Housman Realty Trust – ‘SC 13D’ on 4/23/99 re: Armatron International Inc

As of:  Friday, 4/23/99   ·   Accession #:  910647-99-121   ·   File #:  5-38400

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General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D      Body of Schedule 13D                                  46±   176K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION    
Washington, D.C. 20549    

SCHEDULE 13D    
(Rule 13d-101)    

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT   
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO   
RULE 13d-2(a)   

(Amendment No. _____)*    

ARMATRON INTERNATIONAL, INC.    
---------------------------------------------------------------------------     
(Name of Issuer)    

COMMON STOCK, $1.00 PAR VALUE   
---------------------------------------------------------------------------     
(Title of Class of Securities)    

042167 10 6   
----------------------    
(CUSIP Number)    

MALCOLM D. FINKS, TRUSTEE, BASS DOHERTY & FINKS, P.C., 40 SOLDIERS FIELD PLACE  
BOSTON, MA 02135-1104   (617) 787-5551    
------------------------------------------------------------------------------- 
(Name, Address and Telephone Number of Person Authorized    
to Receive Notices and Communications)    

April 20, 1999    
-----------------------------------------------------------   
(Date of Event which Requires Filing of this Statement)   

If the filing person has previously filed a statement on Schedule 13G to        
report the acquisition that is the subject of this Schedule 13D, and is         
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check      
the following box. [ ].                                                         

NOTE:  Schedules filed in paper format shall include a signed original and      
five copies of the schedule, including all exhibits.  See [SECTION]             
240.13d-7(b) for other parties to whom copies are to be sent.                   

*  The remainder of this cover page shall be filled out for a reporting         
person's initial filing on this form with respect to the subject class of       
securities, and for any subsequent amendment containing information which       
would alter disclosures provided in a prior cover page.                         

The information required on the remainder of this cover page shall not be       
deemed to be "filed" for the purpose of Section 18 of the Securities            
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of         
that section of the Act but shall be subject to all other provisions of the     
Act (however, see the Notes).                                                   

SCHEDULE 13D    

CUSIP NO.  042167 10 6               13D                                        

1     NAMES OF REPORTING PERSONS                                                

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)         

Housman Realty Trust                                                

2     CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP        (a)   [ ]         
                                                     (b)   [ ]

3     SEC USE ONLY                                                              

4     SOURCE OF FUNDS                                                           

00                                                                  

5     CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT         
TO ITEMS 2(d) or 2(e)                                          [ ]  

6     CITIZENSHIP OR PLACE OF ORGANIZATION                                      

Dedham, Massachusetts                                               

NUMBER OF       7     SOLE VOTING POWER                                   

               6,667,000 shares (consists of 6,667 shares of
               Series A Convertible Preferred Stock which is
SHARES              currently convertible into 6,667,000 shares of    
Common Stock)                 

BENEFICIALLY     8     SHARED VOTING POWER                                  

OWNED BY             0                                                  

EACH         9     SOLE DISPOSITIVE POWER                           

               6,667,000 shares (consists of 6,667 shares of
               Series A Convertible Preferred Stock which is
REPORTING             currently convertible into 6,667,000 shares of      
Common Stock)                 

PERSON       10     SHARED DISPOSITIVE POWER                          

WITH               0                                                

11    AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON              

6,667,000 shares (consists of 6,667 shares of Series A Convertible  
Preferred Stock which is currently convertible into 6,667,000 shares
of Common Stock)                                                    

12    CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN            
SHARES                        [ ]                                   

13    PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)                        

73%                                                                 

14    TYPE OF REPORTING PERSON                                                  

OO                                                                  

* SEE INSTRUCTION BEFORE FILLING OUT!     

INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7  
(INCLULDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.   

Item 1.  Security and Issuer                                                    
-------------------                                           

This statement relates to the common stock, $1.00 par value (the    
"Common Stock"), of Armatron International, Inc., a Massachusetts               
corporation (the "Company").  The address of the Company's principal            
executive offices is 2 Main Street, Melrose, MA  02176.                         

Item 2.  Identity and Background                                                
-----------------------                                       

This statement is being filed by Housman Realty Trust (the "Trust"),
formed under declaration of trust on June 6, 1969, as amended and restated      
on January 11, 1990, as filed in the Norfolk County Registry of Deeds,          
Dedham, Massachusetts.  The business address of the Trust is c/o Bass           
Doherty & Finks, P.C., 40 Soldiers Field Place, Boston, MA 02135-1104.  The     
purpose of the Trust is to deal in and with, buy, purchase, own, acquire,       
hold, exchange, convey, sell, lease, sub-lease, rent, mortgage, pledge,         
encumber, hypothecate, survey, improve, divide, sub-divide, plant, develop,     
build, construct, alter, remodel, establish, operate, conduct, maintain         
and/or otherwise dispose of either as principal, agent or broker, land and      
real estate of every kind, nature, and description of all kinds, personal       
or mixed property, including, without limiting the foregoing, buildings,        
machinery, chattel mortgages, real mortgages, negotiable and non-negotiable     
instruments, securities, chooses in action and other obligations to do and      
perform all things needful and lawful for carrying out the same.  The           
trustee of the Trust is Malcolm D. Finks.  Mr. Finks's business address is      
Bass Doherty & Finks, P.C., 40 Soldiers Field Place, P.C., Boston, MA           
02135-1104.  Mr. Finks's present principal occupation is attorney.  Mr.         
Finks is a citizen of the United States.                                        

 Neither the Trust nor Mr. Finks has been, during the last five years,
(a) convicted in a criminal proceeding (excluding traffic violations or         
similar misdemeanors) or (b) a party to a civil proceeding of a judicial or     
administrative body of competent jurisdiction and as a result of such           
proceeding was or is subject to a judgment, decree or final order enjoining     
future violations of, or prohibiting or mandating activities subject to,        
federal or state securities laws or finding any violation with respect to       
such laws.                                                                      

Item 3.  Source and Amount of Funds or Other Consideration                      
-------------------------------------------------             

On April 20, 1999, the Trust converted $2,000,100 of the principal  
amount of debt owed to it by the Company pursuant to a Promissory Note          
dated January 11, 1990, as amended, in the original principal sum of            
$7,000,000 into 6,667 shares of Series A Convertible Preferred Stock, $100      
par value per share (the "Preferred Stock").  This Preferred Stock is           
convertible into 6,667,000 shares of Common Stock.                              

Item 4.  Purpose of Transaction                                                 
----------------------                                        

On April 22, 1999, the Company filed a Schedule 13E-3 and a         
Preliminary Proxy Statement with the Securities and Exchange Commission         
relating to an Agreement and Plan of Merger (the "Merger Agreement")            
between the Company and Armatron Merger Corporation, a newly formed             
Massachusetts corporation that was organized as a nonsubstantive transitory     
vehicle to effect the following transactions ("MergerCo"), which provides,      
among other things, for the merger of MergerCo into the Company (the            
"Merger") with the Company continuing as the surviving corporation (the         
"Surviving Corporation").  In the Merger, (i) each outstanding share of         
Common Stock will be converted into the right to receive $0.27 in cash          
(except that any shares held by MergerCo or in the Company's treasury will      
be canceled and any stockholder who properly dissents from the Merger will      
be entitled to appraisal rights under Massachusetts law); (ii) each             
outstanding share of common stock, $.01 par value per share, of MergerCo        
(the "MergerCo Common Stock") will be converted into one share of common        
stock, $.01 par value per share, of the Surviving Corporation; and (iii)        
each outstanding share of Series A Preferred Stock, $100 par value per          
share, of the Company will be converted into one share of Series A              
Preferred Stock, $.01 par value per share, of the Surviving Corporation.        

   Following the Merger, the Company will not list the common stock of the
Surviving Corporation on any national securities exchange or automated          
quotation system and will delist the Company's Common Stock.  If the Merger     
is effected, it is anticipated that the Company will have fewer than 300        
stockholders and will promptly request termination of registration under        
Section 12(g) of the Securities Exchange Act of 1934.                           

Prior to the issuance of the Preferred Stock, the Company was deemed
insolvent under Massachusetts law because its liabilities exceeded its          
assets.  In order to make the Company solvent so that the Company may, in       
connection with the Merger, pay the merger consideration to its                 
stockholders without violating Massachusetts law, the Trust agreed to           
convert a portion of its debt into the Preferred Stock.                         

The Preferred Stock votes on an as converted basis with the Common  
Stock.  The Preferred Stock is convertible into 6,667,000 shares of Common      
Stock which represent the power to vote 73% of the shares of capital stock      
of the Company.  The Trust intends to vote these shares in favor of the         
Merger.                                                                         

Except as set forth above, the Trust has no plans or present        
proposals which relate to or would result in any of the matters listed in       
Item 4(a)-(j) of Schedule 13D.                                                  

Item 5.  Interest in Securities of the Issuer                                   
------------------------------------                          

(a) The Trust beneficially owns 6,667 shares of Preferred Stock, all
of which are presently convertible into 6,667,000 shares of Common Stock        
and which represent 73% of the Common Stock of the Company.                     

(b) The Trust has sole power to vote or to direct the vote and sole 
power to dispose or to direct the disposition of 6,667 shares of Preferred      
Stock, all of which are presently convertible into 6,667,000 shares of          
Common Stock.                                                                   

(c) Over the last sixty days, the Trust has not effected any        
transactions in any security of the Company.                                    

(d) Not applicable.                                                 

(e) Not applicable.                                                 

Item 6.  Contracts, Arrangements, Understandings or Relationships with          
------------------------------------------------------------- 
Respect to Securities of the Issuer                           
-----------------------------------                           

The Trust is party to a Promissory Note dated January 11, 1990, as  
amended, in the original principal sum of $7,000,000 under which the Trust      
has extended a $7,000,000 line of credit to the Company. This line of           
credit, with interest payable at 10%, requires monthly payments only, is        
payable in full on October 1, 1999 and is collateralized by all assets of       
the Company.  The Company had $4,715,000 outstanding and unpaid interest of     
$1,633,000 under this line of credit at March 31, 1999.  On April 20, 1999,     
the Trust converted $2,000,100 of the principal amount of the debt into         
6,667 shares of Preferred Stock.  The Preferred Stock is convertible into       
6,667,000 shares of Common Stock.                                               

Item 7.  Material to be Filed as Exhibits                                       
--------------------------------                              

Exhibit 1     Promissory Note dated January 11, 1990, as amended, in the        
    original principal sum of $7,000,000 issued by the Trust

Exhibit 2     Agreement and Plan of Merger by and between the Company and       
MergerCo.                                           

Signature   
---------   

After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,             
complete and correct.                                                           

                  HOUSMAN REALTY TRUST

Date:                                  By: /s/ Malcolm D. Finks                 
                          --------------------
                                       Malcolm D. Finks, Trustee

                                                                     EXHIBIT 1

PROMISSORY NOTE   
---------------   

Principal Sum                                                                   
$7,000,000.00                                              January 11, 1990     
-------------                                              ----------------     

FOR VALUE RECEIVED, the undersigned, ARMATRON INTERNATIONAL, INC., a            
Massachusetts corporation, having its principal place of business in            
Melrose, Massachusetts, promises to pay to the order of ELLIOT J.               
ENGLANDER, TRUSTEE OF THE HOUSMAN REALTY TRUST, established under a             
Declaration of Trust, dated June 6, 1969, as amended, having an address at      
55 Summer Street, 8th Floor, Boston, MA 02110, (hereinafter called the          
"holder"), the sum of SEVEN MILLION ($7,000,000.00) DOLLARS, or such sum or     
sums as the holder shall advance to the undersigned from time to time in        
his discretion up to Seven Million ($7,000,000.00) Dollars, with interest       
on the unpaid principal balance from the date of this note, (calculated on      
the basis of a 360-day year for the actual number of days elapsed), until       
paid, at a rate per annum which at all times shall be equal to the rate         
from time to time designated by the Shawmut Bank, N.A. as its "Base Rate"       
plus two (2%) per cent, but not less than 11.75% per annum. Notwithstanding     
the foregoing, the rate of interest payable hereunder shall be adjusted         
monthly on the 1st day of each month until said note is paid in full. Any       
adjustments of interest shall be affected with the first payment due after      
the effective date of change. Interest only shall be payable in monthly         
installments on the 1st day of each month hereafter beginning March 1, 1990     
until February 1, 1995 when the entire indebtedness remaining unpaid with       
interest shall then be due and payable in full. At the option of the            
holder, the entire indebtedness remaining unpaid with interest shall become     
due and payable twelve (12) months after giving maker written notice of         
demand for payment. All payments are to be made payable to the holder at 55     
Summer Street, 8th Floor, Boston, Massachusetts, 02110, or at such other        
place as the holder may from time to time designate in writing. The maker       
shall have the right to prepay in whole or in part the within note at any       
time without penalty.                                                           

The undersigned agrees to pay all costs and expenses, including all             
attorney's fees and expenses incurred by the holder in the collection of        
this note. Upon default interest shall accrue at a rate per annum equal to      
the aggregate of five (5%) per cent plus the "Base Rate" until paid in          
full.                                                                           

At the option of the holder, this note shall become immediately due and         
payable without notice or demand upon the occurrence at any time of any of      
the following events: (1) Default in any payment of interest or principal       
due hereunder; (2) Default in the performance or observance of the terms or     
conditions of the Security Agreement, (including amendments and extensions      
thereof) securing this note; (3) Default in the payment or performance of       
any other liability or obligation of the undersigned or of any indorser or      
guarantor of any liability or obligation of the undersigned to the holder;      
(4) The service upon the holder hereof of a writ in which the holder is         
named as trustee of the undersigned; (5) If the undersigned shall generally     
not, or shall be unable to or shall admit in writing its inability to, pay      
its debts as they become due; (6) The liquidation, termination or               
dissolution of the undersigned; (7) If the undersigned shall make an            
assignment for the benefit of creditors, or if a receiver or conservator of     
any such party's property shall be appointed, or if a petition in               
bankruptcy or other similar proceeding under any law for relief of debtors      
shall be filed by or against the undersigned; (8) The commencement of           
foreclosure proceedings by any mortgagee or secured party against any real      
estate or property of the undersigned being pledged as security for this        
promissory note; or (9) The sale, transfer, or further hypothecation of any     
of the property given as security for this indebtedness; (10) A material        
adverse change in the business, operations, property or financial condition     
or prospects of the undersigned; (11) If any judgment be entered against        
the undersigned which judgment remains unsatisfied fourteen (14) days after     
issuance thereof; or (12) If for any other cause the holder in his sole         
discretion, deems this obligation in jeopardy.                                  

