Document:

ASSET PURCHASE AGREEMENT

         THIS  ASSET  PURCHASE  AGREEMENT  (this  "Agreement"),  is  dated as of
November 15, 2000,  by and among Imo  Industries  Inc., a Delaware  corporation,
(the "Seller"), TFX Acquisition Incorporated,  a Delaware corporation ("Buyer"),
and Teleflex Incorporated, a Delaware corporation ("Parent").

                                    RECITALS

         WHEREAS,  Seller  is  engaged  in the  business  of  manufacturing  and
distributing  equipment and aftermarket parts for the marine,  mobile equipment,
aviation and other industrial  applications worldwide through its Morse Controls
Division, which Division includes the Assets and related Liabilities and certain
wholly-owned foreign and domestic  subsidiaries of Seller identified on Schedule
1 (the  "Subsidiaries")  and  interests  in  certain  affiliates  identified  on
Schedule 2 hereto (the  "Affiliates")(the  Morse  Controls  Division  Assets and
Liabilities,  and the Subsidiaries  and Affiliates are hereinafter  collectively
referred to as the "Morse Division"); and

         WHEREAS,  the  Buyer  desires  to  purchase  and  acquire  from  Seller
(directly  or  indirectly  through  subsidiaries),  and Seller  desires to sell,
assign and transfer to Buyer, the Assets, and the Buyer is willing to assume all
of the Liabilities other than the Excluded  Liabilities (defined below), all for
the  purchase  price  and  subject  to  the  terms,  conditions  and  exclusions
hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the foregoing and of the mutual
covenants  and  agreements  hereinafter  set forth,  and intending to be legally
bound, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         See Appendix A for a list of definitions used in this Agreement.

                                   ARTICLE II

                           SALE AND PURCHASE OF ASSETS

         2.01     Asset Sale.

                  (a)  On  the  basis  of the  representations,  warranties  and
agreements  contained  herein,  and subject to the terms and conditions  hereof,
Seller agrees to sell, assign, transfer,  convey and deliver to Buyer, and Buyer
agrees to purchase  from  Seller,  free and clear of all Liens,  rights of first
refusal,  preemptive or similar rights, or voting restrictions,  all of Seller's
right, title and interest in and to the Assets at the Closing.

                  (b) If any  particular  Asset  shall  be  incapable  of  being
conveyed,  assigned or otherwise transferred hereunder,  in whole or in part, or
if the  conveyance,  assignment or other  transfer  hereunder of any  particular
Asset shall  require the consent of another  Person,  which consent has not been
obtained  as of the  Closing  Date,  then  notwithstanding  any other  provision
hereof, this Agreement shall not constitute a conveyance, assignment or transfer
of such particular Asset if an attempted  conveyance,  assignment or transfer of
such  particular  Asset would not be permitted by the terms  thereof.  In order,
however,  to provide  Buyer the material  benefits of the Assets,  Seller agrees
that on and after the Closing,  it will,  at the request and under the direction
of Buyer and at Buyer's  expense,  in the name of Seller or  otherwise  as Buyer
shall specify,  take all  reasonable  actions to do or cause to be done all such
things as shall in the  reasonable  opinion of Buyer or its counsel be necessary
or proper (i) to assure  that the rights of Seller  with  respect to such Assets
shall be preserved to the extent  practicable  in all material  respects for the
benefit of Buyer and (ii) to facilitate the  conveyance,  assignment or transfer
of each such Asset as promptly as practicable following the Closing.  Nothing in
this  Section  2.01(b)  shall  in any way  diminish  Buyer's  right  to  require
satisfaction  of the  conditions  to its  obligations  set forth in  Article  VI
hereof.

         2.02 Assumption of Liabilities.  At the Closing,  Buyer shall assume or
be deemed to assume any and all debts,  liabilities and obligations of Seller or
its  Subsidiaries  or Affiliates  of any nature  whatsoever,  (whether  accrued,
unmatured, absolute, contingent, known or unknown, and whenever due or to become
due), other than the Excluded  Liabilities,  carried or incurred by, related to,
associated with or otherwise  attributable to the Morse Division and its Assets,
Subsidiaries and Affiliates.

        2.03  Excluded  Liabilities.  The Buyer does not  assume,  and  Parent
does not assume,  and will not become  responsible  for any of the
following  liabilities  and  obligations  of the Seller or its  Subsidiaries  or
Affiliates (collectively, the "Excluded Liabilities"):

                  (a) all Taxes based on income  relating to the Morse  Division
or the  operation of the Morse  Division  for periods  prior to the Closing Date
other  than  Taxes  relating  to the Morse  Division  and the  Subsidiaries  and
Affiliates as provided in Section 5.10;

                  (b) all liabilities and obligations of the Seller or the Morse
Division  under  notes  payable  to  banks  or  other  non-intra-Morse  Division
indebtedness  for monies borrowed (other than the capital lease to be assumed as
set forth on Schedule 2.03(b)).

                  (c) all  liabilities  and  obligations  of the  Seller for any
division of the Seller  other than the Morse  Division  or for any  discontinued
operations or former division or subsidiary of the Seller,  except to the extent
such discontinued operation, former division or subsidiary was owned or operated
by the Morse Division;

                  (d) all liabilities and obligations of the Seller relating to
Seller's corporate headquarters operations or any other business segment except
as primarily relates to the Continuing Employees;

                  (e) all liabilities and obligations with respect to any
employee of the Seller other than the Continuing Employees and former employees
 of the Morse Division;

                  (f) all  liabilities  and  obligations  of the  Seller  to any
current and former  officers and  directors of the Seller,  other than those who
are Continuing  Employees and former  employees of the Seller who were employees
of the Morse Division;

                  (g) all liabilities and obligations of Seller to any current
and former shareholders of the Seller in their capacities as shareholders;

                  (h) all  liabilities  and  obligations of the Seller or any of
its subsidiaries or affiliates for any professional, financial advisory services
or consulting fees arising out of the  negotiation,  preparation and approval of
this Agreement and the transactions contemplated herein;

                  (i) all other liabilities,  obligations and commitments, known
or unknown, of the Seller arising out of the ownership,  operation or conduct of
the business of the Seller other than the Morse Division, or the ownership,  use
or operation of any assets of the Seller other than the Assets,  but only if and
to the  extent  such  liabilities,  obligations  and  commitments  relate to the
business of the Seller other than the business of the Morse Division;

                  (j) any  liability or  obligation  for Taxes (i)  allocated to
Seller  by  Section  5.10,  (ii) of any  affiliate  of  Seller  (other  than the
Subsidiaries and Affiliates) or (iii) of any consolidated  group or corporations
of which a Subsidiary  or  Affiliate  was a member on or before the Closing Date
(excluding  the  respective  groups of which  Subsidiaries  and  Affiliates  are
presently  members) and in which such  Subsidiary or Affiliate may be considered
liable pursuant to Treas. Reg. ss. 1.1502-6 or comparable provision under state,
local or foreign tax law;

                  (k) all  liabilities  and  obligations  of Seller or the Morse
Division arising from any  environmental  condition or discharge or release into
the  environment,  existing or occurring at or generated by the Morse Division's
present  and  former  facilities  in Hudson,  Ohio but only to the  extent  such
liability or obligation arises from occurrences prior to the Closing Date.

                  (l) all  liabilities  and  obligations  of Seller or the Morse
Division arising from any  environmental  condition or discharge or release into
the  environment,  existing or occurring at or generated by the Morse Division's
present and former facilities in France and Porterville, California.

         2.04 Purchase Price.  For and in  consideration  of the conveyances and
assignments  described  herein,  Buyer  agrees to pay  Seller  the amount of One
Hundred and  Thirty-Five  Million U.S.  Dollars  ($135,000,000)  (the  "Purchase
Price") by wire  transfer  of funds to an account  which will be  identified  by
Seller in writing  prior to the Closing  Date and to assume the  Liabilities  as
provided in Section 2.02.

         2.05     Post-Closing Purchase Price Adjustment.

                  (a) Post-Closing Purchase Price Adjustment. The Purchase Price
shall be  adjusted on the date that is 15 Business  Days  following  the Closing
Date (the "Adjustment Date"), dollar for dollar, by the Post-Closing  Adjustment
Amount, as defined in Section 2.05(b).

                  (b)   Post-Closing   Adjustment   Amount.   The   Post-Closing
Adjustment  Amount  shall  be the sum of the  following:  (i) all  cash and cash
equivalents  held by the  Subsidiaries and all balances in all bank accounts and
short-term cash management  accounts  maintained by the Subsidiaries,  as of the
Closing  Date,  as set forth on a closing  cash  balance  schedule  delivered by
Seller to Buyer on or before Adjustment Date and (ii) the difference between (x)
the total assets less total  liabilities of the Morse Division  (excluding  cash
and  third-party  debt (with the  exception  of the  capital  lease set forth on
Schedule  2.03(b)))  (the "Net  Worth") as set forth on a Closing  Date  Balance
Sheet delivered by Seller to Buyer on or before the Adjustment Date and prepared
on a basis  consistent  with the  September  30,  2000 pro forma  balance  sheet
attached  hereto as  Schedule  2.05(b) and (y) the Net Worth of  $68,746,000  as
shown on the September  30, 2000 pro forma  balance sheet of the Morse  Division
attached hereto as Schedule 2.05(b).

                  (c)  Payment  of  Post-Closing   Adjustment   Amount.  If  the
Post-Closing Adjustment Amount is a positive number, the Purchase Price shall be
increased by such amount and Buyer shall pay such  additional  amount to Seller.
If the Post-Closing  Adjustment Amount is a negative number,  the Purchase Price
shall be reduced by such  amount and Seller  shall  remit such  amount to Buyer.
Payment of the Post-Closing  Adjustment Amount shall be made by Buyer or Seller,
as the  case  may  be,  together  with  interest  thereon  by wire  transfer  of
immediately  available funds, in the case of payments to Seller,  to the account
specified  in Section  2.04 or, in the case of payments to Buyer,  to an account
which will be  identified  by Buyer in  writing  prior to the  Adjustment  Date.
Interest  will  accrue at a rate of nine and one half  percent  (9.5%)  from the
Closing Date  through the date on which the  Post-Closing  Adjustment  Amount is
finally  determined.  If  payment is not made on or before the date on which the
Post-Closing  Adjustment  Amount  is  finally  determined,  applicable  rate  of
interest will be fourteen and one half percent (14.5%) per annum calculated from
the date on which  the  Post-Closing  Adjustment  Amount is  finally  determined
through the payment date.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES BY SELLER

         Seller  represents  and  warrants  to Buyer as of the  date  hereof  as
follows:

         3.01   Organization   and  Standing.   Seller  is  a  corporation  duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware.  Seller has the corporate  power and  authority,  to enter into and
perform the terms of this Agreement,  the agreements and instruments referred to
herein,  and the  transactions  contemplated  hereby  and  thereby.  Each of the
Subsidiaries and Affiliates is duly incorporated or organized,  validly existing
and in good standing under the laws of the jurisdiction in which such Subsidiary
or Affiliate is organized and has the requisite  power and authority,  corporate
or otherwise,  to carry on its business as now being conducted.  Each Subsidiary
and  Affiliate  is qualified  to do business in each  jurisdiction  in which the
character  of its  properties  owned or leased or the  nature of its  activities
makes such qualification necessary, except where such failure to be so qualified
or licensed and in good standing would not have a material adverse effect on the
business, financial condition or results of operations of the Morse Division.

         3.02  Authorization.  Seller has the power and authority to own,  lease
and operate the Assets, to carry out the business of the Morse Division,  and to
enter  into  and  perform  the  terms of this  Agreement,  the  agreements,  and
instruments  referred to herein,  and the transactions  contemplated  hereby and
thereby.  The execution,  delivery and  performance of this Agreement and of the
agreements and  instruments  called for hereunder,  and the  consummation of the
transactions  contemplated  hereby and by such agreements and  instruments  have
been duly and  validly  authorized  by all  necessary  actions of  Seller.  This
Agreement constitutes, and upon execution and delivery, each other agreement and
instrument  will  constitute,  valid and binding  agreements and  obligations of
Seller,  enforceable in accordance with their  respective  terms. The execution,
delivery and  performance  by Seller of this  Agreement and the  agreements  and
instruments  called  for  hereunder,  and the  performance  by the Seller of the
transactions  contemplated hereby and thereby,  including the transfer of all of
the  Seller's  right,  title and  interest in the  Assets,  will not require the
consent,  approval  or  authorization  of any  Person,  entity  or  Governmental
Authority,  other than under the HSR Act, any foreign  antitrust  filings and as
set forth in Schedule 3.02.

         3.03  Litigation;  Compliance with Law. Except as set forth on Schedule
3.03, there is no action, suit, investigation,  claim, arbitration or litigation
pending or, to Seller's  Knowledge,  threatened  against or involving  the Morse
Division,  at  law or in  equity,  or  before  or by any  court,  arbitrator  or
governmental authority, and the Morse Division is not operating under or subject
to any  order,  judgment,  decree or  injunction  of any  court,  arbitrator  or
Governmental  Authority.  Seller,  its  Subsidiaries  and  its  Affiliates  have
complied and are in compliance in all material  respects with all material laws,
ordinances,  regulations,  awards,  orders,  judgments,  decrees and injunctions
applicable to the Morse Division, including all federal, state and local laws.

