Common use of Certain Legal Matters Clause in Contracts

Certain Legal Matters. Except as described in this Section 15, based on information provided by the Company, none of the Company, Purchaser or Honeywell is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, the Purchaser and Honeywell presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the SEC and other publicly available information provided by concerning the Company, none of the CompanyPurchaser, Purchaser Parent or Honeywell TBG Holdings is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) ), as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any governmental entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser Purchaser, Parent and Honeywell presently TBG Holdings currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." ". While, except as otherwise expressly described in this Offer to PurchaseSection 15, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could could, subject to the terms and conditions of the Merger Agreement, decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCLSTATE TAKEOVER LAWS. A number of other states throughout the United States have adopted laws and regulations enacted takeover statutes that purport, in varying degrees, to be applicable to attempts to acquire securities of corporations which that are incorporated, incorporated or have substantial assets, stockholdersshareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)Xxxxx x.

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information provided concerning the Company, as well as certain representations made to the Purchaser and Parent in the Merger Agreement by the Company, none of neither the Company, Purchaser or Honeywell nor Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any Governmental Entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently Parent currently contemplate that such approval or other action will be sought, except as described below under "State State-Takeover Laws." ". While, except as otherwise expressly described in this Offer to PurchaseSection 15, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for or payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states throughout the United States have adopted laws and regulations enacted takeover statutes that purport, in varying degrees, to be applicable to attempts to acquire securities of corporations which that are incorporated, incorporated or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax Xxxxx x. XXXE MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds held that the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides involved state securities laws that made the takeover of certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") corporations more difficult, imposed a substantial burden on interstate commerce and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywelltherefore was unconstitutional. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)CTS Corp.

Certain Legal Matters. General Except as described in this Section 15otherwise disclosed herein, based on information provided by upon an examination of publicly available filings with respect to the Company, none of Parent and the Company, Purchaser or Honeywell is are not aware of any license licenses or other regulatory permit that appears permits which appear to be material to the business of the Company and its subsidiaries, taken as a whole, that which might be adversely affected by the Purchaser's acquisition of Shares (and by the indirect acquisition of Purchaser pursuant to the stock of the Company's subsidiaries) as contemplated herein Offer or of any approval or other action by a domestic or foreign any governmental, administrative or regulatory agency or authority that which would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated hereinpursuant to the Offer. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently contemplate it is currently contemplated that such approval or other action will would be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of sought or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there taken. There can be no assurance that any such approval or other action, if needed, would be obtained or would or, if obtained, that it will be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action adverse consequences might not result in consequences adverse to the Company's or Parent's business or that certain parts of the Company's or Parent's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or taken, any of which could cause the Purchaser to elect to terminate the Offer without the purchase of the Shares thereunder. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions set forth in order Section 11. Antitrust Compliance Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission ("FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to obtain any such approval or other actionthe Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. If certain types The acquisition of adverse action are taken Shares by the Purchaser is subject to these requirements. Pursuant to the HSR Act, Parent intends to file a Notification and Report Form with respect to the matters discussed belowacquisition of Shares pursuant to the Offer and the Merger with the Antitrust Division and the FTC on May 18, 1999. Under the provisions of the HSR Act applicable to the purchase of Shares pursuant to the Offer, such purchases may not be made until the expiration of a 15-calendar day waiting period following the filing by Parent. Accordingly, the waiting period under the HSR Act will expire at 11:59 p.m., New York City time, on June 2, 1999, unless early termination of the waiting period is granted or Parent receives a request for additional information or documentary material prior thereto. If either the FTC or the Antitrust Division were to request additional information or documentary material from Parent, the waiting period would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request unless the waiting period is sooner terminated by the FTC or the Antitrust Division. Thereafter, the waiting period could be extended only by agreement or by court order. Only one extension of such waiting period pursuant to a request for additional information is authorized by the rules promulgated under the HSR Act, except by agreement or by court order. Any such extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. Although the Company is required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer, neither the 25 28 Company's failure to make such filings nor a request from the Antitrust Division or the FTC for additional information or documentary material made to the Company will extend the waiting period. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the proposed acquisition of Shares by the Purchaser pursuant to the Offer. At any time before or after the Purchaser's purchase of Shares, the Antitrust Division or the FTC could decline take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to accept for payment enjoin the acquisition of Shares pursuant to the Offer or pay for seeking divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of Parent, the Company or any Shares tenderedof their respective subsidiaries. See Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. Section 14 for 11 of this Offer to Purchase contains a description of certain conditions to the OfferOffer that could become applicable in the event of such a challenge. Neither Parent, including conditions with respect to governmental actionsthe Purchaser nor the Company believes that the antitrust and competition laws of certain other foreign jurisdictions require notification of the transaction or the observance of pre-consummation waiting periods. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. Laws A number of other states have adopted laws and regulations applicable to attempts offers to acquire securities of corporations which are incorporated, or incorporated in such states and/or which have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such statestherein. In Edgax x. XXXE Corp.Corporation, the Supreme Court of the United States invalidated on constitutional grounds held that the Illinois Business Takeover statuteStatute, which, as a matter which made the takeover of state securities law, made takeovers of certain corporations meeting certain requirements more difficult, imposed a substantial burden on interstate commerce and was therefore unconstitutional. However in 1987, in In CTS Corp. Corporation v. Dynamics Corp. Corporation of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law andlaw, and in particular, those laws concerning corporate governance, a state may constitutionally disqualify an acquiror of "control shares" (ones representing ownership in excess of certain voting power thresholds e.g. 20%, 33% or 50%) of a corporation incorporated in its state and meeting certain other jurisdictional requirements from exercising voting power with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on shares without the affairs approval of a target corporation without the prior approval majority of the remaining presenting disinterested stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCLDGCL limits the ability of a Delaware corporation to engage in business combinations with "interested stockholders" (defined generally as any beneficial owner of 15% or more of the outstanding voting stock of the corporation) unless, among other things, the corporation's board of directors has given its prior approval to either the business combination or the transaction which resulted in the stockholder becoming an "interested stockholder." The Company's Board of Directors has approved the Merger Agreement and the Purchaser's acquisition of Shares pursuant to the Offer and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the Merger. Based on information supplied by the Company, the Purchaser has does not attempted to comply with the takeover laws of any other state. Should any person seek to apply believe that any state takeover law, laws purport to apply to the Offer or the Merger. Neither the Purchaser will take such action as then appears desirable, which may include challenging nor Parent has currently complied with any state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity or applicability of any state law purportedly applicable to the Offer or the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Merger is intended as a waiver of such statute in appropriate court proceedingsright. In the event If it is asserted that one or more any state takeover laws statute is applicable to the Offer or the Merger, Merger and if an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in consummating the Offer or the Merger. In such case, the Purchaser may not be obliged to accept for payment or pay for any Shares tendered pursuant to the Offer. 26 29 If it is asserted that one or more state takeover laws applies to the Offer and it is not determined by an appropriate court that such act or acts do not apply or are invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the MergerOffer. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Exon-Florxx Under Section 14. The Company and certain 721 of its subsidiaries conduct business in a number Title VII of other states throughout the United StatesStates Defense Production Act of 1950, some as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 ("Exon-Florxx"), the President of the United States is authorized to prohibit or suspend acquisitions, mergers or takeovers by foreign persons of persons engaged in interstate commerce in the United States if the President determines, after investigation, that such foreign persons in exercising control of such acquired persons might take action that threatens to impair the national security of the United States and that other provisions of existing law do not provide adequate authority to protect national security. Pursuant to Exon-Florxx, xxtice of an acquisition by a foreign person is to be made to the Committee on Foreign Investment in the United States ("CFIUS"), which have enacted is comprised of representatives of the Departments of the Treasury, State, Commerce, Defense and Justice, the Office of Management and Budget, the United States Trade Representative's Office and the Council of Economic Advisors and which has been selected by the President to administer Exon-Florxx, xxther voluntarily by the parties to such proposed acquisition, merger or takeover laws and regulationsor by any member of CFIUS. A determination that an investigation is called for must be made within 30 days after notification of a proposed acquisition, merger or takeover is first filed with CFIUS. Any such investigation must be completed within 45 days of such determination. Any decision by the President to take action must be announced within 15 days of the completion of the investigation. Although Exon-Florxx xxxs not require the filing of a notification, nor does it prohibit the consummation of an acquisition, merger or takeover if notification is not made, such an acquisition, merger or takeover thereafter remains indefinitely subject to divestment should the President subsequently determine that the national security of the United States has been threatened or impaired. Neither Honeywell Royal Philips nor the Purchaser knows whether believes that the Offer or the Merger threatens to impair the national security of the United States and neither Royal Philips nor the Purchaser intends to notify CFIUS of the proposed transaction. 