purpose); and

                    (v)  if at any time the representations and
               warranties of Acquiror contemplated by paragraph (i)(1)
               below cease to be true and correct in all material
               respects;

               (g)  otherwise use its reasonable best efforts to
          comply with all applicable rules and regulations of the SEC,
          and make available to its security holders an earnings


<PAGE>
     

          statement that shall satisfy the provisions of Section 11(a)
          of the Securities Act, provided that Acquiror shall be
          deemed to have complied with this paragraph if it has
          complied with Rule 158 of the Securities Act;

               (h)  use reasonable best efforts to cause all such
          Registrable Securities to be listed on any securities
          exchange on which the Acquiror capital stock is then listed,
          if such Registrable Securities are not already so listed and
          if such listing is then permitted under the rules of such
          exchange, and to provide a transfer agent and registrar for
          such Registrable Securities covered by such Registration
          Statement no later than the effective date of such
          Registration Statement;

               (i)  enter into agreements (including an underwriting
          agreement in the form customarily entered into by Acquiror
          in a comparable underwritten offering) and take all other
          appropriate and all commercially reasonable actions in order
          to expedite or facilitate the disposition of such
          Registrable Securities and in such connection, whether or
          not an underwriting agreement is entered into and whether or
          not the registration is an underwritten registration:

                    (i)  make such representations and warranties to
               the Holders of such Registrable Securities and the
               underwriters, if any, in form, substance and scope as
               are customarily made by Acquiror to underwriters in
               comparable underwritten offerings;

                    (ii) obtain opinions of counsel to Acquiror and
               updates thereof (which counsel and opinions shall be
               reasonably satisfactory (in form, scope and substance)
               to the managing underwriters, if any, and the Holders
               of a majority in number of the Registrable Securities
               being sold) addressed to such Holders and the
               underwriters covering the matters customarily covered
               in opinions requested in comparable underwritten
               offerings by Acquiror;

                    (iii)  obtain "cold comfort" letters and updates
               thereof from Acquiror's independent certified public
               accountants addressed to the selling Holders of
               Registrable Securities and the underwriters, if any,
               such letters to be in customary form and covering
               matters of the type customarily covered in "cold
               comfort" letters by independent accountants in
               connection with comparable underwritten offerings on


<PAGE>
     

               such date or dates as may be reasonably requested by
               the managing underwriter;

                    (iv) if requested, provide the indemnification in
               accordance with the provisions and procedures of
               Section 10 hereof to all parties to be indemnified
               pursuant to such Section; and

                    (v)  deliver such documents and certificates as
               may be reasonably requested by the Holders of a
               majority in number of the Registrable Securities being
               sold and the managing underwriters, if any, to evidence
               compliance with clause (f) above and with any customary
               conditions contained in the underwriting agreement or
               other agreement entered into by Acquiror;

               (j)  cooperate with the Holders of Registrable
          Securities covered by such Registration Statement and the
          managing underwriter or underwriters to facilitate, to the
          extent reasonable under the circumstances, the timely
          preparation and delivery of certificates (not bearing any
          restrictive legends) representing the securities to be sold
          under such Registration Statement, and enable such
          securities to be in such denominations and registered in
          such names as the managing underwriter or underwriters, if
          any, or such Holders may request and/or in a form eligible
          for deposit with the Depository Trust Company;

               (k)  make available for inspection by any Holder
          included in such Registration Statement, any underwriter
          participating in any disposition pursuant to such
          Registration Statement, and any attorney, accountant or
          other agent retained by any such Holder or underwriter
          (collectively, the "Inspectors"), reasonable access to
          appropriate officers of Acquiror and Acquiror's subsidiaries
          to ask questions and to obtain information reasonably
          requested by such Inspector and all financial and other
          records and other information, pertinent corporate documents
          and properties of any of Acquiror and its subsidiaries and
          affiliates (collectively, the "Records"), as shall be
          reasonably necessary to enable them to exercise their due
          diligence responsibility; provided, however, that the 
                                    --------  -------
          Records that Acquiror determines, in good faith, to be
          confidential and which it notifies the Inspectors in writing
          are confidential shall not be disclosed to any Inspector
          unless such inspector signs a confidentiality agreement
          reasonably satisfactory to Acquiror or either (i) the
          disclosure of such Records is necessary to avoid or correct