Each and every party liable hereon, either as maker, indorser, guarantor,       
surety or otherwise, hereby (1) waives presentment, demand, protest and         
notices of every kind and description, and all suretyship defenses and          
defenses in the nature thereof; (2) waives any defenses based upon, and         
specifically assents to, any and all extensions and postponements of the        
time of payment and all other indulgences and forbearances which may be         
granted by the holder to any party liable hereon; (3) agrees to any             
substitution, exchange, release, surrender or other delivery of any             
collateral held hereunder and to the addition or release of any other party     
or person primarily or secondarily liable; and (4) agrees to be bound by        
all of the terms contained in this note and agrees that the obligations and     
agreements of all such parties shall be joint and several.                      

No delay or omission on the part of the holder in exercising any right          
hereunder shall operate as a waiver of such right or of any other right of      
such holder, nor shall any delay, omission or waiver on any one occasion be     
deemed a bar to or waiver of the same or any other right on any future          
occasion.                                                                       

All property (including tangible, intangible, real, personal, and other         
property of every kind, nature and description) and all other collateral        
and security delivered to or held by the holder as security for the payment     
of this note or the payment of any other notes or the performance of any        
other obligations or liabilities to the holder of any party liable hereon,      
either as maker, indorser, guarantor, surety, or otherwise, or for which        
any such party is liable to the holder, and all guarantees and endorsements     
hereof shall be deemed (insofar as it is legally possible to do so by           
agreement of the undersigned) to be security for any guarantees and             
endorsements assuring the payment of this note and all other said notes and     
the performance of all of said obligations and liabilities of all of such       
parties liable hereon to the holder, whether now existing or hereafter          
arising, due or to become due, absolute or contingent, joint or several,        
primary or secondary. Any default under this note or in the performance and     
observance of the provisions of any mortgage, security agreement, or other      
agreement pertaining thereto shall be deemed a default on all other notes,      
obligations and liabilities of all parties liable hereon to the holder,         
whether now existing or hereafter arising, shall also be deemed a default       
on this note.                                                                   

No single or partial exercise of any power hereunder or under any pledge or     
security agreement securing this note shall preclude other or future            
exercise thereof or the exercise of any other power. The holder hereof          
shall at all times have the right to proceed against any portion of the         
security held herefor in such order and in such manner as the holder may        
see fit, without waiving any rights with respect to any other security.         

All rights and obligations hereunder shall be governed by the laws of the       
Commonwealth of Massachusetts and this note is executed as and shall have       
the effect of a sealed instrument. Notwithstanding any provision herein or      
in any instrument now or hereafter securing this note, the total liability      
for payments in the nature of interest shall not exceed the limitations now     
imposed by the applicable laws of the state whose laws are controlling on       
the subject as shall be determined by final order of a court of competent       
jurisdiction.                                                                   

The provisions of the Promissory Note are hereby declared to be severable,      
and if any such provision or the application of such provision to any           
person, corporation, or circumstance shall be held to be invalid or             
unconstitutional, such invalidity or unconstitutionality shall not be           
construed to affect the validity or constitutionality of any of the             
remaining provisions of this note or the application of such provision to       
persons, corporations, or circumstances other than those as to which it is      
held invalid.                                                                   

The undersigned acknowledge receipt of a copy of the within note.               

IN WITNESS WHEREOF, ARMATRON INTERNATIONAL, INC. has caused these presents      
to be executed and delivered as an instrument under seal by Charles J.          
Housman, its President and Treasurer, thereunder duly authorized, the day       
and year first above written.                                                   

Witness:                               ARMATRON INTERNATIONAL, INC.             

/s/ Edward J. Rogers                   By /s/ Charles J. Housman                
-----------------------------             --------------------------------      
Edward J. Rogers                          Charles J. Housman, President         
                   and Treasurer

This note is secured by a Security Agreement covering all of the assets of      
the maker, and without limiting the generality of the foregoing, including      
present and hereinafter acquired equipment, inventory, accounts receivable,     
contract rights and other intangibles as set forth in said Security             
Agreement and financing statements to be filed with the Secretary of the        
Commonwealth of Massachusetts and elsewhere.                                    

AGREEMENT FOR REVISION OF   
TERMS OF PROMISSORY NOTE AND SECURITY AGREEMENT   
-----------------------------------------------   

 AGREEMENT made this 30th day of September, 1994 by and between Elliot
J. Englander, Trustee of Housman Realty Trust, (hereinafter referred to as      
"Lender") and Armatron International, Inc., a Massachusetts corporation,        
located at 2 Main Street, Melrose, Massachusetts, (hereinafter referred to      
as "Borrower").                                                                 

WHEREAS Lender is the Holder and Borrower is the Maker of a certain 
Promissory Note dated January 11, 1990, in the original principal amount of     
$7,000,000.00 (hereinafter "the Note");                                         

WHEREAS the Note is secured by a certain Security Agreement dated   
January 11, 1990, on the inventory, accounts, accounts receivable,              
equipment and other assets of the Borrower as evidenced by UCC financing        
statements on file with the Secretary of State of Massachusetts, and the        
Clerk's Officer of Melrose, Massachusetts; and                                  

WHEREAS Lender and Borrower have agreed to extend the due date of   
said Note and Security Agreement.                                               

NOW, THEREFORE, Lender and Borrower, for themselves, and their      
respective successors, executors, administrators, and assigns, mutually         
covenant and agree as follows:                                                  

1.  The maturity date of the Note is extended to October 1, 1997.   

2.  The interest rate on said Note is the "Base Rate" as determined 
from time to time by the Shawmut Bank, N.A. plus two (2%) percent.              

3.  In all other respects, the terms and conditions of the Note and 
Security Agreement are hereby ratified and reaffirmed.                          

Executed and delivered as an instrument under seal this 30th day of 
September, 1994.                                                                

LENDER:                                BORROWERS:                               

HOUSMAN REALTY TRUST                   ARMATRON INTERNATIONAL, INC.             

By /s/ Elliot J. Englander             By /s/ Charles J. Housman                
-------------------------------        --------------------------------   
Elliot J. Englander, Trustee           Charles J. Housman, President      
                   and Treasurer

AGREEMENT FOR SECOND REVISION OF    
TERMS OF PROMISSORY NOTE AND SECURITY AGREEMENT   
-----------------------------------------------   

AGREEMENT made this 10th day of November, 1994 by and between Elliot
J. Englander, Trustee of Housman Realty Trust, (hereinafter referred to as      
"Lender") and Armatron International, Inc., a Massachusetts corporation,        
located at 2 Main Street, Melrose, Massachusetts, (hereinafter referred to      
as "Borrower").                                                                 

WHEREAS Lender is the Holder and Borrower is the Maker of a certain 
Promissory Note dated January 11, 1990, in the original principal amount of     
$7,000,000.00 (hereinafter "the Note");                                         

WHEREAS the Note is secured by a certain Security Agreement dated   
January 11, 19990, on the inventory, accounts, accounts receivable,             
equipment and other assets of the Borrower as evidenced by UCC financing        
statements on file with the Secretary of State of Massachusetts, and the        
Clerk's Office of Melrose, Massachusetts;                                       

 WHEREAS said Note and Security Agreement were amended by an Agreement
for Revision of Terms of Promissory Note and Security Agreement ("revision")    
dated September 30, 1994; and                                                   

 WHEREAS Lender and Borrower have agreed to further amend the interest
rate as set forth on said Note as amended by revision dated September 30,       
1994.                                                                           

NOW, THEREFORE, Lender and Borrower, for themselves, and their      
respective successors, executors, administrators, and assigns, mutually         
covenant and agree as follows:                                                  

1.  The interest rate on said Note effective as of November 8, 1994 
will be at the rate of ten (10%) percent per annum on the unpaid balance.       

2.  In all other respects, the terms and conditions of the Note and 
Security Agreement dated January 11, 1990, as amended by revision dated         
September 30, 1994, are hereby ratified and reaffirmed.                         

Executed and delivered as an instrument under seal this 10th day of 
November, 1994.                                                                 

LENDER:                                BORROWERS:                               

HOUSEMAN REALTY TRUST                  ARMATRON INTERNATIONAL, INC.             

By:  /s/ Elliot J. Englander           By:  /s/ Charles J. Housman              
-----------------------------          ------------------------------ 
Elliot J. Englander, Trustee           Charles J. Housman, President  
                       and Treasurer

AGREEMENT FOR REVISION OF   
TERMS OF PROMISSORY NOTE AND SECURITY AGREEMENT   
-----------------------------------------------   

AGREEMENT made this 7th day of August, 1997 by and between Elliot J.
Englander, Trustee of Housman Reality Trust, (hereinafter referred to as        
"Lender") and Armatron International, Inc., a Massachusetts corporation,        
located at w2 Main Street, Melrose, Massachusetts, (hereinafter referred to     
as "Borrower").                                                                 

WHEREAS Lender is the Holder and Borrower is the Maker of a certain 
Promissory Note dated January 11, 1990, in the original principal amount of     
$7,000,000.00 (hereinafter "the Note);                                          

WHEREAS the Note is secured by a certain Security Agreement dated   
January 11, 1990, on the inventory, accounts, accounts receivable,              
equipment and other assets of the Borrower as evidenced by UCC financing        
statements on file with the Secretary of State of Massachusetts, and the        
Clerk's Office of Melrose, Massachusetts;                                       

WHEREAS Lender and Borrower have agreed to extend the due date of   
said Note and Security Agreement.                                               

NOW, THEREFORE, Lender and Borrower, for themselves, and their      
respective successors, executors, administrators, and assigns, mutually         
covenant and agree as follows:                                                  

1.  The maturity date of the Note is extended to October 1, 1998.   

2.  The interest rate on said Note is 10% per annum.                

3.  In all other respects, the terms and conditions of the Note and 
Security Agreement are hereby ratified and reaffirmed.                          

Executed and delivered as an instrument under seal this 7th date of 
August 1997.                                                                    

LENDER:                                BORROWERS:                               

HOUSMAN REALTY TRUST                   ARMATRON INTERNATIONAL, INC.             

BY:  /s/ Elliot J. Englander           By:  /s/ Charles J. Housman              
-----------------------------          ------------------------------ 
Elliot J. Englander, Trustee           Charles J. Housman, President  
                       and Treasurer

AGREEMENT FOR REVISION OF   
TERMS OF PROMISSORY NOTE AND SECURITY AGREEMENT   
-----------------------------------------------   

AGREEMENT made this 27th day of October 1998 by and between Malcolm 
D. Finks, Trustee of Housman Realty Trust, (hereinafter referred to as          
"Lender") and Armatron International, Inc., a Massachusetts corporation,        
located at 2 Main Street, Melrose, Massachusetts, (hereinafter referred to      
as "Borrower").                                                                 

WHEREAS Lender is the Holder and Borrower is the Maker of a certain 
Promissory Note dated January 11, 1990, in the original principal amount of     
$7,000,000.00 (hereinafter "the Note");                                         

WHEREAS the Note is secured by a certain Security Agreement dated   
January 11, 1990, on the inventory, accounts, accounts receivable,              
equipment and other assets of the Borrower as evidenced by UCC financing        
statements on file with the Secretary of State of Massachusetts, and the        
Clerk's Office of Melrose, Massachusetts; and                                   

WHEREAS Lender and Borrower have agreed to extend the due date of   
said Note and Security Agreement.                                               

NOW, THEREFORE, Lender and Borrower, for themselves, and their      
respective successors, executors, administrators, and assigns, mutually         
covenant and agree as follows:                                                  

1.  The maturity date of the Note is extended to October 1, 1999.   

2.  The interest rate on said Note is 10% per annum.                

3.  In all other respects, the terms and conditions of the Note and 
Security Agreement are hereby ratified and reaffirmed.                          

Executed and delivered as an instrument under seal this 27th day of 
October 1998.                                                                   

LENDER:                                BORROWERS:                               

HOUSMAN REALTY TRUST                   ARMATRON INTERNATIONAL, INC.             

BY:  /s/ Malcolm D. Finks              By:  /s/ Charles J. Housman              
-----------------------------          ------------------------------ 
Malcolm D. Finks, Trustee              Charles J. Housman, President  
                       and Treasurer

                                                                     EXHIBIT 2

AGREEMENT AND PLAN OF MERGER    

by and among    

ARMATRON INTERNATIONAL, INC.    

and   

ARMATRON MERGER CORPORATION   

dated as of   

April __, 1999    

TABLE OF CONTENTS   

ARTICLE I                                                               1       
THE MERGER                                                            1     
SECTION 1.1 THE MERGER                                                1     
SECTION 1.2 EFFECTIVE TIME                                            1     
SECTION 1.3 CLOSING                                                   2     
SECTION 1.4 ARTICLES OF ORGANIZATION; BY-LAWS                         2     
SECTION 1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION       2     

ARTICLE II                                                              2       
CONVERSION OF SHARES                                                  2     
SECTION 2.1 CONVERSION OF CAPITAL STOCK                               2     
SECTION 2.2 PAYMENT OF MERGER CONSIDERATION                           3     
SECTION 2.3 DISSENTING SHARES                                         4     

ARTICLE III                                                             4       
REPRESENTATIONS AND WARRANTIES OF THE COMPANY                         4     
SECTION 3.1 ORGANIZATION                                              4     
SECTION 3.2 CAPITALIZATION                                            5     
SECTION 3.3 AUTHORIZATION; VALIDITY OF AGREEMENT                      6     
SECTION 3.4 NO VIOLATIONS; CONSENTS AND APPROVALS                     6     
SECTION 3.5 SEC REPORTS AND FINANCIAL STATEMENTS                      7     
SECTION 3.6 ABSENCE OF CERTAIN CHANGES                                8     
SECTION 3.7 ABSENCE OF UNDISCLOSED LIABILITIES                        8     
SECTION 3.8 PROXY STATEMENT; EXCHANGE ACT SCHEDULES                   8     
SECTION 3.9 EMPLOYEE BENEFIT PLANS; ERISA                             9     
SECTION 3.10 LITIGATION; COMPLIANCE WITH LAW                          9     
SECTION 3.11 INTELLECTUAL PROPERTY                                   10     
SECTION 3.12 CONTRACTS                                               11     
SECTION 3.13 TAXES                                                   13     
SECTION 3.14 ENVIRONMENTAL MATTERS                                   13     
SECTION 3.15 REQUIRED VOTE BY COMPANY STOCKHOLDERS                   15     
SECTION 3.16 BROKERS                                                 15     
SECTION 3.17 OPINION OF FINANCIAL ADVISOR                            15     
SECTION 3.18 ASSETS                                                  15     
SECTION 3.19 REAL PROPERTY                                           16     
SECTION 3.20 INSURANCE                                               16     
SECTION 3.21 LABOR MATTERS, ETC                                      16     
SECTION 3.22 DISCLOSURE                                              17     
SECTION 3.23 TAKEOVER STATUTES                                       17     

