<PAGE>
 
                                                                   EXHIBIT 10.27


                      AGREEMENT AND PLAN OF REORGANIZATION

                                     AMONG

                            QUARTERDECK CORPORATION,
                               LIMBEX CORPORATION


                                      AND


                         THE SHAREHOLDERS LISTED ON THE
                             EXECUTION PAGES HERETO

                                August 13, 1996
                                
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                     Page
                                                                     ----
<S>         <C>                                                        <C>
RECITALS    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1   PLAN OF REORGANIZATION  . . . . . . . . . . . . . . . . . . 1

     1.1    Board of Directors' and Shareholders' Approval  . . . . . . 1
     1.2    The Merger  . . . . . . . . . . . . . . . . . . . . . . . . 1
     1.3    The Closing   . . . . . . . . . . . . . . . . . . . . . . . 3
     1.4    Effective Time  . . . . . . . . . . . . . . . . . . . . . . 3
     1.5    Exemption from Registration   . . . . . . . . . . . . . . . 4
     1.6    Surrender and Exchange of Outstanding Certificates;
            Status of Outstanding Certificates;
            Fractional Shares   . . . . . . . . . . . . . . . . . . . . 4
     1.7    Dissenters' Rights  . . . . . . . . . . . . . . . . . . . . 4
     1.8    Articles of Incorporation; Bylaws; Directors and
            Officers of the Surviving Corporation   . . . . . . . . . . 4
     1.9    Escrow  . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE 2   REPRESENTATIONS AND WARRANTIES
            REGARDING LIMBEX  . . . . . . . . . . . . . . . . . . . . . 5

     2.1    Organization and Standing   . . . . . . . . . . . . . . . . 5
     2.2    Capitalization  . . . . . . . . . . . . . . . . . . . . . . 6
     2.3    Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . 6
     2.4    Authority, Approval and Enforceability  . . . . . . . . . . 6
     2.5    Financial Statements and Other Financial
            Information   . . . . . . . . . . . . . . . . . . . . . . . 7
     2.6    Material Adverse Change   . . . . . . . . . . . . . . . . . 7
     2.7    Properties  . . . . . . . . . . . . . . . . . . . . . . . . 7
     2.8    Insurance   . . . . . . . . . . . . . . . . . . . . . . . . 8
     2.9    Material Agreements   . . . . . . . . . . . . . . . . . . . 8
     2.10   Intellectual Property Rights  . . . . . . . . . . . . . . . 8
     2.11   Employees and Employee Benefit Plans  . . . . . . . . . .  10
     2.12   Environmental and Safety Laws   . . . . . . . . . . . . .  10
     2.13   Compliance with Laws  . . . . . . . . . . . . . . . . . .  11
     2.14   Absence of Litigation   . . . . . . . . . . . . . . . . .  11
     2.15   No Brokers  . . . . . . . . . . . . . . . . . . . . . . .  11
     2.16   Taxes   . . . . . . . . . . . . . . . . . . . . . . . . .  11
     2.17   Compliance with Instruments   . . . . . . . . . . . . . .  13
     2.18   Related Party Transactions  . . . . . . . . . . . . . . .  13
     2.19   Disclosure; Accuracy of Documents and Information   . . .  14
</TABLE>

                                       i
<PAGE>
 
<TABLE>
<CAPTION>
                                                                     Page
                                                                     ----
<S>         <C>                                                        <C>
ARTICLE 2A  REPRESENTATIONS AND WARRANTIES REGARDING THE
            SHAREHOLDERS  . . . . . . . . . . . . . . . . . . . . . .  14

     2A.1   Authority, Approval and Enforceability.   . . . . . . . .  14

ARTICLE 3   REPRESENTATIONS AND WARRANTIES OF QUARTERDECK   . . . . .  15

     3.1    Organization and Standing   . . . . . . . . . . . . . . .  15
     3.2    Authority, Approval and Enforceability  . . . . . . . . .  15
     3.3    Financial Statements and Reports  . . . . . . . . . . . .  16
     3.4    Quarterdeck Common Stock  . . . . . . . . . . . . . . . .  17
     3.5    No Brokers  . . . . . . . . . . . . . . . . . . . . . . .  17

ARTICLE 4   COVENANTS   . . . . . . . . . . . . . . . . . . . . . . .  17

     4.1    Maintenance of Business   . . . . . . . . . . . . . . . .  17
     4.2    Tax Treatment   . . . . . . . . . . . . . . . . . . . . .  17
     4.3    Other Discussions   . . . . . . . . . . . . . . . . . . .  17
     4.4    Best Efforts  . . . . . . . . . . . . . . . . . . . . . .  17
     4.5    Shareholder Vote; Investment Representation
            Certificate   . . . . . . . . . . . . . . . . . . . . . .  18
     4.6    Registration Rights; NASDAQ Listing   . . . . . . . . . .  18
     4.7    Access to Information   . . . . . . . . . . . . . . . . .  18
     4.8    Business Plan   . . . . . . . . . . . . . . . . . . . . .  18
     4.9    Employment Agreements   . . . . . . . . . . . . . . . . .  18
     4.10   Existing Agreement  . . . . . . . . . . . . . . . . . . .  20
     4.11   Supplements to Schedules  . . . . . . . . . . . . . . . .  20
     4.12   Limbex Stock Options  . . . . . . . . . . . . . . . . . .  21

ARTICLE 5   CONDITIONS TO MERGER  . . . . . . . . . . . . . . . . . .  21

     5.1    Conditions to Obligations of Quarterdeck, the
            Shareholders and Limbex   . . . . . . . . . . . . . . . .  21
     5.2    Conditions to Obligations of Quarterdeck  . . . . . . . .  21
     5.3    Conditions to Obligations of Limbex and the
            Shareholders  . . . . . . . . . . . . . . . . . . . . . .  22

ARTICLE 6   INDEMNITY   . . . . . . . . . . . . . . . . . . . . . . .  22

     6.1    Survival of Representations, Warranties,
            Covenants and Agreements  . . . . . . . . . . . . . . . .  22
     6.2    Indemnification of Quarterdeck  . . . . . . . . . . . . .  23
     6.3    Indemnification of the Shareholders   . . . . . . . . . .  25
     6.4    Procedure for Indemnification of Quarterdeck and
            the Surviving Corporation with Respect
            to Non-Third Party Claims   . . . . . . . . . . . . . . .  25
</TABLE>

                                       ii
<PAGE>
 
<TABLE>
<CAPTION>
                                                                     Page
                                                                     ----
<S>         <C>                                                        <C>
     6.5    Procedure for Indemnification of the Shareholders
            with Respect to Non-Third Party Claims  . . . . . . . . .  27
     6.6    Procedure for Indemnification with Respect to
            Third-Party Claims  . . . . . . . . . . . . . . . . . . .  27
     6.7    Procedure for Indemnification with Respect to
            Certain Claims  . . . . . . . . . . . . . . . . . . . . .  29

ARTICLE 7   TERMINATION   . . . . . . . . . . . . . . . . . . . . . .  29

     7.1    Termination by Mutual Consent   . . . . . . . . . . . . .  29
     7.2    Effect of Termination   . . . . . . . . . . . . . . . . .  29

ARTICLE 8   MISCELLANEOUS   . . . . . . . . . . . . . . . . . . . . .  30

     8.1    Notices   . . . . . . . . . . . . . . . . . . . . . . . .  30
     8.2    Entire Agreement; Modifications; Waiver   . . . . . . . .  30
     8.3    Counterparts  . . . . . . . . . . . . . . . . . . . . . .  31
     8.4    Publicity   . . . . . . . . . . . . . . . . . . . . . . .  31
     8.5    Successors and Assigns  . . . . . . . . . . . . . . . . .  31
     8.6    Governing Law   . . . . . . . . . . . . . . . . . . . . .  31
     8.7    Further Assurances  . . . . . . . . . . . . . . . . . . .  32
     8.8    Expenses  . . . . . . . . . . . . . . . . . . . . . . . .  32
     8.9    Attorneys' Fees   . . . . . . . . . . . . . . . . . . . .  32
     8.10   Appointment of Escrow Committee   . . . . . . . . . . . .  32
     8.11   Covenant Not To Compete   . . . . . . . . . . . . . . . .  32
</TABLE>

                                     iii
<PAGE>
 
<TABLE>
<CAPTION>
                                    EXHIBITS
                                    --------
 <S>             <C>
 Exhibit A       Merger Consideration
 Exhibit B       Escrow Agreement
 Exhibit C       Registration Rights Agreement
 Exhibit D       Investment Representation Certificate
 Exhibit E       Limbex Stock Options
</TABLE>

                                       iv
<PAGE>
 
                      AGREEMENT AND PLAN OF REORGANIZATION

                 This Agreement and Plan of Reorganization (the "Agreement") is
entered into as of August 13, 1996, by and among Quarterdeck Corporation, a
Delaware corporation ("Quarterdeck"), Limbex Corporation, a California
corporation ("Limbex"), and the shareholders of Limbex set forth on the
signature page hereto (the "Shareholders").

                                    RECITALS

                 The parties hereto intend that, subject to the terms and
conditions hereinafter set forth, Quarterdeck will acquire Limbex in accordance
with the terms of this Agreement by way of a merger (the "Merger") of a
subsidiary of Quarterdeck incorporated in California ("Merger Sub") with and
into Limbex, as a result of which (i) all outstanding shares of capital stock
of Merger Sub will automatically be converted into the same number of shares of
Common Stock of Limbex, (ii) all of the outstanding shares of Convertible
Preferred Stock - Series B, $.00001 par value per share, of Limbex ("Series B
Preferred"), and common stock, $.00001 par value per share, of Limbex ("Limbex
Common Stock," and collectively with the Series B Preferred, "Limbex Stock"),
except for shares of Limbex Stock owned by Quarterdeck, will automatically be
converted into the right to receive shares of common stock of Quarterdeck
("Quarterdeck Common Stock") or, under certain circumstances, cash, (iii) all
of the outstanding shares of Limbex Stock owned by Quarterdeck and all of the
outstanding shares of Limbex's Convertible Preferred - Series A, par value
$.00001 per share ("Series A Preferred") owned by Quarterdeck will be canceled,
and no payment shall be made nor other consideration paid with respect thereto,
and (iv) all outstanding options to acquire Limbex Common Stock will be assumed
by Quarterdeck and become options to acquire Quarterdeck Common Stock, each on
the terms and conditions set forth herein.  As used in this Agreement, the term
"Limbex Stock" does not include the Series A Preferred.

                 NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:

                                   ARTICLE 1

                             PLAN OF REORGANIZATION

                 1.1      BOARD OF DIRECTORS' AND SHAREHOLDERS' APPROVAL.  The
respective boards of directors of Quarterdeck and Limbex have duly adopted and
approved this Agreement, and this Agreement shall be submitted to the
shareholders of Limbex for approval in accordance with the applicable
provisions of the California Corporations Code (the "California Law").

                 1.2      THE MERGER.  Subject to the terms and conditions of
this Agreement Merger Sub shall be merged with and into Limbex (the "Merger")
pursuant to California Law, with Limbex as the surviving corporation.  At the
Effective Time (as hereinafter defined), the
<PAGE>
 
separate existence of Merger Sub shall cease and Limbex, as the surviving
corporation in the Merger, shall continue its corporate existence under
California Law.  As a result of the Merger, at the Effective Time, (i) all of
the issued and outstanding shares of Merger Sub will automatically be converted
into the same number of shares of common stock of Limbex, (ii) all of the
issued and outstanding shares of Limbex Stock (other than (a) shares as to
which dissenters' rights are perfected under Chapter 13 of the California Law,
(b) any shares of Limbex Stock owned by Limbex or any direct or indirect
wholly-owned subsidiary of Limbex (such shares described in this clause (b) are
referred to herein as the "Non-Participating Shares"), (c) any shares of Limbex
Stock owned by Quarterdeck and any shares of Series A Preferred, (d) any shares
of Limbex Stock owned by Morgan, which are addressed in Section 1.2(c) below,
and (e) any shares of Limbex Stock owned by Inference, which are addressed in
Section 1.2(d) below) shall automatically be converted into the right to
receive in the aggregate 1,197,009 shares of Quarterdeck Common Stock on the
SEC Effective Date (as defined below).

                          (a)     On the date on which the Securities and
Exchange Commission (the "SEC") declares effective the registration statement
on Form S-3 of Quarterdeck to be filed with the SEC pursuant to Section 2(a)(i)
of the Registration Rights Agreement to be entered into among Quarterdeck and
the Shareholders substantially in the form of Exhibit C hereto (the "SEC
Effective Date"), Quarterdeck shall issue to each Shareholder (other than
Morgan, Inference, Quarterdeck, Limbex or any wholly-owned subsidiary of
Limbex) the number of shares of Quarterdeck Common Stock set forth opposite
such Shareholder's name on Exhibit A hereto.

                          (b)     Any shares of Limbex Common Stock owned by
Quarterdeck and all shares of Series A Preferred shall be canceled in the
Merger, and no payment shall be made nor other consideration paid with respect
thereto.  Any Non-Participating Shares shall be canceled in the Merger, and no
securities of Quarterdeck or other consideration shall be delivered in exchange
therefor.

                          (c)     As a result of the Merger, at the Effective
Time, all of the issued and outstanding shares of Limbex Stock owned by Howard
Morgan shall automatically be converted into the right to receive (i) 34,984
shares of Quarterdeck Common Stock on the Closing Date and (ii) cash in an
amount equal to the fair market value of 18,838 shares of Quarterdeck Common
Stock, based upon the average closing sales price of Quarterdeck Common Stock
for a period of five trading days ending on the trading day two trading days
prior to the Closing Date, payable at the time that Howard Morgan is required
by federal tax laws to pay income taxes with respect to the shares of
Quarterdeck Common Stock received in the Merger; provided, however, that in no
event shall Quarterdeck pay such amount later than January 31, 1997, and offset
by any and all amounts that Mr. Morgan owes at such time to Quarterdeck.

                          (d)     As a result of the Merger, at the Effective
Time, (i) all of the issued and outstanding shares of Limbex Common Stock owned
by Inference shall automatically be converted into the right to receive on the
Closing Date a number of shares of

                                       2
<PAGE>
 
Quarterdeck Common Stock equal to $610,526 divided by the average closing sales
price of Quarterdeck Common Stock for the period of five trading days ending on
the trading day two trading days prior to the Closing Date, and (ii) all of the
issued and outstanding shares of Series B Preferred shall automatically be
converted into the right to receive $3,599,753 from Quarterdeck on the first
anniversary of the Closing Date (the "Inference Preferred Consideration Date"),
which may be paid, at Quarterdeck's option, in cash, a number of shares of
Quarterdeck Common Stock equal to $3,599,753 divided by the average closing
sales price of Quarterdeck Common Stock for the period of five trading days
ending on the trading day two trading days prior to the Inference Preferred
Consideration Date, or a combination of cash and shares of Quarterdeck Common
Stock.

                          (e)     Prior to the Distribution Date (as defined in
the Rights Agreement), all references in this Agreement to the Quarterdeck
Common Stock to be received pursuant to the Merger shall be deemed to include
the corresponding percentage of a right (the "Right") to purchase shares of
Series A Junior Participating Preferred Stock of Quarterdeck pursuant to the
Rights Agreement dated as of August 11, 1992, between Quarterdeck and Bank of
America NT&SA, as Rights Agent (the "Rights Agreement").

                          (f)     If, between the date of this Agreement and
the various dates at which shares of Quarterdeck Common Stock may be issued
pursuant to the Merger, the outstanding shares of Quarterdeck Common Stock
shall have been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, split, reverse split,
stock dividend or combination, the consideration to be issued to the holders of
Limbex Stock pursuant to the Merger shall be correspondingly adjusted.

                          (g)     In the event that Quarterdeck enters into an
agreement with any corporation, partnership, person or other entity or group
(other than any affiliate or associate of Quarterdeck) (a "Third Party")
pursuant to which such Third Party agrees to acquire (the "Acquisition") all of
the then outstanding capital stock of Quarterdeck or substantially all of the
assets of Quarterdeck and the Acquisition is consummated prior to the Inference
Preferred Consideration Date, then the issuance of any shares of Quarterdeck
Common Stock to Inference with respect to the Series B Preferred Stock shall
occur immediately prior to the consummation of the Acquisition (the
"Acquisition Issuance Date") and all references to the Inference Preferred
Consideration Date in this Article 1 shall instead mean the Acquisition
Issuance Date.

                 1.3      THE CLOSING.  The closing (the "Closing") of the
Merger shall take place at the principal executive offices of Quarterdeck
Corporation, (assuming the satisfaction or satisfactory waiver of all
conditions set forth in Article 5 of this Agreement) simultaneously with the
Effective Time.  The date on which the Closing occurs is referred to herein as
the "Closing Date."

                 1.4      EFFECTIVE TIME.  The Merger shall become effective
immediately upon the filing of the appropriate certificate of merger and
related instruments with the office of the Secretary of State for the State of
California (the "Effective Time").

                                       3
<PAGE>
 
                 1.5      EXEMPTION FROM REGISTRATION.  The Quarterdeck Common
Stock to be issued in connection with the Merger will be issued in a
transaction exempt from registration under the Securities Act of 1933, as
amended, and exempt from registration or qualification under the California
Corporate Securities Law (the "California Securities Act").

                 1.6      SURRENDER AND EXCHANGE OF OUTSTANDING CERTIFICATES;
STATUS OF OUTSTANDING CERTIFICATES; FRACTIONAL SHARES.  The conversion of
shares of Limbex Stock into the right to receive shares of Quarterdeck Common
Stock or cash as provided for by this Agreement shall occur automatically at
the Effective Time without further action by the holders thereof.  Until
surrendered, each certificate that prior to the Effective Time represented
shares of Limbex Stock will be deemed to evidence the right to receive that
number of shares of Quarterdeck Common Stock and/or the amount of cash into
which such Limbex Stock has been converted.  Stock certificates for fractions
of Quarterdeck Common Stock shall not be issued in the Merger and such
fractional interests shall not entitle the owners thereof to vote, to receive
dividends or to exercise any other right of a stockholder with respect to such
fractional interest.  In lieu of any such fractional interests, each holder of
Limbex Stock who would otherwise have been entitled to a fraction of a share of
Quarterdeck Common Stock upon surrender of stock certificates will be paid cash
(rounded to the nearest cent, 0.5 cents to be rounded to 1 cent) upon such
surrender in an amount equal to such fraction times the closing sale price of a
share of Quarterdeck Common Stock on the Nasdaq National Market on the Closing
Date.