<PAGE>
     

          a misstatement or omission of a material fact in such
          Registration Statement or (ii) the release of such Records
          is ordered pursuant to a subpoena or other order from a
          court of competent jurisdiction; and provided, further, that
                                               --------  -------
          any decision regarding the disclosure of information
          pursuant to subclause (i) shall be made only after
          consultation with counsel for the applicable Inspectors. 
          Each Holder agrees that it will, promptly after learning
          that disclosure of such Records is sought in a court having
          jurisdiction, give notice to Acquiror and allow Acquiror, at
          Acquiror's expense, to undertake appropriate action to
          prevent disclosure of such Records; and

               (l)  in the event of the issuance of any stop order
          suspending the effectiveness of the Registration Statement
          or of any order suspending or preventing the use of any
          related Prospectus or suspending the qualification of any
          Registrable Securities included in the Registration
          Statement for sale in any jurisdiction, Acquiror will use
          all commercially reasonable efforts promptly to obtain its
          withdrawal.

               Acquiror may require each Holder as to which any
     registration is being effected to furnish Acquiror with such
     information regarding such Holder and pertinent to the disclosure
     requirements relating to the registration and the distribution of
     such securities as Acquiror may from time to time reasonably
     request in writing.

               Each Holder agrees that, upon receipt of any notice
     from Acquiror of the happening of any event of the kind described
     in Section 7(e), such Holder shall forthwith discontinue
     disposition of Registrable Securities pursuant to the Prospectus
     or Registration Statement covering such Registrable Securities
     until such Holder's receipt of the copies of the supplemented or
     amended Prospectus contemplated by Section 7(e), and, if so
     directed by Acquiror, such Holder will deliver to Acquiror (at
     Acquiror's expense) all copies, other than permanent file copies
     then in such Holder's possession, of the Prospectus covering such
     Registrable Securities current at the time of receipt of such
     notice.  In the event Acquiror shall give any such notice, the
     Effective Period and the period mentioned in Section 7(b) shall
     be extended by the number of days during the period from the date
     of the giving of such notice pursuant to Section 7(e) and through
     the date when each seller of Registrable Securities covered by
     such Registration Statement shall have received the copies of the
     supplemented or amended Prospectus contemplated by Section 7(e).

<PAGE>
     

               8.  Registration Expenses.  Acquiror shall pay all
                   ---------------------
     Registration Expenses in connection with all registrations of
     Registrable Securities pursuant to Sections 3 and 4 upon the
     written request of any of the Holders, and each Holder shall pay
     (x) all fees and expenses of counsel to such Holder and any
     counsel to the Holders and (y) all underwriting discounts and
     commissions and transfer taxes, if any, relating to the sale or
     disposition of such Holder's Registrable Securities pursuant to
     the Registration Statement.

               9.  Reports Under the Exchange Act.  Acquiror agrees
                   ------------------------------
     to:

               (a)  file with the SEC in a timely manner all reports
          and other documents required of Acquiror under the Exchange
          Act; and

               (b)  furnish to any Holder, during the Effective
          Period, forthwith upon request (A) a written statement by
          Acquiror that it has complied with the current public
          information and reporting requirements of Rule 144 under the
          Securities Act and the Exchange Act and (B) a copy of the
          most recent annual or quarterly report of Acquiror and such
          other reports and documents so filed by Acquiror.

               10.  Indemnification; Contribution.
                    -----------------------------
     (a) Indemnification by Acquiror.  Acquiror agrees to indemnify
         ---------------------------
     and hold harmless each Holder included in any registration of
     Registrable Securities pursuant to this Agreement, its officers
     and directors and each Person who controls such Holder (within
     the meaning of Section 15 of the Securities Act or Section 20 of
     the Exchange Act), and any agent or investment adviser thereof
     against all losses, claims, damages, liabilities and expenses
     (including reasonable attorneys' fees and expenses) incurred by
     such party pursuant to any actual or threatened action, suit,
     proceeding or investigation arising out of or based upon (i) any
     untrue or alleged untrue statement of material fact contained in
     any Registration Statement, any Prospectus or preliminary
     Prospectus, or any amendment or supplement to any of the
     foregoing or (ii) any omission or alleged omission to state
     therein a material fact required to be stated therein or
     necessary to make the statements therein (in the case of a
     Prospectus or a preliminary Prospectus, in light of the
     circumstances then existing) not misleading, except in each case
     insofar as the same arise out of or are based upon, any such
     untrue statement or omission made in reliance on and in
     conformity with information with respect to such Holder furnished
     in writing to Acquiror by such Holder or its counsel expressly