ARTICLE IV                                                             17       
REPRESENTATIONS AND WARRANTIES OF MERGERCO                           17     
SECTION 4.1 ORGANIZATION                                             17     
SECTION 4.2 AUTHORIZATION; VALIDITY OF AGREEMENT                     17     
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS                    18     
SECTION 4.4 PROXY STATEMENT; EXCHANGE ACT SCHEDULES                  18     
SECTION 4.5 BROKERS                                                  19     
SECTION 4.6 FORMATION OF MERGERCO; NO PRIOR ACTIVITIES               19     

ARTICLE V                                                              19       
COVENANTS                                                            19     
SECTION 5.1 INTERIM OPERATIONS OF THE COMPANY                       19      
SECTION 5.2 ACCESS TO INFORMATION                                    21     
SECTION 5.3 FURTHER ACTION; REASONABLE BEST EFFORTS                  21     
SECTION 5.4 SHAREHOLDERS' MEETING; PROXY STATEMENT                   21     
SECTION 5.5 NOTIFICATION OF CERTAIN MATTERS                          23     
SECTION 5.6 DIRECTORS' AND OFFICERS' INDEMNIFICATION                 23     
SECTION 5.7 RECAPITALIZATION                                         23     
SECTION 5.8 CONVEYANCE TAXES                                         23     
SECTION 5.9 DELISTING                                                24     
SECTION 5.10 CONDUCT OF THE COMPANY AFTER THE MERGER                 24     

ARTICLE VI                                                             24       
CONDITIONS                                                           24     
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT                 
THE MERGER                                                          24    
SECTION 6.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO EFFECT           
THE MERGER                                                          24    
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF MERGERCO TO EFFECT                 
THE MERGER                                                          25    

ARTICLE VII                                                            25       
TERMINATION                                                          25     
SECTION 7.1 TERMINATION                                              25     
SECTION 7.2 EFFECT OF TERMINATION                                    26     

ARTICLE VIII                                                           27       
MISCELLANEOUS                                                        27     
SECTION 8.1 FEES AND EXPENSES                                        27     
SECTION 8.2 AMENDMENT; WAIVER                                        27     
SECTION 8.3 SURVIVAL                                                 28     
SECTION 8.4 NOTICES                                                  28     
SECTION 8.5 INTERPRETATION                                           29     
SECTION 8.6 HEADINGS; SCHEDULES                                      29     
SECTION 8.7 COUNTERPARTS                                             29     
SECTION 8.8 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES              29     
SECTION 8.9 SEVERABILITY                                             29     
SECTION 8.10 GOVERNING LAW                                           29     
SECTION 8.11 ASSIGNMENT                                              30     

SCHEDULES                                                                       

Schedule 3.1                      Subsidiaries                                  
Schedule 3.2 (a)                  Capitalization                                
Schedule 3.2 (b)                  Ownership                                     
Schedule 3.4 (a)                  No Violations; Consents and Approvals         
Schedule 3.4 (b)                  Filings by the Company                        
Schedule 3.6                      Absence of Certain Changes                    
Schedule 3.7                      Absence of Undisclosed Liabilities            
Schedule 3.9 (b)                  Employee Benefit Plans                        
Schedule 3.9 (c)                  Severance Benefits                            
Schedule 3.10 (a)                 Litigation                                    
Schedule 3.10 (b)                 Compliance with Laws                          
Schedule 3.11                     Intellectual Property                         
Schedule 3.12 (a)                 Contracts                                     
Schedule 3.13                     Taxes                                         
Schedule 3.14 (c)                 Environmental Matters                         
Schedule 3.18                     Assets                                        
Schedule 3.18 (b)                 Certain Liens                                 
Schedule 3.19 (i)                 Formerly Owned Property                       
Schedule 3.19 (ii)                Leases                                        
Schedule 3.20                     Insurance Policies                            
Schedule 4.3 (b)                  Filings by the MergerCo                       
Schedule 5.1 (iii)                Interim Operations                            

EXHIBITS                                                                        

Exhibit A                         List of Stockholders of MergerCo              

TABLE OF DEFINED TERMS    
----------------------    
Term                                                              Section       
----                                                              -------       

Articles of Merger                                                1.2           
Articles of Organization                                          3.1           
Assets                                                            3.18(a)       
Certificates                                                      2.2(a)        
Closing                                                           1.3           
Closing Date                                                      1.3           
Code                                                              3.9(a)        
Company                                                           Recitals      
Company Common Stock                                              2.1           
Company Intellectual Property                                     3.11          
Company Preferred Stock                                           2.1           
Company Reports                                                   3.5           
Company SEC Documents                                             3.5           
Consolidated Group                                                3.13(b)       
Disclosure Schedule                                               3.1           
Dissenting Shares                                                 2.3           
Effective Time                                                    1.2           
Environmental Law                                                 3.14(d)       
Exchange Act                                                      3.4(b)        
Fairness Opinion                                                  3.17          
Financial Advisor                                                 3.17          
Formerly Owned Property                                           3.19          
GAAP                                                              3.5           
Governmental Entity                                               3.4(b)        
Hazardous Materials                                               3.14(d)       
Identified Contracts                                              3.12(a)       
Indemnified Parties                                               5.6(a)        
Intellectual Property                                             3.11          
Laws                                                              3.4(a)        
Leased Real Property                                              3.19          
Leases                                                            3.19          
Lien                                                              3.18(b)       
Litigation                                                        3.10(a)       
Massachusetts Secretary of State                                  1.2           
Material Adverse Effect                                           3.1           
Material Contracts                                                3.12(a)       
MBCL                                                              Recitals      
Merger                                                            1.1           
MergerCo                                                          Recitals      
MergerCo Common Stock                                             2.1           
MergerCo Disclosure Schedule                                      4.3(b)        
Merger Consideration                                              2.1(a)        
Owned Real Property                                               3.19          
Permits                                                           3.10(c)       
Permitted Liens                                                   3.18(b)       
Person                                                            3.1           
Plans                                                             3.9(a)        
Proxy Statement                                                   5.4(a)        
Real Property                                                     3.19          
Recapitalized Common Stock                                        2.1(b)        
Recapitalized Preferred Stock                                     2.1(d)        
Schedule 13E-3                                                    5.4(c)        
SEC                                                               3.5           
Securities Act                                                    3.4(b)        
September 30, 1998 Balance Sheet                                  3.7           
Shares                                                            2.1           
Special Meeting                                                   5.4(a)        
Subsidiary                                                        3.1           
Surviving Corporation                                             1.1           
Tax Returns                                                       3.13(b)       
Taxes                                                             3.13(b)       

AGREEMENT AND PLAN OF MERGER    
----------------------------    

AGREEMENT AND PLAN OF MERGER, dated as of April __, 1999, by and    
between Armatron International, Inc., a Massachusetts corporation (the          
"Company"), and Armatron Merger Corporation, a Massachusetts corporation        
("MergerCo"), formed by certain stockholders of the Company.                    

WHEREAS, the Board of Directors of MergerCo has approved, and deems 
it advisable and in the best interests of the stockholders of MergerCo to       
participate in the recapitalization of the Company, upon the terms and          
subject to the conditions set forth herein;                                     

WHEREAS, the Board of Directors of the Company, has approved, and   
deems it advisable and in the best interests of the shareholders of the         
Company to consummate, the recapitalization of the Company, upon the terms      
and subject to the conditions set forth herein; and                             

WHEREAS, in furtherance of such recapitalization, the Board of      
Directors of MergerCo and the Board of Directors of the Company have each       
approved this Agreement and the merger of MergerCo with and into the            
Company in accordance with the terms of this Agreement and the Business         
Corporation Law of the Commonwealth of Massachusetts (the "MBCL").              

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the     
parties hereto agree as follows:                                                

ARTICLE I   

THE MERGER    

SECTION 1.1  The Merger.  Upon the terms and subject to the         
conditions of this Agreement and in accordance with the applicable              
provisions of the MBCL, at the Effective Time (as defined in Section 1.2        
hereof), MergerCo shall be merged (the "Merger") with and into the Company      
and the separate corporate existence of MergerCo shall cease.  After the        
Merger, the Company shall continue as the surviving corporation (sometimes      
hereinafter referred to as the "Surviving Corporation") and shall continue      
to be governed by the laws of the Commonwealth of Massachusetts.  The           
Merger shall have the effect as provided in the applicable provisions of        
the MBCL.  Without limiting the generality of the foregoing, upon the           
Merger, all the rights, privileges, immunities, powers and franchises of        
the Company and MergerCo shall vest in the Surviving Corporation and all        
restrictions, obligations, duties, debts and liabilities of the Company and     
MergerCo shall be the obligations, duties, debts and liabilities of the         
Surviving Corporation.                                                          

SECTION 1.2  Effective Time.  On or as promptly as practicable      
following the Closing (as defined in Section 1.3), MergerCo and the Company     
will cause the appropriate articles of merger (the "Articles of Merger") to     
be executed and filed with the Secretary of State of the Commonwealth of        
Massachusetts (the "Massachusetts Secretary of State") in such form and         
executed as provided in Section 78 of the MBCL.  The Merger shall become        
effective on the date on which the Articles of Merger have been duly filed      
with the Massachusetts Secretary of State, or such time as is agreed upon       
by the parties and specified in the Articles of Merger, but not later than      
30 days after such filing, and such time is hereinafter referred to as the      
"Effective Time."                                                               

 SECTION 1.3  Closing.  The closing of the Merger (the "Closing") will
take place at 10:00 a.m., Boston time, on a date to be specified by the         
parties, which shall be no later than the second business day after             
satisfaction or waiver of all of the conditions set forth in Article VI         
hereof (the "Closing Date"), at the offices of Mintz, Levin, Cohn, Ferris,      
Glovsky and Popeo, P.C., One Financial Center, Boston, Massachusetts,           
unless another date or place is agreed to by the parties hereto.                

SECTION 1.4  Articles of Organization; By-Laws.  Pursuant to the    
Merger, (x) the articles of organization of the Surviving Corporation shall     
be amended and restated at and as of the Effective Time to read as did the      
articles of organization of MergerCo immediately prior to the Effective         
Time, until thereafter amended as provided by applicable law and such           
articles of organization, except that the name of the Surviving Corporation     
will remain unchanged and (y) the By-laws of the Surviving Corporation          
shall be amended and restated, at and as of the Effective Time, to read as      
did the By-laws of MergerCo immediately prior to the Effective Time, until      
thereafter amended as provided by applicable law, the articles of               
organization or the By-laws of the Surviving Corporation, except that the       
name of the Surviving Corporation will remain unchanged.                        

SECTION 1.5  Directors and Officers of the Surviving Corporation.   

(a)   The directors of MergerCo immediately prior to the Effective  
Time shall, from and after the Effective Time, be the directors of the          
Surviving Corporation until their successors shall have been duly elected       
or appointed and qualified or until their earlier death, resignation or         
removal in accordance with the Surviving Corporation's articles of              
organization and By-laws.                                                       

(b)   The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall       
hold office until their respective successors are duly elected and              
qualified, or their earlier death, resignation or removal.                      

ARTICLE II    

CONVERSION OF SHARES    

SECTION 2.1  Conversion of Capital Stock.  As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders       
of any shares of common stock, par value $1.00 per share, of the Company        
(referred to herein, as the "Shares" or "Company Common Stock"), Series A       
Preferred Stock, par value $100 per share, of the Company (the "Company         
Preferred Stock") or the common stock, par value $.01 per share, of             
MergerCo (the "MergerCo Common Stock"):                                         

(a)   Each issued and outstanding share of Company Common Stock     
(other than (i) Shares to be contributed to MergerCo in accordance with         
Section 2.1(b), (ii) Shares to be canceled in accordance with Section           
2.1(c) and (iii) Dissenting Shares covered by Section 2.3) shall be             
converted into the right to receive $.27 in cash, payable to the holder         
thereof, without interest (the "Merger Consideration"), upon surrender of       
the certificate formerly representing such share of Company Common Stock in     
the manner provided in and otherwise in accordance with Section 2.2. All        
such shares of Company Common Stock, when so converted, shall no longer be      
outstanding and shall automatically be canceled and retired and shall cease     
to exist, and each holder of a certificate representing any such Shares         
shall cease to have any rights with respect thereto, except the right to        
receive the Merger Consideration therefor in accordance with Section 2.2.       

(b)   Each issued and outstanding share of Company Common Stock held
by the persons and entities listed on Exhibit A attached hereto shall be        
contributed to MergerCo in exchange for one hundredth of one fully paid and     
nonassesable share of MergerCo Common Stock (or fraction thereof) and each      
such share of MergerCo Common Stock shall then be converted into and become     
one fully paid and nonassessable share of common stock, $.01 par value per      
share (or fraction thereof), of the Surviving Corporation (the                  
"Recapitalized Common Stock").                                                  

 (c)   All shares of Company Common Stock that are held by the Company
as treasury stock or that are held by MergerCo shall be canceled and            
retired and shall cease to exist and no Merger Consideration shall be           
delivered in exchange therefor.                                                 

(d)   Each issued and outstanding share of Company Preferred Stock  
shall be converted into and become one fully paid and nonassessable share       
of Series A Preferred Stock, $.01 par value per share, of the Surviving         
Corporation (the "Recapitalized Preferred Stock").                              

SECTION 2.2  Payment of Merger Consideration.                       

(a)   The Company will promptly, and in any event not later than ten
business days following the Effective Time, mail to each holder of record       
of a certificate or certificates, which immediately prior to the Effective      
Time represented outstanding shares of Company Common Stock (the                
"Certificates"), whose Shares were converted pursuant to Section 2.1(a)         
into the right to receive the Merger Consideration, a check from the            
Company representing the Merger Consideration for each share of Company         
Common Stock formerly represented by such Certificate. Each Certificate         
(other than Certificates representing Dissenting Shares) shall be deemed at     
any time after the Effective Time to be canceled and represent only the         
right to receive the Merger Consideration as contemplated by this Section       
2.2.                                                                            

(b)   After the Effective Time, the stock transfer books of the     
Company shall be closed and there shall be no transfers on the stock            
transfer books of the Surviving Corporation of Shares which were                
outstanding immediately prior to the Effective Time.  If, after the             
Effective Time, Certificates are presented to the Surviving Corporation,        
they shall be canceled and exchanged for the Merger Consideration as            
provided in this Article II.  Any former shareholders of the Company shall      
after the Effective Time, look only to the Surviving Corporation for            
payment of any Merger Consideration that may be payable upon surrender of       
any Certificates such shareholder holds, as determined pursuant to this         
Agreement, without any interest thereon.                                        

(c)   None of MergerCo, the Company, the Surviving Corporation, or  
any other person shall be liable to any former holder of shares of Company      
Common Stock for any amount properly delivered to a public official             
pursuant to applicable abandoned property, escheat or similar laws.             

