<PAGE>
                     IN THE UNITED STATES BANKRUPTCY COURT
                         FOR THE DISTRICT OF MARYLAND


------------------------------
In re:                        )
                              )    
     APPLIED RESEARCH OF      )      Case No.96-1-2425-DK
     MARYLAND, INC.           )
               Debtor.        )
                              )
------------------------------

                        DEBTOR'S PLAN OF REORGANIZATION
                       --------------------------------

     Applied Research of Maryland, the debtor and debtor-in-possession herein
( the "Debtor"), hereby proposes and presents this Plan of Reorganization (the
"Plan"), pursuant to the provisions of Chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. Sections 101, "et seq," and, upon an Order of
Confirmation, agrees to be bound hereby.

                                   ARTICLE I
                                  DEFINITIONS
                                  -----------

     For purposes of this Plan, unless the context otherwise requires, the
following terms shall have the respective meanings hereinafter set forth:

     1.1   "ADMINISTRATIVE EXPENSE CLAIM" shall mean any Claim arising or
accruing on or after the Petition Date which is entitled to Priority Status
pursuant to Sections 503(b) and 507(a) (1) of the Bankruptcy Code. 
Administrative Expense Claim includes Claims of persons, such as attorneys,
accountants and other professionals, retained and entitled to compensation and
reimbursement in the Chapter 11 Case pursuant to Sections 327, 328, 330, 331
and 503(b) of the Bankruptcy Code.

     1.2   "ALLOWED AMOUNT" or "ALLOWED CLAIM" shall mean (a) the amount of a
Claim for which a proof of Claim has been filed, or amended if necessary, with
the Bankruptcy Court by the Bar Date, to which no objection has been
interposed, (b) if no proof of Claim is timely filed, the amount of any Claim
listed in the Schedules, including any timely amendments thereto, which is not
listed as disputed, contingent or unliquidated as to amount, and (c) if an
objection to the allowance of any Claim has been filed, the amount of such
Claim allowed by Final Order of the Bankruptcy Court or by agreement of the
Debtor.

     1.3   "ALLOWED SECURED CLAIM" shall mean that portion of an Allowed
Claim which is secured by a properly perfected, non-avoidable lien or security
interest in property of the estate.

     1.4   "BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as
amended from time to time, and codified at 11 U.S.C. Sections 101 "et seq."

     1.5   "BANKRUPTCY COURT" shall mean the United States Bankruptcy Court
for the District of Maryland or any other court having jurisdiction over the
Debtor's Chapter 11 Case or any proceeding arising under or arising in or
related to the Debtor's Chapter 11 Case.

     1.6   "BANKRUPTCY RULES" shall mean the Federal Rules of Bankruptcy
Procedure promulgated August 1, 1991, or as more recently amended.

     1.7   "BAR DATE" shall mean the deadline established by the Bankruptcy
Court pursuant to Bankruptcy Rule 3003(c)(3) as the date by which Claims which
must be filed shall be filed, failing which such Claims may be disallowed for
purposes of voting or distribution.  Further, no Claims shall be amended,
modified or transferred after the Bar Date.

     1.8   "CASH DISTRIBUTIONS" shall mean the cash payable from Cash Flow to
Classes of Claims other than Administrative Expense Claims entitled to payment
under the terms of the Plan.

     1.9   "CASH FLOW" shall mean all Revenues after payment of
Administrative Expense Claims, funding of necessary reserves, and payment of
current disbursements. 

     1.10  "CHAPTER 11 CASE" shall mean the Chapter 11 case of Applied
Research of Maryland, Case No. 96-1-2425-DK pending in the Bankruptcy Court.

     1.11  "CLAIM" shall mean:

     (a)   a right to payment, whether or not such right is reduced to
           judgment, liquidated, unliquidated, fixed, contingent, matured,
           unmatured, disputed, undisputed, legal, equitable, secured or
           unsecured; or 

     (b)   a right to an equitable remedy for breach of a performance if such
           breach gives rise to a right to payment, whether or not such right
           to an equitable remedy is reduced to judgment, fixed, contingent,
           matured, unmatured, disputed, undisputed, secured or unsecured.