                 1.7      DISSENTERS' RIGHTS.  Holders of Limbex Stock who have
complied with all requirements for perfecting the dissenters' rights as set
forth in Chapter 13 of the California Law shall be entitled to their rights
under such laws.  Limbex shall give Quarterdeck prompt written notice of any
assertions of dissenters' rights or withdrawals of assertions of dissenters'
rights, and any other instrument in respect thereof received by Limbex and the
opportunity to participate in all negotiations and proceedings with respect to
demands for appraisal.

                 1.8      ARTICLES OF INCORPORATION; BYLAWS; DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION.

                          (a)     The articles of incorporation and bylaws of
Merger Sub, as in effect on the Effective Date, shall be (until amended or
repealed as provided by law) the articles of incorporation and bylaws of the
surviving corporation, respectively, except that such articles of incorporation
shall be amended to provide that the name of the surviving corporation shall be
Limbex Corporation.

                          (b)     The directors and officers of Merger Sub
immediately prior to the Effective Time shall be the directors and officers of
the surviving corporation until their successors are elected or appointed and
qualified.

                 1.9      ESCROW.  A portion of the shares of Quarterdeck
Common Stock to be issued and cash to be paid in the Merger to the Shareholders
other than Inference (the "Escrow Consideration") shall be delivered by
Quarterdeck on behalf of such Shareholders into escrow and shall be held in
escrow as collateral for the indemnification obligations of the Shareholders


                                       4
<PAGE>
 
pursuant to Article 6 of this Agreement and disbursed pursuant to the terms of
an escrow agreement ("Escrow Agreement") substantially in the form attached
hereto as Exhibit B.  Quarterdeck shall, upon issuance of consideration in the
Merger from time to time, deliver into escrow on behalf of the Shareholders
(other than Inference) the number of shares of Quarterdeck Common Stock or the
amount of cash set forth opposite such Shareholder's name on Exhibit A hereto.

                                   ARTICLE 2

                REPRESENTATIONS AND WARRANTIES REGARDING LIMBEX

                 Alex Jacobson ("Jacobson") and Brad Allen ("Allen") represent
and warrant to Quarterdeck as follows:

                 2.1      ORGANIZATION AND STANDING.

                          (a)     Limbex is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California, has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect.  Whenever used in this Article 2, "Material Adverse Effect"
shall mean any fact, event or condition, or the absence of any fact, event or
condition, as the context requires, which, individually or in the aggregate,
would have a material adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of Limbex.

                          (b)     Limbex has delivered to Quarterdeck complete
and accurate copies of its Articles of Incorporation and Bylaws and minutes of
all of its directors' and shareholders' meetings.  Limbex stock books provided
to Quarterdeck are complete and accurate as of the date hereof.

                 2.2      CAPITALIZATION.

                          (a)     The authorized capital stock of Limbex
consists of (i) 10,000,000 shares of Limbex Common Stock and (ii) 1,684,422
shares of preferred stock, par value $.00001 per share.  Schedule 2.2
accurately sets forth the outstanding shares of capital stock of Limbex
(including any rights, options or warrants to purchase shares of capital stock
of Limbex) as well as the ownership thereof.  Except as set forth on Schedule
2.2, there are no outstanding shares of capital stock of Limbex and there are
no options, warrants or other securities convertible into shares of capital
stock of Limbex nor any other rights, agreements or arrangements with respect
to the issuance of capital stock of Limbex or securities convertible into or
exchangeable for capital stock of Limbex.

                          (b)     (i) all of the issued and outstanding shares
of Limbex Stock and the Series A Preferred have been duly authorized and
validly issued, are fully paid and non assessable, and were issued in full
compliance with all applicable federal and state securities

                                       5
<PAGE>
 
laws and were not issued in violation of any preemptive rights; (ii) none of
the issued and outstanding shares of Limbex Stock is subject to repurchase and
(iii) all outstanding options to purchase capital stock of Limbex have been
granted in accordance with Limbex's stock option plans (true and correct copies
of which have been delivered to Quarterdeck) and all applicable securities
laws.

                          (c)     Except for any restrictions imposed by
applicable state and federal securities laws, there is no right of first
refusal, co-sale right, right of participation, right of first offer, option or
other restriction on transfer applicable to any shares of Limbex Stock.  Limbex
is not a party or subject to any agreement, and there is no agreement between
or among any Shareholders that affects or relates to the voting or giving of
written consent with respect to any shares of Limbex Stock other than (i) the
Voting Trust and Transfer Restriction Agreement, dated as of May 9, 1995,
between Jacobson and Allen, (ii) the Shareholder Voting Agreement, dated as of
May 9, 1995, among Quarterdeck, Inference, Jacobson, Allen and Morgan and (iii)
the Buy-Sell Agreement, dated as of May 9, 1995, among Quarterdeck, Inference,
Jacobson, Allen and Morgan, all of which will terminate at or prior to the
Effective Time.

                 2.3      SUBSIDIARIES.  Limbex does not own, directly or
indirectly, an interest in any corporation, partnership, business, trust or
other entity.

                 2.4      AUTHORITY, APPROVAL AND ENFORCEABILITY.

                          (a)     Subject to obtaining any required approvals
of the holders of Limbex Stock and the Series A Preferred, Limbex has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and all corporate action on its part necessary
for such execution, delivery and performance has been duly taken.

                          (b)     The execution and delivery by Limbex of this
Agreement does not, and the performance and consummation of the transactions
contemplated by this Agreement will not, result in any conflict with, breach or
violation of or default, termination or forfeiture under (or upon the failure
to give notice or the lapse of time, or both, result in any conflict with,
breach or violation of or default, termination or forfeiture under) any terms
or provisions of (i) its Articles of Incorporation or Bylaws, (ii) any statute,
rule, regulation, or any judicial, governmental, regulatory or administrative
decree, order or judgment applicable to Limbex, or (iii) any material
agreement, lease or other instrument to which it is a party or by which it or
any of its assets may be bound.

                          (c)     No consent, approval, authorization, order,
registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
part of Limbex for the consummation by it of the transactions contemplated by
this Agreement, except the filing of the certificate of merger and related
instruments with the Secretary of State of the State of California.
<PAGE>
 
                          (d)     Upon due execution and delivery by Limbex,
this Agreement will be its legal, valid and binding obligation, enforceable
against it in accordance with the terms hereof, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and subject to the
availability of equitable remedies.

                 2.5      FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION.

                          (a)     Limbex has delivered to Quarterdeck complete
copies of its unaudited balance sheet as of June 30, 1996 and the related
unaudited statements of income (loss) and retained earnings (deficit) for the
periods then ended (collectively, the "Limbex Financials").  The Limbex
Financials present fairly (but not in accordance with GAAP) its financial
position as of such date and the results of its operations and cash flows for
the period then ended.  Certain financial transactions and liabilities
reflected in the Limbex Financials, including royalty advances paid to
Quarterdeck by Limbex and payments from Limbex to Inference, although fairly
presented, may not be presented in accordance with GAAP.

                          (b)     There is no outstanding claim, liability or
obligation of any nature, whether absolute, accrued, contingent or otherwise,
known to Limbex, Jacobson or Allen, other than the liabilities and obligations
reflected on the Limbex Financials, except for (i) liabilities and obligations
incurred in the ordinary course of business since the date of the Limbex
Financials and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required to be reflected in the Limbex
Financials in order fairly to present its financial position.

                          (c)     All of the accounts receivable reflected on
the Limbex Financials (other than accounts receivable from Quarterdeck) and all
accounts receivable incurred since that date are or have been fully collectible
in the normal course of business and there are no known or asserted claims or
other rights of set-off against any thereof, except to the extent of any
reserves set forth therefore on the Limbex Financials.

                          (d)     All of the accounts payable reflected on the
Limbex Financials and all accounts payable incurred since that date arose in
the ordinary course of business, and there is no such account payable
delinquent in its payment.

                 2.6      MATERIAL ADVERSE CHANGE.  Since June 30, 1996, to the
best knowledge of Jacobson and Allen, there has not been any material adverse
change in the assets, liabilities, financial condition, or operating results of
Limbex from that reflected in the Limbex Financials.

                 2.7      PROPERTIES.

                          Except for the Intellectual Property of Limbex, which
is defined in and covered by Section 2.10, Limbex has good title to, valid
leasehold interests in, or other right to use all of the assets used in its
operations, free and clear of any mortgages, pledges, security interests,
encumbrances, material restrictions or adverse claims.  All of such assets are
in good

                                       7
<PAGE>
 
operating condition, normal wear and tear excepted, and are adequate and
suitable for the purposes for which they are presently being used.

                 2.8      INSURANCE.  Schedule 2.8 sets forth a list of the
insurance policies held by Limbex.  Limbex is in compliance with each of such
policies such that none of the coverage provided under such policies has been
invalidated.

                 2.9      MATERIAL AGREEMENTS.

                          (a)     Schedule 2.9 sets forth a list of the oral
and written agreements to which Limbex is a party or to which it is subject
presently in effect involving aggregate annual payments in excess of $10,000.

                          (b)     To the best knowledge of Jacobson and Allen,
no party to any such contract, agreement or arrangement intends to cancel,
withdraw, modify or amend such agreement or arrangement except as expressly
provided in this Agreement.

                          (c)     Limbex has performed all material obligations
required to be performed by it on or prior to the date hereof under each
contract, obligation, commitment, agreement, undertaking, arrangement or lease
referred to in this Section 2.9, except for such failures to perform, defaults,
breaches, or violations under such instruments or obligations that would not
have a Material Adverse Effect.

                 2.10     INTELLECTUAL PROPERTY RIGHTS.

                          (a)     (i) Limbex has full title and ownership of or
rights to utilize all license rights, copyrights, trade secrets, information,
proprietary rights and processes necessary for or used in its business as now
conducted (collectively, "Intellectual Property") without any infringement of
the copyrights and trade secret rights of others; (ii) all Intellectual
Property is valid, subsisting, unexpired, enforceable and has not been
abandoned; (iii) no holding, decision or judgment has been rendered by any
governmental authority which would limit, cancel or question the validity of
any Intellectual Property; (iv) except for (A) the Technology License Agreement
dated May 5, 1995 between Limbex and Inference and the Software Publishing
Agreement dated May 5, 1995, as amended, between Limbex and Quarterdeck and (B)
agreements and licenses entered into in the ordinary course of business, there
are no outstanding options, licenses, liens, encumbrances or agreements of any
kind relating to the foregoing nor is Limbex bound by or a party to any
options, licenses, liens, encumbrances or agreements of any kind with respect
to the Intellectual Property of any other person or entity; (v) Limbex has not
received any communications nor is it or Jacobson or Allen aware of any entity
alleging that Limbex has infringed or, by conducting its business as currently
conducted, would infringe any intellectual property right of any other person
or entity; (vi) Limbex, Jacobson and Allen are not aware of any infringement of
the Intellectual Property by third parties; (vii) Limbex has not received any
communication from any governmental agency stating that Limbex is not entitled
to register, or receive patents for, any of its Intellectual Property; (viii)
Limbex, Jacobson and Allen are not aware that any of Limbex's employees or
consultants is obligated under any contract (including licenses,
<PAGE>
 
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote and secure the
Intellectual Property of Limbex or that would conflict with its business as
conducted; provided, however, that this representation shall not be violated by
any agreement by any Limbex employee to refrain from disclosing or using the
confidential information of any former employer or other third party or
otherwise with respect to any trade secrets or other intellectual property
rights of any former employer or third party; (ix) to the best knowledge of
Limbex, Jacobson and Allen, neither the execution nor delivery of this
Agreement, nor the carrying on of Limbex's business by Limbex's employees or
consultants, nor the conduct of Limbex's business as currently conducted, will
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any of such employees or consultants of Limbex is now obligated; (x) each of
Limbex's employees and consultants who participate in the creation of
Intellectual Property, past and present, have executed agreements with Limbex
assigning or licensing his or her rights in any Intellectual Property to
Limbex; and (xi) Limbex, Jacobson and Allen do not believe it is or will be
necessary to utilize any inventions of any of its employees or consultants (or
persons it currently intends to hire as service providers) made prior to their
employment by it.  Schedule 2.10 also sets forth all material patents, patent
applications, trademarks (registered or unregistered) copyrights, processes,
and license agreements owned or licensed by Limbex that are necessary for or
used in its business as now conducted.  All of Limbex's license agreements or
assignments with respect to its Intellectual Property are in writing and
evidence legitimate ownership or licensing of such rights in Limbex.  All
royalty obligations of Limbex are listed on Schedule 2.10.  No unlicensed
invention that is shown as being owned by any employee or consultant of Limbex
is necessary for the conduct of Limbex business as presently conducted.

                          (b)     To the best knowledge of Limbex, Jacobson and
Allen, Limbex is not making unauthorized use of any confidential information of
third parties nor any confidential information in which any of its present or
past employees or other service providers, has claimed a proprietary interest;
and Limbex, Jacobson and Allen are not aware of any facts that would give rise
to such a claim.

                          (c)     Without limiting the generality of the
foregoing representations, Limbex expressly represents and warrants that:

                                  (i)      Limbex is not a party to any
existing or unexpired consulting agreements pursuant to which Limbex provides
consulting services to others;

                                  (ii)     Limbex, Jacobson and Allen are not
aware of any event that has occurred which would give rise to any present or
future liability under any agreement to provide indemnification for
infringement of any third party rights or otherwise; and

                                  (iii)    Limbex is not in arrears in the
payment of any royalty obligations pursuant to any license agreements with
third parties concerning the Intellectual Property.

                                       9
<PAGE>
 
                 2.11     EMPLOYEES AND EMPLOYEE BENEFIT PLANS.  Except as set
forth on Schedule 2.11, Limbex does not maintain and is not a party to any
compensation or employee benefit plans, programs or contracts within the
meaning of Section 3(3) of ERISA (the "Compensation and Benefit Programs") for
employees or former employees or their dependents.

                 Limbex has provided Quarterdeck with all documents and
government filings relating to the Compensation and Benefit Programs.

                 The Compensation and Benefit Programs have been maintained in
all material respects, in compliance with all applicable laws, and there are no
material liabilities associated with the Compensation and Benefit Programs
(statutory, contractual or otherwise) which have not been fully funded by
Limbex.

                 Neither Limbex nor any ERISA Affiliate has sponsored,
maintained or contributed to, or has had any obligation to constitute, any
pension plan regulated under Title IV of ERISA within the last six years.

                 No Compensation or Benefit Program provides benefits described
in Section 3(1) of ERISA to any former employees or retirees of Limbex or any
ERISA Affiliate except as required under Part 6 Title I of ERISA.

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

                                  "ERISA Affiliate" of Limbex means any other
                 person (other than Quarterdeck and Inference) that, together
                 with Limbex as of the relevant measuring date under ERISA, was
                 or is required to be treated as a single employer under
                 Section 414 of the Code.

                 2.12     ENVIRONMENTAL AND SAFETY LAWS.  Limbex has, in all
material respects, complied and is in compliance with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation, recycling, use,
sale, storage, handling, transfer and disposal of any Hazardous Substances, and
Limbex has not been alleged to be in violation of, or been subject to any
administrative, judicial or regulatory proceeding pursuant to, such laws or
regulations.  As used herein, "Hazardous Substances" shall mean any asbestos,
petroleum or any substance or material defined or designated as hazardous or
toxic waste, hazardous or toxic material, hazardous or toxic substance, or
other similar term, by any federal, state or local environmental statute,
regulation or ordinance presently in effect, including, without limitation, any
material or substance which is designated or defined as a "hazardous
substance," "hazardous waste" or "toxic substance" in (i) the Federal Water
Pollution Control Act, 33 U.S.C. Section  1251 et seq., and any amendments
thereto, (ii) the Federal Resource Conservation and Recovery Act 42 U.S.C.
Section Section  6901 et seq., and any amendments thereto, (iii) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section  9601 et seq., and any amendments

                                       10
<PAGE>
 
thereto, or (iv) the Hazardous Material Transportation Act, 49 U.S.C. Section
1801 et seq., and any amendments thereto.

                 2.13     COMPLIANCE WITH LAWS.  Limbex has complied in all
material respects with all foreign, federal, state, local and county laws,
ordinances, regulations, judgments, orders, decrees or rules of any court,
arbitrator or governmental, regulatory or administrative agency or entity
applicable to its business.  Limbex has all valid and current permits,
licenses, orders, authorizations, registrations, approvals and other analogous
instruments (and each is in full force and effect) and Limbex has made all
filings and registrations and the like necessary or required by law to conduct
its business, except where the failure to maintain such permits and other
instruments or to make such filings and registrations would not have a Material
Adverse Effect.  Limbex has not received any governmental notice of any
violation by Limbex of any such laws, rules, regulation or orders.  Limbex is
not in default or material noncompliance under any such permits, consents, or
similar instruments.

                 2.14     ABSENCE OF LITIGATION.  Limbex is not a party to any
litigation, claim, arbitration, investigation or other proceeding, nor is there
any such litigation, claim, arbitration, investigation or other proceeding
threatened against Limbex.  Neither Limbex nor any of its officers or directors
is bound by any judgment, decree, injunction, ruling or order of any court,
governmental, regulatory or administrative department, commission, agency or
instrumentality, arbitrator or any other person that relates to Limbex or its
business.

                 2.15     NO BROKERS.  Limbex is not obligated for the payment
of fees or expenses of any broker or finder in connection with the origin,
negotiation or execution of this Agreement or in connection with any
transaction contemplated hereby or thereby.