16. FEES AND EXPENSES The Purchaser has retained D.F. Xxxx & Xo., Inc. to act as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interviews and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners of Shares. The Information Agent will receive reasonable and customary compensation for such services, plus reimbursement of out-of-pocket expenses and the Purchaser will indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including liabilities under the federal securities laws. The Purchaser will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including liabilities under the federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding material to their customers. 17. MISCELLANEOUS The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or all the acceptance thereof would not be in compliance 27 30 with the laws of these takeover such jurisdiction. However, the Purchaser may, in its sole discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in which the making of the Offer or the acceptance of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. The Purchaser and regulations will by their terms apply Parent have filed with the SEC a Statement on Schedule 14D-1 pursuant to Rule l4d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer, andand may file amendments thereto. Such Statement and any amendments thereto, except as including exhibits, may be examined and copies may be obtained from the principal office of the SEC in Washington, D.C. in the manner set forth above, neither Honeywell nor in Section 8. No person has been authorized to give any information or make any representation on behalf of Parent or the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing not contained in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver Letter of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable Transmittal and, if given or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may representation must not be consummated until 30 calendar days after receipt by relied upon as having been authorized. VULCAN MERGER SUB, INC. May 14, 1999 28 31 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF ROYAL PHILIPS, PHILIPS HOLDING, PARENT AND THE PURCHASER The following tables set forth the Antitrust Division name, business address, present principal occupation and material positions held within the past five years of each director and executive officer of Royal Philips, Philips Holding, Parent and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer Purchaser. DIRECTORS AND EXECUTIVE OFFICERS OF KONINKLIJKE PHILIPS ELECTRONICS N.V. (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (dROYAL PHILIPS ELECTRONICS)*

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information provided concerning the Company, as well as certain representations made to the Purchaser in the Stock Purchase Agreement by the Company, none of the Company, Purchaser or Honeywell is not aware of any regulatory license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition or ownership of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any governmental entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, the Purchaser and Honeywell presently contemplate currently contemplates that such approval or other action will be sought, except as described below under "State Takeover Laws." WhileAlthough, except as otherwise expressly described in this Offer to PurchaseSection 15, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions Certain Conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states throughout the United States have adopted laws and regulations enacted takeover statutes that purport, in varying degrees, to be applicable to attempts to acquire securities of corporations which that are incorporated, incorporated or have substantial assets, stockholdersshareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds held that the Illinois Business Takeover statuteAct, which, as a matter of which involved state securities law, laws that made takeovers the takeover of certain corporations meeting certain requirements more difficult, imposed a substantial burden on interstate commerce and therefore was unconstitutional. However in 1987However, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana a state may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law laws concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholdersshareholders, provided that such laws were applicable only under certain conditions. Subsequently, a number of federal courts ruled that various state takeover statutes were unconstitutional insofar as they apply to corporations incorporated outside of the state of enactment. The state law before Company is incorporated under the Supreme Court was by its terms applicable only laws of the State of Texas. In general, Article 13.03 of the TBCA prevents an "issuing public corporation" (generally, a domestic corporation that has any class of voting shares registered under the Exchange Act) from, directly or indirectly, entering into or engaging in any "business combination" (defined to corporations that had include the issuance or transfer in one transaction or series of transactions, shares of the issuing public corporation) with an "affiliated shareholder" (generally, a substantial number person who beneficially owns twenty percent (20%) or more of stockholders the then outstanding voting shares of the issuing public corporation) for a period of three (3) years following the date such person first became an affiliated shareholder unless, among other things, prior to such date the board of directors of the corporation approved either the business combination or the purchase or acquisition which resulted in the state and were incorporated thereshareholder becoming an affiliated shareholder. Except as described above with respect to Section 203 33 34 Upon consummation of the DGCL, sale of the Purchaser has not attempted to comply with Second Funding Shares and the takeover laws of any other state. Should any person seek to apply any state takeover lawOffer, the Purchaser will take such action become an affiliated shareholder within the meaning of Article 13.03 of the TBCA pursuant to the Stock Purchase Agreement. The Board of Directors of the Company approved the Stock Purchase Agreement and the transactions contemplated thereby on April 9, 1999, and, as then appears desirablea result, which may include challenging has approved the purchase or acquisition of shares by the Purchaser prior to the time the Purchaser will become an affiliated shareholder under Article 13.03 of the TBCA. Accordingly, Article 13.03 is inapplicable to the Offer, and the Common Stock Acquisitions. Neither the Company nor the Purchaser has determined whether any other state takeover laws and regulations will by their terms apply to the Offer or the Common Stock Acquisitions, and, except as set forth above, neither the Company nor the Purchaser has presently sought to comply with any other state takeover statute or regulation. The Company and the Purchaser reserve the right to challenge the applicability or validity or applicability of any state law or regulation purporting to apply to the Offer or the Common Stock Acquisitions, and neither anything in this Offer nor any action taken in connection herewith is intended as a waiver of such statute in appropriate court proceedingsright. In the event it is asserted that one or more state takeover laws statutes is applicable to the Offer or the Merger, Common Stock Acquisitions and an appropriate court does not determine that it such statue is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, Company or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, approval from the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such caseAntitrust. Under the provisions of the HSR Act and the rules promulgated thereunder, the Purchaser may not be obligated to accept for payment or pay for any transactions contemplated by the Stock Purchase Agreement, including the acquisition of Shares tendered pursuant to under the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated following the expiration of a thirty (30)-calendar day waiting period following the filing by the Purchaser of a Notification and Report Form with respect to such transactions, unless certain the Purchaser receives a request for additional information has been furnished to or documentary material from the Antitrust Division of or the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed FTC or unless early termination of the waiting period is granted. HoweverUnder the HSR Act and the rules promulgated thereunder, while a fifteen (15)-calendar day waiting period applies to the acquisition of shares in a cash tender offer, a longer, thirty (30)-calendar day waiting period applies to the acquisition of shares in non-public transactions. As a result, both waiting periods apply to the transactions contemplated by the Stock Purchase Agreement, including the Offer. The Purchaser will make such filing as promptly as practicable after the commencement of the Offer. If, within the initial thirty (30)-day waiting period, either the Antitrust Division or the FTC may extend the waiting period by requesting requests additional information or documentary material from Honeywell or the Company. If Purchaser concerning such a request is madetransactions, such the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Honeywell the Purchaser with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywellthe Purchaser. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not Expiration or termination of the applicable waiting periods under the HSR Act is a condition to the Purchaser's obligation to accept for payment and pay for Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfiedOffer. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the The Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition proposed purchase of the Second Funding Shares and Shares tendered pursuant to the Offer and by the MergerPurchaser. At any time before or after the Purchaser's acquisition of Sharessuch purchases, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise transactions or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of Honeywell the Company or its subsidiaries or the Purchaser or its subsidiaries. Private parties, as well as state governments, parties may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there There can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the resultresults thereof. See Section 14 34 35 16. FEES AND EXPENSES Southwest Securities, Inc. is acting as Dealer Manager in connection with the Offer. The Purchaser has agreed to pay the Dealer Manager reasonable compensation for such services. In addition, the Purchaser has agreed to reimburse the Dealer Manager for its out-of-pocket expenses, related to its engagement, including the reasonable fees and expenses of its counsel, and to indemnify the Dealer Manager and certain related persons against certain liabilities and expenses, including certain liabilities under the federal securities laws. The Purchaser has retained MacKenzie Partners, Inc. to act as the Information Agent and American Stock Transfer & Trust Company to serve as the Depositary in connection with the Offer. The Information Agent and the Depositary each will receive reasonable compensation for their services, be reimbursed for certain conditions reasonable out-of-pocket expenses and be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under the federal securities laws. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by them in forwarding material to their customers. 17. MISCELLANEOUS The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The Purchaser is not aware of any jurisdiction in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. If the Purchaser becomes aware of any state law prohibiting the making of the Offer or the acceptance of Shares pursuant thereto in such state, the Purchaser will make a good faith effort to comply with any such state statute or seek to have such state statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with any such state statute or have such state statute declared inapplicable to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly made to (nor will tenders be accepted from or indirectly secured on behalf of) the holders of Shares in such state. In these jurisdictions where securities laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by the Shares Dealer Manager or other securities which constitute margin stockone or more registered brokers or dealers that are licensed under the laws of such jurisdiction. AccordinglyNO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, all financing for IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, the Company shall file with the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, setting forth its recommendation with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. Such Schedules and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable in the manner set forth in Section 8 (except that such material will not be in full compliance with available at the Margin Regulationsregional offices of the Commission). April 21, 1999 MVII, LLC 35 36 ANNEX A INFORMATION CONCERNING THE SOLE MANAGER AND THE EXECUTIVE OFFICERS OF THE PURCHASER (d)INCLUDING MR. XXXXXX) The following table sets forth the name, business address, and principal occupation or employment at the present time and during the past five years of the sole manager and executive officers of the Purchaser. In addition, unless otherwise noted, each such person's business address is 654 Xxxx Xxxxxx, Xxx Xxxx Xxxxxx, Xxxxxxxxxx 00000. Xxl of the persons listed below are citizens of the United States.