     1.12  "CLAIMS DISTRIBUTION FUND" shall mean the account for Cash
Distributions funded by all Cash Flow of the Debtor existing or realized after
the Confirmation Date. 

     1.13  "CLASS" shall mean a Claim or Interest or a group of Claims or
Interests consisting of those Claims or Interests which are substantially
similar to each other, as classified under the Plan, or a group of Claims or
Interests which are otherwise required to be separately classified.

     1.14  "CONFIRMATION DATE" shall mean when the Confirmation Order becomes
a Final Order. 

     1.15  "CONFIRMATION ORDER" shall mean the order of the Bankruptcy Court
confirming the Plan under Section 1129 of the Bankruptcy Code.

     1.16  "CREDITOR" shall mean any entity which holds a Claim against the
Debtor.

     1.17  "DEBT" shall mean a liability on a Claim.

     1.18  "DISALLOWED AMOUNT" shall mean, with respect to any particular
Disputed Claim, that amount which is equal to the difference, if any, between
the Face Amount of such Disputed Claim and the Allowed Amount thereof.

     1.19  "DISPUTED CLAIM" shall mean any Claim for which an Allowed Amount
has not yet been determined.

     1.20  "EFFECTIVE DATE" shall mean the thirtieth (30th) day following the
Confirmation Date, or the Closing Date, whichever is later.

     1.21  "EMPLOYEE" shall mean any employee as defined by the Asset
Purchase Agreement or any employee or consultant engaged or employed by the
Debtor as of the Effective Date, whether such engagement or employment is
pursuant to a written or unwritten contract or is at will.  Notwithstanding
the foregoing, "Employee" shall not include Dr. Anand.

     1.22  "EQUITY INTEREST HOLDER" shall mean any employee as defined by the
Asset Purchase Agreement or any person who holds a ownership interest in the
Debtor as of the Petition Date.

     1.23  "EXCLUDED ASSETS" shall mean any assets which are not to be
acquired by Space Applications Corporation under the Asset Purchase Agreement. 


     1.24  "FACE AMOUNT" shall mean, with respect to a particular Claim: 

     (a)   if the holder of such Claim has not filed a proof of Claim with
           the Bankruptcy Court by the Bar Date, the amount if any, for which
           such Claim is listed in the Schedules as fixed, undisputed,
           noncontingent and liquidated; or

     (b)   if the holder of such Claim has filed a proof of claim with the
           Bankruptcy Court by the Bar Date, the amount stated in such proof
           of Claim; or

     (c)   with respect to an Administrative Expense Claim in the form of an
           application for allowance of compensation or reimbursement of
           expenses of Professional Persons filed and pending in the
           Bankruptcy Court, the net amount to which such professional would
           be entitled if its application were to be granted in full.

     1.25  "FINAL ORDER" shall mean an order of a court from which the time
for appeal and reconsideration under Bankruptcy Rules 8002 and 9023 has
expired without the commencement of an appeal or request for reconsideration,
or an order of a court as to which an appeal or reconsideration has been
taken, and where such order has been affirmed by appeal, or, in the case of
reconsideration, such request for reconsideration has been denied, and no
appeal from such denial of the request for reconsideration has been taken.

     1.26  "IMPAIRED" shall refer to any Class of Claims or Interests treated
under the Plan in such a manner as described pursuant to Section 1124 of the
Bankruptcy Code.

     1.27  "INTEREST" shall mean the ownership interest(s) held by an Equity
Interest Holder.

     1.28  "PETITION DATE" shall mean April 2, 1996, the date the Debtor
voluntarily commenced its Chapter 11 Case pursuant to the provisions of the
Bankruptcy Code.

     1.29  "PLAN" shall mean this Plan of Reorganization and any and all
modifications or corrections hereof or amendments or supplements hereto.

     1.30  "PRIORITY STATUS" shall mean the priority in distribution which is
afforded ro certain Claims against the Debtor pursuant to Section 507(a) of
the Bankruptcy Code.

     1.31  "PROFESSIONAL PERSONS" shall mean persons retained or to be
compensated pursuant to Sections 327, 328, 330, 331 and 503(b) of the
Bankruptcy Code.