<PAGE>
     

     for use therein.  In connection with an underwritten offering,
     Acquiror will indemnify the underwriters thereof, their officers,
     directors and agents and each Person who controls such
     underwriters (within the meaning of Section 15 of the Securities
     Act or Section 20 of the Exchange Act) to the same extent as
     provided above with respect to the indemnification of the
     Holders. Notwithstanding the foregoing provisions of this Section
     10(a), Acquiror will not be liable to any Holder, any Person who
     participates as an underwriter in the offering or sale of
     Registrable Securities or any other Person, if any, who controls
     such Holder or underwriter (within the meaning of Section 15 of
     the Securities Act or Section 20 of the Exchange Act), under the
     indemnity agreement in this Section 10(a) for any such loss,
     claim, damage, liability (or action or proceeding in respect
     thereof) or expense that arises out of such Holder's or other
     Person's failure to send or deliver a copy of a final Prospectus
     to the Person asserting an untrue statement or alleged untrue
     statement or omission or alleged omission at or prior to the
     written confirmation of the sale of the Registrable Securities to
     such Person if such statement or omission was corrected in such
     final Prospectus and Acquiror has previously furnished copies
     thereof to such Holder in accordance with this Agreement.

               (b)  Indemnification by Holders of Registrable
                    -----------------------------------------
     Securities.  In connection with the any registration of
     ----------
     Registrable Securities pursuant to this Agreement, each Holder
     included in such registration shall furnish to Acquiror in
     writing such information, including the name, address and the
     amount of Registrable Securities held by such Holder, as Acquiror
     reasonably requests for use in the Registration Statement
     relating to such registration or the related Prospectus and
     agrees to indemnify and hold harmless Acquiror, all other Holders
     and any underwriter, each such party's officers and directors and
     each Person who controls each such party (within the meaning of
     Section 15 of the Securities Act or Section 20 of the Exchange
     Act), and any agent or investment adviser thereof against all
     losses, claims, damages, liabilities and expenses (including
     reasonable attorneys' fees and expenses) incurred by such each
     party pursuant to any actual or threatened action, suit,
     proceeding or investigation arising out of or based upon (i) any
     untrue or alleged untrue statement of material fact contained in
     any Registration Statement, any Prospectus or preliminary
     Prospectus, or any amendment or supplement to any of the
     foregoing or (ii) any omission or alleged omission to state
     therein a material fact required to be stated therein or
     necessary to make the statements therein (in the case of a
     Prospectus or a preliminary Prospectus, in light of the
     circumstances then existing) not misleading, but only to the


<PAGE>
     

     extent that any such untrue statement or omission is made in
     reliance on and in conformity with information with respect to
     such Holder furnished in writing to Acquiror by such Holder or
     its counsel specifically for inclusion therein.

               (c)  Conduct of Indemnification Proceedings.  Any
                    --------------------------------------
     Person entitled to indemnification hereunder agrees to give
     prompt written notice to the indemnifying party after the receipt
     by such indemnified party of any written notice of the
     commencement of any action, suit, proceeding or investigation or
     threat thereof made in writing for which such indemnified party
     may claim indemnification or contribution pursuant to this
     Section 10 (provided that failure to give such notification shall
     not affect the obligations of the indemnifying party pursuant to
     this Section 10 except to the extent the indemnifying party shall
     have been actually prejudiced as a result of such failure). In
     case any such action shall be brought against any indemnified
     party and it shall notify the indemnifying party of the
     commencement thereof, the indemnifying party shall be entitled to
     participate therein and, to the extent that it shall wish,
     jointly with any other indemnifying party similarly notified, to
     assume the defense thereof, with counsel satisfactory to such
     indemnified party (who shall not, except with the consent of the
     indemnified party, be counsel to the indemnifying party), and
     after notice from the indemnifying party to such indemnified
     party of its election so to assume the defense thereof, the
     indemnifying party shall not be liable to such indemnified party
     under these indemnification provisions for any legal expenses of
     other counsel or any other expenses, in each case subsequently
     incurred by such indemnified party, in connection with the
     defense thereof other than reasonable costs of investigation.  No
     indemnified party shall consent to entry of any judgment or enter
     into any settlement without the consent of each indemnifying
     party.