                 2.16     TAXES.

                          (a)     Definitions.  For purposes of this Agreement:

                                     (i)     the term "Taxes" means (A) all
federal, state, local, foreign and other net income, gross income, gross
receipts, sales, use, franchise, withholding, payroll, employment, excise,
property or other taxes of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (B)
any liability for payment of amounts described in clause (A) whether as a
result of transferee liability, of being a member of an affiliated,
consolidated, combined or unitary group for any period, or otherwise through
operation of law and (C) any liability for the payment of amounts described in
clauses (A) or (B) as a result of any tax sharing, tax indemnity or tax
allocation agreement or any other express or implied agreement to indemnify any
other person; and the term "Tax" means any one of the foregoing Taxes; and

                                    (ii)     the term "Returns" means all
returns, statements and other documents required to be filed in respect of
Taxes, and the term "Return" means any one of the foregoing Returns.

                                       11
<PAGE>
 
                          (b)     Limbex has completed and filed on a timely
basis (giving effect to valid extensions of time for filing) and in materially
correct form all Returns required to be filed.  As of the time of filing, the
filed Returns did not materially misstate the income, assets, operations,
activities, status or other matters of Limbex or any other information required
to be shown thereon, to the extent the same are relevant for Tax purposes and
none of such Returns contains a disclosure statement under Section 6662 of the
Code (or any predecessor provision or comparable provision of state, local or
foreign law).  Limbex will complete and file on a timely basis (giving effect
to valid extensions of time for filing) and in a materially correct manner all
Returns required to be filed after the date of this Agreement and on or prior
to the Closing.

                          (c)     With respect to all amounts in respect of
Taxes attributable to all taxable periods or portions of periods ending on or
before the date of Closing, all applicable Tax laws and agreements have been
complied with in all material respects, and all such amounts required to be
paid by Limbex to taxing authorities or others have been paid or, if due but
remain payable without penalty or interest, have been adequately reserved for.
Limbex does not owe any Taxes on compensation paid to any of its employees,
other than Taxes that are not yet due and payable.

                          (d)     (i) none of the Limbex Returns have been
audited or are under audit by any tax authority, and Limbex has not received
notice of a forthcoming audit of its Returns; (ii) no claim has been made by a
Tax authority in a jurisdiction where Limbex does not file Returns that it is
or may be subject to Tax by that jurisdiction; (iii) no extensions or waivers
of statutes of limitations with respect to the Returns have been given by or
requested from Limbex; and (iv) no power of attorney granted by Limbex with
respect to Taxes is in force.

                          (e)     There are no liens for Taxes (other than for
current Taxes not yet due and payable) upon the assets of Limbex.

                          (f)     Limbex is not a party to or bound by any tax 
indemnity, tax sharing or tax allocation agreement.

                          (g)     Limbex has never been a member of an
affiliated group of corporations, within the meaning of Section 1504 of the
Code, or a member of combined, consolidated or unitary group for state, local
or foreign Tax purposes.  Limbex has not filed a consent pursuant to the
collapsible corporation provisions of Section 341(f) of the Code (or any
corresponding provision of state, local or foreign income Tax law) or agreed to
have Section 341(f)(2) of the Code (or any corresponding provision of state,
local or foreign income Tax law) apply to any disposition of any asset owned by
it.

                          (h)     Limbex has not agreed to make, nor is it
required to make, any adjustment under Sections 481(a) or 263A of the Code or
any comparable provision of state or foreign tax laws by reason of a change in
accounting method or otherwise.  Limbex has taken no action that is not in
accordance with past practice that could defer a liability for Taxes of

                                       12
<PAGE>
 
Limbex or the Shareholders from any taxable period ending on or before the
Closing Date to any taxable period ending after such date.

                          (i)     Limbex is not a party to any agreement,
contract, arrangement or plan that has resulted or would result, separately or
in the aggregate, in connection with the Merger, any change of control of
Limbex or any other transaction contemplated by this Agreement, in the payment
of any "excess parachute payments" within the meaning of Section 280G of the
Code.

                          (j)     Limbex is not, and has not been, a United
States real property holding corporation (as defined in Section 897(c)(2) of
the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.

                          (k)     As of the date hereof, no shareholder of
Limbex is other than a United States person within the meaning of the Code.

                          (l)     Limbex does not have and has not had a
permanent establishment in any foreign country, as defined in any applicable
Tax treaty or convention between the United States and such foreign country,
and Limbex has not engaged in a trade or business within any foreign country.

                          (m)     The unpaid Taxes of Limbex as of the date
hereof are not materially in excess of the unpaid liability for Taxes reflected
on the most recent accounting books of Limbex heretofore provided to
Quarterdeck.  No material Tax liability of Limbex has been incurred since
January 1, 1996, other than in the ordinary course of business.

                          (n)     Except for those options issued to Howard
Morgan and Peter Tierney, all outstanding options to acquire equity of the
Limbex that purport to be or were otherwise intended (when issued) to be
treated as "incentive stock options" ("ISOs") within the meaning of Section 422
of the Code (and any predecessor provision and any similar provision applicable
state, local or other Tax law) were issued in compliance with such section.
Other than those options issued to Howard Morgan and Peter Tierney, all such
outstanding options currently qualify for treatment as ISOs, and are held by
persons who are employees of Limbex.  The representations and warranties
contained in this Section 2.16(n) are not intended to expand in any way the
rights of the option holders of Limbex or expand any representations or
warranties made to them by Limbex or create any representations or warranties
to them by Limbex.

                 2.17     COMPLIANCE WITH INSTRUMENTS.  Limbex is not in
violation of or conflict with, breach of or in default under (either with the
giving of notice or the passage of time or both) any term or provision of its
Articles of Incorporation or Bylaws, or any agreement, arrangement, contract,
lease or other instrument to which it or its properties is subject except where
such would not have a Material Adverse Effect.

                 2.18     RELATED PARTY TRANSACTIONS.  Except as set forth on
Schedule 2.18, no employee, officer or director of Limbex or member of his or
her immediate family is indebted

                                       13
<PAGE>
 
to Limbex, nor is Limbex indebted (or committed to make loans or extend or
guarantee credit) to any of them.  None of such persons has any direct or
indirect ownership interest in any firm or corporation with which Limbex is
affiliated or with which Limbex has a business relationship, or any firm or
corporation that competes with Limbex, except that the employees, officers or
directors of Limbex and members of their immediate families may own stock in
publicly traded companies that may compete with Limbex.  No member of the
immediate family of any officer or director of Limbex is directly interested in
any material contract with Limbex.

                 2.19     DISCLOSURE; ACCURACY OF DOCUMENTS AND INFORMATION.
No representation or warranty made by Limbex, Jacobson or Allen in this
Agreement, when taken together, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The copies of all instruments, agreements, other documents
delivered by Limbex to Quarterdeck or their counsel pursuant to this Agreement
shall be complete and correct in all material respects as of the date of
delivery thereof.

                                   ARTICLE 2A

           REPRESENTATIONS AND WARRANTIES REGARDING THE SHAREHOLDERS

                 Each of the Shareholders severally and not jointly represent
and warrant to Quarterdeck as follows:

                 2A.1     AUTHORITY, APPROVAL AND ENFORCEABILITY.

                          (a)     Such Shareholder (other than Inference) has
the full power and authority to execute, deliver and perform its obligations
under this Agreement and the Escrow Agreement, and all action on its part
necessary for such execution, delivery and performance has been duly taken.
Inference has the full corporate power and corporate authority to execute,
deliver and perform its obligations under this Agreement, and all action on its
part necessary for such execution, delivery and performance has been duly
taken.

                          (b)     The execution and delivery by such
Shareholder of this Agreement does not, and the performance and consummation of
the transactions contemplated by this Agreement and the Escrow Agreement will
not, result in any conflict with, breach or violation of or default,
termination or forfeiture under (or upon the failure to give notice or the
lapse of time, or both, result in any conflict with, material breach or
violation of or default, termination or forfeiture under) any statute, rule,
regulation, judicial, governmental, regulatory or administrative decree, order
or judgment applicable to such Shareholder, or any material agreement or other
instrument to which it is a party or to which it or any of its assets is
subject.

                          (c)     Upon due execution and delivery by such
Shareholder, this Agreement and the Escrow Agreement (except with respect to
Inference) will be his, her or its

                                       14
<PAGE>
 
legal, valid and binding obligation, enforceable against him, her or it in
accordance with the respective terms hereof and thereof, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and subject to the availability of equitable remedies.

                          (d)     Such Shareholder is the record and beneficial
owner of the shares of Limbex Stock reflected as owned by him, her or it on
Schedule 2.2, free and clear of any and all liens, security interests,
encumbrances or claims.

                                   ARTICLE 3

                       REPRESENTATIONS AND WARRANTIES OF

                                  QUARTERDECK

                 Quarterdeck represents and warrants to Limbex and the
Shareholders as follows:

                 3.1      ORGANIZATION AND STANDING.

                 Quarterdeck is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware, has all requisite
corporate power and authority to own, operate and lease its properties and
carry on its business as now conducted, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect.  Whenever used
in this Article 3, "Material Adverse Effect" shall mean and be defined as any
fact, event or condition, or the absence of any fact, event or condition, as
the context requires, which, individually or in the aggregate, would have a
material adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of Quarterdeck and its subsidiaries (on a
consolidated basis).

                 3.2      AUTHORITY, APPROVAL AND ENFORCEABILITY.

                          (a)     Each of Quarterdeck and Merger Sub has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement, the Escrow Agreement, and the Registration
Rights Agreement, and all corporate action on its part necessary for such
execution, delivery and performance has been duly taken.  No vote or consent of
the stockholders of Quarterdeck is required in connection with the transactions
contemplated by this Agreement including the Merger.

                          (b)     The execution and delivery by Quarterdeck and
Merger Sub of this Agreement and the Escrow Agreement and the execution and
delivery by Quarterdeck of the Registration Rights Agreement do not, and the
performance and consummation of the transactions contemplated by this
Agreement, the Escrow Agreement and the Registration Rights Agreement will not,
result in any conflict with, breach or violation of or default, termination or
forfeiture under (or upon the failure to give notice or the lapse of time, or
both, result in any conflict with, breach or violation of or default,
termination or forfeiture under) any terms or provisions of (i) their
respective Certificate or Articles of Incorporation, as the

                                       15
<PAGE>
 
case may be, or Bylaws, (ii) any statute, rule, regulation or any judicial,
governmental, regulatory or administrative decree, order or judgment, or (iii)
any material agreement, lease or other instrument to which it is a party or to
which it or any of its assets may be bound.

                          (c)     No consent, approval, authorization, order,
registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
part of Quarterdeck or Merger Sub for the consummation by Quarterdeck and
Merger Sub of the transactions contemplated by this Agreement, except any
approvals or filings required under state "blue sky" laws (which will be
obtained or made in accordance with such laws by Quarterdeck on a timely basis)
and the filing of the certificate of merger and related instruments with the
Secretary of State of the State of California.

                          (d)     Upon due execution and delivery by the
parties hereto and thereto, this Agreement, the Escrow Agreement and the
Registration Rights Agreement will be the legal, valid and binding obligation
of Quarterdeck, and this Agreement and the Escrow Agreement will be the legal,
valid and binding obligation of Merger Sub enforceable against Quarterdeck or
Merger Sub, as the case may be, in accordance with the respective terms hereof
and thereof, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally.

                 3.3      FINANCIAL STATEMENTS AND REPORTS.  Quarterdeck has
timely filed all required forms, reports, statements and documents with the
Securities and Exchange Commission (the "Commission") all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act").  Quarterdeck has delivered or made available to Limbex and the
Shareholders true and complete copies of (i) Quarterdeck's Annual Report on
Form 10-K for the fiscal year ended September 30, 1995, (ii) its proxy
statement relating to Quarterdeck's annual stockholders meeting held February
2, 1996, and (iii) all other forms, reports, statements and documents filed by
Quarterdeck with the Commission since September 30, 1995 (collectively, the
"Quarterdeck Reports").  As of their respective dates, the Quarterdeck Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The consolidated financial statements of Quarterdeck included or
incorporated by reference in the Quarterdeck Reports were prepared in
accordance with GAAP applied on a consistent basis (except as otherwise stated
in such financial statements or, in the case of audited statements, the related
report thereon of independent certified public accounts), and present fairly
the financial position and results of operations, cash flows and of changes in
stockholders' equity of Quarterdeck and its consolidated subsidiaries as of the
dates and for the periods indicated, subject, in the case of unaudited interim
financial statements, to normal year-end audit adjustments, none of which
either singly or in the aggregate are or will be material, and except that the
unaudited interim financial statements do not contain all of the disclosures
required by GAAP.

                                       16
<PAGE>
 
                 3.4      QUARTERDECK COMMON STOCK.  The shares of Quarterdeck
Common Stock to be issued to the holders of Limbex Stock as contemplated
hereunder are duly authorized, and when issued pursuant to the terms of this
Agreement, will be validly issued, fully paid, non- assessable and not subject
to any preemptive rights.

                 3.5      NO BROKERS.  Quarterdeck is not obligated for the
payment of fees or expenses of any broker or finder in connection with the
origin, negotiation or execution of this Agreement or in connection with any
transaction contemplated hereby or thereby.

                                   ARTICLE 4

                                   COVENANTS

                 4.1      MAINTENANCE OF BUSINESS.  Except as otherwise
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, Limbex agrees to carry on its business in the ordinary course
and in substantially in the same manner as it has prior to the date of this
Agreement and agrees not to enter into any material agreements or take any
other significant actions outside the ordinary course of business without the
prior written consent of Quarterdeck, which consent shall not be unreasonably
withheld.

                 4.2      TAX TREATMENT.  Quarterdeck, Limbex and the
Shareholders understand and agree that the Merger will be treated for federal
income tax purposes as a taxable sale by the Shareholders of the Limbex Stock
and not as a "reorganization" within the meaning of Section 368(a) of the Code,
and agree to treat the Merger as such on their income tax returns reflecting
the Merger.  Quarterdeck, Limbex and the Shareholders agree that no party to
this Agreement is (i) making any representation or warranty as to the tax
consequences of the Merger or (ii) indemnifying any party to this Agreement for
any tax consequences of the Merger.

                 4.3      OTHER DISCUSSIONS.  From and after the date of this
Agreement until the Closing or this Agreement is terminated in accordance with
its terms, neither Limbex nor any of its officers, directors, agents or
representatives (including the Shareholders) will initiate discussions, solicit
or negotiate (including providing any non-public information concerning its
business), or authorize any person or entity to discuss, solicit or negotiate
on its or their behalf, with any other party concerning the possible sale or
disposition of all or any material portion of Limbex's business, assets or
capital stock.  Limbex will immediately notify Quarterdeck, however, if any
offer is received from a potential purchaser or of any discussions with a
potential purchaser.

                 4.4      BEST EFFORTS.  Each party will use its best efforts
to cause all conditions to the Closing to be satisfied as soon as practicable.
Without limiting any party's rights or remedies for any breach of any
representations or warranty made hereunder, each party shall use its best
efforts to obtain any consents necessary or desirable in connection with the
consummation of the transactions contemplated by this Agreement.

                                       17
<PAGE>
 
                 4.5      SHAREHOLDER VOTE; INVESTMENT REPRESENTATION
CERTIFICATE.  Until this Agreement has been terminated in accordance with its
terms, the Shareholders agree to vote all shares of Limbex Stock held by them
in favor of the Merger.  Each of the Shareholders shall execute an Investment
Representation Certificate in the form attached hereto as Exhibit B (the
"Investment Representation Certificate").

                 4.6      REGISTRATION RIGHTS; NASDAQ LISTING.  Quarterdeck
shall provide to the Shareholders of Limbex registration rights pursuant to the
terms of a registration rights agreement (the "Registration Rights Agreement")
substantially in the form of Exhibit C attached hereto.  Quarterdeck shall
cause the shares of Quarterdeck Common Stock to be issued pursuant to this
Agreement to be listed as of the date such shares are issued on the Nasdaq
National Market.

                 4.7      ACCESS TO INFORMATION.  Quarterdeck shall continue to
have access to the facilities, employees, and records of Limbex; provided,
however, all confidential information obtained by Quarterdeck will be kept
confidential in accordance with the terms of the Confidentiality Agreement
previously entered into between Quarterdeck and Limbex (the "Confidentiality
Agreement").

                 4.8      BUSINESS PLAN.  The parties have agreed upon a
business plan (the "Business Plan") for the business of Limbex (the "Limbex
Business"), which includes a product development plan.  The Business Plan may
not be materially modified without the consent of Jacobson and Allen so long as
they remain employees of Quarterdeck.  Quarterdeck will contribute to the
Limbex Business the amounts by which the amounts required to carry out the
Business Plan exceed the cash generated by the Limbex Business on an on-going
basis, provided that Quarterdeck shall not be obligated to contribute more than
the amount to be specified in a budget to be incorporated into the Business
Plan.  The day to day operations of the Limbex Business will be conducted by
Jacobson or Allen, so long as they are employees of Quarterdeck, subject to
senior management and the Board of Directors of Quarterdeck having the
authority to manage the Limbex Business.

                 4.9      EMPLOYMENT AGREEMENTS.

                          (a)     As a condition to the closing of the Merger,
each of Jacobson and Allen will enter into an employment agreement with
Quarterdeck.  The vesting period for options granted to Jacobson and Allen and
the acceleration of such vesting shall be as set forth in subparagraph (b)
below, provided that (i) in the event Quarterdeck terminates Jacobson or Allen
without Cause (as defined in their Employment Agreements) or Jacobson or Allen
leave with Good Reason (as defined below), fifty percent (50%) of any options
not yet vested in the terminated individual shall automatically and immediately
vest, (ii) for a period of one (1) year following any such termination without
Cause or following any such departure for Good Reason, the terminated
individual shall be retained by Quarterdeck to perform ongoing services as an
independent contractor consultant on terms to be mutually agreed upon, and
during such one (1) year period such individual will achieve vested rights in
the same number of shares that would have vested had such individual continued
to be employed by Quarterdeck

                                       18
<PAGE>
 
during such one (1) year period (i.e., one quarter of the total options granted
shall be subject to vesting during such period) with such vested shares to be
in addition to all previously vested shares, including without limitation
shares previously vested pursuant to clause (i) of this Subsection 4.9(a).
"Good Reason" shall mean (x) Quarterdeck's material violation of its
obligations under the Employment Agreement of Jacobson or Allen, as the case
may be, provided that such violation shall not be deemed Good Reason if
Quarterdeck cures such violation within thirty (30) days after notice thereof
or (ii) the substantial diminution of Jacobson's or Allen's, as the case may
be, duties and responsibilities.