     1.32  "PRO-RATA" shall mean:

     (a)   with respect to Allowed Claims, the same proportion that the
           Allowed Amount of a Claim of a Creditor in any Class of Claims
           bears to the aggregate of:

           (i)      the Allowed Amount of all Claims of that particular Class
                    of Claims or other Classes of Claims if applicable; plus

           (ii)     the aggregate Face Amount of all Claims which are subject
                    to dispute as of the Confirmation Date of that particular
                    Class of Claims or other Classes of Claims if applicable,
                    as reduced from time to time as and to the extent that the
                    Disallowed Amount of such Claims is determined, and

     (b)   with respect to Disputed Claims, the same proportion that the Face
           Amount of a Disputed Claim of a creditor in any Class of Claims
           bears to the aggregate of:

           (i)      the Disputed Amount of all Claims of that particular Class
                    of Claims or other Classes of Claims if applicable; plus

           (ii)     the aggregate Face Amount of all Claims which are subject
                    to dispute as of the Confirmation Date of that particular
                    Class of  claims or other Classes of Claims if applicable,
                    as reduced from time to time as and to the extent that the
                    Disallowed Amount of such Claims is determined.

     1.33  "SCHEDULES" shall mean the schedules of assets and liabilities, as
may be amended, filed by the Debtor with the Bankruptcy Court in the Chapter
11 Case.  Such Schedules may be amended by the Debtor through ninety (90) days
following the Effective Date.

     1.34  "SECURED CREDITOR" shall mean the holder of an Allowed Secured
Claim. 

     1.35  "U.S. TRUSTEE" shall mean the Office of the United States Trustee
in Greenbelt, Maryland.

     1.36  "UNSECURED CLAIM" shall mean a Claim which is not an
Administrative Expense Claim, an Allowed Secured Claim, an Allowed Deficiency
Claim, an Administrative Convenience Claim, or a Claim otherwise entitled to
Priority Status, if any.

                                  ARTICLE II
                DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS
                -----------------------------------------------

     For purposes of the Plan, Claims and Interests are classified as follows:

     2.1   "CLASS 1 CLAIM" shall consist of the Secured Claim of the Internal
Revenue Service.

     2.2   "CLASS 2 CLAIM" shall consist of the Secured Claim of Commerce
Funding Corp.

     2.3   "CLASS 3 CLAIM" shall consist of all Claims entitled to Priority
Status under Section 507(a)(3), (a)(4), and (a)(6) and 1129(a)(9)(B) of the
Bankruptcy Code.

     2.4.  "CLASS 4 CLAIM" shall consist of all Allowed Unsecured Claims.

     2.5.  "CLASS 5 INTERESTS" shall consist of all Equity Interests in the
Debtor.

     2.6   The Debtor has not designated any Class of Claims under Sections
507(a)(1), 507(a)(2) or 507(a)(8) pursuant to Section 1123(a)(1) of the
Bankruptcy Code. The Plan contemplates that all Allowed Administrative Expense
Claims shall be accorded treatment and payment as provided for by the
Bankruptcy Code and as otherwise addressed by this Plan.

                                  ARTICLE III
                 TREATMENT OF CLASSES OF CLAIMS AND INTERESTS
                 --------------------------------------------

     3.1   CLASS 1 CLAIM IS IMPAIRED.  The prior sale of the assets, pursuant
to the terms of the Asset Purchase Agreement, transferred substantially all of
the assets of the Debtor free and clear of all liens without any preservation
of the asserted lien of Class 1.  The Claim of the Internal Revenue Service
shall be deemed fully satisfied by the treatment afforded by the Asset
Purchase Agreement.  Accordingly, the Claim of the Internal Revenue Service
will receive no treatment as an Allowed Secured Claim under the Plan. 

     3.2   THE CLASS 2 CLAIM IS NOT IMPAIRED.  The prior sale of the assets,
pursuant to the terms of the Asset Purchase Agreement, transferred the
substantially all of the assets of the Debtor free and clear of all liens
without any preservation of the asserted lien of Class 2.  Commerce Funding
Corp.  has been paid in full pursuant to the terms of the Asset Purchase
Agreement and its loan documents.  Accordingly, the Secured Claim of Commerce
Funding Corp. will receive no treatment as an Allowed Secured Claim under the
Plan. 