         3.04     Shares to be Transferred.

                  (a) Except as set forth on  Schedule  3.04,  the Seller is the
record and  beneficial  owner of all of the Shares and has valid title to all of
the Shares, free and clear of all Liens, rights of first refusal,  preemptive or
similar  rights,   or  voting   restrictions.   Upon  the  consummation  of  the
transactions contemplated by this Agreement in accordance with the terms hereof,
Buyer will acquire title to the Shares,  free and clear of all Liens,  rights of
first refusal, preemptive or similar rights, or voting restrictions.

                  (b) The  authorized  capital  stock  of the  Subsidiaries  and
Affiliates is as set forth on Schedules 1 and 2, herein. To Seller's  Knowledge,
Schedules  1 and 2 set  forth  all of the  issued  capital  stock  and any other
securities of the  Subsidiaries  and  Affiliates,  and the record holder of such
capital stock and securities,  including  treasury shares. All of the Shares are
duly and validly issued and outstanding and are fully paid and nonassessable. To
Seller's  Knowledge,  there are no  authorized or  outstanding  options or other
agreements  under which any Subsidiary or Affiliate may be obligated to issue or
sell any shares of capital  stock or other  securities.  To Seller's  Knowledge,
other than as set forth on Schedules 1 and 2, Seller does not hold primarily for
use in the Morse Division any securities or equity interests issued by any other
entity,  and the  Subsidiaries  and the Affiliates  hold no other  securities or
equity interests issued by any other entity.

         3.05 Financial Statements and Condition.  Attached as Schedule 3.05 are
(i) the  consolidated  pro forma  balance  sheets of the  Morse  Division  as of
December 31, 1997, 1998 and 1999 and September 30, 2000,  (ii) the  consolidated
pro forma  statements of income for the three (3) years ending December 31, 1999
and the nine (9) months ended September 30, 2000 and (iii) the  consolidated pro
forma  statements of cash flow for the three (3) years ending  December 31, 1999
and the nine (9) months ended  September 30, 2000,  all of which are  unaudited.
All of the financial  statements  referred to in this Section present fairly, in
all material respects,  the financial  condition of the Morse Division as of the
respective  dates and the results of operations and cash flow for the respective
periods  indicated and have been prepared in accordance with generally  accepted
accounting principles (except as otherwise described in Schedule 3.05), and with
the books and records of Seller and on the basis described in Schedule 3.05.

         3.06 Intellectual Property;  Licenses. To Seller's Knowledge,  Schedule
3.06, and Seller's direct and indirect  right,  title and interest in and to the
name  "Teleflex"  and "Morse",  constitutes  a true and complete  listing of all
material  franchises,   licenses,   trademarks,   trademark   registrations  and
applications,  trade  names,  patents,  patent  applications,  patent  licenses,
software  licenses,   know-how,  trade  secrets,  service  marks,  service  mark
registrations and applications, copyright registrations and applications and all
other intangible property rights or technology  primarily used or primarily held
for use in the operation of the Morse Division or owned by the  Subsidiaries  or
Affiliates  ("Intellectual  Property").  Except as set forth on  Schedule  3.06,
Seller  does not have any  Knowledge  nor has  Seller  received  any  notice  of
invalidity or misappropriation  with respect to the Intellectual  Property or to
the effect that the  Intellectual  Property or current  activities  of the Morse
Division may infringe in any material  respect on any  Intellectual  Property or
legally protectible right of another Person.  Seller has made available to Buyer
copies of all material  documents relating to the items listed in Schedule 3.06.
Schedule  3.06 also  contains  a  complete  and  accurate  list of all  material
licenses and other material rights granted by Seller or any of the Affiliates or
Subsidiaries  to any third party with respect to any  Intellectual  Property and
all material  licenses and other  material  rights granted by any third party to
Seller or any of the Affiliates or Subsidiaries with respect to any Intellectual
Property,  in each case identifying the subject  Intellectual  Property.  To the
Sellers'  Knowledge,  no  third  party  has  interfered  with,  infringed  upon,
misappropriated, or otherwise come into conflict with any Intellectual Property.

         3.07     Property, Assets, and Leases.

                  (a) Except as disclosed on Schedule  3.07(a),  Seller has good
and valid  title to all of the  Assets,  free and clear of all Liens  except for
such  imperfections or irregularities  of title,  Liens, or defaults that do not
affect the use thereof in any  material  respect and  statutory  Liens  securing
payments  not yet due.  To Seller's  Knowledge,  the Assets  constitute  all the
assets of the Morse  Division  and are  sufficient  for the  Morse  Division  to
continue to operate its  business as it is  presently  conducted in all material
respects.

                  (b)  To  Seller's  Knowledge,   Schedule  3.07(b)  contains  a
complete  and  accurate  description  in all  material  respects of all the Real
Property  and the  Seller's  or its  Subsidiaries'  interest  therein.  The Real
Property listed on Schedule 3.07(b)  comprises all real property  interests used
in the conduct of the Morse Division's business as conducted on the date hereof.
Seller  has made  available  to Buyer  true and  complete  copies of all  leases
pertaining to the Real  Property.  Except as set forth on Schedule  3.07(b),  to
Seller's  Knowledge,  all Real Property  (including  the  improvements  thereon)
complies in all material  respects with all applicable  building or zoning codes
and regulation of any Governmental Authority having jurisdiction.

                  (c)  To  Seller's  Knowledge,   Schedule  3.07(c)  contains  a
complete list of all vehicle leases and subleases used in the Morse Division and
all leases and subleases  pursuant to which the Seller or its Subsidiaries lease
personal property for the Morse Division that require payment of $50,000 or more
per year. Except as set forth on Schedule 3.07(c),  to Seller's  Knowledge,  (i)
all leases  listed on Schedule  3.07(c) and (ii) all leases  pertaining  to Real
Property are valid,  binding and  enforceable  in  accordance  with their terms,
except as  limited  by an  applicable  bankruptcy,  reorganization,  insolvency,
moratorium or other similar laws affecting the enforcement of creditors'  rights
generally and to general  principles of equity  (whether or not  considered in a
court of law or equity) and are in full force and effect. To Seller's  Knowledge
there are no existing material defaults by Seller or its Subsidiaries under such
leases.  Seller has not received  notice of the  occurrence  of, nor to Seller's
Knowledge has there  occurred,  any event which (whether with or without notice,
lapse  of  time  or the  happening  or  occurrence  of any  other  event)  would
constitute a material default under such leases by any party thereto.

                  (d) To  Seller's  Knowledge,  Schedule  3.07(d) is an accurate
list of all machinery, equipment and other tangible personal property, including
motor  vehicles,  which are owned by  Seller  or its  Subsidiaries,  used in the
conduct of the  business  of the Morse  Division  and having a net book value in
excess of $25,000 (collectively,  the "Material Equipment"). Except as otherwise
specified in Schedule 3.07(d), to Seller's Knowledge, all Material Equipment is,
in all material respects,  in good repair and working order. Except as set forth
on Schedule 3.07(d), no Person, other than Seller or its Subsidiaries,  owns any
equipment or other tangible  property or assets on the premises of Seller or its
Subsidiaries that is necessary to the operation of the Morse Division.

         3.08  Conflicts.  Except as set forth in  Schedule  3.08,  to  Seller's
Knowledge,  the execution and delivery of this  Agreement and the agreements and
instruments called for hereunder, the fulfillment of and the compliance with the
respective   terms  and  provisions  of  each,  and  the   consummation  of  the
transactions  described in each,  do not  conflict  with or violate any material
law, ordinance,  regulation, order, judgment, injunction or decree applicable to
Seller, to the Assets or to the Morse Division,  or conflict with or result in a
material breach of or constitute a material default (or an event which, with the
giving of notice or the  passage  of time or both  would  constitute  a material
default)  under any of the  terms,  conditions  or  provisions  of (i)  Seller's
certificate  of  incorporation  or bylaws,  (ii) any provision of the comparable
charter  or  organizational   documents  of  any  of  the  Subsidiaries  or  the
Affiliates;  (iii) any material judgment,  order,  injunction,  decree, statute,
law,  ordinance,  rule or  regulation  applicable  to the Morse  Division or the
Assets;  or (iv) or any material  contract,  agreement,  lease,  commitment,  or
understanding to which Seller is a party or by which Seller is bound or to which
any  of  the  Assets  or  the  Morse  Division  is  subject,  or  result  in the
acceleration  of any  indebtedness  included  among  the  Liabilities  or in the
creation of any encumbrance upon the Assets.

         3.09     Taxes.

                  (a) To Seller's  Knowledge,  Seller (so far as its  operations
relate to the Morse  Division) and each  Subsidiary and Affiliate have filed all
Tax Returns and forms  required to be filed or have filed  timely  requests  for
extensions of time to file (and have filed or will file within the period set by
such extension),  and have paid in full all Taxes,  estimated  Taxes,  interest,
penalties,  assessments and deficiencies  which have become due pursuant to such
returns or pursuant to any  assessments  received by Seller,  any  Subsidiary or
Affiliate. To Seller's Knowledge, such returns and forms are true and correct in
all material  respects and none of Seller (so far as its  operations  related to
the Morse  Division),  any  Subsidiary or Affiliate is required to pay any other
Taxes  except as shown on such  returns.  No extension of time with respect to a
Tax  assessment  or  deficiency  has been  agreed  to by  Seller  (so far as its
operations relate to the Morse Division),  any Subsidiary or Affiliate. No claim
has ever been made any by an authority in a  jurisdiction  where Tax Returns are
not filed with respect to the Morse  Division that it may be subject to taxation
by that jurisdiction.

                  (b) None of  Seller  (so far as its  operations  relate to the
Morse Division), any Subsidiary or Affiliate is a party to any pending action or
proceeding,  and,  to  Seller's  Knowledge,  there is no  action  or  proceeding
threatened  by  any  government  or  authority  against  Seller  (so  far as its
operations  relate to the Morse  Division),  any  Subsidiary  or  Affiliate  for
assessment  or collection of Taxes,  and no unresolved  claim for  assessment or
collection of such Taxes has been asserted  against  Seller,  any  Subsidiary or
Affiliate unless otherwise disclosed on Schedule 3.09. No waivers of statutes of
limitation  with respect to the Tax Returns have been given by or requested from
the  Seller  (so  far as its  operations  relate  to the  Morse  Division),  any
Subsidiary  or  Affiliate.  There are no liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Morse Division.

                  (c) Except as set forth on Schedule  3.09,  none of Seller (so
far as its operations relate to the Morse Division), any Subsidiary or Affiliate
is a party to any Tax  allocation or sharing  agreement.  Except as set forth on
Schedule 3.09 and except for the  respective  groups of which  Subsidiaries  and
Affiliates are presently  members,  no Subsidiary or Affiliate has been a member
of an Affiliated  Group filing a  consolidated  federal income Tax Return or has
any liability  for the Taxes of any Person  (other than any of the  Subsidiaries
and the  Affiliates)  under  Treasury  Regulation  ss.  1.1502-6 (or any similar
provision of state, local, or foreign law).

                  (d) The unpaid Taxes of the Subsidiaries and Affiliates do not
materially  exceed the  reserve  for Tax  liability  (excluding  any reserve for
deferred Taxes  established to reflect timing  differences  between book and Tax
income) set forth or included in the  Subsidiaries'  and Affiliates' most recent
balance  sheets as adjusted  for the passage of time through the Closing Date in
accordance  with the past custom and  practice of the Seller,  Subsidiaries  and
Affiliates.

                  (e) The Seller (so far as its  operations  relate to the Morse
Division),  each  Subsidiary  and  Affiliate  has  withheld  and paid all  Taxes
required to be withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or third party.

                  (f) Except as disclosed on Schedule 3.09,  none of the Seller,
Subsidiaries and Affiliates is a party to any agreement,  contract,  arrangement
or plan that  would,  as a result  of this  Agreement,  obligate  it to make any
payments that will not be deductible under Code ss. 280G.

         3.10     Employee Benefit Plans.

                  (a) Each "employee  benefit plan",  as defined in Section 3(3)
of ERISA, maintained,  contributed to or required to be contributed to by Seller
or its Subsidiaries or Affiliates for the benefit of current, former and retired
employees of the Morse Division  (collectively  "Seller's ERISA Plans") and each
other  material  plan,  contract or  arrangement  maintained,  contributed to or
required to be  contributed to by the Seller or its  Subsidiaries  or Affiliates
for the benefit of current,  former and retired  employees of the Morse Division
(collectively,  "Seller's  Benefit  Arrangements"),  complies  in  all  material
respects,  to  Seller's  Knowledge,  with its  terms  and all  applicable  Laws,
including ERISA, and no "reportable event" or "prohibited  transaction" (as such
terms are defined in ERISA) or  termination  has  occurred  with  respect to any
Seller ERISA Plan under  circumstances that present a risk of material liability
to Seller.  Seller's ERISA Plans and Seller's Benefit Arrangements are listed on
Schedule 3.10.  Copies or  descriptions of each Seller's ERISA Plan and Seller's
Benefit  Arrangement  have been made  available to Buyer for review prior to the
date hereof.  Seller and its  Subsidiaries and the Affiliates have no obligation
to provide medical or life insurance  coverage to retired employees of the Morse
Division under Seller's ERISA Plans,  Seller's Benefit Arrangements or any other
plan or agreement except as set forth on Schedule 3.10.