(d)   Any payment made pursuant to this Section 2.2 shall be subject
to and made net of applicable withholding taxes.                                

SECTION 2.3  Dissenting Shares.  Notwithstanding anything in this   
Agreement to the contrary, Shares which are issued and outstanding              
immediately prior to the Effective Time and which are held by shareholders      
who have validly demanded payment of the fair value for such shareholders'      
shares as determined by appraisal in accordance with the MBCL (the              
"Dissenting Shares"), shall not be converted into or be exchangeable for        
the right to receive the Merger Consideration provided in Section 2.1(a) of     
this Agreement, unless and until such holder shall have failed to perfect       
or shall have effectively withdrawn or lost such holder's right to              
appraisal and payment under the MBCL.  If such holder shall have so failed      
to perfect or shall have effectively withdrawn or lost such right, such         
holder's Shares shall thereupon be deemed to have been converted into and       
to have become exchangeable for, at the Effective Time, the right to            
receive the consideration provided for in Section 2.1 of this Agreement,        
without any interest thereon.                                                   

ARTICLE III   

REPRESENTATIONS AND WARRANTIES OF THE COMPANY   

 The Company represents and warrants to MergerCo as of the date hereof
that:                                                                           

SECTION 3.1  Organization.  Each of the Company and its Subsidiaries
(as hereinafter defined) is a corporation or other entity duly organized,       
validly existing, and in good standing under the laws of the jurisdiction       
of its incorporation or organization, and has all requisite corporate power     
and authority to own, lease, use and operate its properties and to carry on     
its business as it is now being conducted.  Each of the Company and its         
Subsidiaries (as hereinafter defined) is qualified or licensed to do            
business as a foreign corporation and is in good standing in each               
jurisdiction in which it owns real property or in which the nature of the       
business conducted by it makes such qualification or licensing necessary,       
except where the failure to be so qualified or licensed in the aggregate        
would not have or result in a Material Adverse Effect.  The term "Material      
Adverse Effect" shall mean any change, effect, event, occurrence or state       
of facts that is, or would reasonably be expected to be, materially adverse     
to the business, assets, liabilities, results of operations or financial or     
other condition of the Company and its Subsidiaries taken as a whole.  None     
of the Company or any of its Subsidiaries is in breach or violation of any      
of its articles of organization, by-laws or other organizational documents.     
The Company has previously delivered to MergerCo a complete and correct         
copy of each of its restated articles of organization, as amended (the          
"Articles of Organization") and By-Laws, as currently in effect.  Schedule      
3.1 of the disclosure schedule delivered by the Company to MergerCo on or       
prior to the date hereof (the "Disclosure Schedule") sets forth a complete      
and correct list of the Subsidiaries of the Company and their respective        
jurisdictions of incorporation or organization.  "Subsidiary" shall mean        
with respect to any Person, any corporation or other entity of which 50% or     
more of the securities or other interests having by their terms ordinary        
voting power for the election of directors or others performing similar         
functions with respect to such entity is directly or indirectly owned by        
such Person.  "Person" shall mean any natural person, firm, individual,         
partnership, joint venture, business trust, trust, association,                 
corporation, company, unincorporated entity or Governmental Entity (as          
defined in Section 3.4(b)).                                                     

SECTION 3.2  Capitalization.                                        

(a)   The authorized capital stock of the Company consists of       
6,000,000 shares of Company Common Stock and 100,000 shares of preferred        
stock, of which 6,667 shares have been designated as Company Preferred          
Stock.  At the close of business on April 30, 1999: (i) 2,459,749 shares of     
Company Common Stock were issued and outstanding; (ii) 146,732 shares of        
Company Common Stock were issued and held by the Company in its treasury;       
(iii) 6,667 shares of Company Preferred Stock were issued and outstanding;      
(iv) no shares of Company Common Stock were reserved for issuance pursuant      
to the Company Stock Plan, of which no shares are subject to outstanding        
options; and (v) no shares of Company Preferred Stock have been designated      
(except for the 6,667 shares of Company Preferred Stock referenced above)       
or issued.  All outstanding shares of capital stock of the Company are, and     
all shares thereof which may be issued will be, when issued, duly               
authorized, validly issued, fully paid and nonassessable and not subject to     
preemptive rights.  Except as expressly provided in this Agreement or in        
the Articles of Organization, (x) there are not issued, reserved for            
issuance or outstanding (A) any shares of capital stock or other voting         
securities of the Company, (B) any securities of Company or any of its          
Subsidiaries convertible into or exchangeable or exercisable for shares of      
capital stock or voting securities of the Company, (C) any warrants, calls,     
options or other rights to acquire from Company or any of its Subsidiaries,     
and any obligation of Company or any of its Subsidiaries to issue, any          
capital stock, voting securities or securities convertible into or              
exchangeable or exercisable for capital stock or voting securities of the       
Company, and (y) there are no outstanding obligations of Company or any of      
its Subsidiaries to repurchase, redeem or otherwise acquire any such            
securities or to issue, deliver or sell, or cause to be issued, delivered       
or sold, any such securities, in each case. Except as set forth in Schedule     
3.2(a) of the Disclosure Schedule, there are no existing or outstanding (i)     
options, warrants, calls, preemptive rights, subscriptions or other rights,     
convertible securities, agreements or commitments of any character              
obligating the Company or any of its Subsidiaries to issue, transfer or         
sell any shares of capital stock or other equity interest in, the Company       
or any of its Subsidiaries or securities convertible into or exchangeable       
for such shares or equity interests, (ii) contractual obligations of the        
Company or any of its Subsidiaries to repurchase, redeem or otherwise           
acquire any capital stock of the Company or any Subsidiary of the Company       
or (iii) voting trusts or similar agreements to which the Company or any of     
its Subsidiaries is a party with respect to the voting of the capital stock     
of the Company or any of its Subsidiaries.                                      

(b)   Except as set forth in Schedule 3.2(b) of the Disclosure      
Schedule, (i) all of the outstanding shares of capital stock of each of the     
Company's Subsidiaries are beneficially owned, directly or indirectly, by       
the Company and (ii) neither the Company nor any of its Subsidiaries owns       
any shares of capital stock or other securities of, or interest in, any         
other Person (other than any Subsidiaries listed on Schedule 3.1), or is        
obligated to make any capital contribution to or other investment in any        
other Person, provided that Schedule 3.2(b) shall not be required to set        
forth any cash equivalents held by the Company or any of its Subsidiaries       
or any Person in which the Company or any of its Subsidiaries owns less         
than 100 shares of publicly traded securities.                                  

SECTION 3.3  Authorization; Validity of Agreement.  The Company has 
the requisite corporate power and authority to execute and deliver this         
Agreement and, subject to approval of its stockholders as contemplated by       
Section 5.6 hereof, to consummate the transactions contemplated hereby.         
The execution, delivery and performance by the Company of this Agreement        
and the consummation of the transactions contemplated hereby have been duly     
authorized by the Board of Directors of the Company and, other than             
approval and adoption of this Agreement by the holders of two-thirds of the     
outstanding shares of Company Common Stock and Company Preferred Stock,         
voting together as a single class, no other corporate proceedings on the        
part of the Company are necessary to authorize the execution and delivery       
of this Agreement by the Company and the consummation of the transactions       
contemplated hereby.  This Agreement has been duly executed and delivered       
by the Company and, assuming due authorization, execution and delivery of       
this Agreement by MergerCo, is a valid and binding obligation of the            
Company in accordance with its terms, except that such enforcement may be       
subject to or limited by (i) bankruptcy, insolvency or other similar laws,      
now or hereafter in effect, affecting creditors' rights generally, and (ii)     
the effect of general principles of equity (regardless of whether               
enforceability is considered in a proceeding at law or in equity).              

SECTION 3.4  No Violations; Consents and Approvals.                 

(a)   Neither the execution and delivery of this Agreement by the   
Company nor the consummation by the Company of the transactions                 
contemplated hereby will (i) violate any provision of the Articles of           
Organization or By-Laws of the Company, (ii) except as set forth in             
Schedule 3.4(a) of the Disclosure Schedule, conflict with, result in a          
violation or breach of, or constitute (with or without due notice or lapse      
of time or both) a default (or give rise to any right of termination,           
amendment, cancellation or acceleration, or to the imposition of any Lien       
(as defined in Section 3.18(b))) under, or result in the acceleration or        
trigger of any payment, time of payment, vesting or increase in the amount      
of any compensation or benefit payable pursuant to, the terms, conditions       
or provisions of any note, bond, mortgage, indenture, guarantee or other        
evidence of indebtedness, or any lease, license, contract, agreement, plan      
or other instrument or obligation, to which the Company or any of its           
Subsidiaries is a party or by which any of them or any of their assets may      
be bound, or (iii) conflict with or violate any federal, state, local or        
foreign order, writ, injunction, judgment, award, decree, statute, law,         
rule or regulation (collectively, "Laws") applicable to the Company, any of     
its Subsidiaries or any of their properties or assets; except in the case       
of clauses (ii) or (iii) for such conflicts, violations, breaches or            
defaults which in the aggregate would not have or result in a Material          
Adverse Effect or materially impair or delay the consummation of the            
transactions contemplated hereby.                                               

(b)   Except as disclosed in Schedule 3.4(b) of the Disclosure      
Schedule, no filing or registration with, declaration or notification to,       
or order, authorization, consent or approval of, any federal, state, local      
or foreign court, legislative, executive or regulatory authority or agency      
(a "Governmental Entity") or any other Person is required in connection         
with the execution, delivery and performance of this Agreement by the           
Company or the consummation by the Company of the transactions contemplated     
hereby, except (i) applicable requirements under the Securities Exchange        
Act of 1934, as amended (the "Exchange Act"), (ii) applicable requirements      
under the Securities Act of 1933, as amended (the "Securities Act"), (iii)      
the filing of the Articles                                                      
of Merger with the Massachusetts Secretary of State, (iv) applicable            
requirements under "blue sky" laws of various states, (v) such other            
consents, approvals, orders, authorizations, notifications, registrations,      
declarations and filings the failure of which to be obtained or made in the     
aggregate would not have or result in a Material Adverse Effect or              
materially impair or delay the consummation of the transactions                 
contemplated hereby.                                                            

SECTION 3.5  SEC Reports and Financial Statements.  The Company has 
timely filed with the Securities and Exchange Commission (the "SEC"), any       
applicable state securities authorities and any other Governmental Entity       
all forms and documents required to be filed by it since October 1, 1993        
(collectively, the "Company Reports") and has heretofore made available to      
the MergerCo (i) its Annual Reports on Form 10-K, as amended, for the           
fiscal years ended September 30, 1994, September 30, 1995, September 30,        
1996, September 30, 1997 and September 30, 1998, respectively, (ii) its         
Quarterly Report on Form 10-Q for the period ended December 30, 1998, (iii)     
all proxy statements relating to meetings of stockholders of the Company        
since October 1, 1993 (in the form mailed to stockholders) and (iv) all         
other forms, reports and registration statements filed by the Company with      
the SEC since October 1, 1993 (other than registration statements on Form       
S-8 or Form 8-A or preliminary materials and registration statements in         
forms not declared effective). The documents described in clauses (i)-(iv)      
above (whether filed before, on or after the date hereof) are referred to       
in this Agreement collectively as the "Company SEC Documents". As of their      
respective dates, the Company Reports (a) did not contain any untrue            
statement of a material fact or omit to state a material fact required to       
be stated therein or necessary in order to make the statements therein, in      
light of the circumstances under which they were made, not misleading and       
(b) complied in all material respects with the applicable requirements of       
Law, including in the case of SEC filings, the Exchange Act and the             
Securities Act, as the case may be, and the applicable rules and                
regulations of the SEC thereunder.  The consolidated financial statements       
included in the Company SEC Documents have been prepared in accordance with     
United States generally accepted accounting principles ("GAAP") applied on      
a consistent basis during the periods involved (except as otherwise noted       
therein and except that the quarterly financial statements are subject to       
year end adjustment and do not contain all footnote disclosures required by     
GAAP) and fairly present in all material respects the consolidated              
financial position and the consolidated results of operations and cash          
flows of the Company and its consolidated Subsidiaries as at the dates          
thereof or for the periods presented therein.                                   

SECTION 3.6  Absence of Certain Changes.  Except as disclosed in the
Company SEC Documents filed prior to the date hereof or as disclosed in         
Schedule 3.6 of the Disclosure Schedule, since September 30, 1998, (i) the      
Company and its Subsidiaries have conducted their respective operations         
only in the ordinary course consistent with past practice, (ii) there has       
not been a Material Adverse Effect and (iii) the Company and the                
Subsidiaries have not taken action that if taken after the date hereof          
would constitute a violation of Section 5.1 (other than clause (a)              
thereof).                                                                       

SECTION 3.7  Absence of Undisclosed Liabilities.  Except as and to  
the extent disclosed (a) in the Company's Annual Report on Form 10-K, as        
amended, for the period ended September 30, 1998, including as reflected or     
reserved against in the balance sheet dated as of and as at September 30,       
1998 constituting a portion of the financial statements included therein        
(the "September 30, 1998 Balance Sheet") or in the notes thereto, (b) in        
the Company SEC Documents filed prior to the date hereof or (c) in Schedule     
3.7 of the Disclosure Schedule, neither the Company nor any of its              
Subsidiaries had as of that date any liabilities or obligations (accrued,       
contingent or otherwise) which would be material to the Company and its         
Subsidiaries taken as a whole or which would be required to be set forth in     
an audited consolidated balance sheet of the Company and its Subsidiaries       
as of that date or the notes thereto prepared in accordance with GAAP.          

SECTION 3.8  Proxy Statement; Exchange Act Schedules.               

(a)   The Proxy Statement (as defined in Section 5.4(a)) (and any   
amendment thereof or supplement thereto) at the date mailed to Company          
stockholders and at the time of the Special Meeting (as defined in Section      
5.4(b)), (i) will not contain any untrue statement of a material fact or        
omit to state any material fact required to be stated therein or necessary      
in order to make the statements therein, in light of the circumstances          
under which they are made, not misleading and (ii) will comply in all           
material respects with the provisions of the Exchange Act and the rules and     
regulations thereunder; except that no representation is made by the            
Company with respect to statements made in the Proxy Statement based on         
information supplied by MergerCo specifically for inclusion in the Proxy        
Statement.                                                                      

(b)   Any Schedule 13E-3 (as defined in Section 5.4(c)) and any     
related schedules (and any amendment or supplement to any of the foregoing)     
filed with the SEC at the date so filed (i) will not contain any untrue         
statement of a material fact or omit to state any material fact required to     
be stated therein or necessary in order to make the statements therein, in      
light of the circumstances under which they are made, not misleading and        
(ii) will comply in all material respects with the provisions of the            
Exchange Act and the rules and regulations thereunder; except that no           
representation is made by the Company with respect to statements made in        
any such document based on information supplied by MergerCo specifically        
for inclusion therein.                                                          

SECTION 3.9  Employee Benefit Plans; ERISA.                         