     3.3   THE CLASS 3 CLAIMS ARE IMPAIRED. Priority Claims in this Class are
Claims entitled to priority in accordance with 11 U.S.C. Section 507(a) other
than those designated in 11 U.S.C. Section 1123(a)(1) ("Priority Claims").  In
full and complete satisfaction and release of the Class 3 Claims, and unless
otherwise agreed by the Claimant and the Debtor, the holders of Class 3
Claims, which are Allowed Claims entitled to priority pursuant to 11 U.S.C.
Sections 507(a)(3), (a)(4) and (a)(6), shall be paid pursuant to the Asset
Purchase Agreement.  All claims by the Employees of the Debtor for wages,
salaries, or commissions, including vacation, severance, sick leave, 401K
benefits, and expenses shall be deemed fully satisfied by the treatment
afforded the Employees in the Asset Purchase Agreement.  Accordingly, the
Employees of the Debtor will receive no additional treatment as Priority
Claimants under the Plan because those claims have been waived.  Approximately
One Hundred Forty-Five Thousand Dollars ($145,000.00) of Claims due the
Employees will remain as Class 4 Unsecured Claims.

     3.4   THE CLASS 4 CLAIMS ARE IMPAIRED.  If, and to the extent funds
become available, all Allowed Unsecured Claims shall receive periodic Cash
Distributions from the liquidation of Excluded Assets after disbursement to
all Administrative Expense Claims, Priority Claims and Classes 1 through 3, to
the extent Revenues remain available, commencing on the Effective Date, and
continuing thereafter to the extent additional Revenues are received by the
Debtor through and including the date of final administration of this Case. 
Class 4 Claims will be paid after payment in full to all Administrative
Expense Claims, Priority Claims, Class 1 Claims, Class 2 Claims, and Class 
3 Claims.

     3.5   THE CLASS 5 INTERESTS ARE IMPAIRED.  Class 5 Interests will be
treated under either of two (2) alternatives.  First, if the Intercompany
Settlement Agreement and the Plan are approved as proposed, then the stock in
the Debtor will be retained by its parent corporation.  The Debtor anticipates
that this will improve the possibility of the cash flow payments to Class 4
Claimants under the Intercompany Settlement Agreement.  

     Alternatively, if the Intercompany Settlement Agreement is not approved,
and the treatment of Class 5 as described above is not approved, then the
Class 5 Interests will be terminated on the Confirmation Date and the Class 5
Claimants will retain no interest in the Debtor thereafter.

     3.6   THE ADMINISTRATIVE EXPENSE CLAIMS.  Administrative Expense Claims
are Claims against the Debtor for any costs or expenses of the Chapter 11 case
allowable under 11 U.S.C. Sections 503(b), including all actual and necessary
costs and expenses incurred to preserve the Debtor's estate, as well as the
operations of the Debtor's business, including compensation or reimbursement
of expenses to the extent allowed under the Code.  In this case, the Debtor-
In-Possession and its affiliates have agreed pursuant to the Intercompany
Settlement Agreement that net proceeds for a Sale or improved cash flow if
achieved, enhance the divided to Class Four Creditors.  Administrative Expense
Claims consist primarily of fees owed to Professionals.

     Unless otherwise agreed by the Professionals, Administrative Expense
Claims of Professionals retained pursuant to Court Order shall be paid, in
cash, the full amount of their Allowed Claim as follows: (1) unpaid fees and
expenses, if any, which were approved prior to the Effective Date shall be
paid on the Effective Date, and (2) fees and expenses which are allowed after
the Effective Date shall be paid when allowed.  All reasonable post-
confirmation Professional fees and expenses shall be paid within thirty (30)
days from receipt of a bill.  The Debtor believes that the Professional fees
in this case, which are subject to approval by this Court, are approximately
$493,000.00.

     The Administrative Expense Claims shall be paid from the liquidation of
the Excluded Assets, the funds designated for the repayment of this debt
pursuant to the terms of the Asset Purchase Agreement, and to the extent
necessary, the proceeds of the Intercompany Settlement Agreement with
ARSoftware and ARInternet.  In the event that Administrative Expense Claims
must be paid from the proceeds of the Intercompany Settlement Agreement, such
claims will be satisfied prior to any distribution to the Priority Tax
Claimants.

