<PAGE>

                                                                    EXHIBIT 10.7

                                ACKNOWLEDGMENT

TO:         Capital Vision Inc.
AND TO:     Heartsoft 1997 Limited Partnership

RE:         Proceeds from sale of HEARTSOFT K-8 LIBRARY (THE "SOFTWARE")
AND RE:     Sale of units (the "Units") in Heartsoft 1997 Limited Partnership
            (the "Partnership")

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

      REFERENCE IS MADE TO A SOFTWARE  ACQUISITION AGREEMENT (THE "SOFTWARE
AGREEMENT") DATED MAY 16, 1997, BETWEEN THE PARTNERSHIP AND THE UNDERSIGNED.

      The undersigned hereby irrevocably agrees and acknowledges that
notwithstanding the closing of the sale of Units and the terms of the Software
Agreement which contemplates a purchase price of CDN$1,750,000, in the event
that any remaining Units in the Partnership are not subscribed for, the purchase
price for the Software and the Acquisition Note shall each be reduced PRO RATA.

      EXECUTED at Tulsa, Oklahoma, the _____ day of May, 1997.

                                          HEARTSOFT INC.

                                    Per:  /s/ Benjamin Shell
                                          --------------------------------------
                                          Name: Benjamin Shell
                                          Title:  CEO

<PAGE>
                              SOFTWARE AGREEMENT

THIS AGREEMENT made as of the 16th day of May, 1997

BETWEEN:

            HEARTSOFT INC., a Delaware corporation (hereinafter referred to as
            "Heartsoft")

                                                      OF THE FIRST PART

                                        -and-

            HEARTSOFT 1997 LIMITED PARTNERSHIP, an Ontario limited partnership
            (hereinafter referred to as the "Partnership")

                                                      OF THE SECOND PART

WHEREAS Heartsoft is the exclusive owner of the HEARTSOFT K-8 LIBRARY, a set
of 50 educational software application programs;

AND WHEREAS the Partnership wishes to purchase and Heartsoft wishes to sell
an undivided 15% interest, in perpetuity, in and to the HEARTSOFT K-8 LIBRARY
(such 15% undivided interest hereinafter referred to as the "Computer
Programs");

AND WHEREAS in partial payment of the purchase price for the Computer
Programs, the Partnership intends to execute and deliver to Heartsoft the
Acquisition Note;

AND WHEREAS Heartsoft and the Partnership have agreed to form a joint venture
for the purposes of marketing and exploiting the Computer Programs throughout
the world;

NOW THEREFORE in consideration of the sum of one dollar ($1.00), and other
good consideration, now paid by each of the parties hereto to the other (the
receipt and sufficiency of which is hereby acknowledged), the parties hereto
hereby covenant and agree as follows:

1.    DEFINITIONS

1.01  For the purpose of this Agreement, the following terms shall be deemed
to have the following meanings:

"Acquisition Note" means the promissory note given by the Partnership to
Heartsoft pursuant to section 2.02 of this agreement, in the form attached as
Appendix "A" hereto;

"Affiliate" has the meaning ascribed thereto in the SECURITIES ACT (Ontario);

<PAGE>

"Associate" has the meaning ascribed thereto in the SECURITIES ACT (Ontario)
and also includes any person who does not deal at arm's length (as that term
is defined in the INCOME TAX ACT (Canada)) with such associate;

"Bank" means a chartered bank with offices in Tulsa, Oklahoma, as selected
from time to time by the Executive Committee;

"Closing" means the closing of the sale of the Computer Programs, expected to
take place on or about May 16, 1997;

"Computer Programs" means an undivided 15% interest, in perpetuity, in and to
the HEARTSOFT K-8 LIBRARY, a set of 50 educational software application
programs, as more particularly described in Appendix "B" hereto, together
with all Enhancements, Derivative Works and Maintenance Modifications;

"Derivative Work" means a work that (a) is derived from the Computer Programs
or any part thereof, including revisions, modifications, translations,
abridgments, condensations, expansions and any other form in which the
Computer Programs may be duplicated, recast, transformed or adapted, (b) is
created or completed by the Partnership, Heartsoft or any Associate of any of
them, and (c) would, if prepared without authorization from the owner of the
copyright in the Computer Programs, constitute an infringement of copyright;

"Enhancement" means any enhancement, modification, addition or update of the
Computer Programs, made by or on behalf of Heartsoft or the Partnership, and
which accomplish incidental, performance, structural or functional
improvements to the Computer Programs;

"Executive Committee" means the executive committee of the Joint Venture, as
selected by Heartsoft and the Partnership in accordance with the terms of
this agreement.