(a)   No material liability under Title I or IV of the Employee     
Retirement Income Security Act of 1974, as amended ("ERISA") or the penalty     
or excise tax provisions of the Internal Revenue Code of 1986, as amended       
(the "Code"), relating to employee plans has been incurred by the Company       
or any of its Subsidiaries and, to the Company's best knowledge, no             
condition exists or event has occurred that presents a risk to the Company      
or any of its Subsidiaries of incurring any such material liability.            

 (b)   Each bonus, incentive or deferred compensation, stock option or
other equity based, severance, termination, change in control, retention,       
employment, medical, life, disability, other welfare, profit-sharing,           
retirement or other material compensation or benefit plan, agreement or         
policy in respect of which the Company or any of its Subsidiaries has any       
material liability has been filed with the Company SEC Documents or is          
listed on Schedule 3.9(b) of the Disclosure Schedule (collectively, the         
"Plans").  No such Plan is subject to Section 302 of ERISA or section 412       
of the Code and no such Plan has incurred any "accumulated funding              
deficiency" (as defined in Section 302 of ERISA or Section 412 of the           
Code), whether or not waived.  Each such Plan that is intended to be            
"qualified" within the meaning of section 401(a) of the Code has received a     
determination letter from the Internal Revenue Service confirming its           
qualified status and no condition exists or event has occurred since the        
date of such determination letter that would adversely affect the qualified     
status of any such Plan.  Each Plan has been operated and administered in       
all respects in substantial compliance with its terms and applicable Law,       
including but not limited to ERISA and the Code.  There are no pending, or      
to the best knowledge of the Company, threatened claims by or on behalf of      
any Plan, by any employee or beneficiary or otherwise involving any such        
Plan or the assets thereof, except for claims the resolution of which would     
not individually or in the aggregate have or result in a material liability     
to the Company or a Subsidiary.                                                 

(c)   Assuming that no amount is paid to any employee listed on     
Schedule 3.9(c)(i) as a severance benefit with respect to a termination of      
employment, no payment, benefit or other amount paid, payable or required       
to be paid in respect of any employee will fail to be deductible under          
Section 280G of the Code. Except as set forth on Schedule 3.9(c)(ii) of the     
Disclosure Schedule, (i) no current or former employee or director of the       
Company or any Subsidiary is or will become entitled to any additional or       
new compensation, benefits or other compensatory payment or an increase in      
the amount of any compensation, benefits or other compensatory payment in       
connection with or as a result of the consummation of the transactions          
contemplated by this Agreement and (ii) neither the vesting nor the timing      
of the payment of any such compensation, benefit or other compensatory          
payment in respect of any such employee or director has been or will be         
accelerated in connection with or as a result of the consummation of the        
transactions contemplated by this Agreement.                                    

SECTION 3.10  Litigation; Compliance with Law.                      

 (a)   Except as disclosed in the Company SEC Documents filed prior to
the date hereof or in Schedule 3.10(a) of the Disclosure Schedule, (i)          
there is no suit, claim, action, arbitration, proceeding or investigation       
or other Litigation (as defined below) pending or, to the knowledge of the      
Company, threatened, against the Company or any of its Subsidiaries or any      
of their properties or assets which, individually or in the aggregate, if       
determined adversely to the Company or any such Subsidiary, would have or       
result in a Material Adverse Effect, and (ii) neither the Company nor any       
of its Subsidiaries is subject to any settlement or similar agreement with      
any Governmental Entity, or to any order, judgment, decree, injunction or       
award of any Governmental Entity or arbitrator, that individually or in the     
aggregate, would have or result in a Material Adverse Effect.  "Litigation"     
means any action, cause of action, claim, demand, suit, proceeding,             
citation, summons, subpoena, inquiry or investigation of any nature, civil,     
criminal, regulatory or otherwise, in law or in equity, by or before any        
court, tribunal, arbitrator or other Governmental Entity.                       

 (b)   Except as disclosed in the Company SEC Documents filed prior to
the date hereof, the operations of the Company and its Subsidiaries have        
not been and are not being conducted, and no Real Property (as defined in       
Section 3.19) is, in violation of any law, statute or regulation, any           
judgment, decree, order or injunction of any Governmental Entity, any other     
Law, or any Permit (as defined below), except where such violations in the      
aggregate would not have or result in a Material Adverse Effect.  Except as     
set forth in Schedule 3.10(b) of the Disclosure Schedule, neither the           
Company nor any of its Subsidiaries has received any notice, or has             
knowledge of any claim, alleging any such violation.                            

(c)   The Company and its Subsidiaries hold all licenses, permits,  
variances, consents, authorizations, waivers, grants, franchises,               
concessions, exemptions, orders, registrations and approvals of                 
Governmental Entities or other Persons necessary for the ownership,             
leasing, operation, occupancy and use of the Real Property and the conduct      
of their respective businesses as currently conducted ("Permits"), except       
where the failure to hold such Permits in the aggregate would not have or       
result in a Material Adverse Effect. There is no Litigation pending or, to      
the knowledge of the Company, threatened, that would result in the              
termination, modification or nonrenewal of any Permit, and neither the          
Company nor any of its Subsidiaries has received notice that any Permit         
will be terminated or modified or cannot be renewed in the ordinary course      
of business, and there is no reasonable basis for any such termination,         
modification or nonrenewal, except for such terminations, modifications or      
nonrenewals as in the aggregate would not have or result in a Material          
Adverse Effect.  The execution, delivery and performance of this Agreement      
and the consummation of the transactions contemplated hereby do not and         
will not violate any Permit, or result in any termination, modification or      
nonrenewal thereof, except for such violations terminations, modifications      
or nonrenewals thereof as in the aggregate would not have or result in a        
Material Adverse Effect.                                                        

SECTION 3.11  Intellectual Property.  The Company and its           
Subsidiaries own (beneficially and as of record), or possess valid and          
legally enforceable licenses or rights to use, any and all United States        
and foreign patents, patent applications, patent disclosures, mask works,       
software, trademarks, trade names, copyrights and service marks, including      
applications to register and registrations for any of the foregoing, as         
well as trade secrets, know-how and other proprietary rights and                
information (collectively, "Intellectual Property") necessary for the           
conduct of, or otherwise material to, their business and operations as          
currently conducted or as proposed to be conducted (the "Company                
Intellectual Property"), free and clear of any Liens (except for any            
Permitted Liens, as defined in Section 3.18(b)).  Except as disclosed in        
Schedule 3.11 of the Disclosure Schedule, the conduct of the business of        
the Company and its Subsidiaries as currently conducted does not infringe       
or conflict with any Intellectual Property of any Person; and neither the       
Company nor any of its Subsidiaries has received notice or has actual           
knowledge of any such current infringement or conflict except where such        
infringements and conflicts as in the aggregate would not have or result in     
a Material Adverse Effect.  All of the patents, patent applications and         
patent disclosures included in Company Intellectual Property are valid,         
subsisting and enforceable.  To the knowledge of the Company, no Person is      
infringing or allegedly infringing any Intellectual Property of the Company     
or its Subsidiaries except where such actual and alleged infringements as       
in the aggregate would not have or result in a Material Adverse Effect.         
The execution and delivery of this Agreement and the consummation of the        
transactions contemplated hereby will not result in the loss of, or             
creation of any Lien on, the rights of the Company or any Subsidiary with       
respect to the Intellectual Property owned or used by them, except where        
such losses and such Liens as in the aggregate would not have or result in      
a Material Adverse Effect.  Schedule 3.11 of the Disclosure Schedule            
contains a complete and correct list of all patents, patent applications,       
patent disclosures, mask works, software (other than any software that is       
commercially available for an amount less than $10,000), trademarks, trade      
names, registered copyrights and service marks, including applications to       
register and registrations for any of the foregoing, included in Company        
Intellectual Property except that Schedule 3.11 need not disclose any           
trademarks, trade names or service marks that are not (a) registered or         
applied for and (b) not material to the business of the Company or any of       
its Subsidiaries as currently conducted.  Except as disclosed in Schedule       
3.11 of the Disclosure Schedule, all software used by the Company or any of     
its Subsidiaries, or sold, licensed or otherwise made available to any          
other Person by the Company or any of its Subsidiaries, that in each case,      
contains or calls on a calendar function, including but not limited to any      
function that is indexed to a computer processing unit clock, provides          
specific dates or calculates spans of dates, is and will be able to record,     
store, process and provide true and accurate dates and calculations for         
dates and spans of dates including and following January 1, 2000.               

SECTION 3.12  Contracts.                                            

 (a)   Other than the contracts or agreements of the Company listed as
exhibits to the Company's Annual Report on Form 10-K, as amended, for the       
year ended September 30, 1998 (the "Material Contracts"), Schedule 3.12(a)      
of the Disclosure Schedule sets forth a complete and correct list of each       
of the following contracts, commitments and agreements to which the Company     
or any of its Subsidiaries is a party or by which any of them is bound (the     
contracts, commitments and agreements of the types described below that are     
scheduled or required to be scheduled, collectively, the "Identified            
Contracts"), in each case, as such Identified Contract is in effect on the      
date hereof:                                                                    

  (i)    contracts, commitments and agreements governing the
terms of indebtedness for borrowed money, or guarantees of          
indebtedness, of, or secured by assets of, the Company or any of its
Subsidiaries;                                                       

 (ii)   shareholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity or debt 
interests of the Company or any of its Subsidiaries;                

       (iii)  contracts, commitments and agreements entered into since
1995 providing for the acquisition or disposition of assets having a
value in excess of $500,000, other than sales of inventories in the 
ordinary course of business and sales of obsolete equipment;        

(iv)   leases, subleases and licenses or real property, 
occupancy, use and other agreements relating to or constituting real
property, each with a term of one year or more and an annual payment
obligation in excess of $500,000;                                   

       (v)    (a) joint venture agreements, partnership agreements and
other similar contracts, commitments and agreements involving a     
sharing of profits and expenses; contracts, commitments and         
 agreements providing for a "strategic alliance" or "preferred vendor"
relationship; or (b) contracts, commitments or agreements with      
distributors, brokers or sales agents except, in the case of (b),   
only to the extent that any such distributors, brokers or sales     
agents are responsible for revenues to the Company or any of its    
Subsidiaries in excess of $500,000 per year;                        

  (vi)   contracts, commitments and agreements governing the
terms of indebtedness  (other than trade payables in the ordinary   
course of business) of third parties to the Company or by any of its
 Subsidiaries, or guarantees by the Company or any of its Subsidiaries
of indebtedness of third parties;                                   

   (vii)  contracts, commitments and agreements prohibiting or
materially restricting the ability of the Company or any of its     
Subsidiaries to conduct its business, to engage in any business or  
operate in any geographical area or to compete with any Person;     

    (viii) contracts, commitments and agreements with "change of
control" provisions except to the extent that if a "change of       
control" event occurred, it would not result in a termination or    
 other alteration of such contract, commitment or agreement that would
  have or would reasonably be expected to have a material adverse effect
on the business of the Company or its Subsidiary that is a party    
thereto;                                                            

      (ix)   contracts, commitments, and agreements with any federal
or state Governmental Entity;                                       

       (x)    licenses, licensing arrangements and other contracts and
 agreements either (x) providing, in whole or in part, for the use of,
or limiting the use of, any Intellectual Property or (y) relating to
the development, support or maintenance of any Intellectual Property
 (in each case, that is material to the business of the Company or any
of its Subsidiaries that is a party thereto and other than relating 
to software that is commercially available for less than $10,000);  
and                                                                 

       (xi)   contracts and agreements that are or will be material to
 the business, operations, results of operations, condition (financial
or otherwise), assets or properties of the Company and its          
Subsidiaries involving amounts in excess of $250,000.               

(b)   Each of the Identified Contracts and Material Contracts is in 
full force and effect, and neither the Company nor any of its Subsidiaries,     
nor, to the knowledge of the Company, any other Person, is in breach of, or     
default under, any such contract, commitment or agreement, and no event has     
occurred that with notice or passage of time or both would constitute such      
a breach or default thereunder by the Company or any of its Subsidiaries,       
or, to the knowledge of the Company, any other Person, except for such          
failures to be in full force and effect and such conflicts, violations,         
breaches or defaults as in the aggregate would not have or result in a          
Material Adverse Effect or materially delay the consummation of the             
transactions contemplated hereby.                                               

SECTION 3.13  Taxes.                                                

  (a)   Except as disclosed in Schedule 3.13 of the Disclosure Schedule:
(i) each of the Company, its Subsidiaries, and any Consolidated Group (as       
defined below) has timely filed all material Tax Returns (as defined below)     
required to be filed by it and has paid all Taxes (as defined below) shown      
thereon to be owing, and each of the Company and its Subsidiaries has           
provided reserves in accordance with GAAP in its most recent financial          
statements included in the Company SEC Documents for any Taxes (as defined      
below) that have not been paid for the periods covered by such financial        
statements; (ii) none of the Company or its Subsidiaries has granted any        
extension or waiver of the statute of limitations period applicable to any      
material Tax Return, which period (after giving effect to such extension or     
waiver) has not expired; (iii) no audits or other administrative                
proceedings or court proceedings are presently pending with regard to any       
Taxes or Tax Return of any of the Company, its Subsidiaries or any              
Consolidated Group as to which any taxing authority has asserted in writing     
any claim which, if adversely determined, individually or in the aggregate      
would have or result in a Material Adverse Effect; and (iv) none of the         
Company or any of its Subsidiaries has received any notice of deficiency or     
assessment from any taxing authority with respect to liabilities for income     
or any material other Taxes which has not been fully paid or finally            
settled.                                                                        

(b)   "Consolidated Group" shall mean any consolidated, combined,   
unitary or aggregate group for Tax purposes of which the Company or any of      
its Subsidiaries is a member.  "Taxes" shall mean all federal, state, local     
and foreign taxes, and other assessments of a similar nature (whether           
imposed directly or through withholding), including interest and penalties,     
and additions thereto.  "Tax Returns" shall mean all federal, state, local      
and foreign tax returns, declarations, statements, reports, schedules,          
forms and information returns, and any amendments to any of the foregoing,      
relating to Taxes.                                                              

SECTION 3.14  Environmental Matters.                                

Except as disclosed in Schedule 3.14 of the Disclosure Schedule:    

 (a)   Each of the Company and its Subsidiaries has complied and is in
compliance in all respects with all applicable Environmental Laws (as           
defined below) pertaining to any of the properties and assets of the            
Company or any of its Subsidiaries (including the Real Property and the         
properties currently or formerly owned or leased) and the use and ownership     
thereof, and to their businesses and operations.  No violation by the           
Company or any of its Subsidiaries is being alleged or has been alleged of      
any applicable Environmental Law relating to any of their respective            
properties and assets including (the Real Property and the properties           
currently or formerly owned or leased) or the use or ownership thereof, or      
to their respective businesses and operations.                                  