                          (b)     Quarterdeck shall initially grant as of the
Closing Date a total of 300,000 non-qualified options to acquire shares of
Quarterdeck Common Stock to employees of the Limbex Business (including
Jacobson and Allen), with the allocation of such options to individual
employees to be determined by Jacobson and Allen as part of the management of
the Limbex Business, subject to approval by the Quarterdeck compensation
committee.  Quarterdeck senior management will recommend approval by the
Quarterdeck compensation committee of the allocation of options determined by
Jacobson and Allen and endeavor to obtain such approval.  Such options shall
vest over a period of four (4) years, provided that if Quarterdeck Common Stock
achieves the values set forth below at any time during the option period,
outstanding unvested options shall vest immediately on the date of achievement
of the acceleration trigger, with the options so vested to be applied pro rata
among the holders of outstanding unvested options, such that the aggregate
number of vested options (including options vested immediately prior to the
achievement of the applicable acceleration trigger) shall equal the number set
forth opposite each such acceleration trigger:

<TABLE>
<CAPTION>
                      Acceleration Trigger           Number of Vested Options
                      --------------------           ------------------------
                      <S>                            <C>
                               $17                            100,000

                               $22                            200,000

                               $32                            300,000
</TABLE>

                          (c)     Provided that Jacobson or Allen (or both
Jacobson and Allen) remains in the employ of Quarterdeck, Quarterdeck shall
grant as of the first, second, and third anniversaries of the Closing Date an
additional 100,000 options to acquire shares of Quarterdeck Common Stock on
each such anniversary (i.e., a total of 300,000 additional options), which
options shall be allocated to employees of the Limbex Business (including
Jacobson and Allen) as determined by Jacobson and Allen, if both remain
employed by Quarterdeck, or by Jacobson or Allen, if only one remains employed
by Quarterdeck, subject to approval by the Quarterdeck compensation committee.
Quarterdeck senior management will recommend approval by the Quarterdeck
compensation committee of the allocation of options determined by Jacobson
and/or Allen and endeavor to obtain such approval.  Such options shall also
vest over a period of four (4) years, provided that if Quarterdeck Common Stock
achieves the values set forth below at any time during the option period,
outstanding unvested options shall vest immediately (to the extent of
outstanding options) on the date of achievement of the acceleration trigger,
with options so vested to be applied pro rata among the holders of

                                       19
<PAGE>
 
outstanding unvested options, such that the aggregate number of vested options
(including options vested immediately prior to the achievement of the
applicable acceleration trigger) shall equal the number set forth opposite each
such acceleration trigger:

<TABLE>
<CAPTION>
                  Acceleration Trigger          Number of Options
                  --------------------          -----------------
                  <S>                           <C>
                          $47                       100,000

                          $57                       200,000

                          $67                       300,000
</TABLE>


                          (d)     Quarterdeck Common Stock shall be deemed to
have achieved the values set forth in subparagraphs (b) and (c) above if (i)
the closing sale price of Quarterdeck Common Stock as of the close of each
trading day during a period of forty-five (45) consecutive days equals or
exceeds the specified value, or (ii) the average closing sale price of
Quarterdeck Common Stock for the trading days during a period of forty-five
(45) consecutive days equals or exceeds the specified value, and the closing
sale price of Quarterdeck Common Stock is equal to or greater than the
specified value on at least thirty (30) of such forty-five (45) consecutive
days.  In the event that Quarterdeck Common Stock achieves the applicable
acceleration trigger value prior to the date of grant of the applicable option,
such option shall be fully vested as of the date of grant provided that the
closing sale price of the Quarterdeck Common Stock as of the date of grant of
the option is equal to or higher than the applicable acceleration trigger
value.  To the extent that the vesting of options is accelerated pursuant to
subparagraphs (b) or (c), the remaining options not so accelerated shall vest
pro rata over the remainder of the four year vesting period.

                          (e)     The exercise price for the options pursuant
to this Section 4.9 shall be the fair market value of the Quarterdeck Common
Stock as of the date of grant of the applicable option.  All shares of
Quarterdeck Common Stock issued upon exercise of options granted pursuant to
this Section 4.9 shall be registered on or before the date of issuance on Form
S-8.

                 4.10     EXISTING AGREEMENTS.  All existing agreements between
Limbex and any party(ies) hereto will, upon the closing, terminate and be of no
further force and effect, other than (i) the Technology License Agreement,
dated May 9, 1995, between Inference and Limbex, as amended by Amendment No. 1
and Amendment No. 2 thereto (the "License Agreement"), and (ii) Stock Purchase
Agreement, dated July 31, 1996, among Limbex, Inference, Jacobson and Allen.

                 4.11     SUPPLEMENTS TO SCHEDULES.  From time to time prior to
the Closing Date, Allen and Jacobson will promptly inform Quarterdeck and
Quarterdeck will promptly inform Allen and  Jacobson in writing of any matter
known to any of them hereafter arising (as distinguished from matters that
existed prior to the date hereof) that, if existing or occurring on or prior to
the date hereof, would have been required to be set forth or described in the
Schedules hereto or as an exception to the representations and warranties
herein.  No action or

                                       20
<PAGE>
 
inaction by Allen, Jacobson, Limbex or Quarterdeck following receipt of any
such information shall constitute a waiver of any of its rights hereunder.

                 4.12     LIMBEX STOCK OPTIONS.  Each option to acquire shares
of Limbex Common Stock outstanding at the Closing (the "Limbex Stock Options")
shall be assumed by Quarterdeck at the Closing (subject to execution by each
holder of (i) an option agreement with Quarterdeck and (ii) a release and
termination agreement with Limbex terminating such holder's Limbex Stock Option
and releasing Limbex from any obligations thereunder), and shall become options
to acquire 0.53553237 of a share of Quarterdeck Common Stock for each share of
Limbex Common Stock previously subject to the Option at an exercise price per
share equal to the exercise price per share of Limbex Common Stock divided by
0.53553237.  The options to acquire shares of Quarterdeck Common Stock shall be
(x)(A) in the case of Limbex Stock Options that are ISOs, ISOs of Quarterdeck,
and (B) in the case of Limbex Stock Options that are non-qualified options,
non-qualified stock options of Quarterdeck, (y) fully vested at the assumption
and (z) issued under Quarterdeck's Amended and Restated 1990 Stock Incentive
Plan (relating to securities that have been registered on Registration
Statements on Form S-8).  The assumed options shall be evidenced by the
standard forms of option agreement used in connection with such plans.  Exhibit
E hereto sets forth the outstanding Limbex Stock Options as of the date hereof.

                                   ARTICLE 5

                              CONDITIONS TO MERGER

                 5.1      CONDITIONS TO OBLIGATIONS OF QUARTERDECK, THE
SHAREHOLDERS AND LIMBEX.  The respective obligations of Quarterdeck, the
Shareholders and Limbex to consummate the transactions contemplated hereby are
subject to satisfaction (or waiver) of the following conditions:

                          (a)     The parties hereto shall have obtained all
consents and approvals of shareholders and third parties (including
governmental authorities) required to consummate the transactions contemplated
by this Agreement.

                          (b)     Consummation of the transactions contemplated
by this Agreement shall not violate any order, decree or judgment of any court,
and if any order, decree or judgment of any court would be so violated, the
parties shall use their reasonable efforts to seek the modification,
rescission, withdrawal or elimination of such order, decree or judgment as soon
as practicable in order to permit the Closing to occur.

                          (c)     The Escrow Agreement, the Registration Rights
Agreement and the Employment Agreements shall be executed and delivered by the
parties thereto.

                 5.2      CONDITIONS TO OBLIGATIONS OF QUARTERDECK.  The
obligations of Quarterdeck to consummate the transactions contemplated hereby
are subject to satisfaction (or waiver) of the following conditions:

                                       21
<PAGE>
 
                          (a)     The representations and warranties of Limbex
and the Shareholders made herein shall be true and correct in all material
respects as of the Closing Date.  (To the extent Allen, Jacobson or Limbex
hereafter provides supplements to the Schedules hereto as provided in Section
4.11 hereof, such supplements shall not be deemed a breach of the
representations and warranties of Limbex and the Shareholders hereunder, but to
the extent that any such supplement or supplements constitute a material
adverse change to the representations and warranties contained herein, such
supplement or supplements may constitute a basis for the failure of a condition
in the preceding sentence; the provisions of this sentence shall not apply to
the correction of any representation or warranty that was untrue as of the date
hereof.)  Limbex and the Shareholders shall have performed in all material
respects all obligations and agreements undertaken to be performed by them at
or prior to the Closing.

                          (b)     Quarterdeck shall have received the
Investment Representation Certificate executed by each of the Shareholders.

                          (c)     Quarterdeck shall be satisfied that no
holders of Limbex Stock shall exercise dissenters' rights in connection with
the Merger.

                 5.3      CONDITIONS TO OBLIGATIONS OF LIMBEX AND THE
SHAREHOLDERS.  The obligations of Limbex and the Shareholders to consummate the
transactions contemplated hereby are subject to satisfaction (or waiver) of the
following conditions:

                          (a)     The representations and warranties of
Quarterdeck made herein shall be true and correct in all material respects as
of the Closing Date.  Quarterdeck shall have performed in all material respects
all obligations and agreements undertaken to be performed by it at or prior to
the Closing.

                          (b)     The shares of Quarterdeck Common Stock to be
issued in the Merger shall be approved for listing on the Nasdaq National
Market.

                                   ARTICLE 6

                                   INDEMNITY

                 6.1      SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS.

                 All representations, warranties, covenants and agreements of
Quarterdeck, Limbex and the Shareholders in this Agreement shall survive the
execution, delivery, and performance of this Agreement in accordance with this
paragraph.  All representations and warranties of each party set forth in this
Agreement shall be deemed to have been made again by such party at and as of
the Closing Date.  Quarterdeck shall, on behalf of the Shareholders (other than
Inference), deliver the Escrow Consideration into escrow as provided in the
Escrow Agreement.  The Escrow Consideration shall be released from escrow one
year from the Closing Date (except to the extent that claims have been
submitted or notice of a claim has been provided during such one year period)
in accordance with the terms of the Escrow Agreement.  The representations and
warranties of Quarterdeck and the Shareholders set forth

                                       22
<PAGE>
 
in this Agreement shall terminate (absent fraud or willful misrepresentation)
on the date two years from the Closing Date (except to the extent that claims
have been submitted or notice of the claim has been provided during such two
year period), except for Sections 2.2(a) and 2A.1(d), which shall not
terminate, and Section 2.16, which shall terminate upon the expiration of the
statutes of limitations applicable to the matters covered thereby.

                 6.2      INDEMNIFICATION OF QUARTERDECK.

                          (a)     Each of the Shareholders other than Inference
(the "Indemnifying Shareholders"), jointly and severally, agree to indemnify,
defend and hold harmless Quarterdeck and its affiliates, successors, assigns,
agents and representatives (collectively, the "Affiliated Parties") from and
against any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, remedies and penalties, including interest, penalties and
reasonable attorneys' fees and expenses (collectively, "Losses") that any of
them shall incur or suffer to the extent they arise from or are attributable to
by reason of or in connection with any breach or inaccuracy of the
representations and warranties contained in Article 2 of this Agreement.

                                  (i)      No claim, demand, suit or cause of
action shall be brought under this Section 6.2(a) unless and until the
aggregate amount of claims under this Section 6.2(a) exceeds $50,000, in which
event Quarterdeck and the Affiliated Parties shall be entitled to
indemnification for all claims under this Section 6.2(a) in excess of such
$50,000.

                                  (ii)     The liability of the Shareholders
other than Inference, Jacobson and Allen under this Section 6.2(a) shall be
limited to the return to Quarterdeck of Escrow Consideration, whether or not
such Escrow Consideration has been issued or paid and delivered into, or
released from, escrow.

                                  (iii)    The liability of Jacobson and Allen
under this Section 6.2(a) shall be full recourse and shall not be limited to
the return of Escrow Consideration, subject to Section 6.2(e); provided,
however, that the liability of Jacobson and Allen shall not be full recourse
(and shall instead be limited to the Escrow Consideration, whether or not such
Escrow Consideration has been issued and delivered into or released from
escrow) with respect to a breach of the representations and warranties
contained in Section 2.10 hereof that are qualified to the knowledge, awareness
or belief of Limbex, Jacobson or Allen unless Jacobson or Allen had knowledge,
awareness or belief of the facts or circumstances causing the breach of such
representations or warranties.

                          (b)     Each of the Shareholders, severally and not
jointly, agrees to indemnify, defend and hold harmless Quarterdeck and the
Affiliated Parties against and in respect of any Losses that any of them shall
incur or suffer to the extent they arise from or are attributable to by reason
of or in connection with any breach or inaccuracy of such Shareholder's
representations or warranties contained in Article 2A of this Agreement.

                                  (i)      Quarterdeck's and the Affiliated
Parties' recourse against the Escrow Consideration in respect of a claim
against any Shareholder under this

                                       23
<PAGE>
 
Section 6.2(b) shall be limited to the return to Quarterdeck of Escrow
Consideration allocable to such Shareholder determined pursuant to the Escrow
Agreement, whether or not such Escrow Consideration has been issued or paid and
delivered into, or released from, escrow.

                                  (ii)     The liability of the Shareholders
under Section 6.2(b) shall be full recourse and shall not be limited to the
return of Escrow Consideration, subject to Section 6.2(e).

                          (c)     For purposes of the indemnification set forth
in this Article 6, the fair market value of one share of Quarterdeck Common
Stock shall be equal to the average closing sales price of Quarterdeck Common
Stock on the Nasdaq National Market on each trading day during a period of five
trading days ending on the trading day two trading days prior to the date on
which a claim is paid under this Article 6.

                          (d)     No disclosure by Limbex or the Shareholders
other than as set forth in this Agreement or the schedules hereto nor any
investigation made by or on behalf of Quarterdeck with respect to Limbex or the
Shareholders shall be deemed to affect Quarterdeck's reliance on the
representations and warranties made by Limbex or the Shareholders contained in
this Agreement and shall not constitute a waiver of Quarterdeck's rights to
indemnity as herein provided for the breach or inaccuracy of any of Limbex's or
the Shareholders' representations or warranties under this Agreement.

                          (e)     Notwithstanding anything else in this Section
6.2 to the contrary, the aggregate liability of each Shareholder (other than
Inference) under Sections 6.2(a), 6.2(b) and 6.2(f) shall not exceed the amount
received or to be received by such Shareholder in connection with the Merger,
with the fair market value of one share of Quarterdeck Common Stock equal to
the average closing sales price of Quarterdeck Common Stock on the Nasdaq
National Market on each trading day during a period of five trading days ending
on the trading day two trading days prior to the SEC Effective Date and the
aggregate liability of Inference under Section 6.2(b) shall not exceed
$4,210,279; provided, however, that nothing in this Section 6.2(e) shall limit
Quarterdeck's right to full recourse against all of the Escrow Consideration
attributable to such Shareholder or Shareholders regardless of the value of
such Escrow Consideration and whether or not such Escrow Consideration has been
released from escrow.  The indemnity obligations set forth in this Section 6.2
shall be the exclusive remedy of Quarterdeck with respect to a breach or
inaccuracy of the representations and warranties of the Shareholders, other
than with respect to liability arising out of, involving or relating to
intentional fraud or willful misrepresentation or a breach of Section 8.11.

                          (f)     Allen and Jacobson agree to indemnify and
hold harmless Quarterdeck, and any current or future employee or director of
Quarterdeck, from and against any and all costs, expenses, liabilities and
damages (including but not limited to attorneys fees, taxes, interest and
penalties) resulting from a determination by a taxing authority that (i) the
Limbex options that purport to be ISOs were not ISOs immediately prior to the
time they were assumed by Quarterdeck in connection with the Merger, or (ii)
the acceleration of the vesting

                                       24
<PAGE>
 
schedule set forth in such Limbex options resulted in such options being
treated other than as ISOs.

                 6.3      INDEMNIFICATION OF THE SHAREHOLDERS.

                          (a)     Quarterdeck agrees to indemnify, defend and
hold harmless the Shareholders (and their respective successors and assigns)
from and against and in respect of, any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, remedies and penalties, including
interest, penalties and reasonable attorneys' fees and expenses (collectively,
"Shareholder Losses") that any of the Shareholders shall incur or suffer and
which arise from or are attributable to by reason of or in connection with any
breach or inaccuracy of Quarterdeck's representations or warranties contained
in this Agreement.

                          (b)     No claims, demand, suit or cause of action
shall be brought against the Shareholders under this Section 6.3 unless and
until the aggregate amount of claims under this Section 6.3 exceeds $50,000, in
which event the Shareholders shall be entitled to indemnification from
Quarterdeck for all claims under this Section 6.3 in excess of such $50,000.
Quarterdeck shall have no obligations under this Section 6.3 for an amount in
excess of the fair market value of Quarterdeck Common Stock received or to be
received by Jacobson and Allen in connection with the Merger and the fair
market value of Limbex Escrow Shares (as defined in the Escrow Agreement) and
Escrow Cash received or to be received by Howard Morgan, Thelma Birks, Michelle
Kraus and Clay Chisum, with the fair market value of one share of Quarterdeck
Common Stock equal to the average closing sales price of Quarterdeck Common
Stock on the Nasdaq National Market on each trading day during a period of five
trading days ending on the trading day two trading days prior to the SEC
Effective Date.  The indemnity obligations set forth in this Section 6.3 shall
be the exclusive remedy of the Shareholders with respect to a breach or
inaccuracy of the representations and warranties of Quarterdeck, other than
with respect to liability arising out of, involving or relating to intentional
fraud or willful misrepresentation.