"General Partner" means CVI LP Management Inc., the general partner of the
Partnership, and any replacement general partner of the Partnership;

"Joint Venture" means the joint venture between the Partnership and Heartsoft
to market and exploit the Computer Programs throughout the world;

"Joint Venture Agreement" means the joint venture agreement entered into as
of May 16, 1997 between the Partnership and Heartsoft;

"Losses" means any and all loss, damage, claim, demand, deficiency, cost and
expense, including interest, compound interest and legal fees on a solicitor
and his or her own client basis;

"Maintenance Modifications" means modifications, updates or revisions made by
Heartsoft to the Computer Programs which correct efforts, support new
releases of operating systems or support new models of the Computer Programs;

<PAGE>

"Partnership" means Heartsoft 1997 Limited Partnership, a limited partnership
formed under the laws of the Province of Ontario;

"Purchase Price" means the purchase price paid by the Partnership to
Heartsoft for the Computer Programs, as determined in accordance with section
2.02 of this agreement;

2.    AGREEMENTS OF PURCHASE AND SALE

2.01  In consideration of the payment of the Purchase Price, and of the
fulfillment of the other obligations of the Partnership hereunder, Heartsoft
hereby sells, assigns and transfers all right, title and interest in and to
the Computer Programs to the Partnership in perpetuity.

2.02  The Purchase Price for the Computer Programs shall be $1,750,000 (one
million seven hundred fifty thousand dollars), payable by the Partnership to
Heartsoft as follows:

      (a)   as to $525,000 (five hundred twenty five thousand dollars), by
            certified cheques in two installments of $262,500 each, the first of
            at Closing and the second on May 30, 1998; and

      (b)   as to $1,225,000 (one million two hundred twenty five thousand
            dollars), by way of execution and delivery of the Acquisition Note.

2.03  Upon execution of this agreement, Heartsoft shall deliver to the
Partnership four complete copies of the source code of the Computer Programs, of
which:

      (a)   two shall be in machine readable form on a machine readable storage
            medium suitable for long-term storage and compatible with either
            Macintosh or IBM PC computer systems; and

      (b)   two shall be in human readable form with annotations in the English
            language on bond paper suitable for long-term archival storage.

3.    PROTECTION, MAINTENANCE AND ENHANCEMENT

3.01  Heartsoft shall develop, regenerate and continuously update the
Computer Programs in order to maintain the commercial competitiveness and
effective operation of the Computer Programs.

3.02  The parties hereto acknowledge that the Computer Programs contain
valuable proprietary trading information, and each party hereto shall not
disclose to any other person the source codes of the Computer Programs nor
any other information concerning the Computer Programs without the written
consent of all of the parties hereto.

3.03  Heartsoft hereby acknowledges that all Maintenance Modifications,
Enhancements and Derivative Works shall be considered part of the Computer
Programs and shall become and remain the sole and exclusive property of the
Partnership.

<PAGE>

4.    REPRESENTATIONS AND WARRANTIES

4.01  Heartsoft hereby represents and warrants to the Partnership that the
following representations and warranties are true and correct as of the date
hereof, and acknowledges that the Partnership is relying on such
representations and warranties in connection with the performance of its
obligations under this agreement:

      (a)   Heartsoft is a corporation duly incorporated, organized and validly
            subsisting under the laws of the State of Delaware;

      (b)   This agreement constitutes a valid and binding obligation of
            Heartsoft, enforceable against it in accordance with its terms, and
            each of the instruments and documents necessary to give effect to
            the transactions contemplated herein will, when executed and
            delivered, constitute a valid and binding obligation of Heartsoft,
            enforceable against it in accordance with its terms;