(b)   Neither the Company nor any of its Subsidiaries nor any other 
Person (including any tenant or subtenant) has caused or taken any action       
that will result in, and neither the Company nor any of its Subsidiaries is     
subject to, any liability or obligation on the part of the Company or any       
of its Subsidiaries relating to (x) the environmental conditions on, under,     
or about the Real Property or other properties or assets currently or           
formerly owned, leased, operated or used by the Company or any of its           
Subsidiaries or any predecessor thereto at the present time or in the past,     
including without limitation, the air, soil and groundwater conditions at       
such properties or (y) the past or present use, management, handling,           
transport, treatment, generation, storage, disposal, discharge, leak,           
emission, or other manner of release of any Hazardous Materials (as defined     
below).                                                                         

(c)   The Company has disclosed and made available to MergerCo all  
information, including, without limitation, all studies, analyses and test      
results, in the possession, custody or control of or otherwise known to the     
Company or any of its Subsidiaries relating to (x) the environmental            
conditions on, under or about the Real Property or other properties or          
assets currently or formerly owned, leased, operated or used by the Company     
or any of its Subsidiaries or any predecessor in interest thereto at the        
present time or in the past, and (y) any Hazardous Materials used, managed,     
handled, transported, treated, generated, stored, discharged, leaked,           
emitted, or otherwise released by the Company or any of its Subsidiaries or     
any other Person on, under, about or from any of the Real Property and the      
properties currently or formerly owned or leased, or otherwise in               
connection with the use or operation of any of the properties and assets of     
the Company or any of its Subsidiaries, or their respective businesses and      
operations. Except as disclosed in Schedule 3.14(c), none of the current or     
past operations of the Company or any of its Subsidiaries, or any by-           
product thereof, and none of the currently or formerly owned or leased          
property or assets of the Company or any of its Subsidiaries, including         
without limitation the Real Property, is related to or subject to any           
Litigation related to any Environmental Law.                                    

(d)   "Environmental Law" means any foreign, federal, state or local
law, regulation, rule, ordinance or case law relating to pollution or           
protection of human health and safety or the environment, including, but        
not limited to, laws relating to releases or threatened releases of             
Hazardous Materials into the environment and including laws pertaining to       
the protection of the health and safety of employees.  "Hazardous               
Materials" means any substance or material that is classified or regulated      
as "hazardous" or "toxic" pursuant to any Environmental Law, including          
without limitation, asbestos, polychlorinated biphenyls and petroleum.          

 SECTION 3.15  Required Vote by Company Stockholders.  The affirmative
vote of the holders of two-thirds of the outstanding shares of Company          
Common Stock and Company Preferred Stock is the only vote of any class of       
capital stock of the Company required by the MBCL, the Articles of              
Organization or the By-Laws of the Company to adopt this Agreement and          
approve the transactions contemplated hereby.                                   

SECTION 3.16  Brokers.  No broker, finder or investment banker is   
entitled to any brokerage, finder's or other fee or commission in               
connection with the transactions contemplated by this Agreement based upon      
arrangements made by or on behalf of the Company or any of its                  
Subsidiaries, that is or will be payable by the Company or any of its           
Subsidiaries.                                                                   

 SECTION 3.17  Opinion of Financial Advisor.  The Company has received
from Gordon Associates Inc. (the "Financial Advisor"), and provided to          
MergerCo on or prior to the date hereof, an executed copy of its opinion        
that the Merger Consideration to be received by the holders of Shares in        
the Merger is fair, from a financial point of view, to such holders (the        
"Fairness Opinion").  The Company has been authorized by the Financial          
Advisor to include the Fairness Opinion in the Proxy Statement and has not      
been notified by the Financial Advisor that the Fairness Opinion has been       
withdrawn or modified.                                                          

SECTION 3.18  Assets.                                               

(a)   The Company and its Subsidiaries own, or otherwise have       
sufficient and legally enforceable rights to use, all of the properties and     
assets (real, personal or mixed, tangible or intangible), reasonably            
necessary for the conduct of, or otherwise material to, their business and      
operations (the "Assets").  The Company and its Subsidiaries have good,         
valid and marketable title to, or in the case of leased property have good      
and valid leasehold interests in, all Assets, including but not limited to      
all such Assets reflected in the September 30, 1998 Balance Sheet or            
acquired since the date thereof (except as may have been disposed of in the     
ordinary course of business consistent with past practices prior to the         
date hereof or in accordance herewith), in each case free and clear of any      
Lien (as defined below), except Permitted Liens (as defined below).  All        
tangible Assets are reasonably adequate and suitable for the purposes for       
which they are presently being used.                                            

(b)   "Lien" means any mortgage, pledge, deed of trust,             
hypothecation, right of others, claim, security interest, encumbrance,          
burden, title defect, title retention agreement, lease, sublease, license,      
occupancy agreement, easement, covenant, condition, encroachment, voting        
trust agreement, interest, option, right of first offer, negotiation or         
refusal, proxy, lien, charge or other restrictions of any nature                
whatsoever.  "Permitted Liens" means (a) Liens reserved against in the          
September 30, 1998 Balance Sheet, to the extent so reserved, (b) Liens for      
Taxes not yet due and payable or that are being contested in good faith by      
appropriate proceedings and for which adequate reserves have been provided      
in accordance with GAAP or that are statutory Liens for Taxes not yet           
delinquent, (c) those Liens that are set forth in Schedule 3.18(b) of the       
Disclosure Schedule and (d) those Liens that, in the aggregate with all         
other Permitted Liens, do not and will not materially detract from the          
value of the properties and assets of any of the Company and its                
Subsidiaries, materially interfere with the present use of any thereof or       
otherwise have a Material Adverse Effect.                                       

SECTION 3.19  Real Property.  There is no Owned Real Property (as   
defined below).  Schedule 3.19(i) contains a complete and correct list of       
each parcel of Formerly Owned Property (as defined below) setting forth the     
street address, current owner and date of disposition to the current owner      
of Formerly Owned Property.  Schedule 3.19(ii) of the Disclosure Schedule       
contains a complete and correct list of all Leases (as defined below)           
setting forth the address, tenant for each Lease and the documents of which     
each Lease is comprised.  No material damage or destruction has occurred        
since December 31, 1998 with respect to any of the Leased Real Property.        
"Formerly Owned Property" means any Real Property previously owned by the       
Company or any of its Subsidiaries since 1990, but not owned by the Company     
or any of its Subsidiaries as of the date of this Agreement.  "Leases"          
means the leases, subleases, licenses and use or occupancy agreements           
pursuant to which the Company or any of its Subsidiaries is the lessee,         
sublessee, licensee, user or occupant of Real Property.  "Leased Real           
Property" means all interests in Real Property pursuant to the Leases.          
"Owned Real Property" means the real property owned by the Company and its      
Subsidiaries.  "Real Property" means real property and structures,              
facilities and improvements located thereon or attached or appurtenant          
thereto and all easements, licenses, rights and appurtenances relating to       
the foregoing.                                                                  

SECTION 3.20  Insurance.  Schedule 3.20 of the Disclosure Schedule  
contains a complete and correct list and summary description of all             
insurance policies maintained at present or at any time during the past         
three calendar years by or on behalf of any of the Company and its              
Subsidiaries. Such policies are in full force and effect, and all premiums      
due thereon have been paid.  The Company and its Subsidiaries have complied     
in all material respects with the terms and provisions of such policies.        
The insurance coverage provided by such policies is adequate and suitable       
for the business and operations of the Company and its Subsidiaries, and is     
on such terms (including without limitation as to deductibles and self-         
insured retentions), covers such risks, contains such deductibles and           
retentions, and is in such amounts, as the insurance customarily carried by     
comparable companies of established reputation similarly situated and           
carrying on the same or similar business and operations.                        

 SECTION 3.21  Labor Matters, etc.  Neither the Company nor any of its
Subsidiaries is a party to or bound by and none of their respective             
employees is subject to any collective bargaining agreement, memorandum of      
understanding or other written document relating to the terms and               
conditions of employment for any group of employees, and there are no labor     
unions or other organizations representing or purporting or attempting to       
represent any employees employed by any of the Company and its                  
Subsidiaries.  The Company and its Subsidiaries have complied with all          
applicable Laws pertaining to the employment or termination of employment       
of their respective employees, including, without limitation, all such Laws     
relating to labor relations, equal employment opportunities, fair               
employment practices, prohibited discrimination or distinction and other        
similar employment activities, except for any failures so to comply that        
individually or in the aggregate would not have or result in a Material         
Adverse Effect.                                                                 

SECTION 3.22  Disclosure.  To the actual knowledge of the Company,  
this Agreement and each certificate or other instrument or document             
furnished by or on behalf of the Company to MergerCo pursuant hereto, taken     
as a whole, do not contain any untrue statement of a material fact or omit      
to state a material fact required to be stated herein or therein or             
necessary to make the statements contained herein or therein in light of        
the circumstances under which they were made, not misleading.                   

SECTION 3.23  Takeover Statutes.  No "Fair price," "Moratorium,"    
"control share acquisition" or other similar anti-takeover statute or           
regulation enacted under state or federal laws in the United States             
including, without limitation, Chapters 110C, 110D and 110F of the              
Massachusetts General Laws, applicable to the Company or any of its             
Subsidiaries is applicable to the execution, delivery and performance of        
this Agreement or the consummation of the Merger or the other transactions      
contemplated by this Agreement.                                                 

ARTICLE IV    

REPRESENTATIONS AND WARRANTIES OF MERGERCO    

 MergerCo represents and warrants to the Company as of the date hereof
and as of the Closing Date as follows:                                          

 SECTION 4.1  Organization.  MergerCo is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of     
Massachusetts.  MergerCo has all requisite corporate power and authority to     
own, lease, operate or use its properties and to carry on its business as       
now being conducted and is qualified or licensed to do business and is in       
good standing in each jurisdiction in which it owns real property or in         
which the nature of the business conducted by it makes such qualification       
or licensing necessary.  MergerCo is not in breach of its articles of           
organization or by-laws.  MergerCo has previously delivered to the Company      
complete and correct copies of the articles of organization and by-laws of      
MergerCo, as currently in effect.                                               

SECTION 4.2  Authorization; Validity of Agreement.  MergerCo has the
requisite corporate power and authority to execute and deliver this             
Agreement and to consummate the transactions contemplated hereby.  The          
execution, delivery and performance by MergerCo of this Agreement and the       
consummation by MergerCo of the transactions contemplated hereby have been      
duly authorized by its Board of Directors and, other than the approval and      
adoption of this Agreement by the stockholders of MergerCo, no other            
corporate proceedings on the part of MergerCo are necessary to authorize        
the execution and delivery of this Agreement and the consummation of the        
transactions contemplated hereby.  This Agreement has been duly executed        
and delivered by MergerCo and, assuming due authorization, execution and        
delivery of this Agreement by the Company, is a valid and binding               
obligation of MergerCo enforceable against it in accordance with its terms,     
except that such enforcement may be subject to or limited by (i)                
bankruptcy, insolvency or other similar laws, now or hereafter in effect,       
affecting creditors rights generally, and (ii) the effect of general            
principles of equity (regardless of whether enforceability is considered in     
a proceeding at law or in equity).                                              

SECTION 4.3  Consents and Approvals; No Violations.                 

(a)   Neither the execution and delivery of this Agreement by       
MergerCo nor the consummation by MergerCo of the transactions contemplated      
hereby will (i) violate any provision of the articles of organization or        
by-laws of MergerCo, (ii) conflict with, result in a violation or breach        
of, or constitute (with or without due notice or lapse of time or both) a       
default (or give rise to any right of termination, amendment, cancellation      
or acceleration) under, any of the terms, conditions or provisions of any       
note, bond, mortgage, indenture, guarantee, other evidence of indebtedness,     
license, or any material lease, contract, agreement or other instrument or      
obligation, to which MergerCo is a party or by which any of them or any of      
their assets may be bound or (iii) conflict with or violate any Laws            
applicable to MergerCo, any of its Subsidiaries or any of their properties      
or assets; except in the case of clauses (ii) and (iii) for such conflicts,     
violations, breaches or defaults which in the aggregate would not have a        
material adverse effect on the business, assets, liabilities, results of        
operations or financial or other condition of MergerCo, or materially           
impair or delay the consummation of the transactions contemplated by this       
Agreement.                                                                      

(b)   Except as set forth in Schedule 4.3(b) of the disclosure      
schedule delivered by MergerCo to the Company on or prior to the date           
hereof (the "MergerCo Disclosure Schedule") and assuming that the               
representation and warranty of the Company set forth in Section 3.4(b) is       
true and correct, no filing or registration with, declaration or                
notification to, or order, authorization, consent or approval of, any           
Governmental Entity is required in connection with the execution and            
delivery of this Agreement by MergerCo or the consummation by MergerCo of       
the transactions contemplated hereby, except (i) applicable requirements        
under the Exchange Act, (ii) applicable requirements under the Securities       
Act, (iii) the filing of the Articles of Merger with the Massachusetts          
Secretary of State, (iv) applicable requirements under "blue sky" laws of       
various states, and (v) such other consents, approvals, orders,                 
authorizations, notifications, registrations, declarations and filings (x)      
required to be obtained or made by the Company or any of its Subsidiaries       
or (y) the failure of which to be obtained or made would not have a             
material adverse effect on the business, assets, liabilities, results of        
operations or financial or other condition of MergerCo and its                  
Subsidiaries, taken as a whole, or materially impair or delay the               
consummation of the transactions contemplated by this Agreement.                

SECTION 4.4  Proxy Statement; Exchange Act Schedules.               

(a)   None of the information supplied in writing by MergerCo       
specifically for inclusion in the Proxy Statement (including any amendments     
or supplements thereto) will, at the date mailed to stockholders and at the     
time of the Special Meeting, contain any untrue statement of a material         
fact or omit to state any material fact required to be stated therein or        
necessary in order to make the statements therein, in light of the              
circumstances under which they are made, not misleading.                        