                          (c)     No disclosure by Quarterdeck other than as
set forth in this Agreement or the schedules hereto nor any investigation made
by or on behalf of the Shareholders with respect to Quarterdeck shall be deemed
to affect the Shareholders' reliance on the representations and warranties made
by Quarterdeck contained in this Agreement and shall not constitute a waiver of
the Shareholders' rights to indemnity as herein provided for the breach or
inaccuracy of any of Quarterdeck's representations or warranties under this
Agreement.

                 6.4      PROCEDURE FOR INDEMNIFICATION OF QUARTERDECK AND THE
SURVIVING CORPORATION WITH RESPECT TO NON-THIRD PARTY CLAIMS.  Prior to
termination of the escrow for the Escrow Consideration, Quarterdeck and the
Affiliated Parties shall not be entitled to seek recourse against a Shareholder
in satisfaction of a claim under Section 6.2 without first seeking recourse
against the Escrow Consideration allocable to such Shareholder in the escrow,
unless (i) the amount of such claim against such Shareholder, when taken
together with all other claims against such Shareholder by all of the
indemnified parties, exceeds the aggregate

                                       25
<PAGE>
 
fair market value of the Escrow Consideration (with the fair market value of
Escrow Shares being determined pursuant to Section 6.2(c)) allocable to such
Shareholder in escrow at the time such claim is initiated and (ii) such
Shareholder's liability hereunder in respect of such claim is not limited to
the Escrow Consideration, in which event the indemnified party may seek direct
recourse against such Shareholder in respect of such claim.  If Quarterdeck
shall have any claim against the Shareholders pursuant to this Article 6 for
which it seeks recourse against the Escrow Consideration (but excluding claims
resulting from the assertion of liability by third parties), Quarterdeck shall
promptly give written notice thereof to the Escrow Agent (as defined in the
Escrow Agreement) and the escrow committee established pursuant to the terms of
the Escrow Agreement (the "Committee"), including in such notice a brief
description of the facts upon which such claim is based and the amount thereof.
If the Committee objects to the allowance of any such claims, it shall give
written notice to Quarterdeck and the Escrow Agent within forty-five (45) days
following receipt of Quarterdeck's notice of claim, advising Quarterdeck and
the Escrow Agent that it does not consent to the delivery of any or some of the
Escrow Consideration out of escrow for application to such claims.  If no such
written notice is timely provided by the Committee to Quarterdeck and the
Escrow Agent and received by the Escrow Agent within forty-five (45) days
following the Committee's receipt of Quarterdeck's notice of claim, the Escrow
Agent shall, within five business days after the expiration of the prior notice
period, deliver out of escrow the lesser of: (a) the portion of the Escrow
Consideration most nearly equal in value to the amount of the claim or claims
thus to be satisfied, or (b) all of the Escrow Consideration.  If the Committee
notifies Quarterdeck and the Escrow Agent receives written notice within the
foregoing forty-five (45) day period that the Committee objects to such
application of the Escrow Consideration after a claim has been made, the Escrow
Agent shall hold the Escrow Consideration in an amount most nearly equal in
value to the amount of the claim or claims then made in escrow until the rights
of the Shareholders and Quarterdeck with respect thereto have been agreed upon
between the Committee and Quarterdeck in accordance with the Escrow Agreement
and the Escrow Agent receives written notice accordingly or the Escrow Agent is
directed by a court or arbitration panel.  If any distribution referred to in
this Section 6.4 involves less than all of the Escrow Consideration, it shall
be allocated pro rata against the Escrow Consideration therein based on the
Escrow Consideration beneficially owned by each Shareholder (unless the claim
made is based on an inaccuracy or breach of a representation or warranty
contained in Article 2A of this Agreement, in which case the allocation of the
distribution of the Escrow Consideration shall be determined in accordance with
Section 6.2(b)).  If Quarterdeck has any claim against any Shareholder or
Shareholders pursuant to this Article 6 (but excluding claims resulting from
the assertion of liability by third parties) outside of the Escrow or over and
above the amount of the Escrow Consideration, Quarterdeck shall promptly give
written notice thereof to such Shareholder or Shareholders, including in such
notice a brief description of the facts upon which such claim is based and the
amount thereof.  If such Shareholder or Shareholders, within forty-five (45)
days after receipt of Quarterdeck's notice of claim, do not give written notice
to Quarterdeck announcing their intent to contest such assertion of Quarterdeck
such assertion shall be deemed accepted and the amount of claim shall be deemed
a valid claim and such Shareholder or Shareholders shall, within fifteen (15)
days after expiration of the prior notice period deliver to Quarterdeck the
amount of the claim.  In the event, however, that such Shareholder or
Shareholders contest the assertion of a claim by giving such written notice to

                                       26
<PAGE>
 
Quarterdeck within said period, then the parties shall act in good faith to
reach agreement regarding such claim.  In the event the parties (other than
Inference) are unable to reach an agreement regarding such claim, such claim
shall be settled in accordance with Section 2.5 of the Escrow Agreement.

                 6.5      PROCEDURE FOR INDEMNIFICATION OF THE SHAREHOLDERS
WITH RESPECT TO NON-THIRD PARTY CLAIMS.  If any Shareholder has any claim
against Quarterdeck pursuant to this Article 6 (but excluding claims resulting
from the assertion of liability by third parties), the Shareholder shall
promptly give written notice thereof to Quarterdeck, including in such notice a
brief description of the facts upon which such claim is based and the amount
thereof.  If Quarterdeck, within forty five (45) days after receipt of the
Shareholders' notice of claim, does not give written notice to the Shareholders
announcing its intent to contest such assertion of the Shareholder such
assertion shall be deemed accepted and the amount of claim shall be deemed a
valid claim and Quarterdeck shall, within fifteen (15) days after expiration of
the prior notice period, deliver to the Shareholders the amount of the claim,
which, if such claim is brought on behalf of all Shareholders, shall be
allocated on a pro rata basis based on the number of shares of Limbex Stock
beneficially owned by each Shareholder as set forth in Schedule 2.2.  In the
event, however, that Quarterdeck contests the assertion of a claim by giving
such written notice to the Shareholders within said period, then the parties
shall act in good faith to reach agreement regarding such claim.  In the event
the parties are unable to reach an agreement regarding such claim, such claim
shall be settled in accordance with Section 2.5 of the Escrow Agreement.

                 6.6      PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO
                          THIRD-PARTY CLAIMS.

                          (a)     If an indemnified party determines to seek
indemnification under this Article 6 with respect to a claim resulting from the
assertion of liability by third parties, such indemnified party shall promptly
give notice to the indemnifying parties of facts upon which any such claim is
based; the notice shall set forth such material information with respect
thereto as is then reasonably available to such indemnified party.  In case any
such liability is asserted against the indemnified party, and the indemnified
party notifies the indemnifying parties thereof, the indemnifying parties will
be entitled, if such indemnifying parties so elect by written notice delivered
to the indemnified party within fifteen (15) business days after receiving the
indemnified party's notice, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party.  Notwithstanding the
foregoing, (i) the indemnified party shall also have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the indemnified party unless the indemnified party shall
reasonably determine that there is a conflict of interest between or among the
indemnified party and any indemnifying party with respect to such claim, in
which case the fees and expenses of such counsel will be borne by such
indemnifying parties and (ii) the rights of an indemnified party to be
indemnified hereunder in respect of claims resulting from the assertion of
liability by third parties shall not be adversely affected by its failure to
give notice pursuant to the foregoing unless, and, if so, only to the extent
that, such indemnifying parties are materially prejudiced thereby.  With
respect to any assertion of liability by a third party that

                                       27
<PAGE>
 
results in an indemnifiable claim, the parties hereto shall make available to
each other all relevant information in their possession material to any such
assertion.

                          (b)     In the event that such indemnifying parties,
within fifteen (15) business days after receipt of the aforesaid notice of a
claim, fail to assume the defense of an indemnified party against such claim,
the indemnified party shall have the right to undertake the defense,
compromise, or settlement of such action on behalf of and for the account,
expense, and risk of such indemnifying parties.

                          (c)     Notwithstanding anything in this Article 6 to
the contrary, if there is a reasonable probability that a claim may materially
adversely affect an indemnified party, the indemnified party shall have the
right to participate (at the indemnified party's expense) in such defense,
compromise, or settlement and such indemnifying parties shall not, without the
indemnified party's written consent (which consent shall not be unreasonably
withheld), settle or compromise any such claim or consent to entry of any
judgment in respect thereof unless such settlement, compromise, or consent
includes as an unconditional term thereof the giving by the claimant or the
plaintiff to the indemnified party a release from all liability in form and
substance satisfactory to such indemnified party in respect of such claim.  If
the indemnifying parties notify the indemnified party that they wish to accept
a bona fide written offer to settle or compromise from any such claimant or
plaintiff (which offer includes a release of the indemnified party from all
liability in respect of such claim), and the indemnified party does not consent
to such settlement or compromise, the indemnifying parties shall not be liable
under this Section 6.6 for the amount by which any Losses from any subsequent
settlement, compromise or judgment with respect to such claim exceeds such bona
fide written offer; provided, however, that, if one or more of the Shareholders
is the indemnifying party and Quarterdeck or any of the Affiliated Parties is
the indemnified party, the provisions of this sentence shall not apply unless,
at the time the indemnifying parties give notice of their desire to accept a
bona fide written offer, all such indemnifying parties (i) acknowledge in
writing to Quarterdeck that Quarterdeck and the Affiliated Parties are entitled
unconditionally to indemnification under this Agreement by the Shareholders for
such settlement or compromise and (ii) provide to Quarterdeck evidence
reasonably satisfactory to Quarterdeck that such parties have the financial
ability to satisfy any liability resulting from such settlement or compromise.

                          (d)     In the event Quarterdeck is an "indemnified
party" with respect to a third party claim for which it seeks recourse against
the Escrow Consideration and a settlement or judgment is reached with respect
to such claim, such indemnified party shall promptly give written notice
thereof to the Committee and the Escrow Agent, including in such notice a brief
description of the settlement or judgment and the amount thereof.  If the
Committee objects to the allowance of any such claims, it shall give written
notice to such indemnified party and the Escrow Agent within thirty

                                       28
<PAGE>
 
(30) days following receipt of such notice of claim, advising such indemnified
party and the Escrow Agent that it does not consent to the delivery of any or a
portion of the Escrow Consideration out of escrow to such indemnified party for
application to such claims.  If no such written notice is timely provided by
the Committee to such indemnified party and received by the Escrow Agent within
thirty (30) days following the Committee's receipt of Quarterdeck's notice of
claim, the Escrow Agent shall, within five (5) business days after the
expiration of the prior thirty (30) day notice period, deliver out of escrow
the lesser of: (a) that portion of the Escrow Consideration most nearly equal
in value to the amount of the claim or claims thus to be satisfied, or (b) all
of the Escrow Consideration.  If the Committee notifies such indemnified party
and the Escrow Agent receives such written notice within the foregoing thirty
(30) day period that the Committee objects to such application of the Escrow
Consideration, the Escrow Agent shall hold the Escrow Consideration in escrow
until the rights of the Shareholders and such indemnified party with respect
thereto have been agreed upon between the Committee and such indemnified party
or until such rights are finally determined in accordance with the Escrow
Agreement and the Escrow Agent receives written notice accordingly.  If any
distribution referred to in this Section 6.6 involves less than all of the
Escrow Consideration, it shall be allocated pro rata against the Escrow
Consideration therein based on the Escrow Consideration beneficially owned by
each Shareholder (unless the claim made is based on an inaccuracy or breach of
a representation or warranty contained in Article 2A of this Agreement, in
which case the allocation distribution of the Escrow Shares shall be determined
in accordance with Section 6.2(b)).

                 6.7      PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO CERTAIN
CLAIMS.  Notwithstanding the provisions of this Section 6, Quarterdeck shall
not be entitled to seek recourse against any Shareholder or against the Escrow
Consideration allocable to any Shareholder in satisfaction of a claim for which
Inference has enforceable indemnification obligations to Limbex pursuant to the
License Agreement without first seeking recourse against Inference.

                                   ARTICLE 7

                                  TERMINATION

                 7.1      TERMINATION BY MUTUAL CONSENT.  At any time prior to
the Closing, this Agreement may be terminated by written consent of Quarterdeck
and Limbex, notwithstanding approval of the Merger by the shareholders of
Limbex.  In addition, this Agreement shall automatically terminate if the
Closing does not occur on or before one month from the date hereof.

                 7.2      EFFECT OF TERMINATION.  In the event of termination
as provided above, the obligations of the parties hereunder shall terminate;
provided, that (a) Sections 2.15, 3.5, 4.11, 8.1, 8.3, 8.4, 8.6, 8.8 and 8.9 of
this Agreement and the Confidentiality Agreement shall survive such termination
and continue in full force and effect and (b) nothing herein will relieve any
party from liability for any breach of this Agreement prior to such
termination.

                                       29
<PAGE>
 
                                   ARTICLE 8

                                 MISCELLANEOUS

                 8.1      NOTICES.  Any notice given hereunder shall be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by facsimile) or the third day after mailing by
certified or registered mail, postage prepaid, as follows:

                          (a)     If to Quarterdeck:

                                  Quarterdeck Corporation
                                  13160 Mindanao Way, 3rd Floor
                                  Marina del Rey, CA  90292
                                  Attention:  Law Department
                                  Facsimile:  (310) 309-4217

                          (b)     If to Limbex:

                                  Limbex Corporation
                                  13160 Mindanao Way, 2nd Floor
                                  Marina del Rey, CA  90292
                                  Attention:  Alex Jacobson and Brad Allen
                                  Facsimile:  (310) 309-4282

                          (c)     If to the Shareholders other than Inference:

                                  Limbex Corporation
                                  13160 Mindanao Way, 2nd Floor
                                  Marina del Rey, CA  90292
                                  Attention:  Alex Jacobson and Brad Allen
                                  Facsimile:  (310) 309-4282

                          (d)     If to Inference:

                                  Inference Corporation
                                  100 Rowland Way
                                  Novato, California  94945
                                  Attention:  William D. Griffin
                                  Facsimile:  (415) 899-9080

or to such other address as any party may have furnished in writing to the
other parties in the manner provided above.

                 8.2      ENTIRE AGREEMENT; MODIFICATIONS; WAIVER.  This
Agreement and the exhibits and schedules hereto and the documents referred to
herein and the Confidentiality

                                       30
<PAGE>
 
Agreement between the parties hereto constitute the final, exclusive and
complete understanding of the parties with respect to the subject matter hereof
and supersede any and all prior agreements, understandings and discussions with
respect thereto, including, without limitation, (i) the Amended and Restated
Memorandum of Intent, dated January 30, 1996, (ii) the Amended and Restated
Memorandum of Intent, dated June 12, 1996, by and among Quarterdeck, Limbex and
the Shareholders, (iii) that certain Letter Agreement, dated July 31, 1996, by
and among Quarterdeck, Limbex and certain of the shareholders of Limbex and
(iv) that certain side Agreement, dated July 31, 1996, by and among
Quarterdeck, Limbex and Inference.  No variation or modification of this
Agreement and no waiver of any provision or condition hereof, or granting of
any consent contemplated hereby, shall be valid unless in writing and signed by
the party against whom enforcement of any such variation, modification, waiver
or consent is sought.  The rights and remedies available to Quarterdeck and
Limbex and the Shareholders pursuant to this Agreement and all exhibits
hereunder shall be cumulative.

                 8.3      COUNTERPARTS.  This Agreement may be executed in any
number of counterparts, each of which when so executed shall constitute an
original copy hereof, but all of which together shall constitute one agreement.

                 8.4      PUBLICITY.  Neither Limbex nor its officers or
directors, nor the Shareholders, shall, unless required by law, issue any
statement or communication to the general public or the press regarding the
transactions contemplated hereby without the prior written consent of
Quarterdeck.  Neither Quarterdeck nor its officers or directors shall, unless
required by law, issue any statement or communication to the general public or
the press regarding the proposed transaction which mentions Inference unless
Quarterdeck first provides written notice of such statement or communication to
Inference.  Quarterdeck may then issue such statement or communication if
Inference does not object in writing thereto within 48 hours (or within such
other time period as is reasonably practicable and specified in such notice to
Inference).  If Inference does object within such period, Quarterdeck and
Inference shall in good faith attempt promptly to resolve their differences
regarding such statement or communication before it is issued.

                 8.5      SUCCESSORS AND ASSIGNS.  No party may, without the
prior express written consent of each other party, assign this Agreement in
whole or in part.  This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and its successors and permitted assigns and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person, including, without limitation, any option holder of
Limbex, any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.

                 8.6      GOVERNING LAW.  This Agreement shall be governed by
and construed in accordance with the laws of the State of California as applied
to contracts between California residents made and to be performed entirely
within the State of California.

                                       31
<PAGE>
 
                 8.7      FURTHER ASSURANCES.  At the request of any of the
parties hereto, and without further consideration, the other parties agree to
execute such documents and instruments and to do such further acts as may be
necessary or desirable to effectuate the Merger.

                 8.8      EXPENSES.  Provided that the Merger is consummated,
Quarterdeck shall pay any legal fees incurred by Limbex (but not any
shareholder thereof) in connection with the Merger up to the amount of $100,000
("Reimbursable Counsel Fees").  Neither Quarterdeck nor Limbex shall be liable
for or shall pay any Merger-related legal fees and expenses in excess of the
Reimbursable Counsel Fees incurred prior to the consummation of the Merger.

                 8.9      ATTORNEYS' FEES.  In the event of any suit or other
proceeding to construe or enforce any provision of this Agreement or any other
agreement to be entered into pursuant hereto, or otherwise in connection with
this Agreement, the prevailing party's or parties' reasonable attorneys' fees
and costs (in addition to all other amounts and relief to which such party or
parties may be entitled) shall be paid by the other party or parties.