      (c)   The entering into of this agreement and the consummation of the
            transactions contemplated herein have not resulted and will not
            result in the violation of or default under any of the terms and
            provisions of any trust deed, hypothecation, indenture, mortgage,
            lease, agreement, written or oral, license or pen-nit to which
            Heartsoft is a party or by which it may be bound;

      (d)   The entering into of this agreement and the consummation of the
            transactions contemplated herein will not result in the violation of
            any statute, regulation, judgment, decree or law to which Heartsoft
            may be subject, or any applicable order of any court, arbitrator or
            government authority having jurisdiction over Heartsoft or its
            property;

      (e)   Heartsoft is not materially in default or breach of any contract,
            agreement, lease or other instrument to which it is a party or by
            which it may be bound, nor is Heartsoft aware of any state of facts
            which after notice or the passage of time, or both, would constitute
            such a material default or breach;

      (f)   The Computer Programs are an original work of Heartsoft, and
            Heartsoft has exclusive right, title and interest in and to and is
            the sole owner of the Computer Programs;

      (g)   Heartsoft has the full right to sell, transfer and assign the
            Computer Programs in the manner contemplated in this agreement and
            without any restriction, encumbrance, lien, security interest
            attaching thereto;

      (h)   Heartsoft has not granted, transferred, licensed or assigned any
            right or interest in or to the Computer Programs to any other
            person, and there are no contracts, agreements, licenses or other
            commitments or arrangements in effect with respect to the Computer
            Programs which might or could permit the manufacture,

<PAGE>

            marketing distribution or other exploitation or use of the Computer
            Programs by any other person;

      (i)   The execution and delivery of this agreement, the transfer of the
            Computer Programs to the Partnership and the use of the Computer
            Programs by the Partnership and Heartsoft as contemplated in this
            agreement has not and will not result in the infringement of any
            copyright, trademark, trade secret, intellectual property right or
            any other proprietary rights of any other person; and

      (j)   The Computer Programs have been prepared in a workmanlike manner and
            with professional diligence and skill, will function efficiently in
            the machines and with operating systems for which they are designed,
            are free from defect, deficiency, design flaw or bug of any nature
            and will otherwise be wholly suitable for the purpose for which the
            Partnership intends to use them and for which they have been
            designed.

4.02  The representations and warranties set out in section 4.01 above shall
survive and continue in full force and effect for the benefit of the
Partnership until ten years after the expiration or termination of this
agreement, including all amendments, extensions and renewals thereof.

4.03  No claim by the Partnership for breach of representation or warranty by
Heartsoft shall be valid unless Heartsoft has been given notice thereof
before the date on which the representation or warranty shall have terminated
in accordance with section 4.02 above.

4.04  The Partnership hereby represents and warrants to Heartsoft that the
following representations and warranties are true and correct as of the date
hereof, and acknowledges that Heartsoft is relying on such representations
and warranties in connection with the performance of its obligations under
this agreement:

      (a)   The Partnership is a limited partnership duly registered and in good
            standing in the Province of Ontario;

      (b)   This agreement constitutes a valid and binding obligation of the
            Partnership, enforceable against it in accordance with its terms,
            and each of the instruments and documents necessary to give effect
            to the transactions contemplated herein will, when executed and
            delivered by the Partnership, constitute a valid and binding
            obligation of the Partnership, enforceable against it in accordance
            with its terms;

      (c)   The entering into of this agreement and the consummation of the
            transactions contemplated herein have not resulted and will not
            result in the violation of or default under any of the terms and
            provisions of any trust deed, hypothecation, indenture, mortgage,
            lease, agreement, written or oral, license or permit to which the
            Partnership is a party or by which it may be bound;

<PAGE>

      (d)   The entering into of this agreement and the consummation of the
            transactions contemplated herein will not result in the violation of
            any statute, regulation, judgment, decree or law to which the
            Partnership may be subject, or any applicable order of any court,
            arbitrator or government authority having jurisdiction over the
            Partnership or its property;

      (e)   The Partnership is not materially in default or breach of any
            contract, agreement, lease or other instrument to which it is a
            party or by which it may be bound, nor is it aware of any state of
            facts which after notice or the passage of time, or both, would
            constitute such a material default or breach; and

      (f)   The Partnership has taken all such steps and done all such things as
            may be necessary in order to allow the Partnership to carry out the
            joint venture agreed to herein, including but not limited to
            obtaining all such licenses, registrations, authorizations and
            permits necessary to carry on business in and from Ontario.