(b)   None of the information supplied in writing by MergerCo       
specifically for inclusion in the Schedule 13E-3 (and any amendment or          
supplement to any of the foregoing) will, at the date such document is          
filed with the SEC, contain any untrue statement of a material fact or omit     
to state any material fact required to be stated therein or necessary in        
order to make the statements therein, in light of the circumstances under       
which they were made, not misleading.                                           

SECTION 4.5  Brokers.  No broker, finder or investment banker is    
entitled to any brokerage, finder's or other fee or commission in               
connection with the transactions contemplated by this Agreement based upon      
arrangements made by or on behalf of MergerCo, that is or will be payable       
by the Company or any of its Subsidiaries.                                      

SECTION 4.6  Formation of MergerCo; No Prior Activities.  MergerCo  
was formed solely for the purpose of engaging in the transactions               
contemplated by this Agreement. As of the date hereof and the Effective         
Time, except for (i) obligations or liabilities incurred in connection with     
its incorporation or organization and the transactions contemplated by this     
Agreement, (ii) this Agreement and any other agreements or arrangements         
contemplated by this Agreement or in furtherance of the transactions            
contemplated hereby and (iii) the contribution by the individuals and           
entities listed on Exhibit A attached hereto of the shares of Company           
Common Stock owned by them in exchange for shares of MergerCo Common Stock,     
MergerCo has not incurred, directly or indirectly, through any subsidiary       
or affiliate, any obligations or liabilities or engaged in any business         
activities of any type or kind whatsoever or entered into any agreements or     
arrangements with any Person.                                                   

ARTICLE V   

COVENANTS   

 SECTION 5.1  Interim Operations of the Company. The Company covenants
and agrees that, except as (i) required by this Agreement, (ii) required by     
applicable law, (iii) required by any Material Contract or Identified           
Contract or by any Plan disclosed on Schedule 3.9(b), in each case to the       
extent such requirement is specifically described on Schedule 5.1(iii) or       
(iv) agreed to in writing by MergerCo, after the date hereof and prior to       
the Effective Time:                                                             

(a)   the business of the Company and its Subsidiaries shall be     
conducted only in the ordinary course consistent with past practice and, to     
the extent consistent therewith, each of the Company and its Subsidiaries       
shall use its reasonable efforts to preserve its business organization and      
the business organization of its Subsidiaries intact and maintain existing      
relations with customers, suppliers, employees and creditors;                   

 (b)   the Company shall not amend its Articles of Organization or By-
Laws;                                                                           

 (c)   the Company shall not declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its       
capital stock (except for cash dividends on Company Common Stock in the         
ordinary course of business consistent with past practice); and neither the     
Company nor any of its Subsidiaries shall (i) issue, sell, grant, transfer,     
pledge, dispose of or encumber any additional shares of, or securities          
convertible into or exchangeable for, or options, warrants, calls,              
commitments or rights of any kind to acquire, any shares of capital stock       
of any class of the Company or any of its Subsidiaries (except pursuant to      
the exercise of stock options outstanding on the date hereof to the extent      
contemplated by this Agreement); (ii) incur any long term indebtedness          
(whether evidenced by a note or other instrument, pursuant to a financing       
lease, sale-leaseback transaction, or otherwise) or incur short-term            
indebtedness other than under lines of credit existing on the date hereof,      
except for borrowings under existing credit facilities or lines of credit       
in the ordinary course of business consistent with past practice; (iii)         
redeem, purchase or otherwise acquire directly or indirectly any of its         
capital stock or other securities; or (iv) enter into or amend in any           
material respect any Lease, Material Contract or Identified Contract;           

(d)   neither the Company nor any of its Subsidiaries shall (i)     
except for normal salary increases in the ordinary course of business           
consistent with past practice, grant any increase in the compensation or        
benefits payable or to become payable by the Company or any of its              
Subsidiaries to any officer or other management employee of the Company or      
any Subsidiary; (ii) adopt, enter into or amend or increase, or accelerate      
the payment or vesting of the amounts, benefits or rights payable or            
accrued or to become payable or accrued under, any bonus, incentive or          
deferred compensation, severance, termination, change in control,               
retention, stock option or other equity based or other material employee        
compensation or benefit plan, agreement or policy; or (iii) enter into or       
amend in any material respect any employment, severance, retention or           
collective bargaining agreement or, except in accordance with the existing      
written policies of the Company or existing contracts or agreements, grant      
any severance or termination pay to any officer, director or employee of        
the Company or any of its Subsidiaries;                                         

(e)   neither the Company nor its Subsidiaries shall change the     
accounting principles used by it unless required by GAAP;                       

(f)   neither the Company nor any of its Subsidiaries shall acquire 
or agree to acquire, by merging or consolidating with, by purchasing an         
equity interest in or a portion of the assets of, or by any other manner,       
any business or any corporation, partnership, association or other business     
organization or division thereof, or otherwise acquire or agree to acquire      
any assets of any other Person (other than the purchase of assets in the        
ordinary course of business consistent with past practice);                     

(g)   neither the Company nor any of its Subsidiaries shall sell,   
lease, exchange, mortgage, pledge, transfer or otherwise dispose of, or         
agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise         
dispose of, any of its Assets, except in the ordinary course of business        
consistent with past practice;                                                  

(h)   neither the Company nor its Subsidiaries shall enter into any 
material arrangement, agreement or contract, or any material amendment,         
supplement, waiver or other modification in respect of any existing             
arrangement, agreement or contract, with any third party (other than            
customers in the ordinary course of business) that provides for an              
exclusive arrangement with that third party or is substantially more            
restrictive on the Company or its Subsidiaries or substantially less            
advantageous to the Company or its Subsidiaries than arrangements,              
agreements or contracts existing on the date hereof; and                        

(i)   neither the Company nor any of its Subsidiaries shall make any
material Tax election, amend any Tax Return or settle or compromise any         
material federal, state, local or foreign Tax liability; and                    

 (j)   neither the Company nor any of its Subsidiaries will enter into
an agreement, contract, commitment or arrangement to do any of the              
foregoing.                                                                      

SECTION 5.2  Access to Information.  From the date of this Agreement
until the Effective Time, the Company shall, and shall cause each of its        
Subsidiaries to, afford to MergerCo and its authorized representatives          
reasonable access during normal business hours upon reasonable prior notice     
to all of its books and records, including but not limited to tax,              
financial and accounting books and records. In addition, during such            
period, the Company shall, and shall cause each of its Subsidiaries to,         
furnish promptly to MergerCo (a) a copy of each report, schedule,               
registration statement and other document filed or received by it during        
such period pursuant to the requirements of the Exchange Act or other           
applicable Law and (b) such other information concerning its business,          
properties and personnel as MergerCo may reasonably request. MergerCo and       
its authorized representatives will use all reasonable efforts to conduct       
all such inspections in a manner which will minimize any material               
disruptions of the business and operations of the Company and its               
Subsidiaries.                                                                   

 SECTION 5.3  Further Action; Reasonable Best Efforts.  Upon the terms
and subject to the conditions herein provided, each of the parties hereto       
agrees to use its reasonable best efforts to take, or cause to be taken,        
all action and to do, or cause to be done, all things necessary, proper or      
advisable under applicable laws and regulations to consummate and make          
effective the transactions contemplated by this Agreement, including using      
reasonable best efforts to satisfy the conditions precedent to the              
obligations of any of the parties hereto, to obtain all necessary               
authorizations, consents and approvals, and to effect all necessary             
registrations and filings.  Each of the parties hereto will furnish to the      
other parties such necessary information and reasonable assistance as such      
other parties may reasonably request in connection with the foregoing and       
will provide the other parties with copies of all filings made by such          
party with any Governmental Entity or any other information supplied by         
such party to a Governmental Entity in connection with this Agreement and       
the transactions contemplated hereby.                                           

SECTION 5.4  Shareholders' Meeting; Proxy Statement.                

(a)   As promptly as practicable after the date hereof, the Company 
shall prepare the Proxy Statement (as defined below).  The Company will use     
its best efforts, after consultation with MergerCo, to respond promptly to      
any comments made by the SEC with respect to the Proxy Statement.  The          
Company will use its best efforts to cause a definitive proxy statement         
(the "Proxy Statement") to be mailed to its stockholders as promptly as         
practicable after it has been approved by the SEC.  The Company shall           
include in the Proxy Statement the recommendation of the Board of Directors     
that shareholders of the Company approve and adopt this Agreement and the       
transactions contemplated hereby.                                               

(b)   The Company shall in accordance with applicable law and the   
Articles of Organization and By-laws of the Company, duly call, set a           
record date for, give notice of, convene and hold a special meeting of its      
stockholders (the "Special Meeting") as promptly as practicable for the         
purpose of considering and taking action upon this Agreement and such other     
matters as may be appropriate at the Special Meeting.  The Company shall,       
through its Board of Directors, recommend that its shareholders approve the     
Merger and shall use all reasonable efforts to solicit from shareholders of     
the Company proxies in favor of the approval and adoption of this Agreement     
and the transactions contemplated hereby.                                       

(c)   The Company and MergerCo shall together prepare and file a    
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3") under the        
Exchange Act.  Each of MergerCo and the Company shall furnish all               
information concerning it, its affiliates and the holders of its capital        
stock required to be included in the Schedule 13E-3 and, after consultation     
with each other, shall respond promptly to any comments made by the SEC         
with respect to the Schedule 13E-3.                                             

(d)   The information supplied by the Company for inclusion in the  
Proxy Statement or the Schedule 13E-3 shall not, at the time the Proxy          
Statement is mailed, contain any untrue statement of a material fact or         
omit to state any material fact required to be stated therein or necessary      
in order to make the statements therein, in light of the circumstances          
under which they were made, not misleading or, at the time of the Special       
Meeting, as then amended or supplemented, or at the Effective Time, omit to     
state any material fact necessary to correct any statement originally           
supplied by the Company for inclusion in the Proxy Statement or the             
Schedule 13E-3 which has become false or misleading. If at any time prior       
to the Effective Time any event relating to the Company or any of its           
affiliates, or its, or its affiliates', respective officers, directors or       
shareholders, should be discovered which should be set forth in an              
amendment of, or a supplement to such Proxy Statement or Schedule 13E-3,        
the Company shall promptly so inform MergerCo and will furnish all              
necessary information to MergerCo relating to such event and an appropriate     
amendment or supplement to such Proxy Statement or Schedule 13E-3 will          
thereafter be filed with the SEC by the Company.  All documents that the        
Company is responsible for filing with the SEC in connection with the           
transactions contemplated by this Agreement shall comply in all material        
respects, both as to form and otherwise, with the Exchange Act and/or the       
Securities Act, as the case may be, and the rules and regulations               
thereunder.                                                                     

(e)   The information supplied or to be supplied by MergerCo for    
inclusion in the Proxy Statement or the Schedule 13E-3 shall not at the         
time the Proxy Statement is mailed contain any untrue statement of a            
material fact or omit to state any material fact required to be stated          
therein or necessary in order to make the statements therein, in light of       
the circumstances under which they were made, not misleading or, at the         
time of the Special Meeting, as then amended or supplemented, or at the         
Effective Time, omit to state any material fact necessary to correct any        
statement originally supplied by MergerCo for inclusion in the Proxy            
Statement or the Schedule 13E-3 which has become false or misleading. If at     
any time prior to the Effective Time any event relating to MergerCo or any      
of its affiliates, or its affiliates' respective officers, directors or         
shareholders should be discovered which should be set forth in an amendment     
of, or a supplement to, such Proxy Statement or Schedule 13E-3, MergerCo        
shall promptly so inform the Company and will furnish all necessary             
information to the Company relating to such event and an appropriate            
amendment or supplement to such Proxy Statement or Schedule 13E-3 will          
thereafter be filed with the SEC by the Company.  All documents that            
MergerCo is responsible for filing with the SEC in connection with the          
transactions contemplated by this Agreement shall comply in all material        
respects, both as to form and otherwise, with the Exchange Act and the          
rules and regulations thereunder.                                               

 SECTION 5.5  Notification of Certain Matters.  The Company shall give
prompt notice to MergerCo, and MergerCo shall give prompt notice to the         
Company, of (i) the occurrence or non-occurrence of any event the               
occurrence or non-occurrence of which would cause any representation or         
warranty of the Company, or of MergerCo, as the case may be, contained in       
this Agreement to be untrue or inaccurate in any material respect at the        
Effective Time, (ii) any material failure of the Company, or MergerCo, as       
the case may be, to comply with or satisfy any covenant, condition or           
agreement to be complied with or satisfied by it hereunder and (iii) any        
event, occurrence, fact, condition, change, development or effect that,         
individually or in the aggregate, would have or result in a Material            
Adverse Effect or a breach of Section 5.1.                                      

SECTION 5.6  Directors' and Officers' Indemnification.              

(a)   For a period of six years after the Effective Time, the       
Surviving Corporation shall indemnify, defend and hold harmless the present     
and former officers, directors, employees and agents of the Company and its     
Subsidiaries in such capacities ("Indemnified Parties") against all losses,     
claims, damages, expenses or liabilities arising out of actions or              
omissions or alleged actions or omissions occurring at or prior to the          
Effective Time to the same extent and on the same terms and conditions          
(including with respect to advancement of expenses) provided for in the         
Company's Articles of Organization and By-Laws in effect at the date hereof     
(to the extent consistent with applicable law).                                 

 (b)   The provisions of this Section 5.6 are intended for the benefit
of, and shall be enforceable by, the respective Indemnified Parties.            
Nothing in this Section 5.6 shall limit or restrict the right or ability of     
the Surviving Corporation to change its state of domicile.                      