     The treatment of the claims of the Employees of the Debtor for wages,
salaries, unused vacation pay, 401K benefits, and expenses in the Asset
Purchase Agreement shall be in full and complete satisfaction all of their
claims against the Debtor.  Accordingly, the Employees will receive no
treatment as an Administrative Expense Claim Holder under the Plan as those
claims have been waived.

     3.7   THE PRIORITY CLAIMS PURSUANT TO SECTIONS 507(A)(1), 507(A)(2) OR
507(A)(8) OF THE BANKRUPTCY CODE.  In full and complete satisfaction, and
release of the Interests of the Priority Tax Claims entitled to priority
status under 11 U.S.C. Section 507(a)(8), the Priority Tax Claimants shall
receive payment from the liquidation of the Excluded Assets and proceeds from
the Intercompany Settlement Agreement with ARSoftware and ARInternet to the
extent any proceeds remain after payment of the Administrative Expense Claims.

     The Claims of the State of Maryland, the State of California, and
Washington D.C. (the "State Tax Claimants"), are for withholding taxes and
unemployment taxes.  The Debtor estimates that the claim of the State of
Maryland is in the approximate amount of $163,479.00, that the claim of
Washington D.C. is in the amount of $1,447.00, and the claim of the State of
California is in the amount of $916.00.  In full and complete satisfaction and
release of the claims of the State Tax Claimants, the State Tax Claimants
shall receive a "pro rata" distribution from the proceeds of the Intercompany
Settlement Agreement after payment to the Administrative Expense Claimants, if
necessary.  The payment of the State claims as provided herein shall
constitute a full and complete release of claims against any officer,
director, or responsible person of the debtor.

     The treatment of the claim of the Internal Revenue Service pursuant to
the terms of the Asset Purchase Agreement shall be in full and complete
satisfaction of all of its claims against the Debtor.  Accordingly, the
Internal Revenue Service will receive treatment as a Priority Claim Holder
under the Plan only in the event that there are remaining proceeds after
payment to Administrative Expense Claimants and the State Tax Claimants. To
the extent that the Priority Tax Claim of the Internal Revenue Service exceeds
the payment received from the Asset Purchase Agreement and the remaining
proceeds from the Intercompany Settlement Agreement, if any, the Internal
Revenue Service has waived its right to such claim.

     3.8   Any Class of Claims entitled to timely elect treatment pursuant to
Section llll (b)(2) of the Bankruptcy Code shall receive treatment as required
by law.  Further, nothing in this Plan shall be deemed to preclude any Class
of Claims entitled to elect treatment pursuant to Section 1111 (b)(2) of the
Bankruptcy Code from timely making such election. 

                                  ARTICLE IV
                          MEANS OF EXECUTION OF PLAN
                          --------------------------

     4.1.  This Plan is a liquidating plan under Section 1129(a)(11) of the
Bankruptcy Code and is materially premised upon the disposition of the
Debtor's assets pursuant to the Asset Purchase Agreement as well as the
disposition of the Excluded Assets. The proceeds from the disposition of these
assets will be distributed to Classes of Claims in accordance with the
priorities and terms identified in Articles III and IV of the Plan.

     4.2.  Unless otherwise ordered by the Bankruptcy Court, all Cash
Distributions contemplated by the Plan shall only occur on or subsequent to
the Effective Date. All Cash Distributions under the Plan shall be paid in the
manner generally set forth in Article III of the Plan.  Upon the Confirmation
Date, Greenan, Walker, Trainor & Billman shall act as disbursing agent in
respect of all Cash Distributions required under the Plan.

     4.3.  The Debtor may generally prepay in part or in full any Allowed
Claim without penalty or charge.

                                   ARTICLE V
                                   CRAM DOWN
                                   ---------

     5.1.  In order to confirm the Plan, among other things, the Debtor must
establish that, in accordance with Section 1129(a)(8) of the Bankruptcy Code,
each Class of Claims or Interests either (i) has accepted the Plan or (ii) is
not Impaired under the Plan. In the event that this requirement cannot be
satisfied, however, and all other applicable requirements for confirmation
under Section 1129(a) of the Bankruptcy Code are met, the Debtor may, and
hereby does, invoke the "cramdown" entitlement under Section 1129(b) of the
Bankruptcy Code, such that, as long as the Plan does not discriminate
unfairly, and is fair and equitable, with respect to any Class of Claims or
Interests that is impaired under, and has not accepted, the Plan, the Plan may
be confirmed by the Bankruptcy Court.