                  (b) The  Seller's  ERISA Plans which are  intended to meet the
qualification  requirements  of  Section  401(a) of the Code now meet,  and,  to
Seller's Knowledge, at all times since their inception have met the requirements
for such  qualification,  and the  related  trusts  are now,  and,  to  Seller's
Knowledge,  at all times since their  inception have been,  exempt from taxation
under Section 501(a) of the Code.

                  (c) Except as disclosed in Schedule 3.10, there are no pending
audits or investigations by any Governmental Agency involving the Seller's ERISA
Plans or Benefit  Arrangements,  and no claims (except for individual claims for
benefits payable in the normal operation of such Plans and Arrangements),  suits
or proceedings pending or, to Seller's Knowledge, threatened, involving any such
Plan or Arrangement, and fiduciary thereof or service provider thereto.

         3.11 Seller and Subsidiary  Contracts.  Set forth in Schedule 3.11 is a
list,  as of the date hereof,  of the  following  agreements  that relate to the
Morse Division or affect in any material way the Assets or the Liabilities  (the
"Seller's Contracts"):

                  (a) Each  agreement to which Seller or its  Subsidiaries  is a
party  requiring  the payment in excess of $50,000 a year except  those that are
terminable  at the option of Seller or its  Subsidiaries  upon less than 60 days
notice;

                  (b) Each agreement covering the lease,  purchase or service of
tangible  personal  property  to which  Seller  or its  Subsidiaries  is a party
requiring payment in excess of $50,000 a year;

                  (c) Each agreement to which the Seller or its  Subsidiaries is
a party with respect to indebtedness  for money borrowed,  including  letters of
credit,  guaranties,  indentures,  swaps and similar  agreements with respect to
indebtedness in excess of $50,000 per year;

                  (d) Each collective bargaining agreement and material
management, consulting, employment, severance, or similar agreement, to which
Seller or its Subsidiaries is a party;

                  (e) Each material agreement between Seller and its
Subsidiaries;

                  (f) Each material agreement with any manufacturer's
representative, distributor or sales agent; and

                  (g) Each material agreement preventing Morse Division from
competing in any line of business.

To Seller's  Knowledge,  each of the Seller's  Contracts  is valid,  binding and
enforceable  in  accordance  with its terms except as limited by any  applicable
bankruptcy,  reorganization,  insolvency,  moratorium  or together  similar laws
affecting  the  enforcement  of  creditors'  rights  generally  and  to  general
principles  of equity  (whether or not  considered in a court of law or equity),
and are in full force and effect. To Seller's  Knowledge,  there are no existing
material defaults by Seller or its Subsidiaries  under any of Seller's Contracts
and no event has occurred (whether with or without notice,  lapse of time or the
happening or occurrence of any other event) would  constitute a material default
under any of Seller's Contracts by any other party thereto.

         3.12. Material Changes. Except as otherwise set forth in this Agreement
(including  Schedule 3.12 and the other  Schedules  hereto) since  September 30,
2000, Seller, the Subsidiaries and the Affiliates have conducted the business of
the Morse Division in the ordinary  course and in accordance with past practices
and  there has not been,  with  respect  to the  Morse  Division  or the  Assets
considered as a whole:

                  (a) any damage, destruction, or loss to any of the Assets,
whether or not covered by insurance, in excess of $250,000;

                  (b) any  change  or any  threat  of any  change  in any of its
relations  with,  or any  loss  or  threat  of  loss  of,  any of the  important
suppliers, distributors or customers of the Morse Division that could reasonably
be  expected  to have a material  adverse  effect on the  assets,  business,  or
operations of the Morse Division;

                  (c)  any  cancellation  or  waiver  of  any  right  under  any
contract,  lease,  agreement  license or permit which right is or was,  prior to
such cancellation or waiver, material to the Morse Division;

                  (d) any sale,  transfer or other disposition of, or subjection
to any  encumbrance of, any Assets having an aggregate book value of $250,000 or
more,  or any material  properties or rights of the Morse  Division,  except for
sales of obsolete or damaged equipment or retirement of equipment,  in each case
in the ordinary course of business;

                  (e) any making or authorization of any capital expenditures
 in excess of $250,000;

                  (f) any  payment,  discharge or  satisfaction  of any material
liability or obligation (whether accrued, absolute,  contingent or otherwise) of
the Morse Division,  other than the payment,  discharge or satisfaction,  in the
ordinary course of business, of liabilities or obligations shown or reflected on
the September  30, 2000 balance  sheet  described in Section 3.05 or incurred in
the ordinary course of business since September 30, 2000;

                  (g) any  write-off as  uncollectible  of any notes or accounts
receivable of the Morse  Division or  write-downs  of the value of any assets by
the Seller,  the  Subsidiaries  or Affiliates with respect to the Morse Division
other  than  in  immaterial  amounts  or in  the  ordinary  course  of  business
consistent with past practice;

                  (h) any change by Seller, the Subsidiaries or Affiliates in
any method of accounting or the keeping of books of account or accounting
 practices with respect to the Assets or the Morse Division; and

                  (i) any  material  transaction,  agreement  or  event to which
Seller,  the Subsidiaries or Affiliates is a party or a participant  outside the
ordinary  course of the Morse  Division's  business  or  inconsistent  with past
practice relating to the Morse Division.

         3.13 Inventory. To Seller's Knowledge,  all inventory and raw materials
of the Morse  Division  are in good  condition  and  consist  of a  quality  and
quantity  useable and salable in the  ordinary  course of  business,  except for
obsolete  items  and items of  below-standard  quality,  all of which  have been
written  off or written  down to net  realizable  value in the  Seller's  or its
Subsidiaries' accounting records.

         3.14     Environmental Matters.  Except as set forth in Schedule 3.14:
                  ---------------------

                  (a) To Seller's Knowledge, the Morse Division is in compliance
in all material  respects  with all of the terms and  conditions  of all Permits
which  are  required  under  Environmental  Laws,  and is in  compliance  in all
material  respects  with  all  other  limitations,   restrictions,   conditions,
standards,  prohibitions,  requirements,  schedules  and  timetables  which  are
contained  in all  federal,  state and  local  laws  relating  to  pollution  or
protection of the environment, including laws relating to emissions, discharges,
releases  or  threatened  releases  of  pollutants,  contaminants,  or any other
materials or wastes  including  "hazardous  substances"  as defined in 42 U.S.C.
Section 9601,  petroleum or any constituent thereof,  asbestos,  polychlorinated
biphenyls ("PCBs") and any hazardous or solid waste as defined in 40 C.F.R. Part
261 ("Hazardous  Substances") into the indoor or outdoor environment  (including
ambient air, surface water,  ground water or lands) or otherwise  regulating the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport or handling of Hazardous Substances  ("Environmental  Laws"). All such
Permits  material to the operation of the Morse  Division are listed in Schedule
3.14(a).

                  (b) The Morse  Division has not received any written notice of
a charge, complaint, action, suit, proceeding,  hearing,  investigation,  claim,
demand, request for information or notice, nor to Seller's Knowledge, are any of
the foregoing threatened,  alleging any material liability of the Morse Division
pursuant  to any  Environmental  Law or any  failure  with  respect to the Morse
Division to comply in any material respect with any Environmental Law which have
not been  resolved  including,  without  limitation,  any  written  request  for
information,  notice  of  claim,  demand or  notification  related  to the Morse
Division  that the Morse  Division  is or may be  potentially  responsible  with
respect to any  investigation or cleanup of any threatened or actual Release (as
defined below) of any Hazardous Substance.

                  (c) Except as set forth on  Schedule  3.14(c)  and  heretofore
made  available to Parent and Buyer,  since August 27, 1997,  (except for Sierra
International Inc.  ("Sierra"),  as to which the date shall be December 1, 1999)
to  Seller's   Knowledge,   there  have  been  no   environmental   inspections,
investigations,  studies,  audits, tests, reviews or other analyses conducted by
governmental  entities  relating to Morse Division or any property  currently or
formerly owned, operated or leased by any Seller with respect to Morse Division,
which are in Seller's possession or control.

         3.15  Employees.  Schedule  3.15  sets  forth  a  complete  list of all
non-hourly  employees of the Morse Division as of June 2000 and their annualized
rates of pay as of June 2000 and since  that date  there have been no changes in
the  annual  rates of pay of any Morse  Division  employees,  except  for normal
adjustments.  To Seller's Knowledge, there has not been since December 31, 1999,
any efforts by any labor  organization to organize into a collective  bargaining
unit any employees of the Morse Division.

         3.16 Bank  Accounts.  Schedule 3.16 is an accurate list of all material
non-United  States bank  accounts  maintained by the  Subsidiaries  of the Morse
Division  that  will be  transferred  to Buyer  at  Closing  and the  authorized
signatories therefor.

         3.17 No Brokers.  Except for the  compensation  payable to JP Morgan in
connection with the transactions contemplated by this Agreement,  which is to be
paid by Seller, no broker,  finder or similar agent is entitled to any brokerage
commission,  finder's fee or any similar  compensation  in connection  with this
Agreement or the  transactions  contemplated  hereby.  Except for JP Morgan,  no
broker,  finder or similar  agent has been employed by or on behalf of Seller or
its Subsidiaries or Affiliates,  and there is no person with which the Seller or
its  Subsidiaries  or Affiliates has had any dealings or  communications  of any
kind with respect to this Agreement and the  transactions  contemplated  hereby.
Neither the  Subsidiaries  or the Affiliates  will be liable to JP Morgan or any
other  broker,  finder or  similar  agent for any fees,  commissions,  expenses,
indemnification  or any other  obligation as a results of this Agreement and the
transactions contemplated hereby.

         3.18 No Warranties.  Except to the extent expressly  provided otherwise
in this Agreement, it is understood and agreed that Seller is not making and has
not at any time made any warranties or representations of any kind or character,
expressed or implied,  with respect to the Assets or the Shares,  including  any
warranties or representations as to habitability, merchantability, fitness for a
particular purpose,  title, tax consequences,  operating history or projections,
valuation or any other matter or thing  regarding the Assets and the Shares and,
except as  otherwise  expressly  provided  in this  Agreement,  the  Assets  are
provided "AS IS, WHERE IS, WITH ALL FAULTS."

                                   ARTICLE IV

               REPRESENTATIONS AND WARRANTIES BY BUYER AND PARENT

         Buyer  represents  and  warrants  to  Seller  as of the date  hereof as
follows:

         4.01  Organization  and  Standing.  Each  of  Buyer  and  Parent  is  a
corporation duly organized, validly existing and in good standing under the laws
of the  State of  Delaware.  Buyer  and  Parent  have the  corporate  power  and
authority, to enter into and perform the terms of this Agreement, the agreements
and instruments referred to herein, and the transactions contemplated hereby and
thereby.

         4.02  Authorization.  The execution,  delivery and  performance of this
Agreement and of the agreements and  instruments  called for hereunder,  and the
consummation of the transactions contemplated hereby and thereby, have been duly
and  validly  authorized  by all  necessary  actions of Buyer and  Parent.  This
Agreement constitutes, and upon execution and delivery, each other agreement and
instrument  will  constitute,  a valid and binding  agreement and  obligation of
Buyer and Parent,  enforceable in accordance with their  respective  terms.  The
execution,  delivery and  performance  by Buyer and Parent of this Agreement and
the  agreements  and  instruments  called for  hereunder  will not  require  the
consent,  approval  or  authorization  of any  person,  entity  or  governmental
authority, other than under the HSR Act.

         4.03 Absence of Litigation;  Compliance With Laws.  There is no action,
suit, investigation,  claim, arbitration or litigation pending to which Buyer or
Parent is a party or, to the knowledge of Buyer or Parent, threatened,  against,
affecting or involving the transactions  contemplated by this Agreement,  at law
or in equity, or before or by any court, arbitrator or governmental authority.

         4.04 No  Warranty.  Buyer  acknowledges  and agrees that upon  Closing,
Seller  shall sell and convey to Buyer and Buyer shall accept the Assets "AS IS,
WHERE IS, WITH ALL FAULTS," except to the extent expressly provided otherwise in
this Agreement, and that no warranty, express or implied, including any warranty
of merchantability or fitness for a particular purpose, has been made by Seller.

         4.05 Investment  Intent. The Shares are being purchased for Buyer's own
account  and not with the  view  to,  or for  resale  in  connection  with,  any
distribution or public offering thereof within the meaning of the Securities Act
of 1933, as amended (the "Act").

         4.06  Experience.  Buyer  has  specific  knowledge  and  experience  in
financial  and business  matters of Seller such that it is capable of evaluating
the merits and risks of its investment in the Shares being  acquired  hereunder.
Buyer is an "accredited  investor" within the meaning of Rule 501 under the Act.
Buyer  understands  and is able to bear any economic risks  associated with such
investment  (including,   without  limitation,  the  necessity  of  holding  the
securities  for an  indefinite  period of time,  inasmuch as the Shares have not
been registered under the Act or any state securities laws).