SECTION 5.7  Recapitalization.  Each of the Company and MergerCo    
shall use its best efforts to cause the transactions contemplated by this       
Agreement, including the Merger, to be accounted for as a recapitalization      
and such accounting treatment to be accepted by their respective                
accountants and by the SEC, and each of the Company and MergerCo agrees         
that it shall take no action that would cause such accounting treatment not     
to be obtained.                                                                 

SECTION 5.8  Conveyance Taxes.  MergerCo and the Company shall      
cooperate in the preparation, execution and filing of all returns,              
questionnaires, applications or other documents regarding any real property     
transfer or gains, sales, use, transfer, value added, stock transfer and        
stamp taxes, any transfer, recording, registration and other fees or any        
similar taxes which become payable by the Company or any of its                 
Subsidiaries in connection with the transactions contemplated by this           
Agreement that are required or permitted to be filed on or before the           
Effective Time.                                                                 

 SECTION 5.9  Delisting.  Each of the parties agrees to cooperate with
each other in taking, or causing to be taken, all actions necessary to          
delist the Company Common Stock from the Over the Counter Bulletin Board,       
provided that such delisting shall not be effective until after the             
Effective Time of the Merger.                                                   

SECTION 5.10  Conduct of the Company After the Merger.  Each of the 
parties agree that until one year after the Effective Time of the Merger,       
the Surviving Corporation shall not be a party to any merger,                   
reorganization, liquidation, relocation of operations, sale or transfer of      
assets not in the ordinary course of business, or any other material            
changes in its corporate structure.                                             

ARTICLE VI    

CONDITIONS    

SECTION 6.1  Conditions to Each Party's Obligation To Effect the    
Merger.  The respective obligation of each party to effect the Merger shall     
be subject to the satisfaction on or prior to the Closing Date of each of       
the following conditions (any or all of which may be waived by the parties      
hereto in writing, in whole or in part, to the extent permitted by              
applicable law):                                                                

(a)   No statute, rule, order, decree or regulation shall have been 
enacted or promulgated by any Governmental Entity of competent jurisdiction     
(whether temporary, liminary or permanent) which is in effect and has the       
effect of prohibiting the consummation of the Merger or making the Merger       
illegal.                                                                        

(b)   There shall be no order or injunction of a Governmental Entity
of competent jurisdiction (whether temporary, preliminary or permanent) in      
effect precluding, restraining, enjoining or prohibiting consummation of        
the Merger.                                                                     

 (c)   Other than filing the Articles of Merger in accordance with the
MBCL, all authorizations, consents and approvals of all Governmental            
Entities required to be obtained prior to consummation of the Merger shall      
have been obtained, except for such authorizations, consents, and approvals     
the failure of which to be obtained would not have a Material Adverse           
Effect.                                                                         

SECTION 6.2  Conditions to the Obligation of the Company to Effect  
the Merger.  The obligation of the Company to effect the Merger is further      
subject to the satisfaction or waiver at or prior to the Effective Time of      
the following conditions:                                                       

(a)   The representations and warranties of MergerCo contained in   
this Agreement shall be true and correct at and as of the date hereof, and      
true and correct in all respects (in the case of any representation or          
warranty containing any materiality qualification) or in all material           
respects (in the case of any representation or warranty without any             
materiality qualification) at and as of the Effective Time as if made at        
and as of such time; and                                                        

(b)   MergerCo shall have performed in all material respects its    
obligations under this Agreement required to be performed by it at or prior     
to the Effective Time pursuant to the terms hereof.                             

SECTION 6.3  Conditions to Obligations of MergerCo to Effect the    
Merger.  The obligations of MergerCo to effect the Merger are further           
subject to the satisfaction or waiver at or prior to the Effective Time of      
the following conditions:                                                       

(a)   The representations and warranties of the Company contained in
this Agreement shall be true and correct at and as of the date hereof, and      
true and correct in all respects (in the case of any representation or          
warranty containing any materiality qualification) or in all material           
respects (in the case of any representation or warranty without any             
materiality qualification) at and as of the Effective Time as if made at        
and as such time;                                                               

(b)   The Company shall have performed in all material respects its 
obligations under this Agreement required to be performed by it at or prior     
to the Effective Time pursuant to the terms hereof;                             

(c)   The number of Dissenting Shares shall not exceed 10% of the   
issued and outstanding shares of Company Common Stock; and                      

(d)   No event, occurrence, fact, condition, change, development or 
effect shall exist or have occurred or come to exist or been threatened         
since September 30, 1998 that, individually or in the aggregate, has had or     
resulted in, or could reasonably be expected to become or result in, a          
Material Adverse Effect.                                                        

ARTICLE VII   

TERMINATION   

SECTION 7.1  Termination.  Notwithstanding any thing herein to the  
contrary, this Agreement may be terminated and the Merger may be abandoned      
at anytime prior to the Effective Time, whether before or after shareholder     
approval thereof:                                                               

(a)   By the mutual consent of the Boards of Directors of MergerCo  
and the Company.                                                                

(b)   By either the Company, on the one hand, or MergerCo, on the   
other hand, if: (i) the Merger has not been consummated on or prior to          
September 30, 1999 or such other date, if any, as MergerCo and the Company      
shall agree upon (provided that the right to terminate this Agreement under     
this Section 7.1(b)(i) shall not be available to a party whose failure to       
fulfill any obligation under this Agreement has been the cause of or            
resulted in the failure of the Effective Time to occur on or before such        
date); or (ii) any Governmental Entity shall have issued a statute, order,      
decree or regulation or taken any other action (which statute, order,           
decree, regulation or other action the parties hereto shall use their best      
efforts to lift), in each case permanently restraining, enjoining or            
otherwise prohibiting the Merger or making the Merger illegal and such          
statute, order, decree, regulation or other action shall have become final      
and non-appealable.                                                             

 (c)   By the Company, (i) if holders of two-thirds of the outstanding
Company Common Stock and Company Preferred Stock, voting as a single class,     
fail to approve and adopt this Agreement and the transactions contemplated      
hereby at the Special Meeting (including any postponement or adjournment        
thereof).                                                                       

(d)   By the Company, upon 15 days' prior written notice, in the    
event of a material breach of any representation, warranty, covenant or         
agreement on the part of MergerCo such that the condition set forth in          
Section 6.2(a) or 6.2(b) would not be satisfied as of the Effective Time,       
which breach is not cured prior to the expiration of such 15 day period         
(provided that if such breach is not curable, the Company may terminate         
this Agreement immediately under this Section 7.1(d)); except where the         
Company is in material breach of any representation, warranty, covenant or      
agreement as provided in Section 7.1(e).                                        

(e)   By MergerCo, upon 15 days' prior written notice, in the event 
of a material breach of any representation, warranty, covenant or agreement     
on the part of the Company such that the condition set forth in Section         
6.3(a) or 6.3(b) would not be satisfied as of the Effective Time, which         
breach is not cured prior to the expiration of such 15 day period (provided     
that if such breach is not curable, MergerCo may terminate this Agreement       
immediately under this Section 7.1(e)); except where MergerCo is in             
material breach of any representation, warranty, covenant or agreement as       
provided in Section 7.1(d).                                                     

(f)   By MergerCo, if (i) holders of at least two-thirds of the     
outstanding Company Common Stock and Company Preferred Stock, voting as a       
single class, fail to approve and adopt this Agreement and the transactions     
contemplated hereby at the Special Meeting (including any postponement or       
adjournment thereof); or (ii) the Board of Directors of the Company             
withdraws, modifies or changes its recommendation of this Agreement or the      
Merger in a manner adverse to MergerCo or shall have resolved to do any of      
the foregoing.                                                                  

SECTION 7.2  Effect of Termination.  In the event of the termination
of this Agreement as provided in Section 7.1, written notice thereof shall      
forthwith be given by the terminating party or parties to the other party       
or parties specifying the provision hereof pursuant to which such               
termination is made, and this Agreement shall forthwith become null and         
void, and there shall be no liability on the part of MergerCo or the            
Company, except as set forth in Section 8.1 hereof; provided that nothing       
herein shall relieve any party from any liability or obligation with            
respect to any willful breach of this Agreement.                                

ARTICLE VIII    

MISCELLANEOUS   

SECTION 8.1  Fees and Expenses.  (a)  Except as contemplated by this
Agreement, all costs and expenses incurred in connection with this              
Agreement and the consummation of the transactions contemplated hereby          
shall be paid by the party incurring such expenses except that the Company      
shall bear and pay the costs and expenses incurred in connection with (i)       
the preparation, filing, printing and mailing of the Proxy Statement            
(including SEC filing fees) and (ii) the filing of the Schedule 13E-3.          

(b)   This Section 8.1 shall survive any termination of this        
Agreement.                                                                      

SECTION 8.2  Amendment; Waiver.                                     

(a)   This Agreement may be amended by the parties hereto, by action
taken or authorized by their respective Boards of Directors, at any time        
before or after approval by the shareholders of the Company of the matters      
presented in connection with the Merger, but after any such approval no         
amendment shall be made without the approval of such shareholders if such       
amendment changes the Merger Consideration or alters or changes any of the      
other terms or conditions of this Agreement if such alteration or change        
would materially adversely affect the rights of such shareholders.  This        
Agreement may not be amended except by an instrument in writing signed on       
behalf of each of the parties hereto.                                           

(b)   At any time prior to the Effective Time, the parties may (i)  
extend the time for the performance of any of the obligations or other acts     
of the other parties hereto, (ii) waive any inaccuracies in the                 
representations and warranties of the other parties contained herein or in      
any document, certificate or writing delivered pursuant hereto or (iii)         
waive compliance with any of the agreements or conditions of the other          
parties hereto contained herein.  Any such extension or waiver by the           
Company shall require the consent of the Board of Directors of the Company.     
Any agreement on the part of any party to any such extension or waiver          
shall be valid only if set forth in an instrument in writing signed on          
behalf of such party.  Any such waiver shall constitute a waiver only with      
respect to the specific matter described in such writing and shall in no        
way impair the rights of the party granting such waiver in any other            
respect or at any other time.  Neither the waiver by any of the parties         
hereto of a breach of or a default under any of the provisions of this          
Agreement, nor the failure by any of the parties, on one or more occasions,     
to enforce any of the provisions of this Agreement or to exercise any right     
or privilege hereunder, shall be construed as a waiver of any other breach      
or default of a similar nature, or as a waiver of any of such provisions,       
rights or privileges hereunder.  The rights and remedies herein provided        
are cumulative and none is exclusive of any other, or of any rights or          
remedies that any party may otherwise have at law or in equity.  The rights     
and remedies of any party based upon, arising out of or otherwise in            
respect of any inaccuracy or breach of any representation, warranty,            
covenant or agreement or failure to fulfill any condition shall in no way       
be limited by the fact that the act, omission, occurrence or other state of     
facts upon which any claim of any such inaccuracy or breach is based may        
also be the subject matter of any other representation, warranty, covenant      
or agreement as to which there is no inaccuracy or breach.  The                 
representations and warranties of the Company shall not be affected or          
deemed waived by reason of any investigation made by or on behalf of            
MergerCo (including but not limited to any of its advisors, counsel,            
consultants or representatives) or by reason of the fact that MergerCo or       
any of such advisors, counsel, consultants or representatives knew or           
should have known that any such representation or warranty is or might be       
inaccurate.                                                                     

 SECTION 8.3  Survival.  The respective representations and warranties
of MergerCo and the Company contained herein or in any certificates or          
other documents delivered prior to or as of the Effective Time shall not        
survive beyond the Effective Time.  The covenants and agreements of the         
parties hereto (including the Surviving Corporation after the Merger) shall     
survive the Effective Time without limitation (except for those which, by       
their terms, contemplate a shorter survival period).                            

 SECTION 8.4  Notices.  All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) transmitter's            
confirmation of a receipt of a facsimile transmission, (b) confirmed            
delivery by a standard overnight carrier or when delivered by hand or (c)       
the expiration of five business days after the day when mailed in the           
United States by certified or registered mail, postage prepaid, addressed       
at the following addresses (or at such other address for a party as shall       
be specified by like notice):                                                   

(a)   if to the Company, to:      Armatron International, Inc.      
             2 Main Street
                            Melrose, Massachusetts 02176
                         Facsimile: (781) 321-2309
                         Telephone: (781) 321-2300
                     Attention:  President

with a copy to:             Bass, Doherty & Finks, P.C. 
                       40 Soldiers Field Place
                           Boston, Massachusetts 02135
                         Facsimile: (617) 787-4969
                         Telephone: (617) 787-5551
                                     Attention:  Malcolm D. Finks, Esquire

(b)   if to MergerCo, to:         Armatron Merger Corporation       
             2 Main Street
                            Melrose, Massachusetts 02176
                         Facsimile: (781) 321-2309
                         Telephone: (781) 321-2300
                     Attention:  President

with a copy to              Mintz, Levin, Cohn, Ferris  
                         Glovsky and Popeo, P.C.
                    One Financial Center
                           Boston, Massachusetts 02111
                         Facsimile: (617) 542-2241
                         Telephone: (617) 542-6000
                                 Attention: Anne L. Bruno, Esquire

SECTION 8.5  Interpretation.  When a reference is made in this      
Agreement to Sections, such reference shall be to a Section of this             
Agreement unless otherwise indicated.  Whenever the words "include",            
"includes" or "including" are used in this Agreement they shall be deemed       
to be followed by the words "without limitation".  The phrase "made             
available" when used in this Agreement shall mean that the information          
referred to has been made available to the party to whom such information       
is to be made available.  The words "affiliates" and "associates" when used     
in this Agreement shall have the respective meanings ascribed to them in        
Rule 12b-2 under the Exchange Act.  The phrase "beneficial ownership" and       
words of similar import when used in this Agreement shall have the meaning      
ascribed to it in Rule 13d-3 under the Exchange Act.                            

SECTION 8.6  Headings; Schedules.  The headings contained in this   
Agreement are for reference purposes only and shall not affect in any way       
the meaning or interpretation of this Agreement.  Disclosure of any matter      
pursuant to any Schedule to the Disclosure Schedule shall not be deemed to      
be an admission or representation as to the materiality of the item so          
disclosed.                                                                      

SECTION 8.7  Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of         
which shall be considered one and the same agreement.                           

SECTION 8.8  Entire Agreement; Third Party Beneficiaries.  This     
Agreement (a) constitutes the entire agreement, and supersedes all prior        
agreements and understandings (written and oral), among the parties with        
respect to the subject matter hereof and (b) except for the provisions of       
Sections 5.6 and 5.9, are not intended to confer upon any person other than     
the parties any rights or remedies.                                             

SECTION 8.9  Severability.  If any term, provision, covenant or     
restriction of this Agreement is held by a court of competent jurisdiction      
or other authority to be invalid, void, unenforceable or against its            
regulatory policy, the remainder of the terms, provisions, covenants and        
restrictions of this Agreement shall remain in full force and effect and        
shall in no way be affected, impaired or invalidated.                           

SECTION 8.10  Governing Law.  This Agreement shall be governed and  
construed in accordance with the laws of the Commonwealth of Massachusetts.     

SECTION 8.11  Assignment.  Neither this Agreement nor any of the    
rights, interests or obligations hereunder shall be assigned by any of the      
parties hereto (whether by operation of law or otherwise) without the prior     
written consent of the other parties.  This Agreement will be binding upon,     
inure to the benefit of and be enforceable by, the parties and their            
respective successors and assigns.                                              

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

                ARMATRON INTERNATIONAL, INC.

                          By:___________________________________
              Name:   Charles J. Housman
                         Title:  President and Chief Executive
           Officer

[Seal]                                                                          

               ARMATRON MERGER CORPORATION

                          By:___________________________________
              Name:   Charles J. Housman
     Title:  President

[Seal]                                                                          

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘SC 13D’ Filing		Date		Other Filings
		1/1/00
		10/1/99
		9/30/99		DEFS14A,  PRE13E3/A
		4/30/99
Filed on:		4/23/99
		4/22/99		8-K,  PRE13E3
		4/20/99		8-K
		3/31/99		10-Q
		12/31/98		10-Q
		12/30/98
		10/1/98
		9/30/98		10-K,  10-K/A
		10/1/97
		9/30/97		10-K
		9/30/96		10-K,  10-K/A
		9/30/95		10-K,  NT 10-K
		2/1/95
		11/8/94
		9/30/94
		10/1/93
				List all Filings