                 8.10     APPOINTMENT OF ESCROW COMMITTEE.  By approval of this
Agreement (by written consent or at a duly authorized shareholders' meeting)
the shareholders shall appoint Allen and Jacobson as committee members pursuant
to the Escrow Agreement.  Such committee members shall have all of the
authority granted pursuant to the Escrow Agreement.

                 8.11     COVENANT NOT TO COMPETE.  Each of Allen and Jacobson,
severally and not jointly, agree that for a period of three years from the
Closing Date (the "Non-Compete Period"), he shall not, directly or indirectly,
as principal, agent, employee, employer, consultant, stockholder, partner or in
any other individual or representative capacity, engage in any business
directly competitive with the business currently conducted by Limbex in any
county or metropolitan area in which Limbex currently conducts business (the
"Competitive Business"); provided, further, that if the employment of Allen or
Jacobson is terminated by Quarterdeck without Cause or Jacobson or Allen
terminate their employment with Quarterdeck with Good Reason (as defined in
Section 4.9 of this Agreement) during the Non-Compete Period, Allen or
Jacobson, as the case may be, shall not be obligated to refrain from engaging
in the Competitive Business for more than one year from the date of such
termination.  Notwithstanding anything to the contrary contained herein, Allen
and Jacobson may, without violating the provisions of this Section 8.11,
purchase and hold up to 5% of any entity whose shares are publicly traded on
NASDAQ or any U.S. stock exchange, whether or not such entity is engaged in a
Competitive Business.  Any provision of this Section 8.11 which is deemed
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction and
subject to this paragraph be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions of this
paragraph in such jurisdiction or rendering that or any other provisions of
this Agreement invalid or unenforceable in any other jurisdiction.  If any
covenant should be deemed invalid or unenforceable because of its scope,
geographical area or duration, or any combination thereof, such covenant shall
be modified and reformed so that the scope, geographic area and duration of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid and enforceable.  For

                                       32
<PAGE>
 
purposes of this Section 8.11 only, each of the Allen and Jacobson agrees that
the counties and metropolitan areas in which Limbex currently conducts business
are those areas in which any product of Limbex may be purchased or is
accessible through electronic or other means.

                                       33
<PAGE>
 
                 IN WITNESS WHEREOF, each of the parties has executed this
Agreement as of the date first above written.


                            QUARTERDECK CORPORATION

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

                            LIMBEX CORPORATION

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


                            THE SHAREHOLDERS:

                                                                       
                            -------------------------------------------
                            Bradley Allen

                                                                       
                            -------------------------------------------
                            Alexander Jacobson

                                                                       
                            -------------------------------------------
                            Howard Morgan

                                                                       
                            -------------------------------------------
                            Thelma Birks

                                                                       
                            -------------------------------------------
                            Michelle Kraus

                                                                       
                            -------------------------------------------
                            Clay Chisum

                            INFERENCE CORPORATION

                            By:                                        
                                 --------------------------------------


                                       34
<PAGE>
 
                                   EXHIBIT A

MERGER CONSIDERATION TO BE RECEIVED AT CLOSING


<TABLE>
<CAPTION>
                                   SHARES TO BE RECEIVED 
          NAME                           IN MERGER
          ----                           ---------
                           ESCROW      NON-ESCROW         TOTAL
                           ------      ----------         -----
  <S>                      <C>         <C>              <C>

  Inference                  --         77,897(1)       77,897(1)
  Corporation

  Howard Morgan            3,498(2)     31,486(2)       34,984(2)
</TABLE>


1        The shares of Limbex Common Stock owned by Inference shall
         automatically be converted into the right to receive on the Closing
         Date a number of shares of Quarterdeck Common Stock equal to $610,526
         divided by the average closing sales price of Quarterdeck Common Stock
         for the period of five business days ending on the business day two
         business days prior to the Closing Date.

2        The shares of Limbex Common Stock owned by Howard Morgan shall
         automatically be converted into the right to receive (i) 34,984 shares
         of Quarterdeck Common Stock on the Closing Date and (ii) cash in an
         amount equal to the fair market value of 18,838 shares of Quarterdeck
         Common Stock, based upon the average closing sales price of
         Quarterdeck Common Stock for a period of five business days ending on
         the business day two business days prior to the Closing Date, payable
         at the time that Howard Morgan is required by federal tax laws to pay
         income taxes with respect to the shares of Quarterdeck Common Stock
         received in the Merger; provided, however, that in no event shall
         Quarterdeck pay such amount later than January 31, 1997, and offset by
         any and all amounts that Mr. Morgan owes at such time to Quarterdeck.
<PAGE>
 
MERGER CONSIDERATION TO BE RECEIVED AFTER CLOSING

<TABLE>
<CAPTION>
                DATE TO BE      SHARES TO BE RECEIVED         CASH CONSIDERATION TO BE RECEIVED IN            TOTAL
     NAME        RECEIVED             IN MERGER                              MERGER                       CONSIDERATION
     ----       ---------             ---------                              ------                       -------------
                                          NON-                               NON-    
                              ESCROW     ESCROW    TOTAL        ESCROW      ESCROW       TOTAL
                              ------     ------    -----        ------      -------      -----
                                                                                     
 <S>           <C>            <C>        <C>      <C>         <C>           <C>        <C>                <C>
 Inference     First            --         (1)      (1)           --            --          --                 (1)
 Corporation   Anniversary                                                           
                                                                                     
 Howard        Tax Payment      --         --        --       $14,765(2)   $132,880(2) $147,645(2)             (2)
 Morgan        Date                                                                  
                                                                                     
 Brad Allen    SEC            60,296     542,668  602,964         --            --          --            602,964 shares
               Effective                                                             
               Date                                                                  
                                                                                     
 Alex          SEC            57,664     518,976  576,640         --            --          --            576,640 shares
 Jacobson      Effective                                                             
               Date                                                                  
                                                                                     
 Thelma        SEC             1,338      12,050   13,388         --            --          --            13,388 shares
 Birks         Effective                                                             
               Date                                                                  
                                                                                     
 Clay          SEC               268       2,410    2,678         --            --          --             2,678 shares
 Chisum        Effective                                                             
               Date                                                                  
                                                                                     
 Michelle      SEC               134       1,205    1,339         --            --          --             1,339 shares
 Kraus         Effective
               Date
</TABLE>



1        The shares of Limbex Series B Preferred owned by Inference shall
         automatically be converted into the right to receive on the Inference
         Preferred Consideration Date a number of shares of Quarterdeck Common
         Stock equal to $3,599,753 divided by the average closing sales price
         of Quarterdeck Common Stock for the period of five business days
         ending on the business day two business days prior to the Inference
         Preferred Consideration Date.

2        The shares of Limbex Common Stock owned by Howard Morgan shall
         automatically be converted into the right to receive (i) 34,984 shares
         of Quarterdeck Common Stock on the Closing Date and (ii) cash in an
         amount equal to the fair market value of 18,838 shares of Quarterdeck
         Common Stock, based upon the average closing sales price of
         Quarterdeck Common Stock for a period of five business days ending on
         the business day two business days prior to the Closing Date, payable
         at the time that Howard Morgan is required by federal tax laws to pay
         income taxes with respect to the shares of Quarterdeck Common Stock
         received in the Merger; provided, however, that in no event shall
         Quarterdeck pay such amount later than January 31, 1997, and offset by
         any and all amounts that Mr. Morgan owes at such time to Quarterdeck.

                                       2
<PAGE>
 
                                   EXHIBIT B


                            LIMBEX ESCROW AGREEMENT

                 This Agreement is made and entered into as of this 13th day of
August, 1996, by and among American Stock Transfer and Trust Company (the
"Escrow Agent"), Quarterdeck Corporation, a Delaware corporation
("Quarterdeck"), the shareholders of Limbex Corporation ("Limbex") listed on the
execution pages hereto (individually, a "Limbex Shareholder" and, collectively,
the "Limbex Shareholders"), and Bradley Allen and Alexander Jacobson (the
"Committee").

                              W I T N E S S E T H:

                 WHEREAS, Quarterdeck, Limbex and the Limbex Shareholders have
entered into an Agreement and Plan of Reorganization, dated as of August 13,
1996 (collectively, with all amendments, schedules, exhibits and certificates
referred to therein, the "Reorganization Agreement"), which provides for the
acquisition of Limbex by Quarterdeck by way of a merger of a subsidiary of
Quarterdeck with and into Limbex (the "Limbex Merger") in connection with which,
among other things, the issued and outstanding shares of common stock, $.00001
par value per share, of Limbex will be converted into the right to receive (i)
shares of common stock, $.001 par value per share, of Quarterdeck ("Quarterdeck
Common Stock") and/or (ii) cash, on the Closing Date, the SEC Effective Date (as
each such term is defined in the Reorganization Agreement) and December 31, 1996
(the "Issuance Dates") as specified in the Reorganization Agreement
(collectively, the "Merger Consideration"); and

                 WHEREAS, the Reorganization Agreement provides that the number
of shares of Quarterdeck Common Stock and the amount of cash set forth on
Exhibit A hereto to be issued or paid in the Limbex Merger and otherwise
distributable to the shareholders of Limbex pursuant thereto will be deposited
in escrow with the Escrow Agent pursuant to this Agreement.

                 NOW, THEREFORE, in consideration of the mutual premises and
covenants contained in the Reorganization Agreement and herein, the parties
agree as follows:

                                   ARTICLE I

                                    ESCROW

                 1.1      ESCROW.

                          (a)     Subject to Sections 2.1 and 2.2 of this
Agreement, on each of the Issuance Dates, Quarterdeck shall, on behalf of each
of the Limbex Shareholders, deliver to the Escrow Agent, to the extent that each
such Limbex Shareholder receives Merger Consideration, and the Escrow Agent
shall hold in escrow, Quarterdeck Common Stock certificates in the names of each
such Limbex Shareholder representing the number of shares, if any, of
Quarterdeck Common Stock issued to such Limbex Shareholder on such date set
forth on Exhibit A hereto and the cash consideration, if any, paid to such
Limbex Shareholder on such date. The shares of Quarterdeck Common Stock
delivered into escrow are referred to as the "Limbex Escrow Shares;" the cash
consideration delivered into the Cash Escrow Account (as defined below) is
referred to as the "Escrow Cash;" and the Limbex Escrow Shares and the Escrow
Cash are collectively referred to as the "Escrow Consideration."


                          (b)     Concurrently with the delivery of any Limbex
Escrow Shares to the Escrow Agent pursuant hereto, each Limbex Shareholder shall
execute a stock power with respect to such Limbex Shareholder's certificates
evidencing such shares, which stock power shall 

                                       42
<PAGE>
 
be delivered to the Escrow Agent and attached to the certificates evidencing
such shares. All Escrow Cash delivered by Limbex Shareholders to the Escrow
Agent pursuant hereto shall be held in a single separate account (the "Cash
Escrow Account") and shall be invested in accordance with written instructions
from the Committee to the Escrow Agent. The Limbex Escrow Shares and the Escrow
Cash shall be held and distributed by the Escrow Agent in accordance with the
terms and conditions of this Agreement.

                          (c)     Promptly following the issuance thereof,
Quarterdeck shall provide a written notice to the Escrow Agent (with a copy to
the Committee) of the total number of shares of Quarterdeck Common Stock issued
to each Limbex Shareholder, the amount of cash consideration paid to each Limbex
Shareholder and the number of shares of Quarterdeck Common Stock and the amount
of cash consideration to be deposited into escrow by each Limbex Shareholder.

                                   ARTICLE II

                      APPLICATION OF ESCROW CONSIDERATION

                 2.1      DISTRIBUTION OF ESCROW CONSIDERATION.

                          (a)     Within five (5) business days after the date
one year from the Closing of the Limbex Merger, the Escrow Agent shall
distribute to the Limbex Shareholders all of the Escrow Consideration then held
in the escrow pursuant to Article I hereof, less Escrow Consideration having an
aggregate value most nearly equal to the amount of any pending claims asserted
by Quarterdeck under the Reorganization Agreement as is set forth in a written
notice from Quarterdeck to the Escrow Agent prior thereto. The value of such
pending claims shall be determined in good faith by the Board of Directors of
Quarterdeck, after taking into account such factors as the Board of Directors
shall deem appropriate, provided that if the Committee by prompt written notice
to the Escrow Agent does not agree with the Board of Directors' determination of
the amount of any such pending claims, the amount of any such pending claim
shall be finally determined in accordance with Section 2.5 of this Agreement.
The Escrow Consideration shall be distributed to the Limbex Shareholders on a
pro rata basis, based on each Limbex Shareholder's equity interest in Limbex
immediately prior to the Closing of the Limbex Merger, with each Limbex
Shareholder being entitled to receive such Limbex Shareholder's proportionate
share of Escrow Cash and/or Limbex Escrow Shares deposited by such Limbex
Shareholder in escrow.

                          (b)     The Escrow Consideration not so distributed
pursuant to Section 2.1(a) shall be retained in escrow by the Escrow Agent until
all such pending claims are resolved and the Escrow Agent receives written
instructions from Quarterdeck and the Committee to distribute such Escrow
Consideration or the Escrow Agent receives written instructions from an
arbitrator or court to distribute such Escrow Consideration; provided, that upon
the disposition of any such claims prior to the disposition of all such claims,
the Escrow Agent shall, upon receipt of written instructions from Quarterdeck
and the Committee or an arbitrator or court, deliver to the Limbex Shareholders
Escrow Consideration in the amount indicated in such written notice and which,
in the aggregate, is most nearly equal to the excess of the value of the
remaining Escrow Consideration over the amount of the remaining unresolved and
pending aggregate claims as determined above.





                                       

                                       43
<PAGE>
 
                 2.2.     PROCEDURE FOR INDEMNIFICATION OF QUARTERDECK AND THE
SURVIVING CORPORATION.

                          (a)     If Quarterdeck shall have any claim against
the Limbex Shareholders pursuant to Article 6 of the Reorganization Agreement
(but excluding claims resulting from the assertion of liability by third
parties) for which it seeks recourse against the Escrow Consideration, it shall
promptly give written notice thereof to the Escrow Agent and the Committee,
including in such notice a brief description of the facts upon which such claim
is based and the amount thereof. If the Committee objects to the allowance of
any such claims, it shall give written notice to Quarterdeck and the Escrow
Agent within forty-five (45) days following receipt of Quarterdeck's notice of
claim, advising it and the Escrow Agent that it does not consent to the delivery
of any or some of the Escrow Consideration out of escrow for application to such
claims. If no such written notice is timely provided by the Committee to
Quarterdeck and the Escrow Agent and received by the Escrow Agent within
forty-five (45) days following the Committee's receipt of Quarterdeck's notice
of claim, the Escrow Agent shall, within five (5) business days after the
expiration of the prior notice period, deliver out of escrow the lesser of: (a)
that portion of the Escrow Consideration most nearly equal in value to the
amount of the claim or claims thus to be satisfied, or (b) all of the Escrow
Consideration. If the Committee notifies Quarterdeck and the Escrow Agent; and
the Escrow Agent receives written notice within the foregoing forty-five (45)
day period that the Committee objects to such application of the Escrow
Consideration after a claim has been made, the Escrow Agent shall hold the
Escrow Consideration most nearly equal to the amount of the claim or claims then
made in escrow until the rights of the Limbex Shareholders and Quarterdeck with
respect thereto have been agreed upon between the Committee and Quarterdeck in
accordance with this Agreement and the Escrow Agent receives written notice from
Quarterdeck and the Committee accordingly. If any distribution referred to in
this Section 2.2(a) involves less than all of the Escrow Consideration, it shall
be allocated pro rata against the Escrow Consideration therein based on the
Escrow Consideration beneficially owned by each Limbex Shareholder (unless the
claim made is based on an inaccuracy or breach of a representation or warranty
contained in Article 2A of the Reorganization Agreement, in which case the
allocation of the distribution of the Escrow Consideration shall be determined
in accordance with Section 6.2(b) of the Reorganization Agreement).

                          (b)     In the event Quarterdeck is an "indemnified
party" with respect to a third party claim for which it seeks recourse to the
Escrow Consideration and a settlement or judgment is reached with respect to
such claim, Quarterdeck shall promptly give written notice thereof to the
Committee and the Escrow Agent, including in such notice a brief description of
the settlement or judgment and the amount thereof. If the Committee objects to
the allowance of any such claims, it shall give written notice to such
indemnified party and the Escrow Agent within thirty (30) days following receipt
of such notice of claim, advising Quarterdeck and the Escrow Agent that it does
not consent to the delivery of any or some of the Escrow Consideration out of
escrow to Quarterdeck for application to such claims. If no such written notice
is timely provided by the Committee to Quarterdeck and the Escrow Agent and
received by the Escrow Agent within thirty (30) days following the Committee's
receipt of Quarterdeck's notice of claim, the Escrow Agent shall, within five
(5) business days after the expiration of the prior thirty (30) day notice
period, deliver out of escrow the lesser of: (a) that portion of the Escrow
Consideration most nearly equal in value to the amount of the claim or claims
thus to be satisfied, or (b) all of the Escrow Consideration. If the Committee
objects to such application of the Escrow Consideration by notifying Quarterdeck
and the Escrow Agent, and the Escrow Agent receives such written notice within
the foregoing thirty (30) day period, the Escrow Agent shall hold the Escrow
Consideration in escrow until the rights of the Limbex Shareholders and
Quarterdeck with respect thereto have been agreed upon between the Committee and
Quarterdeck or until





                                       

                                       44
<PAGE>
 
such rights are finally determined in accordance with this Escrow Agreement and
the Escrow Agent receives written notice from Quarterdeck and the Committee
accordingly. If any distribution referred to in this Section 2.2(b) involves
less than all of the Escrow Consideration, it shall be allocated pro rata
against the Escrow Consideration therein based on the Escrow Consideration
beneficially owned by each Limbex Shareholder (unless the claim made is based on
an inaccuracy or breach of a representation or warranty contained in Article 2A
of the Reorganization Agreement, in which case the allocation distribution of
the Escrow Consideration shall be determined in accordance with Section 6.2(b)
of the Reorganization Agreement).