                                  ARTICLE VI
                           MODIFICATION OF THE PLAN
                           ------------------------

     6.1.  The Debtor may modify this Plan at any time prior to the Effective
Date as permitted by Section 1127(a) of the Bankruptcy Code. If so modified,
after the Debtor files the modification with the Bankruptcy Court, the Plan as
modified becomes the Plan.

     6.2.  The Debtor may modify this Plan at any time after the Effective
Date and before substantial consummation of this Plan as permitted by Sections
1101(2) and 1127(b) of the Bankruptcy Code. The Plan as so modified under this
subsection becomes the Plan only if the Bankruptcy Court, after notice and a
hearing, confirms such Plan as modified under Section 1127 of the Bankruptcy
Code.

     6.3.  Before or after the Confirmation Date, or in the Confirmation
Order, the Debtor or the Bankruptcy Court may remedy any defect or omission,
or reconcile any inconsistencies in the Plan or amend the Plan, in such a
manner as may be necessary to carry out the provisions, purposes and effect of
the Plan.

                                  ARTICLE VII
                                DISPUTED CLAIMS
                                ---------------

     7.1.  Any party objecting to Claims that were made and existed or arose
on or before the Petition Date, or that are listed as undisputed,
non-contingent and liquidated in the Debtor's Schedules, must file such
objection within thirty (30) days following the Effective Date of the Plan.

     7.2.  The acceptance of any vote of any Claim or Interest by The Debtor
shall not constitute an acceptance of such Claim or Interest for any purpose
other than voting, nor shall the Debtor be deemed estopped from objecting to
any Claim or Interest on such grounds.  The recognition of any Claim or
Interest by the Debtor for any purpose(s) preceding the entry of the
Confirmation Order during the Chapter 11 Case shall not constitute a waiver of
the Debtor's duty to its estate to investigate all Claims and Interests for
objection.  The Debtor reserves the right to object to any Claim or Interest
and to treat same as a Disallowed Claim or Interest under the Plan. 

                                 ARTICLE VIII
                        CONTRACTS AND UNEXPIRED LEASES
                        ------------------------------

     8.1.  Any and all executory contracts and unexpired leases within the
meaning of Section 365(a) of the Bankruptcy Code which have not been assumed
or as to which the Debtor has not applied to the Court for authority to assume
within the Ninety (90) Days after the Effective Date or which have not been
assumed pursuant to the terms of this Plan, shall be deemed to have been
rejected by the Debtor as of the Confirmation Date.  

                                  ARTICLE IX
                           RETENTION OF JURISDICTION
                           -------------------------

     9.1.  The Bankruptcy Court shall retain jurisdiction over the Debtor and
its Chapter 11 proceedings through and including the date that all Claims have
been satisfied in the manner required under this Plan to the extent permitted
under the Bankruptcy Code, including, "inter alia," to determine any and all
controversies and disputes arising under, or in conjunction with the Plan
including, but not limited to, issuing any orders appropriate under Section
105 of the Bankruptcy Code; to effectuate payments under, and performance of,
the provisions of the Plan, to modify the terms of the Plan; and to determine
such other matters and acts for such other purposes as may be provided for in
the Confirmation Order.

     9.2   The Bankruptcy Court shall retain jurisdiction to enforce the
provisions of the Asset Purchase Agreement and to resolve any dispute
concerning the Asset Purchase Agreement, the Order Approving Sale of
Substantially All Assets Free and Clear of Liens and Encumbrances, as well as
the rights and duties of the parties obligated under the Asset Purchase
Agreement.

     9.3   In the event of a default under the Asset Purchase Agreement by
Space Applications Corporation, each party affected by such default may move
on its own behalf to enforce the terms of the Asset Purchase Agreement.

     9.2.  Notwithstanding such retention of jurisdiction, the Debtor, any
party in interest or creditor may move to reopen the Chapter 11 Case in the
event necessary to afford any party in interest relief under Section 350 of
the Bankruptcy Code.