4.05  The representations and warranties set out in section 4.04 above shall
survive and continue in full force and effect for the benefit of Heartsoft
until ten years after the expiry or termination of this agreement, including
all amendments, extensions and renewals thereof.

4.06  No claim by Heartsoft for breach of representation or warranty by the
Partnership shall be valid unless the Partnership has been given notice
thereof before the date on which the representation or warranty shall have
terminated in accordance with section 4.05 above.

5.    INDEMNIFICATION

5.01  The general indemnifications set out in this section are in addition to
any specific obligation of either of the parties hereto to indemnify the
other hereunder.

5.02  Heartsoft shall indemnify and save harmless the Partnership for and
from and against any Losses suffered by it as a result of any inaccuracy in
or breach of any representation or warranty by Heartsoft, or the failure of
Heartsoft to fulfill any condition or perform any covenant as provided herein
or in the Joint Venture Agreement.

5.03  The Partnership shall indemnify and save harmless Heartsoft for, from
and against any Losses suffered by it as a result of any inaccuracy in or
breach of any representation or warranty by the Partnership or the failure of
the Partnership to perform any covenant as provided herein.

5.04  Notwithstanding anything else in this section, each of the parties
hereto shall have an obligation to mitigate any Losses which are the subject
of a claim for indemnification.

6.    TERMINATION

6.01  Notwithstanding any other term of this agreement, the Partnership may,
but is not obligated to, terminate this agreement upon 30 days written notice
in the event that:

<PAGE>

      (a)   Heartsoft becomes bankrupt or insolvent or makes an assignment for
            the benefit of its creditors;

      (b)   Heartsoft takes steps to wind-up, dissolve or liquidate, except for
            internal corporate reorganizations, mergers or shareholder
            reorganizations;

      (c)   If a trustee, receiver, receiver and manager or other Custodian is
            appointed with respect to the assets or undertaking of Heartsoft; or

      (d)   There is a material breach of a material term of the Software
            Agreement by Heartsoft.

6.02  On or after January 1, 1999, but subject to section 6.03 of this
agreement, Heartsoft may, but is not obligated to, terminate this agreement
upon 30 days written notice to the Partnership.

6.03  In the event that Heartsoft elects to terminate this agreement in
accordance with section 6.02 of this agreement, Heartsoft and the Partnership
shall negotiate, in good faith, a price at which the Partnership's interest
in the Computer Programs shall be acquired by Heartsoft. In the event that
Heartsoft and the Partnership cannot in good faith determine that price
within 30 days, then an independent appraiser shall be retained to determine
the price, and the cost of such appraisal shall be borne equally by Heartsoft
and the Partnership.

7.    NOTICE

7.01  Any notice, direction or other instrument required or permitted to be
given pursuant to this agreement shall be in writing and may be given by
delivering the same or sending the same by prepaid first-class mail or by
telecopier to the appropriate party as follows:

      (a)         To Heartsoft:

                        3101 North Hemlock Circle
                        Broken Arrow, Oklahoma
                        74012

                        Attention: Bryan Reusser
                        Fax: 918-251-4018

      (b)         The Partnership:

                        c/o CVI LP Management Inc.
                        225 Richmond Street West
                        Suite 400
                        Toronto, Ontario
                        M5V IW2

                        Attention: Greg Coleman
                        Fax: 416-593-6157

<PAGE>

7.02  Any such notice, direction or other instrument, if delivered, shall be
deemed to have been given on the date on which it was delivered and, if sent
by mail, shall be deemed to have been given on the seventh (7th) business day
following the date of mailing and, if transmitted by telecopier, shall be
deemed to have been given at the opening of business in the office of the
addressee on the business day next following the transmission thereof.