                 2.3 OWNERSHIP OF LIMBEX ESCROW SHARES; VOTING RIGHTS. The
Limbex Shareholders shall have all indicia of ownership of the Limbex Escrow
Shares and shall remain the registered owners of such shares while they are held
in escrow, including, without limitation, the right to vote the Limbex Escrow
Shares and receive distributions thereon and the obligations to pay all taxes,
assessments, and charges with respect thereto, but excluding the right to sell,
transfer, pledge, hypothecate or otherwise dispose of any Limbex Escrow Shares;
provided, that any distribution of stock of Quarterdeck on or with respect to
the Limbex Escrow Shares and any other shares or securities into which such
Limbex Escrow Shares may be changed or for which they may be exchanged pursuant
to corporate action of Quarterdeck affecting holders of Quarterdeck Common Stock
generally shall be delivered to the Escrow Agent and upon such delivery and
receipt, held in escrow and shall be subject to the indemnity and escrow
provisions of Article 6 of the Reorganization Agreement. All amounts earned and
received into escrow on the Limbex Escrow Shares (dividends or other
distributions) shall be distributed pro rata to the Limbex Shareholders based
upon their beneficial ownership of Limbex Escrow Shares from time to time upon
the written request of the Committee, and the Escrow Agent shall be reimbursed
by Quarterdeck for the reasonable cost of such distribution. The Escrow Agent
shall have no responsibility or liability for shares or property not delivered
and received by it.

                 2.4 RIGHTS TO AMOUNTS EARNED ON ESCROW CASH. All amounts earned
and received into escrow with respect to the Escrow Cash shall be distributed
pro rata to the Limbex Shareholders based upon their beneficial ownership of the
Escrow Cash within five (5) business days after the date one year from the
Closing of the Limbex Merger, and the Escrow Agent shall be reimbursed by
Quarterdeck for the reasonable cost of such distribution.

                 2.5 ARBITRATION. Any controversy involving a claim by
Quarterdeck pursuant to Article 6 of the Reorganization Agreement or this
Agreement or a claim by any Limbex Shareholder pursuant to Article 6 of the
Reorganization Agreement or this Agreement shall be finally settled by
arbitration in Los Angeles, California, in accordance with the then-current
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Such arbitration shall be conducted by three
arbitrators chosen by mutual agreement of the Committee and Quarterdeck. Failing
such agreement, the arbitration shall be conducted in accordance with the
foregoing rules. Discovery, including without limitation the production of
books, records, documents and other evidence, and the taking of depositions,
shall be freely granted at the request of either party, subject to the
discretion and control of the arbitrators. At the conclusion of any arbitration,
the arbitrators will issue a written opinion of findings of fact and conclusions
of law. Upon receipt of such opinion, either party may file within ten (10) days
thereafter a motion to reconsider, and the arbitrators thereupon will reconsider
the issues raised by such motion and either confirm or change the decision,
which will then be final and conclusive. Depositions shall be conducted in
accordance with the California Code of Civil Procedure. The cost and expenses
(including counsel fees) of any such arbitration shall be borne by the Limbex
Shareholders and Quarterdeck in such proportions as shall be determined by the
arbitrators, or if there is no such





                                       

                                       45
<PAGE>
 
determination, each party shall pay its own costs and expenses (including
counsel fees) of any such arbitration.

                 2.6      MARKET VALUE OF LIMBEX ESCROW SHARES.  For purposes
of this Article II, the market value of Limbex Escrow Shares shall be
determined as provided in Article 6 of the Reorganization Agreement.

                                  ARTICLE III

                         AUTHORITY AND INDEMNIFICATION

                 3.1 AUTHORITY. Upon consummation of the Limbex Merger and in
consideration of the Merger Consideration, each Limbex Shareholder shall be
deemed to have irrevocably appointed the Committee as their attorneys in fact to
contest, settle, compromise or otherwise dispose of any claim made by
Quarterdeck in accordance with this Agreement. No further documentation shall be
required to evidence such appointment, and such power of attorney shall be
coupled with an interest, thereby confirming such appointment as irrevocable.
The Committee shall be empowered to act by unanimous vote with respect to all
matters arising under this Agreement.

                 3.2 INDEMNITY. No Committee member shall be liable to anyone
whatsoever by reason of any error of judgment or for any act done or step taken
or omitted by them in good faith or for any mistake of fact or law for anything
which he or she may do or refrain from doing in connection herewith unless
caused by or arising out of his or her own gross negligence or willful
misconduct. Each Limbex Shareholder shall, jointly and severally, indemnify and
hold the Committee, and each of them, harmless from any and all liability and
expense (including, without limitation, counsel fees) which may arise out of any
action taken or omitted by them as a Committee member in accordance with this
Agreement, as the same may be amended, modified or supplemented, except such
liability and expense as may result from the gross negligence or willful
misconduct of a Committee member.

                 3.3 RELIANCE. The Committee shall be entitled to treat as
genuine any letter, paper, facsimile, telex, or other document furnished or
caused to be furnished to it by any party to this Agreement and believed by it
to be genuine and to have been telexed, telegraphed, faxed, or cabled or signed
and presented by any party to this Agreement.

                                   ARTICLE IV

                                  ESCROW AGENT

                 4.1 DUTIES AND OBLIGATIONS. The duties and obligations of the
Escrow Agent are exclusively set forth in this Agreement, as each may from time
to time be amended. The Escrow Agent may request, rely and shall be protected in
acting or refraining from acting upon any written notice, request, waiver,
consent, receipt or other paper or document from Quarterdeck, Limbex or any
Committee member, not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth of any information
therein contained, that the Escrow Agent in good faith believes to be genuine
and as to which the Escrow Agent shall have no actual notice of invalidity, lack
of authority or other deficiency.

                 The Escrow Agent shall not be liable for any error of judgment,
or for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, for anything which it may do or refrain from doing in
connection therewith, except for any liability arising from its own gross
negligence or willful misconduct.





                                       

                                       46
<PAGE>
 
                 The Escrow Agent shall be entitled to consult with competent
and responsible counsel of its choice with respect to the interpretation of the
provisions hereof, and any other legal matters relating hereto, and shall be
fully protected in taking any action or omitting to take any action in good
faith in accordance with the advice of such counsel. The Escrow Agent shall be
entitled to request written instructions from Quarterdeck or the Committee as
the case may be, and shall have the right to refrain from acting until it has
received such written instructions.

                 No provision in this Agreement or in the Reorganization
Agreement shall require the Escrow Agent to risk or expend its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder; provided that the Escrow Agent will be promptly paid or reimbursed
upon request for any and all expenses, fees, costs, disbursements and/or
advances which may be incurred or made by it in accordance with the provisions
hereof (including reasonable compensation, and any expenses and disbursements of
Escrow Agent's counsel, and all agents not regularly in Escrow Agent's employ).

                 4.2      RISK OF LOSS.  The Escrow Agent acknowledges and
agrees that the Escrow Agent bears the exclusive risk of loss, theft or damage
with respect to the Limbex Escrow Shares in its possession.

                 4.3 ESCROW AGENT'S COMPENSATION. Quarterdeck shall pay to the
Escrow Agent compensation in respect of the Escrow Agent's duties and
obligations under this Agreement. Upon the execution of this Agreement and the
delivery of the Limbex Escrow Shares to the Escrow Agent, the Escrow Agent shall
be entitled to a one-time escrow fee of $1,000; provided that in the event that
the escrow contemplated by this Agreement remains in effect after the one (1)
year anniversary of the Closing of the Limbex Merger, then the Escrow Agent
shall be entitled to received from Quarterdeck such additional escrow fees as
the parties may agree.

                 4.4 RESIGNATION. The Escrow Agent may resign at any time by
giving not less than sixty (60) days written notice thereof to each of
Quarterdeck and the Committee.

                 4.5 SUCCESSOR ESCROW AGENT. Upon receipt of the Escrow Agent's
notice of resignation, Quarterdeck and the Committee may appoint a successor
escrow agent. Upon the acceptance of the appointment as escrow agent hereunder
by a successor escrow agent and the transfer to such successor escrow agent of
the Limbex Escrow Shares, the resignation of the Escrow Agent shall become
effective and the Escrow Agent shall be discharged from any future duties and
obligations under this Agreement.

                 4.6 CONFLICTING DEMANDS. If on or before the close of escrow
the Escrow Agent receives or becomes aware of any conflicting demands or claims
with respect to the Escrow Consideration or the rights of any of the parties
hereto to such Escrow Consideration, the Escrow Agent shall have the right to
discontinue any or all further acts on the Escrow Agent's part until such
conflict is resolved to the Escrow Agent's satisfaction, and the Escrow Agent
shall have the right to commence or defend any action or proceedings for the
determination of such conflict. In the event any of the above-described events
occur, each of Quarterdeck, on the one hand, and the Limbex Shareholders (pro
rata based on the Merger Consideration received by the Limbex Shareholders in
connection with the Limbex Merger), on the other hand, agree to pay one half of
all costs, damages, judgments and expenses, including reasonable attorneys fees,
suffered or incurred by the Escrow Agent in connection with, or arising out of,
such conflicting demands or claims, including, without limitation, a suit in
interpleader brought by the Escrow Agent.

                 4.7      INDEMNITY.  The Limbex Shareholders and Quarterdeck
hereby agree to jointly and severally indemnify the Escrow Agent for, and to
hold it harmless against any loss,





                                       

                                       47
<PAGE>
 
liability or expense arising out of or in connection with this Agreement and
carrying out its duties hereunder, including the costs and expenses of defending
itself against any claim of liability, except in those cases where the Escrow
Agent has been guilty of gross negligence or willful misconduct. Anything in
this Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including, but not limited to, lost profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.

                                   ARTICLE V

                                 MISCELLANEOUS

                 5.1 NOTICES. Unless otherwise provided, all notices or other
communications required or permitted to be given to the parties hereto shall be
in writing and shall be deemed to have been given if personally delivered
(including personal delivery by facsimile, provided that the sender receives
telephonic or electronic confirmation that the facsimile was received by the
recipient), or three (3) days after mailing by certified or registered mail,
return receipt requested, first class postage prepaid, addressed as follows (or
at such other address as the addressed party may have substituted by notice
pursuant to this Section 5.1):

                 (a)      If to Quarterdeck or Acquisition Sub:

                          Quarterdeck Corporation
                          13160 Mindanao Way, 3rd Floor
                          Marina del Rey, CA  90292
                          Attention: Law Department
                          Facsimile:(310) 309-4218

                 (b) If to the Committee, to their respective addresses set
forth below their respective names in Schedule A attached hereto.

                 (c)      If to the Escrow Agent:

                          American Stock Transfer and Trust Company
                          6201 15th Avenue
                          Brooklyn, New York  11219
                          Attention:  _______________________
                          Facsimile:  _______________________

                 5.2 TERMINATION. This Agreement shall terminate upon the mutual
written express agreement of Quarterdeck and the Committee. In any event, this
Agreement shall terminate when all of the Escrow Consideration has been
distributed in accordance with the terms hereof.

                 5.3 INTERPRETATION. The validity, construction, interpretation
and enforcement of this Agreement shall be determined and governed by the laws
of the State of California. The invalidity or unenforceability of any provision
of this Agreement or the invalidity or unenforceability of any provision as
applied to a particular occurrence or circumstance shall not affect the validity
or enforceability of any of the other provisions of this Agreement or the
applicability of such provision, as the case may be. All capitalized terms used
in this Agreement, unless otherwise defined herein, shall have the meanings
ascribed to them in the Reorganization Agreement.





                                       

                                       48
<PAGE>
 
                 5.4      COUNTERPARTS.  This Agreement may be signed in one or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one agreement.

                 5.5 TRANSFER OF INTERESTS. None of the Limbex Shareholders
shall sell, transfer, pledge, hypothecate or otherwise dispose of any Escrow
Consideration, or any interest therein, prior to the distribution of such Escrow
Consideration in accordance with Section 2.1 above.

                 5.6 TAXES. For purposes of federal and state income taxation,
the Escrow Consideration shall be treated as owned by the Limbex Shareholders
and this Agreement shall be interpreted in a manner to effect the Limbex
Shareholders' ownership of the Escrow Consideration for such tax purposes as of
the date such Escrow Consideration is issued or paid by Quarterdeck to the
Limbex Shareholders.





                                       

                                       49
<PAGE>
 
                 IN WITNESS WHEREOF, the parties have signed this Agreement on
the day and year first above written.


                       AMERICAN STOCK TRANSFER AND TRUST
                       COMPANY, as Escrow Agent

                       By:
                          -------------------------------------

                       QUARTERDECK CORPORATION, a Delaware
                       corporation

                       By:
                          -------------------------------------

                       THE LIMBEX SHAREHOLDERS:


                       ----------------------------------------
                       Bradley Allen


                       ----------------------------------------
                       Alexander Jacobson


                       ----------------------------------------
                       Howard Morgan


                       ----------------------------------------
                       Thelma Birks


                       ----------------------------------------
                       Michelle Kraus


                       ----------------------------------------
                       Clay Chisum





                                       

                                       50
<PAGE>
 
                        THE COMMITTEE



                        ----------------------------------------
                        Bradley Allen


                        ----------------------------------------
                        Alexander Jacobson


                        Address:
                        c/o Limbex Corporation
                        13160 Mindanao Way, 2nd Floor
                        Marina del Rey, CA  90292





                                       

                                       51
<PAGE>
 
                                   EXHIBIT A

MERGER CONSIDERATION TO BE RECEIVED AT CLOSING



                                   SHARES TO BE RECEIVED
          NAME                           IN MERGER
          ----                           ---------
                           ESCROW      NON-ESCROW         TOTAL
                           ------      ----------         -----
  Inference                  --         77,897(1)       77,897(1)
  Corporation

  Howard Morgan            3,498(2)     31,486(2)       34,984(2)


 1       The shares of Limbex Common Stock owned by Inference shall
         automatically be converted into the right to receive on the Closing
         Date a number of shares of Quarterdeck Common Stock equal to $610,526
         divided by the average closing sales price of Quarterdeck Common Stock
         for the period of five business days ending on the business day two
         business days prior to the Closing Date.

 2       The shares of Limbex Common Stock owned by Howard Morgan shall
         automatically be converted into the right to receive (i) 34,984 shares
         of Quarterdeck Common Stock on the Closing Date and (ii) cash in an
         amount equal to the fair market value of 18,838 shares of Quarterdeck
         Common Stock, based upon the average closing sales price of
         Quarterdeck Common Stock for a period of five business days ending on
         the business day two business days prior to the Closing Date, payable
         at the time that Howard Morgan is required by federal tax laws to pay
         income taxes with respect to the shares of Quarterdeck Common Stock
         received in the Merger; provided, however, that in no event shall
         Quarterdeck pay such amount later than January 31, 1997, and offset by
         any and all amounts that Mr. Morgan owes at such time to Quarterdeck.

                                       52
<PAGE>
 
MERGER CONSIDERATION TO BE RECEIVED AFTER CLOSING

<TABLE>
<CAPTION>

                DATE TO BE      SHARES TO BE RECEIVED       CASH CONSIDERATION TO BE RECEIVED IN        TOTAL
     NAME       RECEIVED             IN MERGER                            MERGER                    CONSIDERATION
     ----       ---------            ---------                            ------                    -------------
                                          NON-
                              ESCROW     ESCROW    TOTAL      ESCROW    NON-ESCROW     TOTAL
                              ------     ------    -----      ------    ----------     -----

 <S>           <C>            <C>        <C>      <C>       <C>         <C>         <C>             <C>
 Inference     First            --         (1)      (1)         --          --           --              (1)
 Corporation   Anniversary

 Howard        Tax Payment      --         --        --     $14,765(2) $132,880(2)  $147,645(2)          (2)
 Morgan        Date

 Brad Allen    SEC            60,296     542,668  602,964       --          --           --         602,964 shares
               Effective
               Date

 Alex          SEC            57,664     518,976  576,640       --          --           --         576,640 shares
 Jacobson      Effective
               Date

 Thelma        SEC             1,338     12,050    13,388       --          --           --          13,388 shares
 Birks         Effective
               Date

 Clay          SEC              268       2,410    2,678        --          --           --           2,678 shares
 Chisum        Effective
               Date

 Michelle      SEC              134       1,205    1,339        --          --           --           1,339 shares
 Kraus         Effective
               Date
</TABLE>



 1       The shares of Limbex Series B Preferred owned by Inference shall
         automatically be converted into the right to receive on the Inference
         Preferred Consideration Date a number of shares of Quarterdeck Common
         Stock equal to $3,599,753 divided by the average closing sales price
         of Quarterdeck Common Stock for the period of five business days
         ending on the business day two business days prior to the Inference
         Preferred Consideration Date.

 2       The shares of Limbex Common Stock owned by Howard Morgan shall
         automatically be converted into the right to receive (i) 34,984 shares
         of Quarterdeck Common Stock on the Closing Date and (ii) cash in an
         amount equal to the fair market value of 18,838 shares of Quarterdeck
         Common Stock, based upon the average closing sales price of
         Quarterdeck Common Stock for a period of five business days ending on
         the business day two business days prior to the Closing Date, payable
         at the time that Howard Morgan is required by federal tax laws to pay
         income taxes with respect to the shares of Quarterdeck Common Stock
         received in the Merger; provided, however, that in no event shall
         Quarterdeck pay such amount later than January 31, 1997, and offset by
         any and all amounts that Mr. Morgan owes at such time to Quarterdeck.




                                       

                                       53
<PAGE>
 
                                   EXHIBIT C

                        REGISTRATION RIGHTS AGREEMENT


                 THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of August 13, 1996, by and among Quarterdeck Corporation, a
Delaware corporation (the "Company"), and the holders of capital stock of Limbex
Corporation, a California corporation ("Limbex"), set forth on the signature
pages hereto (the "Holders").

                 WHEREAS, each Holder is or will become the owner of Shares (as
defined below) in connection with the acquisition of Limbex by Quarterdeck by
way of the merger of a subsidiary of Quarterdeck with and into Limbex (the
"Merger"), pursuant to the terms of the Agreement and Plan of Reorganization,
dated as of August 13, 1996 (the "Acquisition Agreement"), by and among the
Company, Limbex, and certain other parties; and

                 WHEREAS, pursuant to the terms of the Acquisition Agreement,
the Company has agreed to grant to the Holders the registration rights provided
for below.