Certain Legal Matters. Except as described in this Section 15, based on information provided by the Company, none of the Company, Purchaser or Honeywell Parent is aware of any license or regulatory permit that 39 42 appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell Parent presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In generaladdition to Virginia, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholdersshareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects effects, in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statuteStatute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholdersshareholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders shareholders in the state and were incorporated there. Except as described above with respect The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not know whether any of these laws will, by their terms, apply to Section 203 of the DGCL, Offer or the Purchaser Merger and has not attempted to comply complied with the takeover laws of any other statesuch laws. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is are applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information withpayment, or to receive approvals frompay for, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares Share tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 1514, based on information provided by the CompanyStarbase, none of Starbase, the Company, Purchaser or Honeywell Borland is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, Starbase that might be adversely affected by the Purchaser's ’s acquisition of Shares (and shares of Starbase common stock in connection with the indirect acquisition of Offer or the stock of the Company's subsidiaries) as contemplated herein Merger, or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition shares of the Starbase common stock of the Company's subsidiaries) by the Purchaser as contemplated hereinin connection with the Offer or the Merger. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell Borland presently contemplate that such approval or other action will be sought, except as described below under "“State Takeover Laws." Statutes”. While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of of, or payment for Shares for, shares of Starbase common stock that are tendered pursuant to in the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's Starbase’s business or that certain parts of the Company's Starbase’s business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment payment, or pay for any Shares tenderedfor, shares of Starbase common stock that are tendered in the Offer. See Section 14 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 15otherwise disclosed herein, based on a review of publicly available information provided filed by the CompanyCompany with the Commission, none of the Company, Purchaser or Honeywell is not aware of (i) any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares by the Purchaser pursuant to the Offer or (and the indirect acquisition of the stock of the Company's subsidiariesii) as contemplated herein or of any approval or other action by a domestic or foreign any governmental, administrative or regulatory agency or authority authority, domestic or foreign, that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently contemplate currently contemplates that it would seek such approval or other action will be soughtaction. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See "THE OFFER, except as described below under "State Takeover LawsSection 12 -- Conditions to the Offer." While, except as otherwise described in this Offer to Purchase, While the Purchaser does not presently currently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome obtaining of any such matterapproval or the taking of any such action, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action adverse consequences might not result in consequences adverse to the Company's business of the Company or the Purchaser or that certain parts of the Company's business businesses of the Company or the Purchaser might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such any other actions were not taken or in order to obtain any such approval or other actiontaken. If certain types The Offer constitutes a "going private" transaction under Rule 13e-3 of adverse action are taken with respect to the matters discussed belowExchange Act. Consequently, the Purchaser, the Purchaser could decline to accept Stockholders and the Company have signed the Schedule TO, which has been filed with the Commission, for payment or pay for any Shares tendered. See Section 14 for certain conditions to purposes of certifying the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws information required by Rule 13e-3 of the State of DelawareExchange Act contained therein. In generalPursuant to Rule 13e-3, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with contains information relating to, among other matters, the fairness of the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offerstockholders of Holt'x Xxxar Holdings, Inc. (other than the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (dStockholders).

Certain Legal Matters. Except as described in this Section 15otherwise disclosed herein, based on information provided by the Companyupon an examination of publicly available filings with respect to Xxxxxx, none of the Company, Purchaser or Honeywell OrthoStrategies is not aware of any license licenses or other regulatory permit that appears permits which appear to be material to the business of the Company Xxxxxx and its subsidiaries, taken as a whole, that which might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of Shares by OrthoStrategies pursuant to the Company's subsidiaries) as contemplated herein Offer or of any approval or other action by a domestic or foreign any governmental, administrative or regulatory agency or authority that which would be required or desirable for the acquisition and or ownership of the Shares (and by OrthoStrategies pursuant to the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated hereinOffer. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently contemplate it is currently contemplated that such approval or other action will would be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of sought or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there taken. There can be no assurance that any such approval or other action, if needed, would be obtained or or, if obtained, that it would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action adverse consequences might not result in consequences adverse to the Company's Xxxxxx'x or OrthoStrategies' business or that certain parts of the Company's Xxxxxx'x or OrthoStrategies' business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order taken, any of which might enable OrthoStrategies to obtain any such approval or other actionelect to terminate the Offer without the purchase of the Shares thereunder, if the relevant conditions to termination were met. If certain types of adverse action are taken with respect to OrthoStrategies' obligation under the matters discussed below, the Purchaser could decline Tender Offer Agreement to accept for payment or and pay for any the Shares tenderedis subject to certain other conditions. See Section 14 for certain conditions to 13. Under the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which1976, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authoritiesamended, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to rules that have been promulgated thereunder by the OfferFederal Trade Commission ("FTC"), or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") FTC and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination acquisition of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will OrthoStrategies is not violate the antitrust lawssubject to these requirements. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)State Takeover Laws

Certain Legal Matters. Except as described in this Section 1514, based on information provided by the Company, none of the Company, Purchaser or Honeywell Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell Parent presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 13 -- "Certain Conditions of the Offer" for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover LawsAffiliated Transaction Statute. The Because the Company is incorporated under the laws of the State of Delaware. In generalFlorida, it is subject to Section 203 607.0901 (the "Affiliated Transactions Statute") of the DGCL prevents FBCA. The Affiliated Transactions Statute generally prohibits a Florida corporation from engaging in an "affiliated transaction" with an "interested stockholdershareholder," unless (e.g. i) the affiliated transaction is approved by a majority of the disinterested directors or by the affirmative vote of the holders of two-thirds of the voting shares other than the shares beneficially owned by the interested shareholder, (ii) the corporation has not had more than 300 shareholders of record at any time for three years prior to the public announcement relating to the affiliated transaction, or (iii) the corporation complies with certain statutory fair price provisions. Subject to certain exceptions, under the FBCA an "interested shareholder" is a person who beneficially owns more than 10% of the corporation's outstanding voting shares. In general terms, an "affiliated transaction" includes: (i) any merger or has consolidation with an interested shareholder; (ii) the right transfer to acquire 15any interested shareholder of corporate assets with a fair market value equal to 5% or more of the corporation's consolidated assets or outstanding shares or representing 5% or more of the corporation's earning power or net income; (iii) the issuance to any interested shareholder of shares with a fair market value equal to 5% or more of the aggregate fair market value of all outstanding shares of the corporation; (iv) any reclassification of securities or corporate reorganization that will have the effect of increasing by more than 5% the percentage of the corporation's outstanding voting stockshares beneficially owned by any interested shareholder; (v) from engaging in the liquidation or dissolution of the corporation if proposed by any interested shareholder; and (vi) any receipt by the interested shareholder of the benefit of any loans, advances, guaranties, pledges or other financial assistance or any tax credits or other tax advantages provided by or through the corporation. At the October 22, 2002 meeting of the Company's Board of Directors, by unanimous vote of all directors, including a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period majority of three years following the time such person became an interested stockholder unless, among other thingsdisinterested directors, the corporationCompany's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has have approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for Shareholder Tender and Voting Agreements and the purposes of Section 203 transactions contemplated by those agreements. As a result, the provisions of the DGCLAffiliated Transactions Statute are not applicable to the Offer and the Merger and the transactions contemplated by such agreements. Control Share Acquisition Statute. The Company also may be subject to Section 607.0902 of the FBCA (the "Control Share Acquisition Statute"). The Control Share Acquisition Statute provides that shares of publicly held Florida corporations that are acquired in a "control share acquisition" generally will have no voting rights unless such rights are conferred on those shares by the vote of the holders of a majority of all the outstanding shares other than interested shares. A control share acquisition is defined, with certain exceptions, as the acquisition of the ownership of voting shares which would cause the acquirer to have voting power within the following ranges or to move upward from one range into another: (i) 20%, but less than 33 1/3%; (ii) 33 1/3%, but less than 50%; or (iii) 50% or more of such votes. The Control Share Acquisition Statute does not apply to an acquisition of shares of a publicly held Florida corporation (i) pursuant to a merger or share exchange effected in compliance with the FBCA if the publicly held Florida corporation is a party to the merger or share exchange agreement, or (ii) if such acquisition has been approved by the board of directors of that corporation before the acquisition. Because the Control Share Acquisition Statute specifically exempts (i) an acquisition of shares of a publicly held Florida corporation which has been approved by the board of directors of the such corporation before the acquisition, and (ii) a merger effected in compliance with the FBCA if the publicly held Florida corporation is a party to the merger agreement, the provisions of the Control Share Acquisition Statute are not applicable to the Offer or to the Merger. At the October 22, 2002 meeting of the Company's Board of Directors, by unanimous vote of all directors, the Company's Board of Directors approved the acquisition of the Subject Shares (as defined in the Shareholder Tender and Voting Agreements) pursuant to the Shareholder Tender and Voting Agreements, the acquisition of Shares pursuant to the Offer, and the Merger Agreement. Short-Form Merger. Section 607.1104 of the FBCA provides that, if a parent corporation owns at least 80% of the outstanding shares of each class of a subsidiary corporation, the merger of the subsidiary corporation into another 80% owned subsidiary of the parent corporation may be effected by a plan of merger adopted by the board of directors of the parent corporation and the appropriate filings with the Florida Department of State, without the approval of the shareholders of the subsidiary corporation (a "short-form merger"). In accordance with the FBCA, if Purchaser acquires at least 80% of the outstanding Shares, Purchaser will be able to effect the Merger without a vote of the other shareholders of the Company. In such event, the Company has agreed in the Merger Agreement to take, at the request of Purchaser, all necessary and appropriate action to cause the Merger to become effective after such acquisition without a meeting of the Company's shareholders. State Takeover Statutes. A number of other states have adopted laws and regulations applicable which purport, to varying degrees, to apply to attempts to acquire securities of corporations which that are incorporatedincorporated in, or which have substantial assets, stockholdersshareholders, principal executive offices or principal places of business, business or whose business operations otherwise have substantial economic effects in in, such states. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. Except as described herein, we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger and have not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger we believe that there are reasonable bases for contesting such laws. In Edgax 1982, in Xxxxx x. XXXE MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However However, in 1987, 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana maycould, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governancelaw, constitutionally disqualify a potential acquiror from voting on the affairs shares of a target corporation without the prior approval of the remaining presenting stockholders. The state law before stockholders where, among other things, the Supreme Court was by its terms applicable only to corporations that had corporation is incorporated, and has a substantial number of stockholders stockholders, in the state and state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated thereoutside Oklahoma in that they would subject such corporations to inconsistent regulations. Except Similarly, in Tyson Foods, Inc. x. XxXxxxxxxx, a Federal District Court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as described above with respect applied to Section 203 corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a Federal District Court in Florida held in Grand Metropolitan PLC x. Xxxxxxxxxxx, that the 38 provisions of the DGCLFlorida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida. Based on information supplied by the Company and the approval by the Board of Directors of the Company of the Merger Agreement, the Shareholder Tender and Voting Agreements, the Merger and the Offer, Purchaser does not believe that any state takeover statutes or similar laws purport to apply to the Offer or the Merger. Neither Purchaser nor Parent has not attempted currently complied with any state takeover statute or regulation other than as set forth in this Offer to comply with the takeover laws of Purchase. If any other state. Should any person government official or third party should seek to apply any state takeover lawlaw to the Offer or the Merger or other business combination between Purchaser or any of its affiliates and the Company, the Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity or applicability of any such statute in appropriate court proceedings. In the event that it is asserted that one or more state takeover laws statutes is applicable to the Offer or the Merger, Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, Offer or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authoritiesauthorities or holders of Shares, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in continuing or consummating the OfferOffer or the Merger. In such case, the Purchaser may not be obligated to accept for payment or pay for any tendered Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to Under the HSR Act, which provides and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") FTC and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their A Notification and Report Forms Form with respect to the Offer is expected to be filed under the HSR Act on or about October 28, 2002, and the waiting period with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m.P.M., New York City time, on the 15th fifteenth day after such Notification and Report Form is filed. Before such time, however, either the date Honeywell's form is filed unless early termination of the waiting period is granted. However, FTC or the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the CompanyPurchaser. If such a request is made, such the waiting period will expire at 11:59 p.m.P.M., New York City time, on the tenth calendar day after substantial compliance by Honeywell Purchaser has substantially complied with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such the waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the CompanyPurchaser's consent. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell Parent or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell Parent and the Company are engaged, Honeywell Parent and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to 13 -- "Certain Conditions of the Offer, ," including conditions with respect to litigation and certain governmental actions. (c) In addition to the United States, the antitrust and competition laws of other countries may apply to the Offer and the Merger and additional filings and notifications may be required. Parent and the Company are reviewing whether any such filings are required and intend to make such filings promptly to the extent required. Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all All financing for the Offer will be structured so as to be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information provided by concerning the Company and discussions of representatives of Parent with representatives of the Company, none of Parent, the Company, Purchaser or Honeywell the Company is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any Governmental Entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, Parent and the Purchaser and Honeywell presently currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, ". While (except as otherwise expressly described in this Offer to Purchase, Section 15) the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could could, subject to the terms and conditions of the Merger Agreement, decline to accept for payment or pay for any Shares tendered. See Section 14 for a description of certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information provided by concerning the Company and discussions of representatives of Parent with representatives of the Company, none of the CompanyPurchaser, Purchaser Parent or Honeywell the Company is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any Governmental Entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, Parent and the Purchaser and Honeywell presently currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, ". While (except as otherwise expressly described in this Offer to Purchase, Section 15) the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could could, subject to the terms and conditions of the Merger Agreement, decline to accept for payment or pay for any Shares tendered. See Section 14 for a description of certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 15, based Based on information provided a review of publicly available filings made by the Company, none Company with the Commission and other publicly available information concerning the Company and the review of certain information furnished by the Company to Parent and discussions of representatives of Parent with representatives of the Company during Parent's investigation of the Company, except as otherwise described in this Offer to Purchase, neither the Purchaser or Honeywell nor Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any Governmental Entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently Parent currently contemplate that such approval or other action will be sought, except as described below under "State State-Takeover Laws." ". While, except as otherwise expressly described in this Offer to PurchaseSection 15, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover LawsNevada Gaming Regulations. The Company is incorporated under ownership and operation of casino gaming facilities in Nevada are subject to: (i) the laws Nevada Act; and (ii) various local regulation. Parent's and the Company's respective gaming operations are subject to the licensing and regulatory control of the State of DelawareNevada Commission, the Nevada Board, the Xxxxx County Liquor and Gaming Licensing Board (the "CCLGLB") and the Xxxxxxx County Commission. In generalThe Nevada Commission, Section 203 the Nevada Board, the CCLGLB and the Xxxxxxx County Commission are collectively referred to as the "Nevada Gaming Authorities." Regulations of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more Nevada Commission provide that control of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware registered publicly traded corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of as the Company has approved the Offercannot be acquired through a tender offer, the Mergermerger, the Merger Agreement and the Stockholder Agreement for the purposes consolidation, acquisition of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices management or principal places consulting agreements or any form of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation takeover whatsoever without the prior approval of the remaining presenting stockholdersNevada Commission. Parent and the Purchaser have filed their applications for the necessary approvals with the Nevada Board and the Nevada Commission, and, assuming favorable recommendations from the Nevada Board, anticipate receiving the required approvals from the Nevada Commission in January 1995. The state law before Nevada Board reviews and investigates applications for such approvals and makes recommendations on such applications to the Supreme Court was Nevada Commission for final action. Under the Nevada Act, the Nevada Commission is required to use its best efforts to take final action upon an application for approval of an acquisition of control by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 person making a tender offer, within 60 days of the DGCLdate of filing such application and payment of the required fees. If the Nevada Commission cannot take final action within such period, the Purchaser Nevada Commission is required to provide the applicant with written notice of a time certain for completion of the Nevada Board's investigation and final action by the Nevada Commission. Parent is currently registered as a publicly traded corporation and has been found suitable to own the shares of a subsidiary that has licensed gaming facilities in Nevada. Accordingly, Parent does not attempted to comply with the takeover laws of any other stateexpect significant delays in obtaining necessary approvals in January 1995. Should any person seek to apply any state takeover lawHowever, the Purchaser there can be no assurances that such approvals will take be granted or will be granted within such action as then appears desirabletime. Furthermore, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In approval, if granted, does not constitute a finding, recommendation or approval by the event it is asserted that one Nevada Board or more state takeover laws is applicable the Nevada Commission as to the accuracy or adequacy of the Offer to Purchase or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating merits of the Offer and the Merger. Any representation to the contrary is unlawful. In such caseseeking approval to acquire control of the Company, Parent and Purchaser must satisfy the Purchaser may not be obligated Nevada Commission as to accept for payment any Shares tendered. See Section 14a variety of stringent standards. The Company Nevada Board and certain of its subsidiaries conduct business the Nevada Commission will