7.03  Any party hereto may change its address for service or telecopier
number from time to time by notice given to the other parties hereto in
accordance with the foregoing.

8.    FURTHER ASSURANCES AND ACTIONS

8.01  Each of the parties hereto shall sign and deliver such further and
other documents, instruments, notices and papers and do and perform and cause
to be done and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to the purpose and intent
of this agreement and all ancillary agreements relating to the transactions
contemplated herein.

9.    GENERAL MATTERS

9.01  Unless otherwise expressly stated, all dollar amounts referred to in
this agreement are expressed and shall be payable in Canadian dollars.

9.02  In this agreement, unless the context otherwise requires, words
importing number include the singular and plural, words importing gender
include all genders, and words importing persons shall include firms,
corporations, trusts, estates, government agencies and departments and all
other types of entities, and vice versa.

9.03  In this agreement, any reference to "generally accepted accounting
principles" mean the principles established in and amended from time to time
by the Handbook of the Canadian Institute of Chartered Accountants.

9.04  Each of the provisions contained in this agreement is distinct and
several and a declaration of invalidity of unenforceability of one or mom
provisions of this agreement by any court of competent jurisdiction, shall
not effect the validity or enforceability of any other provision hereof.

9.05  This agreement constitutes the entire agreement between the parties
pertaining to the transaction contemplated herein and supersedes all prior
agreements and there are no other warranties, representations or agreements
between the panics in connection with the transactions contemplated herein.

<PAGE>

9.06  This agreement shall be governed by and interpreted in accordance with
the laws of the Province of Ontario and the laws of Canada as applicable
therein. Each of the parties hereto irrevocably attorns and submits to the
jurisdiction of the courts of the Province of Ontario.

9.07  Headings used in this agreement are for convenience of reference only
and do not form a part of this agreement, nor are they intended to interpret,
define or limit the scope, extent or intent of this agreement or any
provision hereof.

9.08  Any reference in this agreement to a statute shall include and shall be
deemed to be a reference to such statute and the regulations made pursuant
thereto, with amendments made thereto and in force from time to time, and to
any statute or regulation that may be passed which has the effect of
supplementing or superseding the statute so referred to or the regulations
made pursuant thereto.

9.09  Any reference in this agreement to my entity shall include and shall be
deemed to be a reference to any entity that is a successor to such entity.

9.10  Time shall be of the essence in this agreement.

9.11  This agreement may be executed in two (2) or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.

9.12  This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal personal representatives,
successors and assigns, but shall not be assignable by any party hereto
without the written consent of the other parties hereto.

9.13  No waiver of any provision of this agreement shall constitute a waiver
of any other provision nor shall any waiver of any provision of this
agreement constitute a continuing waiver unless otherwise expressly provided.

EXECUTED at Toronto this 16th day of May, 1997

                                    HEARTSOFT INC.

                              Per:  /s/ Benjamin P. Shell
                                    --------------------------------------------
                                    Benjamin P. Shell - Chief Executive Officer

                              HEARTSOFT 1997 LIMITED PARTNERSHIP, BY ITS GENERAL
                              PARTNER, CVI LP MANAGEMENT INC.

                              Per:  /s/ Greg Coleman
                                    --------------------------------------------
                                    Greg Coleman - President

<PAGE>

                                    APPENDIX "A"

                                  ACQUISITION NOTE

May 16, 1997
Toronto, Ontario

MATURITY DATE: May 1, 2007

FOR VALUE RECEIVED, the undersigned (the "Maker") acknowledges itself
indebted to and promises to pay to Heartsoft Inc. (the "Holder") on the dates
specified below at 225 Richmond Street West, Suite 400, Toronto, Ontario, M5V
I W2 (or at such other place as the Holder may from time to time designate in
writing to the Maker), the principal sum of $1,225,000 (one million two
hundred twenty five thousand dollars) (the "Principal Sum") in lawful money
of Canada, together with interest thereon as set forth herein.