               (d)  Contribution.  If the indemnification from the
                    ------------
     indemnifying party provided for in this Section 10 is unavailable
     to an indemnified party hereunder in respect of any losses,
     claims, damages, liabilities or expenses referred to therein,
     then the indemnifying party, in lieu of indemnifying such
     indemnified party, shall contribute to the amount paid or payable
     by such indemnified party as a result of such losses, claims,
     damages, liabilities and expenses in such proportion as is
     appropriate to reflect the relative fault of the indemnifying
     party and indemnified party in connection with the actions which
     resulted in such losses, claims, damages, liabilities and
     expenses, as well as any other relevant equitable considerations. 
     The relative fault of such indemnifying party and indemnified

<PAGE>
     

     party shall be determined by reference to, among other things,
     whether any action in question, including any untrue or alleged
     untrue statement of a material fact or omission or alleged
     omission to state a material fact, has been made by, or relates
     to information supplied by, such indemnifying party or
     indemnified party, and the parties' relative intent, knowledge,
     access to information and opportunity to correct or prevent such
     action.  The amount paid or payable by a party as a result of the
     losses, claims, damages, liabilities and expenses referred to
     above shall be deemed to include, subject to the limitations set
     forth in Section 10(c), any legal and other fees and expenses
     reasonably incurred by such indemnified party in connection with
     any investigation or proceeding.

               The parties hereto agree that it would not be just and
     equitable if contribution pursuant to this Section 10(d) were
     determined by pro rata allocation or by any other method of
     allocation which does not take account of the equitable
     considerations referred to in the immediately preceding
     paragraph.  Notwithstanding the provisions of this Section 10(d),
     no underwriter shall be required to contribute any amount in
     excess of the amount by which the total price at which the
     Registrable Securities underwritten by it and distributed to the
     public were offered to the public exceeds the amount of any
     damages which such underwriter has otherwise been required to pay
     by reason of such untrue or alleged untrue statement or omission
     or alleged omission and no Holder shall be required to contribute
     any amount in excess of the amount by which the total price at
     which the Registrable Securities of such Holder were offered to
     the public exceeds the amount of any damages which such Holder
     has otherwise been required to pay by reason of such untrue or
     alleged untrue statement or omission or alleged omission.  No
     Person guilty of fraudulent misrepresentation (within the meaning
     of Section 11(f) of the Securities Act) shall be entitled to
     contribution from any Person who was not guilty of such
     fraudulent misrepresentation.  

               If indemnification is available under this Section 10,
     the indemnifying parties shall indemnify each indemnified party
     to the fullest extent provided in Section 10(a) or (b), as the
     case may be, without regard to the relative fault of such
     indemnifying parties or indemnified party or any other equitable
     consideration provided for in this Section 10(d).

               (e)  The provisions of this Section 10 shall be in
     addition to any liability which any party may have to any other
     party and shall survive any termination of this Agreement.


<PAGE>
     

               11.  Participation in Underwritten Offerings.  No
                    ---------------------------------------
     Holder may participate in any underwritten offering hereunder
     unless such Holder (a) agrees to sell such Holder's securities on
     the basis provided in any underwriting arrangements approved by
     Acquiror in its reasonable discretion and (b) completes and
     executes all questionnaires, powers of attorney, indemnities,
     underwriting agreements and other documents reasonably required
     under the terms of such underwriting arrangements.

               12.  Miscellaneous.  (a) Remedies.  Each Holder, in
                    -------------       --------
     addition to being entitled to exercise all rights granted by law,
     including recovery of damages, will be entitled to specific
     performance of its rights under this Agreement.

               (b)  Amendments and Waivers.  Except as otherwise
                    ----------------------
     provided herein, the provisions of this Agreement may not be
     amended, modified or supplemented, and waivers or consents to
     departures from the provisions hereof may not be given, unless
     Acquiror has obtained the written consent of Holders of at least
     a majority in number of the Registrable Securities then
     outstanding.