                                   ARTICLE X
                      PREFERENCES AND AVOIDABLE TRANSFERS
                      -----------------------------------

     10.1. Any action by the Debtor or any other authorized party-in-interest
to recover property of the estate and avoid any transfer pursuant to Sections
542, 543, 544, 547, 548 or 549 of the Bankruptcy Code shall be commenced by
the filing of a complaint pursuant to Bankruptcy Rule 7003 within ninety (90)
days following the Confirmation Date.

                                  ARTICLE XI
                    EQUITY INTEREST HOLDERS AND MANAGEMENT
                    --------------------------------------

     11.1. The Equity Interest Holders shall be treated in accordance with
Class 5 of the Plan.  As stated previously herein, the Class 5 Interests will
be treated under either of two (2) alternatives.  First, if the Intercompany
Settlement Agreement and the Plan are approved as proposed, then the stock in
the Debtor will be retained by its parent corporation.  The Debtor anticipates
that this will improve the possibility of the cash flow payments to Class 4
Claimants under the Intercompany Settlement Agreement.

     Alternatively, if the Intercompany Settlement Agreement is not approved,
and the treatment of Class 5 as described above is not approved, then the
Class 5 Interests will be terminated on the Confirmation Date and the Class 5
Claimants will retain no interest in the Debtor thereafter.

                                  ARTICLE XII
                                 MISCELLANEOUS
                                 -------------

     12.1. Upon the Confirmation Date, the entry of the Confirmation Order
shall supersede, amend and modify any prior Orders entered by this Court, or
any other court, to the extent such prior Orders are inconsistent with the
terms or effect of the Plan.

     12.2. Prior to the Effective Date, the Debtor shall establish a Claims
Distribution Fund to fund Cash Distributions to Allowed Claims under the Plan
from Cash Flow.  The Debtor shall establish, and fund from Revenues,
appropriate reserves to fund Allowed Administrative Expense Claims, necessary
disbursements incidental to the distribution of funds pursuant to the terms
and provisions of the Asset Purchase Agreement as well as any other
appropriate expenditures, including satisfaction of Allowed Administrative
Expense Claims.

     12.3. Except for any default or event of default which occurs under the
terms of the Plan, if any Creditor holding an Allowed Claim fails to receive a
Cash Distribution as provided under the Plan, or if any Creditor wishes to
dispute the Debtor's compliance with the Plan, such Creditor shall serve upon
the Debtor written notice thereof, and the Debtor shall not be deemed to be in
default of the provisions of this Plan unless the Debtor fails to cure such
noncompliance, if any, or fails to take any other affirmative response within
20 days from its uncontested receipt of service.

                                 ARTICLE XIII
                    TERMINATION OF THE CREDITORS COMMITTEE
                    --------------------------------------

     13.1  The appointment and tenure of the Creditor's Committee shall be
terminated as of the Effective Date, provided that there are no pending or
unresolved motions, appeals, objections, or other pleadings in which the
Creditor's Committee seeks affirmative relief.  In the event that such a
pleading is pending, such pleading shall constitute an extension of the term
of the Creditor's Committee.  

                                  ARTICLE XIV
          SETTLEMENT AGREEMENT WITH UNITED STATES DEPARTMENT OF LABOR
         ------------------------------------------------------------

     14.1  Dr. Anand currently is negotiating a settlement agreement with the
United States Department of Labor regarding the administration (and
liquidation and distribution when appropriate) of the assets of the 401(k)
pension plan, and his role as pension plan administrator and plan trustee.  

     14.2  The United States Department of Labor has determined that it will
not pursue the Debtor, or any other employee of the Debtor beside Dr. Anand,
for any liability with regard to the 401(k) pension plan. 

                                  ARTICLE XV
                         SETTLEMENT AGREEMENT BETWEEN 
                   THE DEBTOR AND ARSOFTWARE AND ARINTERNET
                  ------------------------------------------

     15.1  Subject to approval by the Bankruptcy Court, the Debtor and
ARSoftware and ARInternet have entered into a settlement agreement whereby
ARSoftware and ARInternet shall pay to the Debtor One Hundred and Fifty
Thousand Dollars ($150,000.00) over the period of three (3) years (the
"Intercompany Settlement Agreement").  