The Principal Sum plus all accrued and unpaid interest thereon shall be due
and payable by the Maker to the Holder in full on May 1, 2007.

The Principal Sum from time to time outstanding shall bear interest from and
after the date hereof at the rate of five percent (5%) per annum, payable in
U.S. dollars, compounded annually both before and after demand, default,
maturity and judgment with interest on overdue principal and interests at the
same rate until the date of payment in full. The Maker shall pay all accrued
and unpaid interest on the principal amount outstanding from time to time,
annually, in arrears, on or before January 30 of each year.

In the event that the Maker defaults in payment of any sum due hereunder, and
fails to correct that default within 30 days of receiving written notice from
the Holder, the Principal Sum then outstanding together with accrued but
unpaid interest may, at the Holder's option, be accelerated and immediately
become due and payable in full, with interest thereon from such date at the
rate as specified herein.

So long as the Maker is not in default in the making of any payment due
hereunder, it shall have the right to prepay at any time and from time to
time all or any part of the Principal Sum then outstanding, and any interest
thereon, without notice, bonus or penalty, provided that the right of the
Maker to make any such prepayments shall be conditional upon payment by the
Maker to the Holder of all accrued and unpaid interest owing in respect of
the Principal Sum to the date of any such prepayment.

The provisions of this promissory note shall enure to the benefit of the
Holder (who may not transfer, assign, pledge or otherwise encumber this
promissory note without the express written consent of the Maker, which
consent may be unreasonably withheld) and shall be binding upon the Maker and
its successors and assigns. The Maker hereby waives presentment, protest,
demand, notice of protest and notice of dishonor of this promissory note and
expressly agrees that this promissory note and any payment due hereunder may
be extended from time to time by the Holder without in any way affecting the
liability of the Maker.

<PAGE>

The Maker agrees to pay to the Holder 100% of Gross Receipts, as defined in
the offering memorandum of the Maker dated March 15, 1997 (the "Offering
Memorandum"), on an annual basis, until all of the interest owing under this
promissory note is paid in fall, and to pay to the Holder 44% of
Distributable Cash (as defined in the Offering Memorandum) until all
principal owing under this promissory note has been paid in full.

This promissory note is issued by the Maker and accepted by the Holder as
partial payment of the consideration due under a software agreement dated May
16, 1997 between the Maker and the Holder, and this promissory note is
subject to the terms and conditions of that agreement.

This promissory note shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.

EXECUTED at Toronto, Ontario this 27th day of August, 1997.

                                    HEARTSOFT III LIMITED  PARTNERSHIP, BY ITS
                                    GENERAL PARTNER, CVI LP MANAGEMENT INC.

                                    Per:  /s/ Greg Coleman
                                          --------------------------------------
                                          Greg Coleman - President

<PAGE>

                                    APPENDIX "B"

                                 COMPUTER PROGRAMS

1.    Billiards n' Homonyms
2.    Billiards n' Homonyms - Spanish Version
3.    Billiards n' Antonyms
4.    Billiards n' Synonyms
5.    Bubblegum Machine
6.    Bubblegum Machine - Spanish Version
7.    Coin Changer
8.    Coin Changer - Spanish Version
9.    Electric Coloring Book
10.   Electric Coloring Book - Spanish Version
11.   Electric Math Chalkboard
12.   Electric Math Chalkboard - Spanish Version
13.   Great American States Race
14.   Great American States Race - Spanish Version
15.   Knowing English (2 titles)
16.   Memory Master
17.   Memory Master - Spanish Version
18.   Reading Comprehension
19.   Reading Rodeo
20.   Reading Rodeo - Spanish Version
21.   Skill Builders Series (16 titles) - English, Health, Science & Social
      Studies
22.   Sleuth Master
23.   Sleuth Master - Spanish Version
24.   Spelling Book (5 titles)
25.   Spinner's Choice
26.   Spinner's Choice - Spanish Version
27.   Tommy the Time Turtle
28.   Tommy the Time Turtle - Spanish Version
29.   Word Capture
30.   Word Capture - Spanish Version