         4.07 No Brokers.  No broker,  finder or similar agent has been employed
by or on behalf of Buyer or Parent, and no person with which the Buyer or Parent
has had any dealings or  communications of any kind is entitled to any brokerage
commission,  finder's fee or any similar  compensation  in connection  with this
Agreement or the transactions contemplated hereby.

         4.08     Financing.  Buyer has sufficient funds available to consummate
the transactions contemplated hereby and pay all related fees and expenses.

                                    ARTICLE V

                            COVENANTS AND AGREEMENTS

         5.01 Interim  Operations  of the Morse  Division.  From the date hereof
until the Closing Date,  except as  contemplated  by any other provision of this
Agreement  or as set  forth in  Schedule  5.01,  unless  Parent  has  previously
consented in writing  thereto,  Seller shall  operate the Morse  Division in the
ordinary  course of business  and Seller  shall not,  with  respect to the Morse
Division:

                  (a) incur any  indebtedness  or issue any debt  securities  or
assume,  guarantee or endorse the  obligations of any other Persons,  except for
obligations  incurred in the ordinary  course of business  consistent  with past
practice;

                  (b)acquire or dispose of any material Assets except in the
 ordinary course of business;

                  (c)  enter  into  or  amend  any  agreements,  commitments  or
contracts, except amendments,  agreements,  commitments or contracts made in the
ordinary  course of business and which  involve  amounts not more than  $250,000
individually or $1,000,000 in the aggregate;

                  (d)  engage  in any  transactions  with,  or  enter  into  any
contracts or agreements  with, any Affiliates  except in the ordinary  course of
business.

                  (e) issue,  deliver,  sell,  pledge,  dispose of or  otherwise
encumber  any shares of capital  stock,  any other voting  securities  or equity
equivalent  or any  securities  convertible  into,  or any  rights,  warrants or
options to acquire any such shares,  voting  securities,  equity  equivalent  or
convertible securities of any Subsidiary;

                  (f) sell,  lease,  transfer,  pledge,  mortgage,  encumber  or
otherwise  dispose of, or agree to sell,  lease or otherwise  dispose of, any of
the Assets, including without limitation any such transactions between the Morse
Division and the Seller, other than transactions that are in the ordinary course
of business consistent with past practice;

                  (g) (x) increase the  compensation  or benefits  payable or to
become  payable to officers,  employees  or  consultants  of the Morse  Division
(except for increases in the ordinary  course of business  consistent  with past
practice), (y) grant any severance or termination pay to, or enter into any stay
put,  termination  or severance  agreement or similar  agreement or  arrangement
with,  any  officer  of the  Morse  Division,  or (z)  enter  into or amend  any
employment or consulting  agreement with any officer,  employee or consultant of
the Morse Division;

                  (h) violate or fail to perform any material obligation or duty
imposed upon the Morse Division by any applicable  federal,  state or local law,
rule, regulation, guideline or ordinance;

                  (i) make any change to accounting methods, periods, policies
or procedures, including changing the annual accounting period of the Seller,
 Subsidiaries or Affiliates;

                  (j)  prepare  or file any Tax  Return  inconsistent  with past
practice or, on any such Tax Return,  take any position  make any  election,  or
adopt any method that is inconsistent  with positions  taken,  elections made or
methods used in preparing or filing similar Tax Returns in prior periods without
providing Buyer with prior notification of such action.

                  (k) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability without providing
Buyer with prior notification of such action.

                  (l)  take any  action  or omit to take  any  required  action,
including  but not  limited to those in  connection  with the  determination  of
inventory costs, that would materially adversely affect the Tax liability of the
Seller, Subsidiaries or Affiliates;

                  (m) pay,  discharge  or satisfy  any  claims,  liabilities  or
obligations   (absolute,   accrued,   asserted  or  unasserted,   contingent  or
otherwise),  other than the payment, discharge or satisfaction,  in the ordinary
course of business or in accordance with their terms,  of liabilities  reflected
or reserved  against  in, the most  recent  financial  statements  described  in
Section 3.05 or incurred in the ordinary course of business;

                  (n) take any action that would likely result in the
representations and warranties made by it herein becoming false or inaccurate
in any material respect; or

                  (o)enter into any agreement to do any of the foregoing.

         5.02     Reasonable Access; Confidentiality.

                  (a) From the date  hereof  until  the  Closing,  Seller  shall
promptly give Parent and its  representatives  (including its attorneys,  agents
and lenders or other sources of financing),  upon  reasonable  notice to Seller,
reasonable  access  to  the  assets,  properties,  books,  records,  agreements,
employees and  commitments  of the Morse Division and permit Parent to make such
inspections  as it may  reasonably  require  and to furnish  Parent  during such
period with all such  information  relating to the Morse  Division as Parent may
from time to time  reasonably  request.  All  requests  for such access shall be
subject to prior  approval of John Young,  on behalf of Seller.  Buyer's  access
with respect to environmental matters shall be governed by Paragraph (b) of this
Section.

                  (b) Buyer  acknowledges and agrees that Seller has provided it
with a copy of the Environmental Compendium prepared by Erler & Kalinowski, Inc.
which provides detailed information regarding  environmental matters and that in
so doing,  Seller has  fulfilled  its  obligations  to Seller  pursuant  to this
Section 5.02 with respect to environmental matters,  provided that, with respect
to the Sierra facility, Section 5.02(a) will govern.

                  (c) Any information provided to or obtained by Parent pursuant
to paragraph (a) above is  "Information"  as defined  under the  Confidentiality
Agreement,  dated May 23, 2000, between Seller and Parent (the  "Confidentiality
Agreement"),  and is to be held by Parent in  accordance  with and be subject to
the terms of the Confidentiality Agreement.

                  (d) Parent  agrees to be bound and comply with the  provisions
set forth in the Confidentiality  Agreement as if such provisions were set forth
herein, and such provisions are hereby incorporated hereby by reference.

         5.03 Negative  Covenants of Buyer and Parent.  Pending and prior to the
Closing,  Buyer and Parent  will not,  without  the prior  written  approval  of
Seller,  take any action or fail to take any action  that would cause any of the
representations, warranties or covenants of Buyer and Parent contained herein to
be untrue,  incorrect  or  incapable  of being  performed  or  satisfied  in any
material respect.

         5.04  Purchase  Price  Allocation.  The  parties  shall use their  best
efforts  to  agree  to a  preliminary  allocation  of the  Purchase  Price  (the
"Preliminary  Allocation") at or prior to the Closing,  which shall allocate the
Purchase   Price  among  (i)  the  shares  of  capital  stock  of  each  of  the
Subsidiaries,  (ii) the interests in the  Affiliates and (iii) the other Assets.
The  parties  shall use their  best  efforts  to enter  into an  agreement  (the
"Allocation Agreement")  simultaneously with the final determination of Purchase
Price.  Buyer and Parent shall  deliver to Seller a proposed  allocation  of the
Purchase  Price among the Assets for  purposes of financial  and tax  reporting,
which shall be consistent  with the  Preliminary  Allocation,  within sixty (60)
days of the Closing Date. Provided that such Allocation is acceptable to Seller,
Seller  shall  within  forty-five  (45)  days  after  receipt  of such  proposed
allocation  give  written  notice to Buyer and Parent of its  agreement  to such
allocation.  If Seller  objects to Buyer's  and  Parent's  proposed  allocation,
Seller shall give Buyer and Parent  written  notice of the objections and Seller
and Buyer shall use  reasonable  efforts to resolve the  differences.  If within
thirty (30) days after the date on which  Seller has given  Buyer  notice of its
objections,  the parties have not adopted the  allocation,  any dispute  related
thereto  shall be referred to an  independent  accounting  firm  selected by the
parties and  resolved  thirty  (30) days after such  referral.  The  independent
accounting firms'  determination  shall be conclusive and binding upon Buyer and
Seller. The costs,  expenses,  and fees of the independent accounting firm shall
be borne  equally by the  parties.  Buyer and Seller agree that Buyer and Seller
will (i) be bound by the Allocation  Agreement,  (ii) act in accordance with the
Allocation Agreement in the preparation and filing of all Tax Returns,  reports,
forms,  declarations or questionnaires  (including,  without limitation,  filing
Form 8594 with its federal  income tax return for the taxable year that includes
the  Closing  Date)  and in the  course  of any  tax  audit,  refund,  claim  or
litigation  relating thereto and (iii) not take any position  inconsistent  with
the Allocation Agreement.

         5.05 Employment.  Effective as of the Closing Date, Buyer shall employ,
on the terms required by Section 5.06, all  individuals  who are employed by the
Morse Division immediately prior to the Closing Date, including those who are on
lay-off,  leave of absence, or short-term  disability as set forth on a schedule
to be  delivered  by  Seller  to Buyer  at  Closing  (collectively,  "Continuing
Employees").

         5.06     Compensation and Employee Benefits.

                  (a)  In  General.   Buyer  shall  offer   employment  to  each
Continuing Employee on terms and conditions including  compensation and employee
benefits which, in the aggregate, are substantially similar to those provided by
the Morse Division  immediately prior to the Closing Date, and such compensation
or benefits shall not be materially decreased for a period of at least 12 months
following the Closing Date. Effective as of the Closing Date, Buyer shall assume
all of Seller's  obligations to the  Continuing  Employees,  including,  but not
limited to, assumption of Seller's  obligations  under the Transition  Agreement
described  on  Schedule  5.06(a)  (all of  which  shall  be  deemed  part of the
Liabilities),  provided, however, the obligation to pay retention benefits under
the Transition Agreement will remain the responsibility of Seller.

                  (b) Service Credit. For purposes of any employee benefit plan,
program or arrangement established for or made available to Continuing Employees
by the Buyer (the "Buyer  Plans") Buyer shall credit such  Continuing  Employees
with  service  for all  periods of service  prior to the  Closing  Date with the
Seller,  any  Subsidiary  or any  Affiliate.  Such  service will be credited for
purposes of determining  eligibility for, vesting in, and the amount of benefits
under all of the Buyer  Plans and for all other  purposes  for which  service is
either taken into account or recognized;  provided,  however,  such service need
not be credited to the extent that it would result in duplication of coverage or
benefits.

                  (c) Welfare  Benefit  Plans.  Until the Closing  Date,  Seller
shall take such steps as are  reasonably  required in order to provide  coverage
for all Continuing Employees and their respective  dependents under the Seller's
ERISA Plans and Seller's  Benefit  Arrangements  which are welfare benefit plans
within the  meaning  of Section  3(1) of ERISA  (the  "Seller  Welfare  Plans").
Coverage for  Continuing  Employees and their  respective  dependents  under the
Seller  Welfare  Plans will  terminate as of the Closing  Date.  The Buyer Plans
which are welfare benefit plans within the meaning of Section 3(1) of ERISA (the
"Buyer's  Welfare  Plans")  shall  provide  coverage and benefits to  Continuing
Employees (and the eligible dependents of the Continuing Employees) beginning on
the Closing Date. In addition, no pre-existing condition,  limitation, exclusion
or waiting period  applicable  with respect to any Buyer Welfare Plan will apply
to any Continuing  Employee to the extent that such  limitations,  exclusions or
waiting periods exceed those in effect under the Seller Welfare Plans.

                  (d) Savings  Plans.  Effective as of the Closing Date,  Seller
will cause all  Continuing  Employees to become  fully  vested in their  account
balances  under the Imo 401K  Savings  Plan and Imo 401K  Savings Plan for Union
Employees of Morse  Controls  Division  (the  "Savings  Plans").  Following  the
Closing Date,  Seller will take such actions as are necessary and appropriate to
cause the  transfer of the assets and  liabilities  associated  with the account
balances of each  Continuing  Employee  who is a Savings  Plans  participant  to
trusts established by Buyer for such purpose in a "trustee to trustee" transfer.

                  (e) Hourly Employee Pension Plan.  Effective as of the Closing
Date, Seller will cause the transfer of all of the assets and liabilities of the
Retirement Plan for Hourly  Employees-Morse  Controls  Division,  Imo Industries
Inc. (the "Hourly Employees Plan") in a "trustee to trustee" transfer to a trust
established by Buyer for the purpose of accepting  such transfer;  provided that
the assets of the Hourly  Employees  Plan are  sufficient on a plan  termination
basis to be eligible on the Closing  Date for standard  termination  pursuant to
Section 4041 of ERISA without the Seller or the ERISA  Affiliates being required
to make any additional contributions,  it being understood that if the assets of
the Hourly  Employees  Plan are not  sufficient  as  described  in this  Section
5.06(e),  then Buyer shall be under no  obligation to accept any transfer of the
assets or liabilities of the Hourly Employees Plan.

                  (f)  Cooperation.  Buyer  and  Seller  agree  that  they  will
cooperate in effecting the transfers  described in Sections  5.06(d) and 5.06(e)
above,  such cooperation to include,  but not be limited to, the exchange of all
information  necessary to effect such  transfer,  and the taking of such actions
necessary to ensure that the transfers  required by Sections 5.06(d) and 5.06(e)
above comply with Section 414(l) of the Code and the  requirements  of ERISA and
the regulations promulgated thereunder.

                  (g)2000 Bonus Plan.  Buyer shall assume the Morse Division's
2000 bonus arrangement, the terms of which are described on Schedule 5.06(g).

                  (h)W-2 Forms.  Buyer and Seller agree to cooperate to provide
each Continuing Employee with one Form W-2 listing the employee's aggregate
wages and taxes pursuant to Rev. Proc. 96-60, Sec. 5 and comparable state and
 local payroll laws.

         5.07  Filings;  Other  Action.  Subject  to the  terms  and  conditions
provided herein, Seller and Buyer shall (a) use their reasonable best efforts to
cooperate  with each other in timely  making all  filings and  registration  and
timely seeking all consents,  authorizations and approvals,  and the transfer to
Buyer of all Assets and Permits  applicable to the Morse  Division,  and (b) use
their  reasonable  best efforts to cause the  conditions to each of Seller's and
Buyer's  obligations  hereunder  to  be  fulfilled.  Subject  to  the  preceding
sentence,  Buyer  shall be solely  responsible  for  transferring  any  permits,
obtaining  any  authorization,  consent or  approval,  making any  recording  or
filing,  complying with any waiting  period,  or performing  any  remediation or
investigation   required  under  any  Environmental  Law  as  a  result  of  the
transaction contemplated hereby.

         5.08 Publicity.  No publicity,  release or announcement  concerning the
transactions  contemplated  hereby shall be issued by either  party  without the
advance  written  consent of such other party,  except as required by applicable
Law. In the event that a party is required by  applicable  Law to make a release
or  announcement,  such party shall  provide  the other party with a  reasonable
opportunity  to review  such  release or  announcement  before  such  release or
announcement is made.

         5.09 Records.  With respect to the  financial  books and records of the
Morse  Division  (other than Tax records  which are provided for in Section 5.10
and minute books of Seller relating to matters on or prior to the Closing Date),
for a period of ten years after the Closing Date, neither Seller nor Buyer shall
cause or  permit  their  destruction  or  disposal  without  first  offering  to
surrender  them to Buyer or Seller as  appropriate,  and Seller and Buyer  shall
allow Buyer and Seller and his representatives,  as appropriate,  access to such
books and records during regular business hours.

         5.10     Tax Matters.

                  (a)  Seller  and Buyer  shall (i) each  provide  the other and
shall  cause  their   respective   accountants  to  provide  the  other  party's
accountant,  with such  assistance as may reasonably be requested by any of them
in  connection  with the  preparation  of any Tax Return,  or the conduct of any
audit or other examination by any taxing authority or judicial or administrative
proceedings  relating to  liability  for Taxes,  including,  but not limited to,
providing  copies of foreign tax receipts,  financial  statements  and providing
access to  financial  data  needed to  calculate  earnings  and  profits  of the
Subsidiaries  and Affiliates  for federal income tax purposes;  (ii) each retain
and provide the other and shall cause their  respective  accountants  to provide
the other  party's  accountant,  any  records or other  information  that may be
relevant to such Tax Return, audit or examination,  proceeding or determination;
and (iii) each provide the other with any final  determination of any such audit
or examination,  proceeding or determination that affects any amount required to
be shown on any Tax Return of the other for any  period.  Without  limiting  the
generality of the foregoing,  Buyer shall retain and Seller shall retain,  until
the applicable  statute of limitations  (including any extensions) have expired,
copies of all Tax  Returns,  supporting  work  schedules,  and other  records or
information that may be relevant to such returns for all Tax periods or portions
thereof  ending  before or  including  the  Closing  and shall  not  destroy  or
otherwise  dispose of any such records  without first  providing the other party
with a reasonable  opportunity to review and copy same at the cost of such other
party.

                  (b) (i)  Except as  provided  in Section  5.10(b)(ii),  below,
Seller  shall  prepare and timely  file all  required  income Tax  Returns  with
respect to the Morse Division for all periods  commencing prior to and ending on
or before the Closing Date and shall pay all Taxes related thereto.

                           (ii)     Buyer shall prepare and timely file, and
shall pay all Taxes related thereto,
all required income Tax Returns for periods ending on or before the Closing Date
and filed after the Closing Date with respect to any Subsidiary or Affiliate for
which an election is not made under Section  5.10(f) of this  Agreement.  Seller
shall pay the amount of such Taxes to Buyer  within  thirty  (30) days after the
date on which such Taxes are paid to the extent such Taxes are not  reflected in
any reserve for Taxes of the Morse Division or previously prepaid by the Seller.
Buyer shall forward such Tax Returns and supporting  calculations to Seller, for
Seller's  review,  no later than thirty  (30) days prior to due date  (including
extensions) of such Tax Returns. In preparation of such Tax Returns, Buyer shall
use accounting  methods and elections  consistent  with those used previously by
Seller,  unless Buyer  obtains  Seller's  written  consent to do  otherwise.  No
Affiliate or Subsidiary  shall file,  and Buyer shall prevent all Affiliates and
Subsidiaries  from filing,  an amended income tax return for any  pre-Closing or
Straddle  Period without  Seller's  written  consent,  which consent will not be
unreasonably withheld.

                           (iii)    Buyer shall pay all Taxes of the Morse
 Division for all periods that begin
after the Closing Date,  and shall prepare and file all Tax Returns with respect
to the Morse  Division  for all periods  commencing  after the Closing  Date and
ending thereafter. Buyer shall prepare or cause to be prepared and file or cause
to be filed any income Tax Returns  with  respect to the Morse  Division for Tax
periods  which begin before the Closing Date and end after the Closing Date (the
"Straddle Period").  Seller shall pay to Buyer within thirty (30) days after the
date on  which  income  Taxes  with  respect  to the  Morse  Division  are  paid
(determined on a basis  consistent  with prior  practice of the Morse  Division)
with  respect to such  Straddle  Period an amount  equal to the  portion of such
income Taxes which  relates to the portion of such Taxable  period ending on the
Closing  Date (to the extent  such Taxes are not  reflected  in any  reserve for
Taxes of the Morse  Division  or  previously  prepaid by the  Seller)  with such
portion  determined by assuming that the pre-Closing  Date period  constitutes a
separate  taxable period of the  Subsidiaries  and Affiliates and by taking into
account the actual activities and income, deductions or loss of the Subsidiaries
and  Affiliates  during such Straddle  Period,  except that  exemptions,  relief
and/or  allowances for a taxable period  beginning prior to and ending after the
Closing Date that are calculated on an annual or periodic basis shall be assumed
to be fully claimed and available  for offset and shall be  apportioned  to that
pre-Closing  Date period on a per diem basis.  Buyer shall  forward the Straddle
Period Tax Returns and supporting  calculations to Seller,  for Seller's review,
no later than thirty (30) days prior to due date (including  extensions) of such
Tax Returns. In preparation of the Straddle Period Tax Returns,  Buyer shall use
accounting  methods  and  elections  consistent  with those used  previously  by
Seller, unless Buyer obtains Seller's written consent to do otherwise.

                  (c)  Buyer  shall  pay all  state  and  local  sales and stock
transfer  taxes and all  recording  costs and fees however  styled or designated
that are  required  to be paid in  connection  with the  transfer  of the Assets
contemplated by this Agreement.

                  (d) Seller and Buyer shall provide to each other prompt notice
of, and as requested by the other party  reasonable  cooperation  in respect of,
any audit or similar  investigation  or proceeding in which the Internal Revenue
Service or any other  Governmental  Authority  makes or  proposes  to make a Tax
adjustment to any Tax period of Seller ending on or before the Closing Date.

                  (e) Buyer  shall not make,  or cause to be made,  any  Section
338(g) election or similar  election  pursuant to any Law in connection with the
transactions contemplated by this Agreement.

                  (f) At Buyer's  option,  and subject to Buyer's  agreement  to
indemnify  Seller  against any  additional  tax  liability  to Seller  resulting
therefrom,  Seller  will join with  Buyer in making an  election  under  Section
338(h)(10) of the Code (and any corresponding  elections under state,  local, or
foreign tax law) (collectively a "Section 338(h)(10)  Election") with respect to
the  purchase  and sale of the  stock  of  Sierra  or any  other  U.S.  domestic
subsidiary (the "Shares") within the meaning of section 7701(a)(30) of the Code.
Buyer shall be solely responsible for preparing and filing all forms required to
make the Section 338(h)(10)  Election and shall provide such forms for review by
Seller within 30 days of filing.

                  (g) Seller will remain  liable for, and will  indemnify  Buyer
for, any and all Taxes that may be imposed upon Buyer or any of the Subsidiaries
and/or Affiliates due to the Subsidiaries  and/or Affiliates having been members
of the  consolidated,  unitary or  combined  group  which  includes  Seller or a
Subsidiary or Affiliate prior to the Closing Date (other than a group the common
parent of which is a  Subsidiary  or  Affiliate)  (the  "Consolidated  Group Tax
Liability").

                  (h) (i) Except as set forth below,  Seller shall have the sole
right to represent  the interests of Subsidiary or Affiliate in any Tax audit or
administrative or court proceeding relating to taxable periods of the Subsidiary
or Affiliate  which end on or before the Closing Date,  and to employ counsel of
its own choice  and  expense,  to the extent  Seller is liable for such Taxes as
indemnitor  under Article IX of this  Agreement.  Seller agrees that it will not
settle any such audit in a manner which would adversely affect the Subsidiary or
Affiliate  after the Closing  Date without the prior  written  consent of Buyer,
which  consent  shall not be  unreasonably  withheld.  Buyer agrees that it will
cooperate fully with Seller and its counsel in the defense against or compromise
of any claim in any such proceeding.

                           (ii)     If any Governmental Authority asserts
 a claim, makes an assessment or
otherwise  disputes or affects the Tax reporting  position of any  Subsidiary or
Affiliate  for taxable  periods for which Seller has  indemnified  Buyer,  Buyer
shall,  promptly upon receipt by Buyer or any  Subsidiary or Affiliate of notice
thereof, inform Seller thereof. Seller's indemnity obligation hereunder shall be
reduced  or  eliminated  to the  extent  Buyer's  failure  to  comply  with  the
proceeding  sentence  prejudices  Seller's  ability properly and fully to defend
against the underlying Tax.

                           (iii)    Buyer shall have the sole right to
 represent the interests of any Subsidiary
or Affiliate in all other Tax audits or administrative or court proceedings.

                           (iv)     To the extent of any determination of Tax
liability of any Subsidiary or
Affiliate,  whether as a result of an audit or examination,  a claim for refund,
the filing of an  amended  return or  otherwise,  results in any refund of Taxes
paid  attributable  to any period which ends on or before the Closing Date,  any
such refund shall belong to Seller, and Buyer shall promptly pay any such refund
in excess of the respective prepaid assets related to Taxes on each Subsidiary's
balance  sheet  included in the Closing  Date  Balance  Sheet,  and the interest
actually received thereon, to Seller upon receipt thereof by Buyer.

         5.11  Hart-Scott-Rodino  and Foreign Antitrust Filings.  As promptly as
practicable  and no later than five (5) Business Days following the execution of
this Agreement,  Seller and Buyer shall complete any filing that may be required
pursuant  to  the  Hart-Scott-Rodino  Antitrust  Improvements  Act of  1976,  as
amended,  ("HSR Act") and, as promptly as practicable  thereafter,  complete any
filings that may be required  under foreign  antitrust laws or  regulations,  or
shall mutually  agree that no such filings are required.  Seller and Buyer shall
diligently  take, or fully  cooperate in the taking of, all necessary and proper
steps, and provide any additional  information  reasonably requested in order to
comply with, the requirements of the HSR Act or any order,  rule,  regulation or
decree of any applicable federal, state or foreign antitrust authority.

         5.12  Insurance.  Seller and its  Subsidiaries  shall  maintain in full
force and effect all of its existing  casualty,  liability,  and other insurance
through the day  following  the  Closing  Date in amounts not less than those in
effect on the date hereof.

         5.13 Use of Business  Names.  The Buyer  shall not use the  trademarks,
service marks,  brand names and corporate  names of Seller and its  subsidiaries
set forth on  Schedule  5.13 or any  contraction  thereof  (the  "Names") in any
manner without prior written  consent from the Seller except that the Buyer may,
to the extent  that such  Names are used by the Morse  Division  on  stationery,
signage,  invoices,  receipts,  forms,  packaging,  advertising  and promotional
materials,  product,  training and service  literature and  materials,  computer
programs or like  materials  or appear on  Inventory  at the  Closing,  use such
materials or sell such Inventory  after the Closing Date for a period of six (6)
months without  altering or modifying  such materials or Inventory,  or removing
such Names.

         5.14 Receipt of Cash. If,  following the Closing Date,  Seller receives
any cash payments  properly  relating to the Morse Division and which would have
been included  among the Assets,  such  payments will be promptly  forwarded and
remitted to the Buyer.

                                   ARTICLE VI

               CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

         The  obligations  of  Buyer to  purchase  the  Assets  and  assume  the
Liabilities and to proceed with the Closing are subject to the  satisfaction (or
waiver by Buyer) at or prior to the Closing of each of the following conditions:

         6.01 Representations and Covenants.  The representations and warranties
of Seller made herein or in any  agreement,  instrument  or document  called for
hereunder  shall have been true and correct in all material  respects  when made
and shall be true and correct in all  material  respects on the Closing  Date as
though such  representations  and warranties  were made on and as of the Closing
Date,  except for those  representations  and  warranties  that are qualified by
materiality,  in which  case they  shall be true and  correct  in all  respects.
Seller  shall have  performed  and complied in all  material  respects  with all
covenants and agreements  required by this Agreement to be performed or complied
with by Seller prior to the Closing Date.

         6.02 Delivery of Documents  and Assets.  Seller shall have executed and
delivered to Buyer all  agreements and  instruments  and delivered all documents
required to be delivered by Seller to Buyer pursuant to Section 8.02. The Assets
conveyed at Closing shall  include the Shares and the Seller's  interests in the
Affiliates.

         6.03  Legal  Proceedings.  No action  or  proceeding  by or before  any
governmental  authority  shall  have  been  instituted  or  threatened  (and not
subsequently  dismissed,  settled or otherwise terminated) which might restrain,
prohibit or invalidate the transactions  contemplated by this Agreement (but not
including an action or proceeding instituted or threatened by Buyer).

                                   ARTICLE VII

              CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE

         The  obligation  of Seller to sell,  transfer,  convey and  deliver the
Assets and to proceed  with the  Closing  are  subject to the  satisfaction  (or
waiver  by  Seller)  at or  prior  to the  Closing  of  each  of  the  following
conditions:

         7.01 Representations and Covenants.  The representations and warranties
of Buyer and Parent made in this  Agreement or in any  agreement,  instrument or
document  called for hereunder  shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on the
Closing Date as though such  representations  and warranties were made on and as
of the Closing Date,  and Buyer and Parent shall have  performed and complied in
all material respects with all covenants and agreements required to be performed
or complied with by Buyer and Parent prior to the Closing Date.

         7.02  Delivery of Documents.  Buyer shall have  delivered to Seller the
Purchase   Price,   assumed  the   Liabilities  and  delivered  all  agreements,
instruments  and documents  required to be delivered by Buyer to Seller pursuant
to Section 8.03.

         7.03  Legal  Proceedings.  No action  or  proceeding  by or before  any
governmental  authority  shall  have  been  instituted  or  threatened  (and not
subsequently  dismissed,  settled, or otherwise terminated) that might restrain,
prohibit or invalidate the  transactions  contemplated by this Agreement,  other
than an action or proceeding instituted or threatened by Seller.

                                  ARTICLE VIII

                                   THE CLOSING

         8.01  Closing.  Unless  otherwise  agreed by the  parties  hereto,  the
Closing  shall be held at 10:00  A.M.  local  time on the later of (i) the third
Business Day following  notification  of termination of the waiting period under
the  HSR  Act  and  (ii)  the  date  the  Seller's  interests  in  the  non-U.S.
Subsidiaries  and Affiliates are transferable to Buyer under their terms (but in
no event more than 90 days after (i)) at the  offices of Hogan & Hartson  L.L.P.
in Baltimore, MD or at such other time and place as the parties may agree.

         8.02     Delivery by Seller.  At or before the Closing, Seller shall
 deliver to Buyer the following agreements and instruments, dated as of
 the Closing Date:

                  (a)      the Assumption Agreement;

                  (b)      the Assignment of Contracts;

                  (c)      the Assignment of Leases;

                  (d)      Intellectual Property Assignment;

                  (e) Certificates representing the Shares,  accompanied by duly
executed stock powers in proper form for transfer; provided, however, if Closing
occurs prior to January 21, 2001, at Buyer's request, Seller will defer transfer
of certain of the Shares until January 21, 2001;

                  (f)      the Bill of Sale;

                  (g)      certificate of the Secretary of Seller certifying
 as to the resolutions authorizing
this Agreement and the transactions contemplated hereby;

                  (h)      articles of organization, corporate records and
 minute books of each Subsidiary,
certified as of the most recent date practicable; and

                  (i)      certificate of the Chief Executive Officer and Chief
 Financial Officer of Seller as to
Seller's satisfaction of the conditions specified in Section 6.01 and 6.03;

                  (j)      the consents, approvals or authorizations set forth
 in Schedule 3.02;

                  (k) such other  agreements,  instruments or documents as Buyer
may  reasonably  request as are necessary to vest in Buyer all of Seller's title
to the Assets.

         8.03     Delivery by Buyer.  At or before the Closing, Buyer shall
 deliver to Seller the following:

         (a) Purchase Price.  The Purchase Price in the amount and manner set
 forth in Section 2.04.

        (b)  Agreements and Instruments.  The following agreements and
instruments, dated as of the Closing Date:

                           (i)      Assumption Agreement;

                           (ii)     certificates of the Secretaries of Buyer
and Parent certifying as to the resolutions authorizing this Agreement and the
 transactions contemplated hereby; and

                           (iii)    such other instruments or documents as
 Seller may reasonably request as arenecessary to assure the assumption by
 Buyer of all of the Liabilities assumed by
Buyer pursuant to this Agreement and the transactions contemplated hereunder.

                                   ARTICLE IX

                            SURVIVAL; INDEMNIFICATION

         9.01 Survival Periods.  Except for the  representations  and warranties
set forth in Section 3.01, 3.04(a), the first sentence of 3.07(a) and 3.09 which
shall  survive  for  eighteen  (18)  months  following  the  Closing  Date,  the
representations  and warranties of the parties contained in this Agreement shall
not survive the Closing Date. The covenants  contained  herein shall survive the
Closing indefinitely (or such earlier period as is provided therein).

         9.02  Indemnification  by Seller.  Subject to the limitations set forth
herein,  Seller  hereby  agrees  from and after the Closing  Date to  indemnify,
defend and hold harmless Buyer and Parent ("Buyer Indemnitees") from and against
all  demands,   claims,   complaints,   actions  or  causes  of  action,  suits,
proceedings,   investigations,   arbitrations,   assessments,  losses,  damages,
liabilities,  costs and  expenses,  including,  but not  limited  to,  interest,
penalties  and  attorneys'  fees  and  disbursements  (collectively,  "Losses"),
asserted against, imposed upon or incurred by the Buyer Indemnitees, directly or
indirectly,  by reason of or resulting from (a) the Excluded Liabilities and (b)
any breach by the Seller of the covenants,  representations,  warranties made by
Seller in this Agreement. Notwithstanding any other provision of this Agreement,
(i) any claim for indemnity or reimbursement  under this Section 9.02 or Section
9.05  (except  for Losses  from  Excluded  Liabilities)  must be made in writing
within 18 months  after  Closing,  and shall only be made after a Loss or Shared
Environmental  Cost (as defined below) has been actually realized or incurred or
an event has occurred or a condition  discovered  that is  reasonably  likely to
result  in a Shared  Environmental  Cost or Loss,  (ii)  the  maximum  aggregate
liability  of the  Seller  under  Sections  9.02,  9.05  and all  other  matters
hereunder  (other  than  Excluded  Liabilities  and the  covenants  set forth in
Sections  2.01(a),  2.05,  5.04,  5.08,  5.10,  5.14  and  9.02  (the  "Excluded
Covenants") shall not exceed $7.2 million, and (iii) Seller shall only be liable
for Losses,  Shared  Environmental  Costs and all other matters hereunder (other
than Excluded  Liabilities  and the Excluded  Covenants) to the extent that such
Losses,  Shared  Environmental  Costs and other  matters  (other  than  Excluded
Liabilities and the Excluded Covenants), in the aggregate, exceed $1 million.

         9.03  Indemnification  by Buyer. Buyer hereby agrees from and after the
Closing Date to indemnify,  defend and hold harmless Seller from and against all
Losses  asserted  against,  imposed  upon or  incurred  by Seller,  directly  or
indirectly, by reason of or resulting from (a) the Liabilities, (b) the business
and  operations of the Morse  Division,  including the  litigation  described on
Schedule 3.03, attached hereto,  whether they are the result of events occurring
prior to or  following  Closing;  and (c) any  noncompliance  by Buyer  with any
covenants,  agreements or undertakings of Buyer contained in or made pursuant to
this Agreement, or any agreements or instruments contemplated hereby.

         9.04  Conditions of  Indemnification.  Except as otherwise  provided in
Section 5.10 and Section 9.05,  the  obligations  and  liabilities of each party
hereunder with respect to its indemnity and reimbursement  obligations  pursuant
to this Article IX, resulting from any claim (hereinafter  called  collectively,
"Claims"), shall be subject to the following terms and conditions:

                  (a) The  indemnifying  party shall have the right to undertake
at its sole expense,  by counsel of its own choosing,  the defense of such Claim
and the  indemnified  party shall fully cooperate with and provide all requested
information to the indemnifying party in its defense of such Claim.

                  (b) In the event that the  indemnifying  party shall elect not
to undertake such defense,  or within a reasonable time after notice of any such
Claim from the other party  shall fail to defend,  the  indemnified  party (upon
notice to the  other  party)  shall  have the right to  undertake  the  defense,
compromise or settlement of such Claim, by counsel or other  representatives  of
its own choosing, on behalf of and for the account and risk of the other party.

                  (c)   Anything   in   this   Article   IX  to   the   contrary
notwithstanding, (i) if there is a reasonable probability in indemnified party's
judgment, that a Claim may materially and adversely affect the indemnified party
other than as a result of money damages or other money payments, the indemnified
party shall have the right,  at its own cost and expense,  to participate in the
defense,  compromise  or settlement of the Claim,  (ii) the  indemnifying  party
shall not, without the indemnified party's written consent, settle or compromise
any Claim or  consent  to entry of any  judgment  which  does not  include as an
unconditional  term thereof the giving by the  claimant or the  plaintiff to the
indemnified  party of a release from all liability in respect of such Claim, and
(iii) in the event that the indemnifying  party undertakes defense of any Claim,
the indemnified  party, by counsel or other  representative  of its own choosing
and at its sole cost and expense,  shall have the right to consult with,  and be
provided reasonable access to all relevant information within the possession of,
the indemnifying party and its counsel or other representatives  concerning such
Claim and the indemnifying party.

         9.05     Reimbursement of Shared Environmental Costs.

                  (a)  Subject  to the  limitations  set  forth  in  the  second
sentence of Section 9.02, Seller hereby agrees, from and after the Closing Date,
to reimburse Buyer for 60% of (i) all reasonable costs and expenses  incurred by
Buyer and paid to third  parties  in  conducting  any  investigation,  sampling,
analysis or monitoring  ordered by any  Governmental  Authority or  specifically
required by Environmental Law (other than investigation,  sampling,  analysis or
monitoring required by any environmental permit or in the ordinary course of the
Morse Division's business as currently  conducted) and any clean-up conducted as
a result  thereof  (collectively,  "Clean-up")  in  response  to the  release of
Hazardous  Substances  at, on, or under the Real  Property  prior to the Closing
Date, and (ii) all fines  assessed  against Buyer to the extent arising from the
Morse Division's violations of Environmental Law prior to the Closing Date, such
costs,  expenses,  and fines  hereinafter  referred to as "Shared  Environmental
Costs."

                  (b) Shared Environmental Costs shall not include any costs and
expenses (i) incurred in performing any investigation,  sampling,  or monitoring
that  is  not  required  by  a   Governmental   Authority  in  accordance   with
Environmental  Law, (ii) that are not paid to third parties,  and (iii) incurred
when Buyer does not own at least a 50% interest in the Real  Property or a lease
of the Real  Property  or  Buyer  does  not own at  least a 50%  interest  in an
Affiliate  who owns at least a 50%  interest in the Real  Property or a lease of
the Real Property.

                  (c) Buyer and Seller agree to cooperate in connection with any
Shared  Environmental Costs subject to reimbursement  under this Section.  Buyer
shall not agree to incur,  and shall not incur, any Shared  Environmental  Costs
without  consulting with Seller in good faith  beforehand,  unless time for such
consultation  would  cause  Buyer  to  violate  any  Environmental  Law  or  any
requirement  of  any  Governmental   Authority.   Buyer  shall  minimize  Shared
Environmental  Costs to the  maximum  extent  practicable  without  unreasonably
interfering  with the  operations  of the Morse  Division as they are  currently
conducted.

                  (d) Buyer shall promptly  notify Seller upon  discovering  any
information  relating to Hazardous Substances released at, on, or under the Real
Property or violations  of  Environmental  Law  committed by the Morse  Division
prior to the Closing Date,  shall  consult with Seller prior to disclosing  such
information to any Governmental Authority,  and shall promptly provide to Seller
copies of all reports,  assessments,  audits,  technical data  correspondence or
other  documents  relating to the foregoing.  Buyer shall provide Seller and its
representatives with reasonable access to the Real Property, including the right
to take split  samples in connection  with any Clean-up.  Buyer and Seller agree
that they each shall maintain in strict  confidence any  information  concerning
Shared  Environmental  Costs,  except to the  extent  that  disclosure  to third
parties is required by law or as both parties jointly agree in writing or to the
extent  such  information  must be  provided  to  either  parties'  insurers  or
financial,  legal or  environmental  advisors or financing  sources.  If any law
requires any party to disclose such information, such party will promptly notify
the other party and will give such party a reasonable  opportunity to review and
comment in advance upon the content and timing of any such disclosure.

                  (e) Buyer and Seller  agree that any  Clean-up for which Buyer
seeks  reimbursement  under this  section  shall be (i)  undertaken  in the most
commercially   reasonable   manner  under  the   circumstances   that  will  not
unreasonably  interfere  with the  operations of the Morse Division as currently
conducted and based upon the understanding  that the Real Property will continue
to be used for industrial  purposes;  (ii) shall not exceed the least  stringent
requirements  of  Environmental  Law  or  any  clean-up   standards  set  forth,
established,   published,   or  promulgated   under,   pursuant  to,  or  by  an
Environmental  Law or  Governmental  Authority  having  jurisdiction  over  such
Clean-up,  as of the  date  of  such  Clean-up,  (iii)  shall  be  conducted  in
compliance with all Environmental Laws, and (iv) shall be performed by qualified
professionals carrying commercially reasonable insurance naming Buyer and Seller
as  additional  insureds.  To the extent  necessary  to achieve the purposes set
forth in (e)(i),  Buyer shall agree to a deed restriction or other institutional
controls at the Real Property to the extent it has authority to do so,  provided
that such  restriction  or controls  shall not restrict or limit the  industrial
activities currently being conducted at such Real Property. Buyer agrees that it
shall,  in good faith,  to the extent it has  authority to do so, seek to enter,
when  necessary,  into an  agreement  with  the  Governmental  Authority  having
jurisdiction over the Clean-up,  to allow the Buyer to use the most commercially
reasonable  method that would not unreasonably  interfere with the operations of
the Morse Division as currently  conducted and the least  stringent  standard in
connection with the Cleanup under such circumstance and use.

                  (f) Buyer shall submit any reimbursement requests hereunder to
Seller  within 45 days of receiving any invoice for or other request for payment
of Shared Environmental Costs.

         9.06 Exclusive Remedy.  The parties  acknowledge and agree that, except
in the case of fraud,  their sole remedy after the Closing for any breach of any
covenant,  representation  or warranty  contained  in this  Agreement or for any
matter  arising  under  Environmental  Laws or relating to Hazardous  Substances
shall be the  indemnification  and  reimbursement  provisions  set forth in this
Article IX. Buyer,  on behalf of itself and its successors  and assigns,  hereby
agrees to waive any and all claims it now has or that it or its  successors  and
assigns may in the future have against Seller pursuant to Environmental  Laws or
relating  to  Hazardous  Substances,  other than as  provided  in the  preceding
sentence.  Notwithstanding  the foregoing,  nothing herein shall be construed or
interpreted as limiting or impairing the rights or remedies the parties may have
as set forth in Article XI hereof.

                                    ARTICLE X

                                   TERMINATION

         If the  Closing  has not  occurred  on or before  March 31, 2001 either
party  may,  upon  written  notice to the other  party  hereto,  terminate  this
Agreement without any further obligation to the other hereunder,  provided, that
such  notice  of  termination  is given  prior to the date of the  Closing;  and
provided further,  that the party seeking to terminate this Agreement under this
Article shall not be in default under this Agreement.  Upon  termination of this
Agreement pursuant to this Article X, this Agreement shall be deemed null, void,
and of no further  force and effect  (except for the  provisions  of Article XI,
which shall survive such termination).

                                   ARTICLE XI

                                    REMEDIES

         11.01 Default by Buyer.  If Buyer shall default in the  performance  of
its obligations  under this Agreement in any material respect or if, as a result
of Buyer's  action or failure  to act,  the  conditions  precedent  to  Seller's
obligation  to close  specified in Article VII are not  satisfied,  and for such
reason or  reasons  the  transactions  contemplated  by this  Agreement  are not
consummated,  and  provided  that  Seller  shall not then be in  default  in the
performance  of Seller's  obligations  hereunder,  Seller shall be entitled,  at
Seller's  sole  option,  by written  notice to Buyer,  (a) to  require  Buyer to
consummate and specifically perform the purchase in accordance with the terms of
this Agreement, if necessary through injunction or other court order or process;
or (b) to terminate this Agreement.

         11.02 Default by Seller.  If Seller shall default in the performance of
Seller's  obligations under this Agreement in any material respect,  or if, as a
result of Seller's action or failure to act, the conditions precedent to Buyer's
obligation  to close  specified  in  Article VI are not  satisfied  and for such
reason or  reasons  the  transactions  contemplated  by this  Agreement  are not
consummated,  and  provided  that  Buyer  shall  not then be in  default  in any
material  respect in the  performance of Buyer's  obligations  hereunder,  Buyer
shall be entitled,  at Buyer's sole option, by written notice to Seller,  (a) to
require  Seller to consummate  and  specifically  perform the sale in accordance
with the terms of this Agreement, if necessary through injunction or other court
order or process; or (b) to terminate this Agreement.

                                   ARTICLE XII

                                  MISCELLANEOUS

         12.01  Additional  Actions and  Documents.  Each of the parties  hereto
agrees that it will, at any time,  prior to, at or after the Closing Date,  take
or cause to be taken such  further  actions,  and  execute,  deliver and file or
cause  to  be  executed,   delivered  and  filed  such  further   documents  and
instruments,  and obtain such  consents  and  approvals,  as may be necessary or
reasonably  requested in connection  with the  consummation  of the purchase and
sale  contemplated  by this  Agreement  or in  order  to  fully  effectuate  the
purposes, terms and conditions of this Agreement.

         12.02 Expenses.  Each party hereto shall pay its own expenses  incurred
in connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, Buyer shall
pay  all  costs  of  conveyances,   all  notary  fees,  and  all  sales,  stamp,
documentary,   transfer,   and  recording  taxes  and  fees  applicable  to  the
transactions  contemplated  by this Agreement and the  instruments and documents
called for hereunder.

         12.03 Notices. All notices, demands,  requests, or other communications
which may be or are required to be given or made by any party to any other party
pursuant  to this  Agreement  shall be in  writing  and shall be hand  delivered
(including delivery by overnight courier), or transmitted by facsimile addressed
as follows:

                           (i)      If to Parent:

                           Teleflex Incorporated
                           630 West Germantown Pike, Suite 450
                           Plymouth Meeting, PA  19462
                           Attention:  Steven K. Chance, Esquire
                           Fax:  610-834-1029

                  with copies (which shall not constitute notice) to:

                           Dechert
                           4000 Bell Atlantic Tower
                           1717 Arch Street
                           Philadelphia, PA  19103
                           Attention:  Christopher G. Karras, Esquire
                           Fax:  215-994-2222

(ii)     If to Buyer:

                           TFX Acquisition Incorporated
                           630 West Germantown Pike, Suite 450
                           Plymouth Meeting, PA  19462
                           Attention:  Steven K. Chance, Esquire
                           Fax:  610-834-1029

                           with copies to:

                           Dechert
                           4000 Bell Atlantic Tower
                           1717 Arch Street
                           Philadelphia, PA  19103
                           Attention:  Christopher G. Karras, Esquire
                           Fax:  215-994-2222

                           (iii)    If to Seller:

                           John Young
                           Imo Industries Inc.
                           Colfax Corporation
                           9211 Forest Hill Avenue
                           Suite 109
                           Richmond, Virginia  23235
                           Fax:  804-560-4076

                  with copies (which shall not constitute notice) to:

                           Thomas  O'Brien  Colfax  Corporation  997 Lenox Drive
                           Suite 111 Lawrenceville, NJ 08648 Fax: 609-896-7633

                                    and

                           Hogan & Hartson L.L.P.
                           111 S. Calvert Street
                           Suite 1600
                           Baltimore, MD  21202
                           Attn.:  Michael J. Silver, Esq.
                           Fax:  410-539-6981

or such other address as the addressee may indicate by written notice.

         Each notice, demand,  request, or communication which shall be given or
made in the manner  described above shall be deemed  sufficiently  given or made
for all purposes at such time as it is delivered to the addressee (the affidavit
of  messenger  or (with  respect to a fax) the  confirmation  sheet being deemed
conclusive  but not  exclusive  evidence  of such  delivery)  or at such time as
delivery is refused by the addressee upon presentation.

         12.04  Waiver.  No delay or failure on the part of any party  hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document  given in connection  with or pursuant to this  Agreement
shall  impair any such right,  power or privilege or be construed as a waiver of
any default or any  acquiescence  therein.  No single or partial exercise of any
such right,  power or  privilege  shall  preclude  the further  exercise of such
right,  power  or  privilege,  or the  exercise  of any  other  right,  power or
privilege.  No waiver  shall be valid  against any party  hereto  unless made in
writing  and signed by the party  against  whom  enforcement  of such  waiver is
sought and then only to the extent expressly specified therein.

         12.05  Arbitration.  If any dispute arises under or in connection  with
this Agreement or the  performance or  enforcement  hereof,  it shall be decided
finally by an arbitrator in an arbitration proceeding conforming to the Rules of
the American Arbitration Association applicable to commercial  arbitration.  The
arbitrator shall be appointed by mutual agreement of the parties hereto. If they
cannot agree, then the arbitrator shall be appointed by the American Arbitration
Association.  An arbitrator  appointed by the American  Arbitration  Association
shall be impartial.  The arbitration  shall take place in the State of Virginia.
The decision of the arbitrator  shall be conclusively  binding upon the parties,
final and nonappealable, and such decision shall be enforceable as a judgment in
any court of competent jurisdiction.  Each party shall pay the fees and expenses
of its counsel and its  witnesses.  The parties shall share equally the fees and
expenses of the arbitrator.

         12.06  Benefit  and  Assignment.  Except  as  hereinafter  specifically
provided in this Article XII, Buyer shall not assign this Agreement, in whole or
in part,  whether by  operation of law or  otherwise  without the prior  written
consent of Seller. Any purported  assignment  contrary to the terms hereof shall
be null, void and of no force and effect.  Notwithstanding the foregoing,  Buyer
or any  permitted  assignee of Buyer may assign this  Agreement  and any and all
rights  hereunder,  in whole or in part,  to any  subsidiary of Buyer so long as
Buyer unconditionally guarantees performance thereof by the assignee. Subject to
the  foregoing,  this  Agreement  shall be binding  upon and shall  inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns.
Except for the provisions of Sections 5.05 and 5.06 hereof,  no person or entity
other than the parties hereto and their respective  successors and assigns is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their  respective  successors and assigns as permitted
hereunder.

         12.07 Entire Agreement;  Amendment.  This Agreement,  together with all
Appendices and Schedules  hereto,  constitutes  the entire  agreement  among the
parties  pertaining  to the  subject  matter  hereof  and  supersedes  all prior
agreements,  understandings,  negotiations  and  discussions,  whether  oral  or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby.

         12.08  Severability.  If any part of any provision of this Agreement or
any other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability  only,
without in any way  affecting  the  remaining  parts of such  provisions  or the
remaining provisions hereof or of said agreement, document or writing.

         12.09 Governing Law. This Agreement,  the rights and obligations of the
parties hereto,  and any claims or disputes relating thereto,  shall be governed
by and construed under and in accordance with the laws of the State of Delaware,
excluding the choice of law rules thereof.

         12.10  Signature in  Counterparts.  This  Agreement  may be executed in
separate counterparts, none of which need contain the signatures of all parties,
each of which shall be deemed to be an original, and all of which taken together
constitute  one and the same  instrument.  It shall not be  necessary  in making
proof of this  Agreement  to  produce  or  account  for more than the  number of
counterparts  containing the  respective  signatures of, or on behalf of, all of
the parties hereto.

         IN WITNESS WHEREOF,  each of the parties hereto has executed this Asset
Purchase  Agreement,  or has  caused  this  Agreement  to be duly  executed  and
delivered  in its name on its  behalf,  all as of the day and year  first  above
written.

                                            SELLER

                                            IMO INDUSTRIES INC.

                                            By:
                                                ------------------
                                                  Name:
                                                  Title:

                                            BUYER

                          TFX ACQUISITION INCORPORATED

                                            By:
                                                ----------------
                                                  Name:
                                                  Title:

                                            PARENT

                              TELEFLEX INCORPORATED

                                            By:
                                                --------------------
                                                  Name:
                                                  Title:

                                   Appendix A

                                   Definitions

         "Act" shall have the meaning set forth in Section 4.05.

         "Adjustment Date" shall have the meaning set forth in Section 2.05.

         "Affiliates"  means those affiliates of the Seller listed on Schedule 2
hereto.

         "Allocation  Agreement"  shall  have the  meaning  set forth in Section
5.04.

                         "Assets" means all real, personal and mixed assets,
 rights, benefits and privileges,

both tangible and intangible  (including the business of the Morse Division as a
"going concern"),  wherever located,  owned or held by Seller and which are used
exclusively  or held for use  exclusively  in the business and  operation of the
Morse  Division.  Assets shall  include all such assets  existing on the date of
this  Agreement and all such assets  acquired  between that date and the Closing
Date as permitted by this Agreement and shall include,  without limitation,  all
of Seller's right, title and interest in and to the following:

                (a) All furniture, fixtures, furnishings,  machinery, equipment,
accounts  receivable,  inventory,  supplies,  and  other  property  of the Morse
Division,  including,  without limitation, those described in Schedules 3.07(a),
3.07(c) and 3.07(d).

                (b) All leases and subleases,  if any, of the Morse Division and
any and all amendments,  modifications,  supplements,  renewals,  and extensions
thereof,  together  with rents and other  benefits of the  property,  including,
without limitation, those described in Schedule 3.07(b).