consider all relevant material facts in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows determining whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of grant such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authoritiesapproval, and may consider not only the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to effects of the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger but also any other facts that are subject deemed relevant. Such facts may include, among others, (i) the business history of the applicant, including its record of financial stability, integrity, and success of its operations, as well as its current business activities; and (ii) whether the Offer and the Merger will create a significant risk that Parent, the Company or their subsidiaries will not satisfy their financial obligations as they become due or satisfy all financial and regulatory requirements imposed by the Nevada Act. The Nevada Commission must approve Parent and the Purchaser as controlling stockholders of the Company, and register Purchaser as an intermediary company prior to the HSR ActMerger. Following receipt of the necessary approvals of the Nevada Commission and consummation of the Merger, which provides that certain acquisition transactions may not the Company will be consummated unless certain information has been furnished registered by the Nevada Commission as an intermediary company of Parent. Certain officers, directors and key employees of Parent and the Purchaser prior to the Antitrust Division Merger, or the Company after the Merger, who will be actively and directly involved in the Company's gaming activities, may also be required to be found suitable or licensed by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing or registration for any cause that they deem reasonable. A finding of suitability is comparable to licensing, and both require the Department submission of Justice (the "Antitrust Division") detailed personal and the Federal Trade Commission (the "FTC") financial information followed by a thorough investigation. All individuals required to file applications for findings of suitability as such officers and certain waiting period requirements have been satisfied. Honeywell directors of Purchaser and the Company expect to file soon have applications filed on their Notification behalf for the necessary approvals with the Nevada Board and Report Forms with respect to the Offer under Nevada Commission by December 24, 1994, and, assuming favorable recommendations from the HSR Act. The waiting period under Nevada Board, anticipate receiving the HSR Act with respect to required approvals from the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is grantedNevada Commission in January 1995. However, there can be no assurances that such approvals will be granted. New Jersey Gaming Regulations. The Casino Control Act requires prior approval from the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the CompanyCCC before control of a casino licensee can be transferred. If such a request is madeHowever, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transactionan interim casino authorization, the parties frequently engage Casino Control Act permits an entity that obtains publicly-traded securities relating to a casino licensee to acquire and own securities conferring control of such licensee prior to obtaining approval from the CCC. During the period of interim authorization the publicly traded securities of such licensee must be held in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered a trust pursuant to the Offer unless and until provisions of the waiting period requirements imposed by Casino Control Act. As a result of the HSR Act with respect transfer of Shares to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger, Parent and the Purchaser will be required to timely file a completed application with the CCC for qualification as a holding and intermediary company, respectively, of a New Jersey casino licensee, which application must include a fully executed and approved, but not operative, trust agreement. At any time before or after Such completed application will require that the Purchaser's acquisition CCC render decisions with respect to the interim authorization (within 120 days of Shares, its submission) and plenary qualification (within twelve months of its decision with respect to interim authorization) of Parent and the Antitrust Division or Purchaser as holding and intermediary companies respectively of a New Jersey casino licensee. Although the FTC could take such action under Merger Agreement provides the antitrust laws as it deems necessary or desirable in Purchaser with the public interest, including seeking option to enjoin the acquisition either (i) seek regulatory approval of a trust covering all Shares acquired pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engagedMerger or (ii) seek such approval with respect to a trust covering common stock of the Company's qualified New Jersey intermediary company, Honeywell Parent and the Purchaser believe do not intend to pursue the latter option. Accordingly, Parent intends to prepare a trust agreement that will provide for the deposit of the tendered Shares in trust pending plenary qualification by the CCC. The trustee may not exercise rights incident to the ownership of the property unless the CCC orders that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Neverthelesstrust agreement become operative, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will which order may not be made or, if such a challenge unless the CCC denies interim authorization; finds reasonable cause to believe that any person required to be qualified may be found unqualified; or denies plenary qualification. The CCC may grant interim authorization where it finds by clear and convincing evidence that (1) statements of compliance have been issued under the Casino Control Act; (2) the casino hotel is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained an approved hotel in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance accordance with the Margin Regulations. (d)Casino Control Act;

Certain Legal Matters. Except as described in this Section 1514, based on information provided by the CompanyEsperion, none of the CompanyEsperion, Purchaser Merger Sub or Honeywell Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, Esperion that might be adversely affected by the PurchaserMerger Sub's acquisition of Shares (and shares of Company Common Stock in connection with the indirect acquisition of Offer or the stock of the Company's subsidiaries) as contemplated herein Merger, or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of shares of Company Common Stock by Merger Sub in connection with the Shares (and Offer or the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated hereinMerger. Should any such approval or other action be required or desirablerequired, the Purchaser Merger Sub and Honeywell Parent presently contemplate that such approval or other action will be sought, except as described below under "State Takeover LawsStatutes." While, except as otherwise described in this Offer to Purchase, the Purchaser Merger Sub does not presently intend to delay the acceptance for payment of of, or payment for Shares for, shares of Company Common Stock that are tendered pursuant to in the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the CompanyEsperion's business or that certain parts of the CompanyEsperion's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser Xxxxxx Sub could decline to accept for payment payment, or pay for any Shares tenderedfor, the shares of Company Common Stock that are tendered in the Offer. See Section 14 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of DelawareDelaware Law. In general, Section 203 of the DGCL prevents an "interested stockholder" stockholder (e.g. generally, a person who owns or has the right to acquire stockholder owning 15% or more of a corporation's outstanding voting stockstock or an affiliate thereof) from engaging in a "business combination" combination (generally defined to include mergers a merger and certain other transactionstransactions as described below) with a Delaware corporation for a period of three years following the time when such person stockholder became an interested stockholder unless, among other things, unless (i) prior to such time the corporation's board of directors approves such approved either the business combination or the transaction that resulted in which such stockholder becoming an interested stockholder, (ii) upon completion of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder becomes such prior to owned at least 85% of the corporation's voting stock outstanding at the time the transaction commenced (excluding shares owned by certain employee stock option plans and persons who are directors and also officers of the corporation) or (iii) at or subsequent to such time, the business combination is approved by the corporation's board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder becomes such(and such action may not be taken by written consent). The Board Xxxxxxxx's board of Directors of directors has taken all actions necessary to exempt the Company has approved Merger Agreement, the Offer, the Merger, Merger and the other transactions contemplated by the Merger Agreement and from the Stockholder Agreement for the purposes provisions of Section 203 of the DGCL. State Takeover Statutes. A number of other states (including Delaware, where Esperion, Merger Sub and Pfizer Inc. are incorporated) have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated, incorporated in those states or that have substantial assets, stockholderssecurity holders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such those states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above in this Offer to Purchase, it is not known whether any of these laws will, by their terms, apply to the Offer or the Merger and Merger Sub has not complied with respect any such laws. Except as set forth in this Offer to Section 203 of the DGCLPurchase, the Purchaser has Parent and Merger Sub have not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, statutes in connection with the Purchaser will take such action as then appears desirable, which may include challenging Offer or the validity or applicability of any such statute in appropriate court proceedingsMerger. In the event that it is asserted that one or more state takeover laws is applicable statutes apply to the Offer or the Merger, and it is not determined by an appropriate court does that the statutes in question do not determine that it is inapplicable apply or are invalid as applied to the OfferOffer or the Merger, the Purchaser might as applicable, Parent and Merger Sub may be required to file certain information documents with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser Parent and Merger Sub might be unable to accept for payment or pay for Shares purchase shares of Company Common Stock tendered pursuant to in the Offer, Offer or may might be delayed in continuing or consummating the Offer. In such that case, the Purchaser Merger Sub may not be obligated to accept for payment purchase, or pay for for, any Shares shares of Company Common Stock tendered pursuant to in the Offer. See Section 14Antitrust Laws. 29 32 (b) AntitrustUnited States Antitrust Law. The Offer and the Merger are subject to Under the HSR Act, which provides and the rules that have been promulgated under the HSR Act by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated completed unless certain information has been furnished to the FTC and the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell The Offer and the Company expect Merger are subject to the filing and waiting period requirements of the HSR Act. Under the Merger Agreement, Parent is required to, on behalf of itself and Merger Sub, file soon their a Notification and Report Forms Form with respect to the Offer under and Merger with the HSR ActAntitrust Division and the FTC no later than January 16, 2004, and Parent intends to file on that date. The As a result, the waiting period under applicable to the HSR Act with respect purchase of shares pursuant to the Offer will is scheduled to expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is grantedFebruary 4, 2004. However, prior to such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from Honeywell or the CompanyParent and from Esperion. If such a request is made, such the waiting period will expire at be extended until 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell Parent with such request. Only one extension of request (or if the waiting period pursuant to tenth day falls on a request for additional information is authorized by Saturday, Sunday or legal holiday, the HSR Actfirst business day after the tenth day). Thereafter, such waiting period may can be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Companyorder. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the PurchaserMerger Sub's acquisition of Shares pursuant to shares of Company Common Stock in the Offer and the Merger. At any time before or after the PurchaserMerger Sub's acquisition of Sharesshares of Company Common Stock, the FTC or the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the Merger Sub's acquisition of Shares pursuant to shares of Company Common Stock in the Offer Offer, the Merger or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell Parent, Esperion or its their respective subsidiaries. At any time after Merger Sub's acquisition of shares of Company Common Stock in the Offer and the Merger, the FTC or the Antitrust Division could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking the divestiture of the shares of Company Common Stock acquired by Merger Sub in the Offer and the Merger or the divestiture of substantial assets of Parent, Esperion or their respective subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there There can be no assurance that a challenge to the Offer or the Merger or other acquisition of Shares shares of Company Common Stock by the Purchaser Merger Sub on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board RegulationsUnder the Merger Agreement, Parent and Esperion have agreed to use their reasonable best efforts to resolve any objections that the antitrust regulators may raise with respect to the contemplated transactions. Regulations GIn no event, U and X (the "Margin Regulations") however, will Parent be required to sell any assets of the Federal Reserve Board restrict the extension Parent, Esperion or maintenance of credit for the purpose of buying or carrying margin stocktheir respective subsidiaries, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer either to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares obtain governmental or other securities which constitute margin stock. Accordingly, all financing approvals or for the Offer will be in full compliance with the Margin Regulations. (d)any other reason.

Certain Legal Matters. Except as described in this Section 15otherwise disclosed herein, based on a review of publicly available information provided filed by the CompanyCompany with the Commission, none of the Company, Purchaser or Honeywell is not aware of (i) any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares by the Purchaser pursuant to the Offer or (and the indirect acquisition of the stock of the Company's subsidiariesii) as contemplated herein or of any approval or other action by a domestic or foreign any governmental, administrative or regulatory agency or authority authority, domestic or foreign, that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell presently contemplate currently contemplates that it would seek such approval or other action will be soughtaction. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See "THE OFFER, except as described below under "State Takeover LawsSection 12--Conditions to the Offer." While, except as otherwise described in this Offer to Purchase, While the Purchaser does not presently currently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action adverse consequences might not result in consequences adverse to the Company's business of the Company or the Purchaser or that certain parts of the Company's business businesses of the Company or the Purchaser might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such any other actions were not taken taken. The Offer constitutes a "going private" transaction under Rule 13e-3 of the Exchange Act. Consequently, the Purchaser, the Parent, the Parent Stockholders and the Company have signed the Schedule TO, which has been filed with the Commission, for purposes of certifying the information required by Rule 13e-3 of the Exchange Act contained therein. Pursuant to Rule 13e-3, this Offer to Purchase contains information relating to, among other matters, the fairness of the Offer to 800-JR CIGAR's stockholders (other than the Parent, the Purchaser, the Parent Stockholders and the Other Xxxxxxx Trusts). The Purchaser, the Parent and the Parent Stockholders are not aware of any pending or in order to obtain overtly threatened legal proceedings which would affect the Offer or the Merger. If any such approval or other action. If certain types of adverse action are taken with respect matters were to the matters discussed belowarise, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging tendered in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See "THE OFFER, Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 3012-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions -Conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the ."Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)

Certain Legal Matters. Except as described in this Section 1516, based on information provided by the Company, none of the Company, the Purchaser or Honeywell Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell Parent presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 15 for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In generaladdition to Florida, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholdersshareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects effects, in such states. In Edgax Xxxxx x. XXXE MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statuteStatute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholdersshareholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders shareholders in the state and were incorporated there. Except as described above with respect The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not know whether any of these laws will, by their terms, apply to Section 203 of the DGCL, Offer or the Purchaser Merger and has not attempted to comply complied with the takeover laws of any other statesuch laws. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is are applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information withpayment, or to receive approvals frompay for, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)15.

Certain Legal Matters. Except as described in this Section 1513, based on information provided by OpticNet, OpticNet, the CompanyPurchaser, none of the Company, Purchaser or Honeywell is and BEI are not aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, OpticNet that might be adversely affected by the Purchaser's acquisition of Shares (and shares of OpticNet common stock in connection with the indirect acquisition of Offer or the stock of the Company's subsidiaries) as contemplated herein Merger, or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition shares of the OpticNet common stock of the Company's subsidiaries) by the Purchaser as contemplated hereinin connection with the Offer or the Merger. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell BEI presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." ". While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of of, or payment for Shares for, shares of OpticNet common stock that are tendered pursuant to in the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the CompanyOpticNet's business or that certain parts of the CompanyOpticNet's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment payment, or pay for any Shares tenderedfor, shares of OpticNet common stock that are tendered in the Offer. See Section 14 (Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. DELAWARE LAW In general, Section 203 of the DGCL prevents an "interested stockholder" stockholder (e.g. generally, a person who owns or has the right to acquire stockholder owning 15% or more of a corporation's outstanding voting stockstock or an affiliate thereof) from engaging in a "business combination" combination (generally defined to include mergers a merger and certain other transactions) with a Delaware corporation for a period of three years following the time when such person stockholder became an interested stockholder, except where certain board or stockholder unlessapprovals have been obtained. However, among other things, Section 203 of the corporation's board of directors approves such DGCL does apply to a business combination if the subject Delaware corporation does not have a class of voting stock that is (i) listed on a national securities exchange, (ii) authorized for quotation on the NASDAQ Stock Market or (iii) held of record by more than 2,000 stockholders. Because OpticNet common stock is not listed on a national securities exchange, is not authorized for quotation on the transaction in which NASDAQ Stock Market and is held by less than 2,000 stockholders, Section 203 of the interested stockholder becomes such prior DGCL is not applicable to the time the interested stockholder becomes such. The Board of Directors of the Company has approved Merger Agreement, the Offer, the Merger, Merger and the other transactions contemplated by the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCLAgreement. STATE TAKEOVER STATUTES A number of other states have adopted laws and regulations applicable that purport, to varying degrees, to apply to attempts to acquire securities of corporations which that are incorporatedincorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business, business or whose business operations otherwise have substantial economic effects in in, such states. OpticNet, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. Except as described in this Offer to Purchase, it is not known whether any of these laws will, by their terms, apply to the Offer or the Merger and the Purchaser has not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, it is believed that there are reasonable bases for contesting such laws. 49 In Edgax 1982, in a case named Xxxxx x. XXXE MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statuteStatute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in In 1987, however, in a case named CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana maycould, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governancelaw, constitutionally disqualify a potential acquiror from voting on the affairs shares of a target corporation without the prior approval of the remaining presenting stockholders. The state law before stockholders where, among other things, the Supreme Court was by its terms applicable only to corporations that had corporation is incorporated, and has a substantial number of stockholders stockholders, in the state and state. Subsequently, in a case named TLX Acquisition Corp. v. Telex Corp., a Federal District Court located in the State of Oklahoma ruled that certain Oklahoma statutes were unconstitutional insofar as they purported to apply to corporations incorporated there. Except as described above with respect to Section 203 outside of the DGCLState of Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in a case named Tyson Foods, Inc. x. XxXxxxxxxx, a Federal District Court located in the Purchaser has not attempted to comply with the State of Tennessee ruled that four Tennessee takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid statutes were unconstitutional as applied to corporations incorporated outside of the State of Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a Federal District Court located in the State of Florida held in a case named Grand Metropolitan PLC x. Xxxxxxxxxxx that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of the State of Florida. ANTITRUST Although all business combination transactions are subject to U.S. antitrust laws and also may be subject to international antitrust laws, filings with the Department of Justice and the Federal Trade Commission prior to closing of the Merger are not required. However, the Department of Justice or the Federal Trade Commission, as well as a state or private person, may challenge the Merger at any time before or after its completion. APPRAISAL AND DISSENTERS' RIGHTS Summary of Appraisal Rights under the DGCL. Stockholders do not have appraisal rights in connection with the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In additionHowever, if enjoinedthe Merger is consummated, each holder of shares of common stock who has neither voted in favor of the Purchaser might Merger nor consented thereto in writing, and who otherwise under the DGCL complies with the applicable statutory procedures will be unable entitled to accept receive a judicial determination of the fair value of their shares of common stock (exclusive of any element of value arising from the accomplishment or expectation of such merger or similar business combination) and to receive payment of such fair value in cash, together with a fair rate of interest, if any, for payment any Shares tendered pursuant shares held by such holders. Any such judicial determination of the fair value of the shares could be based upon considerations other than or in addition to the Offer, or be delayed price paid in continuing or consummating the Offer and the Mergermarket value of the common stock. In such case, Stockholders should recognize that the Purchaser may not value so determined could be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout higher or lower than the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered price per share paid pursuant to the Offer. See If any holder of common stock who demands appraisal under Section 14262 of the DGCL fails to perfect, or effectively withdraws or loses his rights to appraisal as provided in the DGCL, the common stock of such stockholder will be converted into the right to receive the price paid for each share of common stock in accordance with the Merger Agreement. 