               (c)  Notices.  All notices, requests, claims, demands
                    -------
     and other communications hereunder shall be in writing and shall
     be deemed given if delivered personally or sent by overnight
     courier (providing proof of delivery) to the parties at the
     following addresses (or at such other address for any party as
     shall be Specified by like notice).

                    to a Holder to:

                         c/o Baby Superstore, Inc.
                         1201 Woods Chapel Road
                         Duncan, South Carolina  29334
                         Telephone:  (800) 324-1340
                         Telecopy:   Call to arrange telecopy.
                         Attention:  Linda M. Robertson

                    to Acquiror:

                         Toys "R" Us
                         461 From Road
                         Paramus, New Jersey  07652
                         Telephone:  (201) 262-7800
                         Telecopy:   (201) 262-8919
                         Attention:  Michael Goldstein


<PAGE>
     

                    with a copy to:
                         Weil, Gotshal & Manges LLP
                         767 Fifth Avenue
                         New York, NY 10153
                         Telephone:  (212) 310-8000
                         Telecopy:   (212) 310-8007
                         Attention:  Dennis J. Block, Esq.

               (d) Successors and Assigns.  This Agreement shall inure
                   ----------------------
     to the benefit of and be binding upon the successors of each of
     the parties; provided, however that any successor to a Holder
                  --------  -------
     shall have agreed in writing to become a Holder under this
     Agreement and to be bound by the terms and conditions hereof and
     to become a Shareholder under the Shareholders Agreement and to
     be bound by the terms and conditions thereof.  This Agreement and
     the provisions of this Agreement that are for the benefit of the
     Holders shall not be assignable by any Holder to any Person and
     any such purported assignment shall be null and void.

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

               (f) Descriptive Headings.  The descriptive headings
                   --------------------
     used herein are inserted for convenience of reference only and
     are not intended to be part of or to affect the meaning or
     interpretation of this Agreement.

               (g) Governing Law.  This Agreement shall be governed by
                   -------------
     and construed in accordance with the laws of the State of New
     York, regardless of the laws that might otherwise govern under
     applicable principles of conflicts of laws thereof.

               (h) Severability.  In the event that any one or more of
                   ------------
     the provisions contained herein, or the application thereof in
     any circumstances, is held invalid, illegal or unenforceable in
     any respect for any reason, the validity, legality and
     enforceability of any such provision in every other respect and
     of the remaining provisions contained herein shall not be in any
     way impaired thereby, it being intended that all remaining
     provisions contained herein shall not be in any way impaired
     thereby, it being intended that all of the rights and privileges
     of the Holder shall be enforceable to the fullest extent
     permitted by law.

<PAGE>
     

               (i) Entire Agreement.  This Agreement is intended by
                   ----------------
     the parties as a final expression and a complete and exclusive
     statement of the agreement and understanding of the parties
     hereto in respect of the subject matter hereof. There are no
     restrictions, promises, warranties or undertakings with respect
     to the subject matter hereof, other than those set forth or
     referred to herein.  This Agreement supersedes all prior
     agreements and understandings between the parties with respect to
     such subject matter.


<PAGE>
     

               IN WITNESS WHEREOF, the parties have executed this
     Agreement as of the date first written above.



                                   TOYS "R" US, INC.


                                   By: /s/ Michael Goldstein          
                                       -------------------------------
                                       Name:  Michael Goldstein
                                       Title: Vice Chairman and
                                              Chief Executive Officer


                                   /s/ Linda M. Robertson             
                                   -----------------------------------
                                   Linda M. Robertson


                                   /s/ Jack P. Tate                   
                                   -----------------------------------
                                   Jack P. Tate

<PAGE>


                                                           EXHIBIT C


Toys "R" Us, Inc.
461 From Road
Paramus, New Jersey 07652

Ladies and Gentlemen:

   The  undersigned has been advised that as of the date of this letter it
may be deemed to be an  "affiliate" of Baby Superstore, Inc., a South Carolina
corporation (the "Company"), as such term is defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act").  Pursuant to the
terms of the Agreement and Plan of Merger, dated as of October 1, 1996 (as
amended from time to time, the "Merger Agreement"), among Toys "R" Us, Inc., a
Delaware corporation ("Acquiror"), the Company and Jack P. Tate, the Company
will be merged with and into Acquiror (the "Merger"), with Acquiror continuing
as the surviving corporation.

   Pursuant to the Merger, each share of Common Stock, no par value, of the
Company owned by the undersigned will be converted into the right to receive
shares of Common Stock, par value $0.10 per share, of Acquiror ("Acquiror Common
Shares") on the terms set forth in the Merger Agreement.