                (c) All engineering,  business and other books,  papers,  files,
customer lists, supplier lists, and records of the Morse Division.

                (d)      All of the issued and outstanding Shares of the
 Subsidiaries held by Seller as described in Schedule 1.

                (e)      All of the Shares and other interests held by the
 Seller in its Affiliates described in Schedule 2.

                (f) All Intellectual  Property of the Morse Division,  including
that described in Schedule 3.06 and all of Seller's  direct and indirect  right,
title and interest in the name "Teleflex."

                (g)      All permits of Seller applicable to the Morse Division,
 to the extent assignable.

                (h) All of Seller's  rights to  indemnification  as set forth in
Article VIII of the Stock Purchase  Agreement by and between Echlin Inc. and the
Seller dated as of October 13, 1999, subject to all of the terms and limitations
provided in such agreement.

                (i)      All of Seller's cash lock-box accounts of the Morse
 Division (excluding the cash in those accounts.)

Notwithstanding  the  foregoing,  there  shall be  excluded  from the Assets and
retained by Seller,  to the extent in  existence at the Closing (i) all cash and
cash  equivalents  held directly by Imo Industries  Inc. or in an escrow account
for the  benefit  of Imo  Industries  Inc.  related  to the  sale of the  Hudson
facility,  (ii) all balances in all bank accounts and short-term cash management
accounts  maintained  by Imo  Industries,  Inc.  and (iii) all  rights in and to
domestic bank accounts of or maintained by Imo Industries,  Inc.  (collectively,
the "Retained Assets").

                  "Assignment  of  Contracts"  means that certain  Assignment of
Contracts, dated as of the Closing Date and executed by Seller, substantially in
the form attached hereto as Appendix A.

         "Assignment of Leases" means that certain  Assignment of Leases,  dated
as of the  Closing  Date  and  executed  by  Seller,  substantially  in the form
attached hereto as Appendix B.

"Assumption Agreement" means that certain Assumption Agreement dated the
 Closing Date and executed by Buyer and Seller, substantially in the form
 attached hereto as Appendix C.

"Bill of Sale" means that certain Bill of Sale and Assignment of Assets,
 dated as of the Closing Date and executed by Seller,  substantially  in the
 form attached hereto as Appendix D.

"Business Day" means any day other than a Saturday, Sunday or a day on which
 the banks in New York City are authorized or obligated by law or executive
 order to close.

                         "Buyer Indemnitees" shall have the meaning set forth in
Section 9.02.

                         "Buyer  Plans"  shall  have the  meaning  set  forth in
Section 5.06(b).

                         "Buyer's  Welfare  Plans"  shall have the  meaning  set
forth in Section 5.06(c).

"Cash Adjustment Amount" shall have the meaning specified in Section 2.05.

"Claims" shall have the meaning specified in Section 9.04.

                         "Clean-up"  shall have the meaning set forth in Section
9.05.

                         "Closing" means the closing of the purchase, assignment
 and sale of the Assets contemplated hereunder.

                         "Closing Date" means the time and date on which the
 Closing takes place, as established by Section 8.01.

                         "Closing Date Balance Sheet" means the consolidated
 balance sheet of the Morse Division delivered to Buyer by Seller on the Closing
 Date prepared on a basis  consistent with the September 30, 2000 pro forma
 balance sheet.

                         "Code" shall mean the Internal Revenue Code of 1986,
as amended.  All citations to the Code,  or the Treasury  Regulations
  promulgated  thereunder,  shall include any
amendments or any substitute or successor provisions thereto.

         "Confidentiality Agreement" shall have the meaning set forth in Section
5.02(c).

         "Consolidated  Group Tax Liability" shall have the meaning set forth in
Section 5.10(g).

                         "Continuing Employees" shall have the meaning set forth
in Section 5.05.

                         "Election Tax Cost" shall have the meaning set forth in
Section 5.10(f).

                         "Environmental  Laws"  shall have the meaning set forth
in Section 3.14(a).

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

         "ERISA  Affiliate" means (a) any corporation  included with Seller in a
controlled  group of  corporations  within the meaning of Section  414(b) of the
Code;  (b) any trade or business  (whether or not  incorporated)  which is under
common control with Seller within the meaning of Section 414(c) of the Code; (c)
any member of an affiliated service group of which Seller is a member within the
meaning of Section 414(m) of the Code; or (d) any other person or entity treated
as an affiliate of Seller under Section 414(o) of the Code.

         "Excluded Covenants" shall have the meaning set forth in Section 9.02.

                         "Excluded Liabilities" shall have the meaning set forth
in Section 2.03.

                         "Governmental Authority" means any government or
 political subdivision, whether federal,

state, local or foreign, or any agency or instrumentality of any such government
or political  subdivision,  or any  federal,  state,  local or foreign  court or
arbitrator.

                         "Hazardous Substances" shall have the meaning specified
in Section 3.14(a).

                         "Hourly   Employees   Plan"   shall  have  the  meaning
specified in Section 5.06(e).

                         "HSR Act" means the Hart-Scott-Rodino Antitrust
 Improvements Act of 1976, as amended and the rules and regulations promulgated
 thereunder.

                         "Intellectual   Property"   shall   have  the   meaning
specified in Section 3.06.

                         "Knowledge" means the actual knowledge of
John Suddarth, President of Morse Division and Gerry Powell,
 Chief Financial Officer, Morse Division.

                         "Laws" means any law, statute, code, ordinance,
regulation or other legally enforceable requirement of any Governmental
Authority.

                         "Liabilities" means the Liabilities to be assumed by
Buyer as described in Section 2.02 and does not include the Excluded
 Liabilities set forth in Section 2.03.

                         "Liens" means any mortgage, lien, option, encumbrance,
 restriction, pledge, adverse claim, interest, charge or other similar
encumbrance.

                         "Losses"  shall have the  meaning  set forth in Section
9.02.

                         "Material  Equipment"  shall have the meaning set forth
in Section 3.07(d).

                         "Names"  shall  have the  meaning  set forth in Section
5.13.

                         "Net Worth" shall have the meaning set forth in Section
2.05(b)(ii).

                         "PCBs"  shall  have the  meaning  set forth in  Section
3.14(a).

                         "Permits" means any license, permit, authorization,
 grant, approval, franchise, waiver,

consent, qualification or similar document or authority issued or granted by
any Governmental Authority.

                         "Person" means any individual, sole proprietorship,
partnership, corporation, limited

liability company, joint venture,  unincorporated society or association,  trust
or other entity or Governmental Authority.

                         "Preliminary   Allocation"   shall  have  the   meaning
specified in Section 5.04.

                         "Purchase  Price"  shall have the meaning  specified in
Section 2.04.

                         "Real Property" means all of the Sellers' and
Subsidiaries' real property and interests

in real property,  leaseholds and  subleaseholds,  purchase options,  easements,
licenses,  rights to access, rights of way, all buildings and other improvements
thereon,  and other real property interests  exclusively used in the business or
operations of the Morse Division as of the date of this Agreement, together with
any additions thereto between the date of this Agreement and the Closing Date.

                         "Savings  Plan"  shall  have the  meaning  set forth in
Section 5.06(d).

                         "Section  338(h)(10)  Election"  shall have the meaning
set forth in Section 5.10(f).

                         "Seller Welfare Plans" shall have the meaning set forth
in Section 5.06(c).

                         "Seller's Benefit  Arrangements" shall have the meaning
set forth in Section 3.10(a).

                         "Seller's  Contracts"  shall have the meaning set forth
in Section 3.11.

                         "Seller's ERISA Plans" shall have the meaning set forth
in Section 3.10(a).

                         "Shared Environmental Costs" shall have the meaning set
forth in Section 9.05(a).

                         "Shares" means all of the securities owned, by Seller
 whether or not certificated, and

all  other  rights  and  interest  of  Sellers,   direct  or  indirect,  in  the
Subsidiaries  set forth on Schedule 1 and all of the securities owned by Seller,
directly or  indirectly,  by Seller whether or not  certificated,  and all other
rights and interest of Seller,  direct or indirect,  in the Affiliates set forth
on Schedule 2, all of which are to be transferred pursuant to this Agreement.

                         "Sierra"  shall have the  meaning  set forth in Section
3.14(c).

                         "Straddle  Period"  shall have the meaning set forth in
Section 5.10(b).

                         "Subsidiaries" means those wholly owned subsidiaries of
the Seller listed on Schedule 1.

                         "Tax or Taxes" means any domestic or foreign federal,
 state or local income, franchise,

business,  occupation,  sales/use,  manufacturer's excise, payroll, withholding,
Federal Insurance Contributions Act and employment and unemployment taxes, value
added  taxes,  personal and real  property  taxes and all other taxes or charges
(including all interest and penalties) measured,  assessed,  levied,  imposed or
collected by any Governmental Authority.

                         "Tax Returns" means all tax returns (including
information returns) and reports that are
or were  required to be filed by, or with respect to, the Morse  Division or its
income, properties or operations.

                         "Taxing Authority" shall mean the United States or
 any state, county, local or foreign
 government or subdivision or agency thereof.

                         "Transition Agreement" shall have the meaning set forth
on Schedule 5.06(a).

         All references to Sections, Appendices and Schedules are to Sections of
and Appendices and Schedules to this Agreement.

                                LIST OF SCHEDULES

Schedule 1                Imo Industries Inc. Subsidiaries Included In Morse
                          Controls Division
Schedule 2                Imo Industries Inc. Affiliates Included In Morse
                          Controls Division
Schedule 2.03(b)          Capital Lease to be Assumed
Schedule 2.05(b)          Pro Forma Balance Sheet dated September 30, 2000
Schedule 3.02             Authorization
Schedule 3.03             Litigation; Compliance with Law
Schedule 3.04             Shares Subject to Right of First Refusal
Schedule 3.05             Financial Statements and Condition
Schedule 3.06             Intellectual Property; Licenses
Schedule 3.07(a)          Assets
Schedule 3.07(b)          Real Property
Schedule 3.07(c)          Leases
Schedule 3.07(d)          Material Equipment
Schedule 3.08             Conflicts
Schedule 3.09             Taxes
Schedule 3.10             Seller's ERISA Plans and Seller's Benefit Arrangements
Schedule 3.11             Seller and Subsidiary Contracts
Schedule 3.12             Material Changes
Schedule 3.14(a)          Permits
Schedule 3.14(c)          Environmental Matters
Schedule 3.15             Morse Division Employees
Schedule 3.16             Bank Accounts
Schedule 5.01             Interim Operations of the Morse Division
Schedule 5.06(a)          Seller's Obligations Under Transition Agreements
Schedule 5.06(g)          2000 Bonus Plan
Schedule 5.13             Morse Division Business Names

                                   Schedule 1

                        IMO INDUSTRIES INC. SUBSIDIARIES
                       INCLUDED IN MORSE CONTROLS DIVISION

Date:  12/31/99

                                                      State or Country of
                                                      Incorporation/
Name                                                  Organization

IMO INDUSTRIES (UK) LIMITED                           ENGLAND
     MORSE CONTROLS LIMITED                           ENGLAND
         MORSE CONTROLS AB                            SWEDEN
         RMH CONTROLS LIMITED                         ENGLAND
         MORSE CONTROLS PTY. LTD.                     NEW SOUTH WALES
              MORSE CONTROLS (NZ) LIMITED             NEW ZEALAND
              TELEFLEX-MORSE (N.Z.) LTD.              NEW ZEALAND
         IMO INDUSTRIES PENSION TRUSTEE LIMITED       ENGLAND
         TELEFLEX LIMITED                             ENGLAND
         TELEFLEX MORSE LTD.                          ENGLAND
     IMO INDUSTRIES LIMITED                           ENGLAND
IMO INDUSTRIES GmbH                                   GERMANY
MORSE CONTROLS SARL                                   FRANCE
MORSE CONTROLS S.L.                                   SPAIN
IMO INDUSTRIES PTE LTD                                SINGAPORE
SIERRA INTERNATIONAL INC.                             ILLINOIS

<PAGE>

                                   Schedule 2

                         IMO INDUSTRIES INC. AFFILIATES
                       INCLUDED IN MORSE CONTROLS DIVISION

                                                      State or Country of
                                                      Incorporation/
                                                      Organization
Name

SHANGHAI DONG FENG MORSE CONTROL CABLE CO., LTD.      CHINA (1)
NHK MORSE CO., LTD.                                   JAPAN (1)
     NHK JABSCO CO., LTD.                             JAPAN (2)

-------------------------------

(1)      50%  owned by Imo Industries Inc.
(2)      50%  owned by NHK Morse Co., Ltd.EXHIBIT 4.1

February 26, 2001

Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549

RE: Carnival Corporation
    Commission File No. 1-9610

Gentlemen:

Pursuant to Item 601 (b) (4) (iii) of Regulation S-K promulgated under the
Securities Exchange Act of 1934, as amended, Carnival Corporation (the
"Company") hereby agrees to furnish copies of certain long-term debt
instruments to the Securities and Exchange Commission upon the request of
the Commission, and, in accordance with such regulation, such instruments
are not being filed as part of the Annual Report on Form 10-K of the Company
for its fiscal year ended November 30, 2000.

Very truly yours,

CARNIVAL CORPORATION

/s/ Arnaldo Perez

Arnaldo Perez
General Counsel

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