                 NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements set forth in the Acquisition
Agreement and hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, agree as follows:

                 1.       Certain Definitions.

                 As used in this Agreement, the following capitalized defined
terms shall have the following meanings:

                 "Closing" shall have the meaning specified in the Acquisition
Agreement.

                 "Closing Date" shall have the meaning specified in the
Acquisition Agreement.

                 "Inference Preferred Consideration Date" shall have the meaning
specified in the Acquisition Agreement.

                 "Limbex Common Stock" shall mean the common stock, $.00001 par
value per share, of Limbex.

                 "Person" shall mean an individual or a corporation,
partnership, limited liability company, association, trust, or any other entity
or organization, including a government or political subdivision or an agency or
instrumentality thereof.

                 "Prospectus" shall mean any prospectus included in a
Registration Statement including any resale prospectus and any preliminary
prospectus, and any amendment or supplement thereto, and in each case including
all material incorporated by reference therein.

                 "Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement, including, without
limitation: (i) all 

                                       54
<PAGE>
 
applicable registration and filing fees imposed by the SEC and such securities
exchange or exchanges on which securities of the same class are then listed or
the National Association of Securities Dealers, Inc. ("NASD"), (ii) all fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws (including reasonable fees and disbursements of counsel in connection
with qualification of any of the Shares under any state securities or blue sky
laws and the preparation of a blue sky memorandum) and compliance with the rules
of the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, printing and distributing the Registration Statement, any Prospectus,
certificates and other documents relating to the performance of and compliance
with this Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Shares on any securities exchange or exchanges
pursuant to Section 3(j) hereof, and (v) the fees and disbursements of counsel
for the Company and of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance. Registration Expenses shall
specifically exclude underwriting discounts and commissions, the fees and
disbursements of counsel representing a Holder and transfer taxes, if any,
relating to the sale or disposition of Shares by a Holder, all of which shall be
borne by such Holder in all cases.

                 "Registration Statement" shall mean the registration statements
(or amendments to registration statements) filed by the Company pursuant to
Section 2(a) of this Agreement.

                 "SEC" shall mean the Securities and Exchange Commission or any
successor entity.

                 "SEC Effective Date" shall have the meaning specified in the
Acquisition Agreement.

                 "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.

                 "Shares" shall mean shares of common stock, par value $.001 per
share, ("Common Shares") of the Company, issued or issuable to the Holders as
consideration in the Merger, adjusted for any reclassification,
recapitalization, split, reverse split, stock dividend or combination.

                 2.       Registration under the Securities Act.

                          (a)     Registration.

                                   (i)     Inference Closing Shares and SEC
Effective Date Shares. The Company shall file a registration statement on Form
S-3 or an amendment to an existing registration statement on Form S-3 within
three business days following the Closing, relating to the sale by (A) Inference
Corporation, a Delaware corporation ("Inference"), of Shares received by it in
the Merger on the Closing Date with respect to shares of Limbex Common Stock
owned by it, and (B) the Holders of Shares to be received on the SEC Effective
Date, and shall use its best efforts to cause such registration statement or
amendment to be declared effective by the




                                       

                                       55
<PAGE>
 
SEC on or before September 15, 1996 or as soon as practicable thereafter. The
Company agrees to use its best efforts to keep the registration statement filed
hereunder continuously effective (and to include a Prospectus at all times
meeting the requirements of the Securities Act) for a period of two years (or
one year if the SEC changes the holding period required under Rule 144 under the
Securities Act from two years to one year) from the SEC Effective Date.

                                  (ii)     Inference Preferred Consideration
Shares. The Company shall file a registration statement on Form S- 3 or an
amendment to an existing registration statement on Form S-3 on or before May 31,
1997 relating to the sale by Inference of the Shares reasonably expected to be
issued to Inference on the Inference Preferred Consideration Date, and shall use
its best efforts to cause such registration statement or amendment to be
declared effective by the SEC on the Inference Preferred Consideration Date or
as soon thereafter as practicable. The Company agrees to use its best efforts to
keep the registration statement (or amendment) filed hereunder continuously
effective (and to include a Prospectus at all times meeting the requirements of
the Securities Act) for a period of two years (or one year if the SEC changes
the holding period required under Rule 144 under the Securities Act from two
years to one year) from the Inference Preferred Consideration Date.

                          (b)     Expenses.  The Company shall pay all
Registration Expenses in connection with a registration pursuant to this
Agreement.

                          (c)     Plan of Distribution.  Subject to compliance
by Quarterdeck's employees with Quarterdeck's policies relating to trading in
Quarterdeck's Common Stock by employees and with applicable federal and state
securities law and regulations, any registration statement filed pursuant to
this Agreement shall include disclosure under the caption "Plan of Distribution"
or other appropriate caption that contemplates distribution of the Shares by the
selling stockholders and their permitted assignees, including hedging
transactions and/or short sales, option transactions and loans to secure such
transactions.

                 3.       Registration Procedures.

                 In connection with the obligations of the Company under Section
2 hereof, the Company shall:

                          (a)     prepare and file with the SEC, within the
time period set forth in Section 2 hereof, and use its best efforts to have
declared effective by the SEC, the Registration Statements, which shall (i) be
available for public resale of the Shares by the selling Holders, and (ii)
comply as to form in all material respects with the requirements of the
applicable form and include all company-related information and financial
statements required by the SEC to be filed therewith;

                          (b)     (i) prepare and file with the SEC such
amendments to the Registration Statements as may be necessary to keep it
effective for the applicable period; (ii) cause any Prospectus to be amended or
supplemented as required and to be filed as required by Rule 424 or any similar
rule that may be adopted under the Securities Act; (iii) respond as promptly as
practicable to any comments received from the SEC with respect





                                       

                                       56
<PAGE>
 
to the Registration Statement or any amendment thereto; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling
Holders thereof;

                          (c)     furnish to each Holder, upon request and
without charge, as many copies of any Prospectus and any amendment or supplement
thereto as is requested in order to facilitate the public sale or other
disposition of the Shares;

                          (d)     use its best efforts to register or qualify
the Shares under all applicable state securities or blue sky laws of such
jurisdictions in the United States and its territories and possessions as any
Holder shall reasonably request in writing and keep such registration or
qualification effective during the period the Registration Statement is required
to be kept effective; provided, however, that in connection therewith, the
Company shall not be required to (i) qualify as a foreign corporation to do
business or to register as a broker or dealer in any such jurisdiction where it
would not otherwise be required to qualify or register but for this Section
3(d), (ii) subject itself to taxation in any such jurisdiction with respect to
such registration or qualification, or (iii) file a general consent to service
of process in any such jurisdiction;

                          (e)     notify each Holder promptly and, if requested
by a Holder, confirm in writing, (i) when the Registration Statement and any
post-effective amendments thereto have become effective, (ii) when any amendment
or supplement to a Prospectus has been filed with the SEC, (iii) of the issuance
by the SEC or any state securities authority of any stop order suspending the
effectiveness of the Registration Statement or any part thereof or the
initiation of any proceedings for that purpose, (iv) if the Company receives any
notification with respect to the suspension of the qualification of the Shares
for offer or sale in any jurisdiction or the initiation of any proceeding for
such purpose, and (v) of the happening of any event during the period the
Registration Statement is effective as a result of which (A) such Registration
Statement contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (B) a Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;

                          (f)     use best efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement by the SEC
or any state securities authority as promptly as possible and to amend and cure
any deficiencies resulting in such suspension;

                          (g)     furnish to each Holder upon request, without
charge, at least one conformed copy of the Registration Statement and any
post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);

                          (h)     cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Shares to be sold
and not bearing any Securities Act legend





                                       

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<PAGE>
 
and enable certificates for such Shares to be issued for such numbers of Shares
and registered in such names as the Holders may reasonably request; and

                          (i)     use its best efforts to cause all Shares to
be listed on any securities exchange or NASD Automatic Quotation System on
which the Common Shares are then listed;

                 4.       Certain Agreements of Holders.

                          (a)     Each Holder agrees to furnish to the Company
in writing such information regarding the Holder and such Holder's proposed
distribution of Shares as the Company may from time to time reasonably request
in connection with the preparation of the Registration Statement, or
registration or qualification of the Shares under state securities or blue sky
laws and, furnish to the Company in writing such information regarding all sales
or other dispositions of Shares made by the Holder as the Company may from time
to time reasonably request.

                          (b)     Each Holder agrees, if requested by the
Company in the case of a Company initiated non-underwritten offering or if
requested by the managing underwriter or underwriters in a Company initiated
underwritten offering, not to effect any public sale or distribution of any
Shares, including a sale pursuant to Rule 144 under the Securities Act (except
as part of such Company initiated registration), during the ten day period prior
to, and during the ninety day period beginning on, the date of effectiveness of
each Company initiated offering made pursuant to its registration statement, to
the extent timely notified in writing by the Company or the managing
underwriters.

                 5.       Indemnification, Contribution.

                          (a)     Indemnification by the Company.  The Company
agrees to indemnify and hold harmless each Holder and its officers, directors,
partners, agents, brokers and underwriters and each Person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act, as follows
with respect to any Registration Statement covering the resale by such Holder of
any Shares:

                                   (i)     against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to which such Holder,
officer, director, partner, agent, broker, underwriter or controlling Person may
become subject under the Securities Act or otherwise (A) that arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or (B)
that arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;





                                       

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<PAGE>
 
                                  (ii)     against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever, based upon any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such settlement is
effected with the written consent of the Company; and

                                 (iii)     subject to the limitations set forth
in Section 5(c), against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, investigation or
proceeding by any governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever, based upon any such untrue
statement or alleged untrue statement, omission or alleged omission that relates
to the sale by a Holder of Shares under the Registration Statement, to the
extent that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section 5(a)
shall not apply to any Holder with respect to any loss, liability, claim, damage
or expense that arises out of or is based upon (1) any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by such
Holder expressly for use in the Registration Statement or any amendment thereto
or a Prospectus or any amendment or supplement thereto or (2) trades made by
such Holder in violation of Section 6 below.

                          (b)     Indemnification by Holders.  Each Holder
severally, in proportion of the number of Shares to be sold by such Holder
pursuant to such Registration Statement, agrees to indemnify and hold harmless
the Company and the other selling holders, and each of their respective
directors, officers and partners (including each director of the Company and
each officer of the Company who signed the Registration Statement), and each
Person, if any, who controls the Company or any other selling holder within the
meaning of Section 15 of the Securities Act, to the same extent as the indemnity
contained in Section 5(a) hereof, but only insofar as such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such selling Holder expressly for use
therein; provided, that, with respect to the Holders' indemnification
obligations set forth in this Section 5(b) with respect to Section 5(a)(ii)
above, such settlement is effected with the written consent of the Holders
against which indemnification is sought.

                          (c)     Conduct of Indemnification Proceedings.  Each
indemnified party shall give reasonably prompt notice to each indemnifying party
of any action or proceeding commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party (i)
shall not relieve it from any liability which it may have under the indemnity
agreement provided in Section 5(a) or (b) above, unless and to the extent it did
not otherwise learn of such action and the lack of notice by the indemnified
party materially prejudices the indemnifying party or results in the forfeiture
by the indemnifying party of





                                       

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<PAGE>
 
substantial rights and defenses and (ii) shall not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided under Section 5(a) or (b) above. After
receipt of such notice, the indemnifying party shall be entitled to participate
in and, at its option, jointly with any other indemnifying party so notified, to
assume the defense of such action or proceeding at such indemnifying party's own
expense with counsel chosen by such indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
however, that, if the defendants in any such action or proceeding include both
the indemnified party and the indemnifying party and the indemnified party
reasonably determines, upon advice of counsel, that a conflict of interest
exists or that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, then the indemnified party shall be entitled to counsel
(which shall be limited to a single law firm) the reasonable fees and expenses
of which shall be paid by the indemnifying party. If the indemnifying party does
not assume the defense of any such action or proceeding, after having received
the notice referred to in the first sentence of this paragraph, the indemnifying
party will pay the reasonable fees and expenses of counsel (which shall be
limited to a single law firm) for the indemnified party. In such event, however,
the indemnifying party will not be liable for any settlement effected without
the written consent of such indemnifying party. If the indemnifying party
assumes the defense of any such action or proceeding in accordance with this
paragraph, such indemnifying party shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action or proceeding except as set forth in the proviso in the second sentence
of this Section 5(c).

                          (d)     Contribution.  In order to provide for just
and equitable contribution in circumstances in which the indemnity agreement
provided for in this Section 5 is for any reason held to be unenforceable
although applicable in accordance with its terms, the indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the indemnified
party, in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, access to information
and opportunity to correct or prevent such action.

                 The parties hereto agree that it would not be just or equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

                 Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution





                                      

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<PAGE>
 
from any Person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 5(d), each Person, if any, who controls a Holder within
the meaning of Section 15 of the Securities Act and directors, officers and
partners of a Holder shall have the same rights to contribution as such Holder,
and each director of the Company, each officer of the Company who signed the
Registration Statement and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.

                          (e)     Notwithstanding any term or condition to the
contrary, the liability of any Holder pursuant to this Section 5 shall be
limited to the gross proceeds received by such Holder as a result of the sale
giving rise to the liability.

                          (f)     The obligations of the Company and the
Holders under this Section 5 shall survive the completion of any offering of the
Shares pursuant to a Registration Statement.

                 6.       Suspension of Registration Requirement.

                          (a)     Each Holder agrees that he, she or it will
not effect any sales of Shares pursuant to a Registration Statement after such
Holder has received notice from the Company to suspend sales as a result of the
occurrence or existence of any Suspension Event (as defined in Section 6(b)
below) until the Company provides notice to such Holder that all Suspension
Events have ceased to exist. In addition, each Holder agrees that he, she or it
will not effect any sales of Shares pursuant to the Registration Statement after
such Holder has received notice from the Company to suspend sales because (i)
the Registration Statement, any Prospectus or any supplement thereto contains an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (ii) the Company has filed a
post-effective amendment to the Registration Statement that has not been
declared effective, until the Company notifies such Holder that the misstatement
or omission has been corrected or the post-effective amendment has been declared
effective, as the case may be.

                          (b)     Notwithstanding anything to the contrary set
forth in this Agreement, the Company's obligation to file a Registration
Statement and make any filings with any state securities authority, to use its
best efforts to cause a Registration Statement or any state securities filings
to become effective, or to amend or supplement a Registration Statement or any
state securities filings shall be temporarily suspended in the event of and
during a Suspension Event. A "Suspension Event" shall exist at such times (i)
that the Company is not eligible to use Form S-3 for the registration
contemplated by Section 2(a) hereof or (ii) as circumstances exist that the
Company determines make it impractical or inadvisable for the Company to file,
amend or supplement a Registration Statement or such filings or to cause a
Registration Statement or such filings to become effective (such circumstances
to include, without limitation, (A) the Company conducting an underwritten
primary offering and being advised by the underwriters that sale of Shares under
the Registration Statement would have a material adverse effect on the Company's
offering or





                                       

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<PAGE>
 
(B) pending negotiations relating to, or consummation of, a transaction or the
occurrence of some other event (x) where any of the foregoing would require
disclosure under applicable securities laws of material information in a
Registration Statement (or any other document incorporated into a Registration
Statement by reference) or such state securities filings and (y) as to which the
Company has a bona fide business purpose for preserving confidentiality or which
renders the Company unable to comply with SEC requirements). Suspension of the
Company's obligations pursuant to this Section 6(b) shall continue only for so
long as a Suspension Event or its effect is continuing; provided, however, that
in no event shall any Suspension Event pursuant to clause (ii) of the preceding
sentence exceed more than ninety (90) days in any one hundred eighty (180) day
period. The Company shall notify each Holder promptly after any Suspension Event
occurs or ceases to exist.

                 7.       Miscellaneous.

                          (a)     Amendments and Waivers.  The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified, supplemented or waived, nor may consent to departures therefrom be
given, without the written consent of the Company and the Holders of more than
50% of the outstanding Shares owned beneficially by Holders at the date of any
such amendment, modification, supplement or waiver.

                          (b)     Notices.  All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery, (i) if to a Holder, at such Holder's registered
address appearing on the share register of the Company or (ii) if to the
Company, at 13160 Mindanao Way, 3rd Floor, Marina del Rey, California,
Attention: Law Department.

                 All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
(5) business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; or
at the time delivered if delivered by an air courier guaranteeing overnight
delivery.

                          (c)     Successors and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Company. This Agreement and the registration rights granted hereunder may not be
assigned by a Holder without the consent of the Company and such assignee
agreeing to be bound by the provisions of this Agreement.

                          (d)     Counterparts.  This Agreement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

                          (e)     Headings.  The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.





                                       

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<PAGE>
 
                          (f)     Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of California
without giving effect to the conflicts of law provisions thereof.

                          (g)     Entire Agreement.  This Agreement is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

                          (h)     Attorneys' Fees.  In the event of any suit or
other proceeding to construe or enforce any provision of this Agreement, or
otherwise in connection with this Agreement, the prevailing party's or parties'
reasonable attorneys' fees and costs (in addition to all other amounts and
relief to which such party or parties may be entitled) shall be paid by the
other party or parties.





                                       

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<PAGE>
 
                 IN WITNESS WHEREOF, the parties have signed this Agreement on
the day and year first above written.


                        QUARTERDECK CORPORATION


                        By:
                           -------------------------------------

                        THE SHAREHOLDERS:


                        ----------------------------------------
                                      Bradley Allen


                        ----------------------------------------
                                   Alexander Jacobson


                        ----------------------------------------
                                      Howard Morgan


                        ----------------------------------------
                                      Thelma Birks


                        ----------------------------------------
                                     Michelle Kraus


                        ----------------------------------------
                                       Clay Chisum



                        INFERENCE CORPORATION

                        By:
                           -------------------------------------

                                       64