<PAGE>


   The undersigned represents, warrants and covenants to Acquiror that, with
respect to all Acquiror Common Shares received by it as a result of the Merger:

   1. The undersigned shall not make any sale, transfer or other disposition of
such Acquiror Common Shares in violation of the Securities Act or the Rules
and Regulations

   2. The undersigned has carefully read this letter and the Merger
Agreement and discussed the requirements of such documents and any other
applicable limitations upon its ability to sell, transfer or otherwise dispose
of such Acquiror Common Shares to the extent it felt necessary, with its counsel
or counsel for the Company.

   3. The undersigned understands that the undersigned may not sell,
transfer or otherwise dispose of such Acquiror Common Shares unless (i) such
sale, transfer or other disposition has been registered under the Securities
Act, (ii) such sale, transfer or other disposition is made in conformity with
Rule 145 under the Securities Act, or (iii) such sale, transfer or other
disposition is otherwise exempt from registration under the Securities Act.

   4. The undersigned understands, that, unless the undersigned is a party
to the Registration Rights Agreement, dated as of October 1, 1996, among
Acquiror, Jack P. Tate and Linda M. Robertson, Acquiror is under no obligation
to register under the Securities Act the sale, transfer or other disposition of
such Acquiror Common Shares by the undersigned or on its behalf or to take any
other action necessary in order to make compliance with an exemption from such
registration available.

   5. From and after the Effective Time of the Merger and for so long as is
necessary in order to permit the undersigned to sell the Acquiror Common Shares
held by the undersigned pursuant to Rule 145 under the Securities Act, Acquiror
will use its reasonable best efforts to file on a timely basis all reports
required to be filed by it pursuant to the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as the same shall be in
effect at the time referred to in paragraph (c) of Rule 144 under the Securities
Act, in order to permit the undersigned to sell, transfer or otherwise dispose
of the Acquiror Common Shares held by it pursuant to the terms and conditions of
Rule 145.


                                        2

<PAGE>



   6. The undersigned understands that the certificates for such Acquiror
Common Shares issued to the undersigned, or any substitutions therefore, will
bear a legend substantially to the following effect:

        "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
        TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
        1933 APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
        TRANSFERRED IN ACCORDANCE WITH THE TERMS OF A LETTER, DATED, 1996,
        BETWEEN THE REGISTERED HOLDER HEREOF AND TOYS "R" US, INC., A COPY OF
        WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF TOYS "R" US,
        INC."

   7. The undersigned also understands that unless the transfer by the
undersigned of such Acquiror Common Shares has been registered under the
Securities Act or is a sale made in conformity with the provisions of Rule 145,
Acquiror reserves the right to place the following legend on the certificates
issued to any transferee:

       "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
       UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED  FROM A PERSON WHO
       RECEIVED SUCH SECURITIES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED
       UNDER THE SECURITIES ACT OF 1933 APPLIES.  THE SECURITIES HAVE NOT BEEN
       ACQUIRED BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH,
       ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF
       1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
       PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN
       EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THE SECURITIES ACT OF
       1933."


   It is understood and agreed that the legends set forth in paragraphs 5 and 6
above shall be removed by delivery of substitute certificates without such
legend if Acquiror receives an opinion of counsel reasonably satisfactory to
Acquiror to the effect that such legend is not required for purposes of the
Securities Act. It is understood and agreed that such legends and the stop
orders referred to above will be removed if (i) two years shall have elapsed
from the date the undersigned acquired such.


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<PAGE>


Acquiror Common Shares and the provisions of Rule 145 (d)(2) are then available
to the undersigned, (ii) three years shall have elapsed from the date the
undersigned acquired such Acquiror Common Shares and the provisions of Rule 145
(d)(3) are then available to the undersigned, or (iii) Acquiror has received
either an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to Acquiror, or a "no-action" letter obtained by the undersigned
from the Staff of the Commission, to the effect that the restrictions imposed
by Rule 145 under the Securities Act no longer apply to the undersigned.

   Execution of this letter should not be considered an admission on part of
the undersigned that it is an "affiliate" of the Company as described in the
first paragraph of this letter or as a waiver of any rights that the
undersigned may have to object to any claim that it is such and affiliate on
or after the date of this letter.


                                                   Sincerely,


                                                    _________________


Accepted this _______ day of
_____________, 1996.


TOYS "R" US

By:_____________________
   Name:
   Title:


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