29 32 (b) AntitrustA stockholder's demand for appraisal may be withdrawn by delivering to OpticNet a written withdrawal of his demand for appraisal and acceptance of the Merger. The Offer Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights. Stockholders who will be entitled to appraisal rights in connection with the Merger will receive additional information concerning appraisal rights and the Merger are procedures to be followed in connection therewith before such stockholders have to take any action relating thereto. Summary of Dissenters' Rights under the CGCL. OpticNet is also subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division Section 2115 of the Department of Justice California General Corporation Law (the "Antitrust DivisionCGCL") and the Federal Trade Commission (the "FTC") and ), which requires OpticNet to comply with certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination statutory provisions of the waiting period CGCL, including those statutory provisions relating to dissenters' rights. There is grantedno guarantee that a court would conclude that a stockholder may exercise dissenters' rights under California law. HoweverAssuming such rights are available, pursuant to Chapter 13 of the CGCL, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension holders of the waiting period pursuant common stock have the right to a request for additional information is authorized by dissent from the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In additionmerger and, if the Antitrust Division merger is consummated, to receive cash compensation 50 equal to the fair market value of their shares. The fair market value of any dissenting shares will be determined as of the day before the first announcement of the terms of the proposed merger, excluding any appreciation or depreciation as a result of the FTC raises substantive issues merger, but adjusted for any stock split, reverse stock split, or share dividend which become later effective. Dissenting stockholders will have the rights and duties and must follow the procedures set forth in Chapter 13 of the California law in order to perfect such rights. Failure to comply with the procedures specified in the CGCL timely and properly will result in the loss of dissenters' rights. To exercise dissenters' rights under the California law, a stockholder must not vote in favor of the merger and demand purchase of the stockholder's shares at fair market value, and submit certificates representing the dissenting shares. Stockholders who may be entitled to dissenters' rights in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division receive additional information concerning appraisal rights and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant procedures to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within followed in connection therewith before such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant stockholders have to the Offer and the Merger. At take any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)thereto.

Certain Legal Matters. Mr. Xxxxx, Xxottrade, and a Scottrade branch manager were jointly named as defendants in an NASD arbitration proceeding filed in January 1999 (NASD Case #99-00028). The claimant in the proceedings was a Scottrade customer whose stock in Johnxxx & Xohnxxx xxx sold by Scottrade because timely payment for the purchase of the stock was not received. Claimant alleged that when Scottrade liquidated his position because of nonpayment, Scottrade's failure to provide notice of the sale was misrepresentation. Claimant sought an award of $4,227. In January 2000, the arbitrator determined in full and final resolution of the issues submitted that the defendants were jointly and severally liable to claimant for $1,000. All other requested relief was denied. The award contained no specific findings of any violations of any law or rule or that a misrepresentation had occurred. Rinex xxxer had any direct dealings with the claimant and was apparently named in the proceeding solely as a result of being the President of Scottrade. Except as described in this Section 15, based on information provided by the CompanyComputer Research, none of the Company, Purchaser or Honeywell neither Computer Research nor CRI Acquisition is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a wholeComputer Research, that might be adversely affected by the PurchaserCRI Acquisition's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) shares as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) shares by the Purchaser CRI Acquisition as contemplated herein. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell CRI Acquisition presently contemplate contemplates that such approval or other action will be sought, except as described below under "State Takeover Laws." While, except as otherwise described in this Offer to Purchase, the Purchaser CRI Acquisition does not presently intend to delay the acceptance for payment of or payment for Shares shares tendered pursuant to the Offer offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the CompanyComputer Research's business or that certain parts of the CompanyComputer Research's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser CRI Acquisition could decline to accept for payment or pay for any Shares shares tendered. See Section 14 for certain conditions to the Offeroffer, including conditions with respect to governmental actions. (a) State Takeover LawsSTATE TAKEOVER LAWS A number of states, including Pennsylvania where Computer Research is incorporated, have adopted laws that purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or that have substantial assets, shareholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. The Company Computer Research conducts business in a number of states throughout the United States, some of which have enacted such laws. Computer Research is incorporated under the laws of the State of DelawarePennsylvania. In generalSubchapters E-H of Chapter 25, Section 203 Title 15 of the DGCL prevents an "interested stockholder" Pennsylvania Business Corporation Law include various anti-takeover provisions. Subchapter E seeks to protect the rights of existing shareholders of a corporation involved in a control transaction (e.g. defined as the acquisition by a person who owns or group of the status of a controlling person or group, which generally has voting power over voting shares entitling the holders thereof to cast at least 20% of the votes that all shareholders would be entitled to cast in an election of directors) by providing them the right to acquire 15% or more demand fair value for their shares. Under Subchapter E, shareholders are entitled to notice of the attempt to purchase control shares, of their rights under the statute and of the price they may demand for those shares. Subchapter E also provides that shareholders objecting to the transaction are entitled to dissenters' rights and other remedies. Subchapter F provides that a corporation's outstanding voting stock) from engaging Pennsylvania corporation shall not engage at any time in a "any business combination" combination (defined to include mergers and certain other transactionsactions) with a Delaware corporation for a period of three years following the time such person became an any interested stockholder unlessof the corporation (including the beneficial owner of shares entitling that person to cast at least 20% of the votes that all shareholders would be entitled to cast in an election of directors), among other thingswith certain exceptions for business combinations approved by the board of directors and/or shareholders of the corporation and meeting certain financial conditions. Subchapter G requires the approval of shareholders (first holders of disinterested shares and then holders of all voting shares) before anyone who either has acquired or seeks to acquire a certain percentage of ownership (generally, 20% or more) in a publicly-traded corporation can vote the corporationcontrol shares so acquired. Subchapter H provides that any profits received from the sale of equity securities by a controlling person or group can be recovered by the corporation with respect to dispositions made within 18 months after the person or group obtained controlling person or group status if the equity security had been acquired within 24 months before or 18 months after the person or group obtained controlling group status. Computer Research's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Purchase Agreement and the Stockholder Agreement for the purposes of Section 203 consummation of the DGCL. A number transactions contemplated thereby and has taken all appropriate action, including the adoption of other states have adopted laws and regulations applicable bylaws within the proper time period that specifically provide that the Pennsylvania anti-takeover provisions do not apply to attempts to acquire securities of corporations which are incorporatedComputer Research, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., so that the Supreme Court above-described anti-takeover provisions of the United States invalidated on constitutional grounds the Illinois Pennsylvania Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particularCorporation Law, with respect to those aspects of corporate law concerning corporate governanceComputer Research, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholderswill not be applicable to CRI Acquisition and its affiliates. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of If any other state. Should any person government official or third party should seek to apply any state takeover lawlaw to the offer or the merger or other business combination between CRI Acquisition or any of its affiliates and Computer Research, the Purchaser CRI Acquisition will take such action as then appears desirable, which action may include challenging the applicability or validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws statutes is applicable to the Offer offer or the Merger, merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offeroffer or the merger, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser CRI Acquisition might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)state

Certain Legal Matters. Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information provided by concerning the Company and discussions of representatives of Parent with representatives of the Company, none of the CompanyPurchaser, Purchaser Parent or Honeywell the Company is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiariesSubsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority any Governmental Entity that would be required or desirable for the acquisition and or ownership of the Shares (and the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, Parent and the Purchaser and Honeywell presently currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." While, ". While (except as otherwise expressly described in this Offer to Purchase, Section 15) the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of or other substantial conditions complied with in the event that if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could could, subject to the terms and conditions of the Merger Agreement, decline to accept for payment or pay for any Shares tendered. See Section 14 for a description of certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (e.g. a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the time such person became an interested stockholder unless, among other things, the corporation's board of directors approves such business combination or the transaction in which the interested stockholder becomes such prior to the time the interested stockholder becomes such. The Board of Directors of the Company has approved the Offer, the Merger, the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCL. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgax x. XXXE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Except as described above with respect to Section 203 of the DGCL, the Purchaser has not attempted to comply with the takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination of the waiting period is granted. However, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d).

Certain Legal Matters. Except as described in this Section 1514, based on information provided by OpticNet, OpticNet, the CompanyPurchaser, none of the Company, Purchaser or Honeywell is and BEI are not aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, OpticNet that might be adversely affected by the Purchaser's acquisition of Shares (and shares of OpticNet common stock in connection with the indirect acquisition of Offer or the stock of the Company's subsidiaries) as contemplated herein Merger, or of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority that would be required or desirable for the acquisition and ownership of the Shares (and the indirect acquisition shares of the OpticNet common stock of the Company's subsidiaries) by the Purchaser as contemplated hereinin connection with the Offer or the Merger. Should any such approval or other action be required or desirablerequired, the Purchaser and Honeywell BEI presently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws." ". While, except as otherwise described in this Offer to Purchase, the Purchaser does not presently intend to delay the acceptance for payment of of, or payment for Shares for, shares of OpticNet common stock that are tendered pursuant to in the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to 28 31 obtain any such approval or other action might not result in consequences adverse to the CompanyOpticNet's business or that certain parts of the CompanyOpticNet's business might not have to be disposed of or other substantial conditions complied with in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment payment, or pay for any Shares tenderedfor, shares of OpticNet common stock that are tendered in the Offer. See Section 14 13 (Certain Conditions to the Offer) of this Offer to Purchase for certain conditions to the Offer, including conditions with respect to governmental actions. (a) State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. DELAWARE LAW In general, Section 203 of the DGCL prevents an "interested stockholder" stockholder (e.g. generally, a person who owns or has the right to acquire stockholder owning 15% or more of a corporation's outstanding voting stockstock or an affiliate thereof) from engaging in a "business combination" combination (generally defined to include mergers a merger and certain other transactions) with a Delaware corporation for a period of three years following the time when such person stockholder became an interested stockholder, except where certain board or stockholder unlessapprovals have been obtained. However, among other things, Section 203 of the corporation's board of directors approves such DGCL does apply to a business combination if the subject Delaware corporation does not have a class of voting stock that is (i) listed on a national securities exchange, (ii) authorized for quotation on the NASDAQ Stock Market or (iii) held of record by more than 2,000 stockholders. Because OpticNet common stock is not listed on a national securities exchange, is not authorized for quotation on the transaction in which NASDAQ Stock Market and is held by less than 2,000 stockholders, Section 203 of the interested stockholder becomes such prior DGCL is not applicable to the time the interested stockholder becomes such. The Board of Directors of the Company has approved Merger Agreement, the Offer, the Merger, Merger and the other transactions contemplated by the Merger Agreement and the Stockholder Agreement for the purposes of Section 203 of the DGCLAgreement. STATE TAKEOVER STATUTES A number of other states have adopted laws and regulations applicable that purport, to varying degrees, to apply to attempts to acquire securities of corporations which that are incorporatedincorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business, business or whose business operations otherwise have substantial economic effects in in, such states. OpticNet, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. Except as described in this Offer to Purchase, it is not known whether any of these laws will, by their terms, apply to the Offer or the Merger and the Purchaser has not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, it is believed that there are reasonable bases for contesting such laws. In Edgax 1982, in a case named Xxxxx x. XXXE MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover statuteStatute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in In 1987, however, in a case named CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana maycould, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governancelaw, constitutionally disqualify a potential acquiror from voting on the affairs shares of a target corporation without the prior approval of the remaining presenting stockholders. The state law before stockholders where, among other things, the Supreme Court was by its terms applicable only to corporations that had corporation is incorporated, and has a substantial number of stockholders stockholders, in the state and state. Subsequently, in a 41 case named TLX Acquisition Corp. v. Telex Corp., a Federal District Court located in the State of Oklahoma ruled that certain Oklahoma statutes were unconstitutional insofar as they purported to apply to corporations incorporated there. Except as described above with respect to Section 203 outside of the DGCLState of Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in a case named Tyson Foods, Inc. x. XxXxxxxxxx, a Federal District Court located in the Purchaser has not attempted to comply with the State of Tennessee ruled that four Tennessee takeover laws of any other state. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid statutes were unconstitutional as applied to corporations incorporated outside of the Offer, State of Tennessee. This decision was affirmed by the Purchaser might be required to file certain information with, or receive approvals from, United States Court of Appeals for the relevant state authoritiesSixth Circuit. In additionDecember 1988, if enjoined, a Federal District Court located in the Purchaser might be unable to accept for payment any Shares tendered pursuant to State of Florida held in a case named Grand Metropolitan PLC x. Xxxxxxxxxxx that the Offer, or be delayed in continuing or consummating provisions of the Offer Florida Affiliated Transactions Act and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. The Company and certain of its subsidiaries conduct business in a number of other states throughout the United States, some of which have enacted takeover laws and regulations. Neither Honeywell nor the Purchaser knows whether any or all of these takeover laws and regulations will by their terms apply to the Offer, and, except as set forth above, neither Honeywell nor the Purchaser has currently complied with any other state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or may be delayed in consummating the OfferState of Florida. In such case, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. 29 32 (b) Antitrust. The Offer and the Merger ANTITRUST Although all business combination transactions are subject to the HSR ActU.S. antitrust laws and also may be subject to international antitrust laws, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of filings with the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") and certain waiting period requirements have been satisfied. Honeywell and the Company expect prior to file soon their Notification and Report Forms with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th day after the date Honeywell's form is filed unless early termination closing of the waiting period is grantedMerger are not required. However, the Antitrust Division Department of Justice or the FTC Federal Trade Commission, as well as a state or private person, may extend the waiting period by requesting additional information or documentary material from Honeywell or the Company. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance by Honeywell with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Honeywell. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. As discussed below, the HSR Act requirements with respect to challenge the Merger will not apply if certain conditions are met. In particular, the Merger may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both Honeywell and the Company unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to the Offer (which would be the case if the Minimum Condition were satisfied) or the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30 day period, the Antitrust Division or the FTC may request additional information or documentary materials from Honeywell and/or the Company. The Merger may not be consummated until 20 days after such requests are substantially complied with by both Honeywell and the Company. Thereafter, the waiting periods may be extended only by court order or with the consent of Honeywell and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At at any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Honeywell or its subsidiaries. Private parties, as well as state governments, may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Honeywell and the Company are engaged, Honeywell and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. (c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin Regulations") of the Federal Reserve Board restrict the extension or maintenance of credit for the purpose of buying or carrying margin stock, including the Shares, if the credit is secured directly or indirectly by margin stock. Such secured credit may not be extended or maintained in an amount that exceeds the maximum loan value of all the direct and indirect collateral securing the credit, including margin stock and other collateral. 30 33 As described in Section 10 of this Offer to Purchase, the financing of the Offer will not be directly or indirectly secured by the Shares or other securities which constitute margin stock. Accordingly, all financing for the Offer will be in full compliance with the Margin Regulations. (d)completion.