     15.2  Specifically, the terms of the Intercompany Settlement Agreement
are as follows:

     A.    ARSoftware and ARInternet shall execute a promissory note
           obligating  ARSoftware and ARInternet to pay to the Debtor One
           Hundred and Fifty Thousand Dollars ($150,000.00) over the period
           of three (3) years at a rate of Four Thousand One Hundred and
           Sixty-Seven Dollars ($4,167.00) per month (the "Settlement
           Amount").  ARSoftware and ARInternet agree to execute any and all
           documents, and perform any other actions, necessary for the Debtor
           to maintain a perfected security interest in the agreed upon
           collateral.  The amount to be paid by ARSoftware and ARInternet
           shall not be subject to interest, however, in the event of a
           default interest shall accrue at a rate of twelve percent (12%)
           per annum.  Further, in the event that payments are not timely
           made a late fee equal to five percent (5%) of the monthly amount
           shall be incurred.  

     B.    If for any fiscal year the cash flow of ARSoftware and ARInternet
           exceeds its operating expenses and any debt service including the
           debt service required under the Intercompany Settlement Agreement,
           then one-half (1/2) of the surplus of the Net Cash Flow shall be
           paid to the Bankruptcy Estate.

           Net Cash Flow is defined as that sum remaining after the payment
           of operating expenses, including debt service, on a consistent
           historical basis.  Net Cash Flow shall be supported by a Statement
           of Cash Flow prepared in accordance with GAAP.  The fiscal year-
           end for ARSoftware and ARInternet is May 31, and the fiscal year
           ending May 31, 1998 shall be the base line.  Commencing on
           September 1, 1998 and each year thereafter, if appropriate, the
           monthly payment shall be increased by one-twelfth (1/12) of the
           net surplus, the total of which shall equal one-half (1/2) of the
           Net Cash Flow.  For each fiscal year where there is a net surplus
           the payments shall continue for twelve (12) consecutive months. 
           The Statement of Cash Flow and supporting documents shall be
           delivered to Debtor's estate commencing August 31, 1998 and on the
           31st day of August each year thereafter until the promissory note
           is paid in full.

           In calculating Net Cash Flow, future general administrative
           expenses should not exceed as a percentage of sales the greater of
           those years ended May 31, 1997 and May 31, 1998.

     C.    Both ARSoftware and ARInternet will be jointly and severally
           liable for the settlement amount.  The obligations of ARSoftware
           and ARInternet will be secured by all of their assets, including
           equipment, fixtures, accounts receivable, copy rights and
           intangibles.

     D.    In the event the stock or assets ARSoftware and/or ARInternet are
           sold during the three (3) year payout period, the net proceeds of
           any such sale, after payment of all costs of sale and payment to
           any outstanding creditors of the sold entity including the
           Intercompany Settlement Note, shall be split equally between the
           Debtor and the shareholders of the sold entity.  Those monies due
           shall be paid to the Debtor's estate at closing.

     E.    Dr. Anand shall guaranty the obligations of ARSoftware and
           ARInternet under the Intercompany Settlement Agreement.  

     15.3  The Intercompany Settlement Agreement is subject to approval of
the Bankruptcy Court.  Copies of the Intercompany Settlement Agreement,
Promissory Note, Security Agreement and Guaranty are available for inspection
and copying at the office of Debtor's counsel.  The obligation of ARSoftware
and ARInternet shall be deemed substantially consummated upon delivery of the
executed Settlement Agreement and the first payment to the Debtor.

     15.4  The proceeds generated from the Intercompany Settlement Agreement
will be used to pay the Priority Tax Claims of the State of Maryland, the
State of California, and Washington, D.C. The remaining proceeds from the
Intercompany Settlement Agreement, after payment of Administrative Expense
Claimants, if any, shall be paid to the Internal Revenue Service to the extent
it still has a claim.  The balance of any proceeds, if any, will be paid to
Class 4 Unsecured Claims.  The Internal Revenue Service has consented to the
distribution of the proceeds of the Intercompany Settlement Agreement as
stated herein. 

     15.5  The terms of the Settlement Agreement are deemed approved by the
Bankruptcy Court, upon confirmation of the Plan. 

     
Dated: February ___, 1998

                              Respectfully submitted,

                              APPLIED RESEARCH OF MARYLAND


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                              BY: