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                                                                     EXHIBIT 2.1

                            ASSET PURCHASE AGREEMENT

        This ASSET PURCHASE AGREEMENT (the "Agreement"), dated June 30, 1998
(the "Effective Date"), is made by and between INTERLINQ Software Corporation, a
Washington corporation ("Purchaser"), Logical Software Solutions Corporation, a
Maryland corporation ("Seller") and Mary Collier, Keith Bluford and Michael
Bennett, the principals of Seller (the "Principals").

        Purchaser, Seller and the Principals hereby agree as follows:

SECTION 1. PURCHASE AND SALE OF ASSETS

        1.1 PURCHASE AND SALE OF ASSETS

        Subject to the terms and conditions of this Agreement, on the Closing
Date (as defined in Section 8.1 below) Seller hereby agrees to sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser hereby agrees to
purchase, acquire and accept from Seller, all of Seller's right, title and
interest in and to all of the assets and rights of every type and description of
Seller, including, without limitation, all of the assets and rights used in or
relating to the business of Seller, whether tangible or intangible, real,
personal or mixed, wherever located and whether or not reflected on the books
and records of Seller. Except as disclosed on Schedule 1.1, such assets shall be
free and clear of all liens, mortgages, pledges, deeds of trust, security
interests, charges, encumbrances, and other adverse claims or interests of any
kind ("Encumbrances"). The assets being purchased by Purchaser pursuant to this
Agreement are collectively referred to herein as the "Acquired Assets." The
Acquired Assets include, without limitation, all of Seller's right, title and
interest in, to and under the following (but excluding the Excluded Assets, as
defined in Section 1.2 below):

               1.1.1 EQUIPMENT AND OTHER PERSONAL PROPERTY

        All equipment, machinery, goods, computer hardware, office furniture,
fixtures, office materials and supplies, tooling, spare parts, leasehold
improvements, motor vehicles and other tangible personal property, including,
without limitation, the equipment described in Schedule 1.1.1, and all rights to
the warranties received from the manufacturers and distributors of all such
equipment and personal property and any related claims, credits, rights of
recovery and setoffs with respect to such equipment and personal property.

               1.1.2 EQUIPMENT AND OTHER PERSONAL PROPERTY LEASES

        All leases and rental agreements in respect of equipment or other
tangible personal property, including without limitation, those leases and
agreements described in Schedule 1.1.2.


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               1.1.3 INVENTORY

        All inventories, wherever located, including raw materials, work in
process, packaging, finished inventory and shop and production supplies,
including, without limitation, the inventory described in Schedule 1.1.3.

               1.1.4 INTELLECTUAL PROPERTIES

        All products, computer programs, source code (i.e., the human readable
and not machine executable form of any software, which, when compiled, operates
as the machine readable form of such software) (the "Source Code"), object code,
graphics, devices, techniques, know-how, algorithms, methods, technology,
processes, procedures, packaging, trade dress, trade secrets, formulae,
drawings, designs, improvements, discoveries, concepts and inventions, whether
or not patentable or copyrightable and whether or not reduced to practice, all
designs, logos, themes, concepts that are now used, have been used from 1992 to
the date hereof or are currently in development by Seller and all documentary
evidence thereof, including, without limitation, the intellectual properties
listed in Schedule 1.1.4 (collectively, the "Seller Intellectual Properties").

               1.1.5 INTELLECTUAL PROPERTY RIGHTS

        All intellectual property and other proprietary rights of Seller in the
Seller Intellectual Properties, and all licenses, sublicenses or like agreements
providing Seller any right or concession to use any of the Seller Intellectual
Properties, including all trade names, trademarks, service marks, copyrights and
their registrations and applications and all goodwill associated therewith, all
domestic and foreign letters patent, patent applications, if any, whether
arising under the laws of the United States or any other state, country or
jurisdiction, including all rights or causes of action for infringement or
misappropriation of any of the foregoing, including, without limitation, the
intellectual property and other proprietary rights of Seller described in
Schedule 1.1.5 (collectively, the "Seller Intellectual Property Rights").

               1.1.6 LICENSES

        All licenses, permits, approvals and authorizations held by Seller and
required for the conduct of Seller's business, including, without limitation,
the licenses described in Schedule 1.1.6, other than those licenses which, by
their nature, are not transferable.

               1.1.7 CONTRACT RIGHTS AND OTHER INTANGIBLE ASSETS

        All contracts and agreements, purchase orders, sales orders, sale and
distribution agreements, supply and processing agreements, intangible assets and
goodwill, including, without limitation, the contracts and agreements described
in Schedule 1.1.7, and excluding the Excluded Contracts (as defined below).


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               1.1.8 CLAIMS

        All rights, claims, demands, actions, causes of action and suits of
Seller, whether mature, contingent or otherwise, against third parties relating
to the Acquired Assets, whether in tort, contract or otherwise, including,
without limitation, causes of action, unliquidated rights or claims under or
pursuant to all warranties, representations and guaranties made by
manufacturers, suppliers or vendors and all noncompetition, nondisclosure and
similar agreements with current or former employees of Seller.

               1.1.9 CUSTOMER RELATIONSHIPS AND OTHER DATA

        All customer goodwill and all files containing information and knowledge
about Seller's existing and prior customers and all Seller's mailing lists,
customer lists, supplier lists, vendor data and advertising and promotional
material.

               1.1.10 FILES AND RECORDS

        All business files and records, including schematics, technical
information and engineering data, books of account, employment records and
personnel files, and purchase and sale records and correspondence, including the
files referred to in Section 1.1.9.

               1.1.11 INSURANCE PROCEEDS

        All insurance proceeds paid or payable to Seller in respect of any
change to or destruction or loss of any of the Acquired Assets, including any
assets of Seller that, as far as could reasonably be foreseen, would have been
included in the Acquired Assets but for such change, destruction or loss.

               1.1.12 RECEIVABLES

        All accounts and accounts receivable, including, without limitation, the
accounts receivable described in Schedule 1.1.12.

        1.2 EXCLUDED ASSETS

        Seller will not transfer to Purchaser and Purchaser will not acquire the
following assets (the "Excluded Assets"), which are specifically excluded from
the Acquired Assets and which will remain Seller's property:

               (a) the assets identified in Schedule 1.2(a);

               (b) the contracts and agreements identified in Schedule 1.2(b)
(the "Excluded Contracts");

               (c) Seller's corporate charter, qualifications to conduct
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, 


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taxpayer and other identification numbers, seals, minute books, stock plans,
stock transfer books, blank stock certificates, stockholders agreements,
business licenses which, by their nature, are not transferable and other
documents relating to the organization, maintenance, and existence of the
Company as a corporation;

               (d) Seller's cash, bank deposits or similar cash and cash
equivalents items existing as of the close of business on the Closing Date and
all bank and other accounts associated therewith; and

               (e) all prepaid deposits, rents and expenses all of which will be
accounted for in a Settlement Statement to be agreed upon by the parties at
Closing.

        1.3 ASSUMED LIABILITIES

        Purchaser will assume from Seller the liabilities and obligations of
Seller attributable to the period after the Closing Date under the contracts and
agreements described in Schedule 1.1.7 and those additional assumed liabilities
as are described in Schedule 1.3 (the "Assumed Liabilities").

        1.4 EXCLUDED LIABILITIES

        Purchaser will not assume any liabilities other than the Assumed
Liabilities. Without limiting the generality of the foregoing, Purchaser will
not assume any of the following obligations or liabilities, which shall remain
obligations and liabilities of Seller (all obligations or liabilities not
assumed by Purchaser herein are called the "Excluded Liabilities"):

               1.4.1 TAXES

        Except as otherwise provided in this Agreement, any liabilities for
Taxes (as defined in Section 3.9 below) either accruing or relating to the
periods ending on or prior to the Closing Date.

               1.4.2 LITIGATION

        Any claim, judgment, penalty, settlement agreement or other obligation
to pay in respect of any claim that is pending or, to the knowledge of Seller's
officers, threatened on or prior to the Closing Date, including, but not limited
to, those listed in Schedule 3.8.

               1.4.3 CLAIMS

        All claims, liabilities or other obligations that relate to injuries,
actions, omissions, conditions or events that occurred or existed on or prior to
the Closing Date, whether based on any act or omission of Seller or a Principal.


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               1.4.4 WARRANTIES

        Seller's liabilities and obligations pursuant to warranties (express or
implied) to customers for products manufactured or services performed on or
prior to the Closing Date, excluding liabilities and obligations relating to
performance under product maintenance agreements with Seller.

               1.4.5 EMPLOYEE EXPENSES

        Except as set forth in Schedule 1.3, all liabilities and obligations in
any way relating to or in respect of the Employee Benefit Plan (as defined in
Section 3.16 below), and all liabilities and obligations with respect to accrued
payroll, bonuses, workers compensation liability, year-end profit sharing, state
disability tax, hourly and salary profit sharing, fringe benefits and other
employee benefits with respect to or that relate to periods of employment on or
prior to the Closing Date.

               1.4.6 CLAIMS AND ADJUSTMENTS

        All liabilities and obligations relating to or in respect of (a) return
of merchandise sold on or prior to the Closing Date or (b) offset payments with
respect to sales after the Closing Date against claims on merchandise sold on or
prior to the Closing Date, in each case by reason of alleged overshipments,
defective merchandise, missed delivery dates, incorrect quantities or otherwise,
or with respect to merchandise in the hands of customers under an understanding
that such merchandise would be returnable.

               1.4.7 ACCRUED LIABILITIES AND PAYABLES

        All liabilities accrued on or before the Closing Date, including,
without limitation, property taxes, sales and use taxes, utilities, freight
expense, inventory gain/loss and all other accrued liabilities, and any trade
payable or account payable (whether or not the same has become due and payable),
accrued expense, loan, note, advance, credit, liability or account allocation or
other form of indebtedness of any kind or nature on or prior to the Closing
Date.

               1.4.8 LIABILITIES RELATING TO EXCLUDED ASSETS

        All liabilities and obligations in respect of any Excluded Asset.

        1.5 ASSIGNMENT OF CONTRACTS AND RIGHTS

        Notwithstanding anything in this Agreement to the contrary, this
Agreement will not constitute an agreement to assign any claim, contract,
license or other agreement or any claim, right or benefit arising thereunder or
resulting therefrom if the agreement to assign or attempt to assign, without the
consent of a third party, would constitute a breach thereof or in any way
adversely affect the rights of Purchaser thereunder. Until such consent is
obtained, or if an attempted assignment thereof would be ineffective or would
adversely affect the rights of 


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Seller or Purchaser thereunder so that Purchaser would not in fact receive all
such rights, Purchaser and Seller will cooperate with each other in any
arrangement designed to provide for Purchaser the benefits of any such claim,
contract, license or other agreement. Any transfer or assignment to Purchaser by
Seller of any contract or agreement that requires the consent or approval of any
third party will, without reducing or adversely affecting the obligations of
Seller to transfer or assign such contract or agreement set forth in this
Section 1 or the representations of Seller set forth in Section 3, be made
subject to such consent or approval being obtained.

SECTION 2. PURCHASE PRICE

        2.1 PURCHASE PRICE

        The purchase price for the Acquired Assets (the "Purchase Price") will
be payable by Purchaser at the closing of the transactions contemplated by this
Agreement (the "Closing") and will be the sum of:

        (a) $3,600,001 (the "Cash Purchase Price"), of which $150,000 shall be
retained by Seller as provided in Section 2.3 (the "Retained Amount"); and

        (b) $1,400,000 payable in shares of unregistered common stock of
Purchaser (the "Share Purchase Price") at a value of $6.00 per share, the
closing price of such shares as reported by the Nasdaq National Market on May 7,
1998, for a total of 233,334 shares (the "Shares"). The Shares shall be placed
in escrow and subject to vesting as provided in Section 2.2.

        2.2 VESTING OF SHARES

        (a) Unless vesting is accelerated pursuant to Section 2.2(b) or Section
2.2(c), one-sixth of the Shares (16.667%, or 38,889 Shares) will vest on each of
the first six anniversaries of the Closing Date. All Shares which are unvested
as of a given time shall be referred to herein as the "Unvested Shares."

        (b) Vesting of the Shares will be accelerated if specified performance
goals to be determined by mutual agreement of the parties (the "Performance
Goals") are met as follows:

               (i) Upon completion by Purchaser of its annual audit for the
fiscal year ending June 30, 1999, one-third of the Shares will vest if the
Performance Goal for the 1999 fiscal year is achieved (i.e. since one-sixth of
the Shares will vest under Section 2.2(a) on the first anniversary of the
Closing Date, which will be prior to the date that Purchaser has completed its
annual audit for fiscal year 1999 and therefore prior to the date on which a
determination is made whether Seller has achieved the Performance Goal for the
1999 fiscal year, the additional amount of Shares that may vest under this
Section 2.2(b)(i) is one-sixth of the total Shares, or 38,889 Shares).


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               (ii) Upon completion by Purchaser of its annual audit for the
fiscal year ending June 30, 2000, one-third of the Shares will vest if the
Performance Goal for the 2000 fiscal year is achieved; and

               (iii) Upon completion by Purchaser of its annual audit for the
fiscal year ending June 30, 2001, one-third of the Shares will vest if the
Performance Goal for the 2001 fiscal year is achieved.

        (c) Notwithstanding the foregoing provisions of this Section 2.2, if the
Performance Goals are not determined by mutual agreement of the parties on or
prior to August 31, 1998, 22.25% or 51,917 Shares will vest on each of the first
four anniversaries of the Closing Date and 11% or 25,666 Shares will vest sixth
months after the fourth anniversary of the Closing Date, unless the parties
mutually agree to extend such time period.

        (d) Notwithstanding the foregoing provisions of this Section 2.2,
vesting of all of the then Unvested Shares will be accelerated upon the
occurrence of a merger, consolidation or other transaction pursuant to which (i)
the holders of the outstanding common stock and other classes or series of
securities that are entitled to vote generally for the election of directors to
the Board of Directors of Purchaser (the "Voting Securities") immediately prior
to the transaction would hold less than a majority of the Voting Securities
outstanding immediately after the transaction; (ii) substantially all of the
assets of Purchaser would be transferred to a third party not affiliated with
Purchaser; or (iii) Purchaser transfers or grants to a third party that is not
an affiliate of the Purchaser the exclusive rights to substantially all of the
Source Code.

        (e) Until such time as the Unvested Shares have vested, Purchaser may
hold the certificate or certificates evidencing the Unvested Shares in escrow at
the offices of a third party escrow agent pursuant to an escrow agreement in
substantially the form set forth as Exhibit 2.2(e) (the "Escrow Agreement").
Subject to Section 9.6, Purchaser shall assist in releasing such Shares from
escrow promptly following vesting pursuant to Section 2.2(a), (b), (c) or (d).

        2.3 RETAINED AMOUNT

        During the period from the date hereof and ending on September 19,1999,
Seller shall retain in its corporate bank account the Retained Amount. Seller
shall cause the Retained Amount to be disbursed to pay for any costs and
expenses (including reasonable attorneys' fees) incurred by Seller or Purchaser
pursuant to any claims brought by Project Software and Development, Inc.
("PSDI") or its affiliates against Seller or Purchaser or to pay reasonable
support costs relating to servicing the Seller's agreement with PSDI during the
period prior to its termination. Upon the earlier of September 19, 1999 or
receipt by Seller of written notification from Purchaser that Purchaser has
received a written waiver of claims from PSDI that is acceptable to Purchaser,
Seller may disburse any remaining Retained Amount without any restrictions.


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        2.4 ALLOCATION OF PURCHASE PRICE

        The Purchase Price shall be allocated among the Acquired Assets
according to a purchase price allocation statement (the "Allocation") to be
agreed upon by the parties within 15 business days after the Closing Date, which
shall be substantially similar to the purchase price allocation as set forth on
Schedule 2.4. The Allocation will be binding on Purchaser and Seller for all
federal, state and local tax purposes. The parties agree to report the
Allocation consistently therewith on Internal Revenue Service Form 8594 and to
attach Form 8594 to their respective federal income tax forms for the 1998 tax
year. The failure to comply with the reporting obligations set forth in this
Section 2.4 will constitute a material breach of this Agreement.

        2.5 TRANSFER TAXES

        All title, recording and transfer fees payable or assessable in
connection with the sale and transfers contemplated by this Agreement, together
with any and all sales taxes payable or assessable in connection with the sale
and transfers contemplated by this Agreement, if any, will be borne by
Purchaser.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE PRINCIPALS

        Seller and the Principals hereby represent and warrant to Purchaser,
which representations and warranties will survive the execution and delivery of
this Agreement to the extent provided herein, as provided in this Section 3.
With respect to representations and warranties relating to the Principals, each
Principal only represents and warrants as to himself or herself.

        3.1 ORGANIZATION AND GOOD STANDING; SUBSIDIARIES

        Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland. Seller has all requisite
corporate power and authority to own, operate and lease its properties and
assets and to carry on its business as now conducted and as proposed to be
conducted. Seller is duly qualified and licensed as a foreign corporation to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified or licensed would not have a material adverse effect on Seller or
on the condition or use of the Acquired Assets. Seller does not have any
subsidiaries or any ownership interest, direct or indirect, in any corporation,
partnership, joint venture or other business entity.

        3.2 POWER AND AUTHORITY; ENFORCEABILITY

        Seller has full power and authority to execute, deliver and perform its
obligations under this Agreement, and to consummate the transactions
contemplated hereby. All actions on the part of Seller and its officers,
directors and shareholders necessary for the authorization, execution, delivery
and performance of this Agreement and the consummation 


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of the transactions contemplated hereby have been or will be taken prior to
Closing. This Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller and is enforceable
against Seller in accordance with its terms.

        Each Principal is legally competent and has all requisite power and
authority to enter into this Agreement and each of the agreements, certificates,
instruments and documents executed or delivered pursuant to the terms of this
Agreement by such Principal.

        3.3 NO APPROVALS OR NOTICE REQUIRED; NO CONFLICTS WITH INSTRUMENTS

        Except as set forth in Schedule 3.3, the execution, delivery and
performance of this Agreement by Seller and the Principals and the consummation
of the transactions contemplated hereby will not (a) constitute a violation
(with or without the giving of notice or lapse of time, or both) of any
provision of any law or any judgment, decree, order, regulation or rule of any
court, agency or other governmental authority applicable to Seller or any
Principal; (b) require any consent, approval or authorization of any person,
corporation, partnership, governmental or regulatory authority or other
organization or entity (a "Person"); (c) result in a default (with or without
the giving of notice or lapse of time, or both) under, an acceleration or
termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel, any agreement, lease, note or other restriction,
Encumbrance, obligation or liability to which Seller is a party or by which it
is bound or to which the Acquired Assets are subject; (d) result in the creation
of any Encumbrance upon the Acquired Assets; (e) conflict with or result in a
breach of any provision of Seller's Articles of Incorporation or Bylaws; or (f)
invalidate or adversely affect any transferable permit, license, authorization
or status used by Seller in the conduct of its business.

        3.4 FINANCIAL STATEMENTS

        Seller has delivered to Purchaser: (a) an unaudited balance sheet (the
"Unaudited December 31, 1997 Balance Sheet") and statements of operations,
shareholders' equity and cash flows for Seller at and for the fiscal year ended
December 31, 1997, and (b) Seller's unaudited balance sheet and statements of
operations, shareholders' equity and cash flows at and for the five-month period
ended May 31, 1998 (collectively, the "Seller Financial Statements"). The Seller
Financial Statements have been prepared by Seller's management in conformity
with generally accepted accounting principles in the United States ("GAAP") and
on a basis consistent with prior accounting periods, and present fairly Seller's
financial position, results of operations and changes in financial position at
the dates and for the periods indicated, subject, in the case of the interim
Seller Financial Statements, to later adjustments that are not in the aggregate
material. Seller has no liabilities or obligations of any nature (absolute,
contingent or otherwise) that are not fully reflected or reserved against in the
unaudited May 31, 1998 balance sheet (the "Unaudited May 31, 1998 Balance
Sheet"), except (a) liabilities, obligations, claims or assessments incurred
since the date of the Unaudited May 31, 1998 Balance Sheet that have been
disclosed to Purchaser in writing, or (b) liabilities, 


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obligations, claims or assessments incurred in the ordinary course of business
and not required under GAAP to be reflected in the Unaudited May 31, 1998
Balance Sheet.

        3.5 ABSENCE OF CHANGES AND EVENTS

        Except as set forth in Schedule 3.5, since December 31, 1997, Seller has
conducted its business in the ordinary course consistent with Seller's past
practice and has not:

               (a) taken any action or entered into or agreed to enter into any
transaction, agreement or commitment (other than this Agreement and matters
related thereto) not in the ordinary course of business;

               (b) created or incurred any new debt or reduced any outstanding
debt except in the ordinary course of business;

               (c) encumbered or disposed of any assets or made any capital
expenditures, except in the ordinary course of business;

               (d) taken any action resulting in the reduction of Seller's
working capital (current assets including cash, less current liabilities not
including the short-term or current portion of long-term debt) except for
customary changes in the ordinary course of business;

               (e) changed the compensation and terms of employment provided to
Seller's officers and principal employees;

               (f) entered into or agreed to enter into any transaction,
agreement or commitment, suffered the occurrence of any event or events or
experienced any change in financial condition, business, results of operations
or otherwise that, in the aggregate, has (i) materially interfered with the
normal and usual operations of Seller or the business prospects of Seller or
(ii) resulted in a material adverse change in the financial condition, assets,
liabilities, earnings or business of Seller or could reasonably be expected to
have a material adverse effect on the business prospects of Seller; or

               (g) other than charges made in the ordinary course of business,
taken any action resulting in a corporate charge by Seller to the business.

        3.6 CUSTOMERS AND SUPPLIERS

        Schedule 3.6.1 sets forth a complete and accurate list of Seller's
customers during the two and a half years preceding the Closing Date, showing
the approximate total revenues from each such customer, and a complete and
accurate list of Seller's suppliers during the two years preceding the Closing
Date.


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        3.7 ORDERS, COMMITMENTS AND RETURNS

        Schedule 3.7 contains an accurate summary as of the Effective Date of
Seller's total backlog, including those to be filled more than twelve months
from the Effective Date and all accepted and unfulfilled supply and service
contracts, and the aggregate of all outstanding purchase orders issued by Seller
(which aggregate includes all contracts or commitments for Seller's purchase of
materials or other supplies). All such sale and purchase commitments were made
in the ordinary course of business.

        3.8 CLAIMS AND LEGAL PROCEEDINGS

        Except as listed on Schedule 3.8, there are no claims, demands, causes
of action, suits, arbitrations, hearings, criminal or civil investigations or
proceedings (each, a "Claim") pending or involving or, to the knowledge of
Seller's officers, threatened against Seller before or by any court or
governmental or nongovernmental department, commission, board, bureau, agency or
instrumentality, or any other Person that would, directly or indirectly, have an
adverse effect on the Acquired Assets. To Seller's knowledge there is no valid
basis for any Claim against Seller or involving the Acquired Assets. There are
no outstanding or unsatisfied judgments, orders, decrees or stipulations to
which Seller is a party that involve the transactions contemplated herein or
that could result in an Encumbrance on any of the Acquired Assets or result in
the commencement of a Claim against Purchaser.

        3.9 TAXES

        All Taxes of Seller with respect to the Acquired Assets and the
operation of the business using the Acquired Assets have been or will be timely
paid or are being contested in good faith, and Seller otherwise has no liability
for any Taxes with respect to the Acquired Assets or its operation of the
business using the Acquired Assets except, in each of the foregoing cases, any
Taxes that, if not timely paid by Seller, will not result in (a) an Encumbrance
on any of the Acquired Assets, (b) a claim, suit or other proceeding against
Purchaser, or (c) a Loss for any Purchaser Indemnified Party. No action or
proceeding by any taxing authority for assessment or collection of Taxes is
pending or threatened against or in respect of Seller, no unresolved claim for
assessment or collection of Taxes has been asserted against or in respect of
Seller, and no tax audit or investigation by any taxing authority is underway
with respect to Seller. Seller has withheld and remitted to the appropriate
taxing authority all amounts required to be withheld from the wages of its
employees under applicable law. Seller has furnished Purchaser with complete and
correct copies of all returns of Taxes for periods beginning on or after January
1, 1991 except for returns of Taxes for periods as to which the applicable
statutory period of limitations has expired. No claim has been made by a taxing
authority in a jurisdiction where Seller has not filed Tax Returns that Seller
is or may be subject to taxation by that jurisdiction. Seller is not a party to
any tax sharing or similar agreement pursuant to which it will have any
obligation to make any payments after the Closing. "Taxes" mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, excise, gross receipts, property, sales, use, ad valorem, 


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transfer, franchise, profits, license, withholding, payroll, employment,
severance, stamp, occupation, windfall profits taxes, social security and
unemployment or other taxes imposed by the United States or any agency or
instrumentality thereof, any state, county, local or foreign government, or any
agency, subdivision or instrumentality thereof, and any interest, fines and any
and all penalties or additions relating to such taxes, charges, fees, levies or
other assessments.

        3.10 CONTRACTS

        Schedule 1.1.7 contains a true and complete list of all contracts,
agreements, arrangements and understandings, oral or written, to which Seller is
a party or by which Seller is bound, including, without limitation, all security
agreements, license agreements, purchase and supply agreements, and agreements
relating to the borrowing of money. Except as set forth in Schedule 1.1.7, all
such contracts are valid, binding and enforceable in accordance with their terms
against each party thereto and are in full force and effect; Seller has
performed all obligations imposed on it thereunder and neither Seller nor, to
the knowledge of Seller's officers, any other party thereto is in default
thereunder, nor is there any event that with notice or lapse of time, or both,
would constitute a default thereunder. True and complete copies of each such
contract have been delivered to Purchaser. Seller has not received notice, nor
is Seller otherwise aware, that any party to any such contract intends to
cancel, terminate or refuse to renew such contract or to exercise or decline to
exercise any option or right thereunder. Seller has identified in Schedule 1.1.7
all contracts, agreements, arrangements, understandings and contract termination
agreements, oral or written, to which Seller was a party or by which Seller was
bound that have been terminated within the two years prior to the date of this
Agreement, except for such contracts, agreements, arrangements and
understandings that have been terminated in the ordinary course of business
following full performance by all the parties thereto. Schedule 3.10 contains a
complete list of all contracts and agreements for which consent or approval is
required for the consummation of the transactions contemplated hereby and
indicates those contracts and agreements for which such consent or approval has
not been obtained as of the Closing Date

        3.11 REAL PROPERTY

        Seller does not own any real property. Schedule 3.11 contains a complete
and accurate list of all real property that is leased, rented or used by Seller
(the "Real Property"). Seller has delivered to Purchaser true and complete
copies of all leases, subleases, rental agreements, tenancies or licenses
relating to the Real Property. Except as set forth in Schedule 3.11, no consent
is required from any Person under any lease or other agreement or instrument
relating to the Real Property in connection with the consummation of the
transactions contemplated by this Agreement, and Seller has not received notice
that any party to any such lease or other agreement or instrument intends to
cancel, terminate or refuse to renew the same or to exercise or decline to
exercise any option or other right thereunder.


                                       12


<PAGE>   13
        3.12 PERSONAL PROPERTY

        Schedule 3.12 contains a complete and accurate list of each item of
personal property that is owned, leased or rented by Seller, other than the
Excluded Assets (the "Personal Property"). Seller has delivered to Purchaser
true and complete copies of all leases, subleases, rental agreements, contracts
of sale, tenancies or licenses relating to the Personal Property. Seller has
good and marketable title to all Personal Property, free and clear of all
Encumbrances, except as set forth in Schedule 3.12. With the exception of
Personal Property Taxes, all of the Encumbrances will be released at or prior to
the Closing. The Personal Property is in good operating condition and repair,
reasonable wear and tear excepted. During the past five years there has not been
any significant interruption in the conduct of the Seller's business due to the
malfunctioning of any such Personal Property. No machinery, equipment, furniture
or physical assets other than those listed in Schedules 1.1.1 and 1.1.2 are used
or required by Seller in the conduct of its business. Except as set forth in
Schedule 3.12, no consent is required from any Person under any lease or other
agreement or instrument relating to the Personal Property in connection with the
consummation of the transactions contemplated by this Agreement, and Seller has
not received notice that any party to any such lease or other agreement or
instrument intends to cancel, terminate or refuse to renew the same or to
exercise or decline to exercise any option or other right thereunder. Seller has
not granted any lease, sublease, tenancy or license of any portion of the
Personal Property.

        3.13 INTELLECTUAL PROPERTY

               3.13.1 TITLE

               Except as set forth in Schedule 3.13.1, Seller owns, or is
licensed or otherwise entitled to use without restriction (free and clear of any
Encumbrances other than those restrictions set forth in the licenses to the
licensed Seller Intellectual Properties), the Seller Intellectual Properties and
the Seller Intellectual Property Rights and has rights (and except as set forth
in Schedule 3.13.1 is not contractually obligated to pay any compensation to any
third party in respect thereof) to use the Seller Intellectual Properties and
Seller Intellectual Property Rights as they are now being used by Seller.

               3.13.2 SOURCE CODE

               Except as set forth in Schedule 3.13.2, no Person (other than
Seller's current employees) has a copy, or the right to acquire or discover a
copy, of any of the Source Code. Except as set forth in Schedule 3.13.2, Seller
has not delivered copies of the Source Code to any Person, whether pursuant to
an escrow arrangement or otherwise.

               3.13.3 LICENSES

               All licenses, sublicenses and other agreements, including
confidential disclosure agreements, as to which Seller is a party and pursuant
to which any other Person is authorized to use any of the Seller Intellectual
Properties, are listed in Schedule 3.13.3 and copies thereof 


                                       13


<PAGE>   14
previously have been delivered by Seller to Purchaser. Except as set forth in
Schedule 3.13.3, Seller is not in violation of, and as a result of the execution
and delivery of this Agreement or the performance of Seller's obligations
hereunder will not be in violation of, or lose any rights pursuant to, any such
license, sublicense or agreement.

               3.13.4 INFRINGEMENT

               The Seller Intellectual Properties do not infringe: (a) any
copyright, trade secret or other intellectual property or proprietary right of
any Person, whether arising under the laws of the United States or any other
state, country or jurisdiction, or (b) any patent or trademark of any Person,
whether arising under the laws of the United States or any other state, country
or jurisdiction. No Claim with respect to the Seller Intellectual Properties has
been asserted or, to the knowledge of Seller's officers, is threatened by any
Person, and Seller's officers do not know of any Claim: (i) to the effect that
the manufacture, sale or use of any product now used or offered by Seller or
currently under development or proposed for sale by Seller infringes any
copyright, patent, trademark, service mark, trade secret or other intellectual
property or proprietary right of any third party, whether arising under the laws
of the United States or any other state, country or jurisdiction; (ii) against
the use by Seller of any of the Seller Intellectual Properties; or (iii)
challenging the ownership, validity or effectiveness of any of the Seller
Intellectual Property Rights. To the knowledge of Seller's officers, there has
not been and there is not now any unauthorized use, infringement or
misappropriation of any of the Seller Intellectual Properties or Seller
Intellectual Property Rights by any third party, including, without limitation,
any current employee of Seller.

               3.13.5 VALID AND SUBSISTING; APPLICATIONS AND REGISTRATIONS

               All patents and registered trademarks, service marks and other
company, product or service identifiers and registered copyrights of Seller are
valid and subsisting. Seller had and does now have the exclusive right to file,
prosecute and maintain all applications and registrations with respect to the
Seller Intellectual Property Rights.

               3.13.6 INDEMNIFICATION

               Except as set forth in Schedule 3.13.6, Seller has not entered
into any agreement or offered to indemnify any Person against any charge of
infringement of any intellectual property or other proprietary right. Seller has
not entered into any agreement granting any Person the right to bring any
infringement action with respect to, or otherwise to enforce, any Seller
Intellectual Property Right.

        3.14 GOVERNMENTAL AUTHORIZATIONS AND COMPLIANCE WITH LAWS

        Seller has conducted its business in accordance with all applicable
foreign, federal, state and local laws, regulations, permits, licenses,
authorizations and other requirements of all governmental entities having
jurisdiction over Seller, the noncompliance with which, or the violation of, or
the failure to obtain or adhere to, could have a material adverse effect on


                                       14


<PAGE>   15
Seller or on the condition or use of the Acquired Assets. Seller has received
all currently required governmental approvals, authorizations, consents,
licenses, orders, registrations and permits of all agencies, whether federal,
state, local or foreign, related to the operation of the Seller's business, the
failure to obtain of which could have a material adverse effect on Seller or on
the condition or use of the Acquired Assets.

        3.15 LABOR MATTERS

        There are no labor disputes, employee grievances or disciplinary actions
pending or, to the knowledge of Seller's officers, threatened against or
involving Seller or any present or former employee of Seller. Seller has
complied in all material respects with all provisions of all laws relating to
the employment of labor, and it has no liability for arrears of wages or taxes
or penalties for failure to comply with such laws. Seller has previously
provided Purchaser with true and complete copies of all invention,
confidentiality, noncompetition and similar agreements entered into between
Seller and current or former employees, independent contractors and consultants
of Seller, and each such agreement is fully assignable to Purchaser and
enforceable by Purchaser at the Closing. To Seller's knowledge, no such current
or former employee of Seller is in violation of any such agreement, and Seller
will use its best efforts to prevent any such violation. Seller has not provided
confidential information to any current or former employee, independent
contractor or consultant except pursuant to such an agreement.

        3.16 EMPLOYEE BENEFITS

        (a) Except as set forth in Schedule 3.16, Seller is not a party to, does
not maintain, sponsor or administer and does not (and could not) have any
liability or potential liability with respect to any: (a) management, employment
or other contract providing for the employment or rendition of services; (b)
bonus, incentive, deferred compensation, severance pay, pension, profit-sharing,
retirement, stock purchase, stock option, health insurance, life insurance, Code
Section 125, dependent care assistance, tuition reimbursement, fringe benefit or
other employee benefit plan, policy, agreement or arrangement including, but not
limited to, any "employee benefit plan" within the meaning of Section 3(3) of
ERISA; or (c) other employment contract or other compensation agreement or
arrangement, oral or written, affecting or relating to any current or former
employee of Seller. The items listed in Schedule 3.16 hereinafter referred to
individually as an "Employee Benefit Plan" and collectively as the "Employee
Benefit Plans."

        (b) Seller has delivered to Purchaser a true, correct and complete copy
(or, in the case of an unwritten Employee Benefit Plans, descriptions) of each
Employee Benefit Plan and all contracts related thereto, along with a copy of
the most recent annual report (Form 5500 series) filed for each Employee Benefit
Plan and a copy of the most recent summary plan description distributed with
respect to each Employee Benefit Plan and any Summaries of Material
Modifications thereto.


                                       15


<PAGE>   16
        (c) Each Employee Benefit Plan is, and has been, maintained,
administered and operated in material compliance with its terms and with the
requirements prescribed by any and all applicable laws, statutes, orders, rules
and regulations, including, but not limited to, ERISA and the Code. Seller is
not subject to COBRA. All returns, reports and other disclosures required to be
filed with any governmental entity or agency or furnished to any participant or
beneficiary with respect to any Employee Benefit Plan have been fully and
accurately completed and timely and properly filed or furnished in accordance
with applicable law. To the knowledge of Seller's officers, no non-exempt
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or violation of the fiduciary requirements of ERISA or any
other applicable law has occurred with respect to any Employee Benefit Plan.
Seller has no unfunded or underfunded liabilities under or with respect to any
Employee Benefit Plan. None of the Employee Benefit Plans contains any provision
that (i) could cause Purchaser to be bound by the terms of any Employee Benefit
Plan, or (ii) could result in Purchaser incurring any liability or obligation
under or with respect to any Employee Benefit Plan.

        (d) Neither Purchaser nor any ERISA Affiliate maintains or contributes
to, or has ever maintained or contributed to (or been obligated to contribute
to) (i) any multiemployer plan, within the meaning of Section 3(37) or
4001(a)(3) of ERISA, (ii) any multiple employer plan, within the meaning of
Section 4063 or 4064 of ERISA or Section 413(c) of the Code or(iii) any plan
that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code.
For purposes of this Agreement, "ERISA Affiliate" means any individual,
corporation, partnership, business or other Person that, together with Seller,
is treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code.

        (e) There are no Claims (other than routine claims for benefits) pending
or, to the knowledge of Seller's officers, threatened with respect to any
Employee Benefit Plan or against the assets of any Employee Benefit Plan, nor,
to the knowledge of Seller's officers, is there a basis for any such action,
suit or claim. None of the Employee Benefit Plans is currently under
investigation, audit or review, directly or indirectly, by the IRS, the
Department of Labor or any other governmental entity or agency, and, to the
knowledge of Seller, no such action is contemplated or under consideration by
the IRS, the Department of Labor or any other governmental entity or agency.

        (f) All contributions and other payments required to have been made by
Seller or any other person (including any pre-tax or post-tax contributions or
payments by employees or their dependents) to any Employee Benefit Plan (or to
any person pursuant to the terms of any Employee Benefit Plan) for any period
ending on or before the Closing Date have been made by Seller or will be made by
Seller prior to the Closing Date. Except as set forth in Schedule 3.16, the
amount of any such contribution or payment that has not yet been made, is
reflected in the Seller Financial Statements in accordance with generally
accepted accounting principles.


                                       16


<PAGE>   17
        (g) Seller has not entered into any compensatory agreement or
arrangement with respect to the performance of services which payment thereunder
could result in a nondeductible expense to Seller or Purchaser pursuant to
Section 280G of the Code or an excise tax to the recipient of such payment
pursuant to Section 4999 of the Code.

        3.17 ACCOUNTS RECEIVABLE

        All accounts and accounts receivable of Seller reflected in the
Unaudited May 31, 1998 Balance Sheet or existing at the Closing ("Accounts")
represent amounts due for services performed or sales actually made in the
ordinary course of business and properly reflect the amounts due. Except as
disclosed on Schedule 3.17, all Accounts existing and remaining unpaid at the
Closing, are, to the knowledge of Seller's officers, collectible by Purchaser,
except to the extent of the normal allowance for doubtful accounts with respect
to Accounts, consistent with Seller's prior practices and as reflected in the
Seller Financial Statements.

        3.18 CORPORATE BOOKS AND RECORDS

        Seller previously has furnished to Purchaser true and complete copies of
(a) Seller's Articles of Incorporation and Bylaws as currently in effect,
including all amendments thereto, (b) Seller's minute books and (c) Seller's
stock transfer books. Such minutes reflect all formally called meetings of
Seller's shareholders and Board of Directors and any committees thereof since
Seller's inception and accurately reflect in all material respects the events of
and actions taken at such meetings.

        3.19 NO ENCUMBRANCES

        Except for actions required to be taken by Purchaser set forth on
Schedule 3.19, all actions have been taken with respect to the transactions
contemplated by this Agreement that are necessary or required to transfer the
Acquired Assets to Purchaser free and clear of all Encumbrances. Except as set
forth on Schedule 3.19, Seller owns all right, title and interest in and to the
Acquired Assets, free and clear of all Encumbrances of any other Person. Except
as set forth in Schedule 3.19, the execution and delivery of this Agreement will
convey, transfer and assign to Purchaser good and marketable title to the
Acquired Assets and associated proprietary rights free and clear of all
Encumbrances of any Person. The Acquired Assets include all properties and
assets reflected in the Unaudited May 31, 1998 Balance Sheet, all properties and
assets purchased by Seller since the date of the Unaudited May 31, 1998 Balance
Sheet and all properties and assets used in Seller's business.

        3.20 BROKER'S OR FINDER'S FEES

        Seller has retained The Corum Group to advise it in connection with this
Agreement and the transactions contemplated hereby. Seller and the Principals
shall pay all fees and expenses of The Corum Group and shall indemnify and hold
harmless Purchaser from and against any claims by The Corum Group arising out of
the transactions contemplated hereby. 


                                       17


<PAGE>   18
Seller has not incurred, and will not incur, directly or indirectly, as a result
of any action taken by or on its behalf, any other liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby. 

        3.21 CREDITORS LIST

        Schedule 3.21 contains a full, complete and accurate list of all
creditors of Seller, with the amounts payable to each such creditor as of the
Effective Date.

        3.22 RESTRICTED SECURITIES

        Seller and each Principal agree and understand that the Shares are
characterized as "restricted securities" under the Securities Act of 1933, as
amended, and all rules and regulations promulgated thereunder (the "Securities
Act"), in that they are being acquired from Purchaser in a transaction not
involving a public offering and that under the Securities Act the Shares may not
be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of by Seller or a Principal without registration under the Securities
Act, except pursuant to an exemption to the Securities Act. Seller and each
Principal represent that it, he or she is familiar with the Securities Act,
including Rule 144 promulgated thereunder, and the resale limitations on the
Shares imposed by it. Seller and each Principal understand that Purchaser is
relying on the representations, warranties and covenants contained in this
Section 3.22 and in Sections 3.23 and 3.24 in connection with the issuance of
the Shares to Seller and with such understanding authorizes Purchaser to place a
restrictive legend on the certificates representing the Shares.

        3.23 PERMITTED DISTRIBUTION OF THE SHARES AND EXPERIENCE

        Seller is acquiring the Shares with the intention of distributing the
Shares only to the Principals. Seller and the Principals are not acquiring the
Shares with a view to any other distribution of any part thereof and Seller and
the Principals have no present intention to sell, grant any participation in or
otherwise distribute any of the Shares in a manner contrary to the Securities
Act or any applicable state securities law. Seller and each Principal are
"accredited investors" as defined in Rule 501 of Regulation D promulgated under
the Securities Act. Seller and each Principal acknowledge that the Shares are
speculative and involve a high degree of risk, and that it can bear the economic
risk of its investment (including the possible loss thereof) for an indefinite
period of time. Seller and each Principal have such knowledge and experience in
business and financial matters, and has been given access to such information
about Purchaser that Seller and each Principal deemed necessary, to evaluate the
merits and risks of investing in the Shares.

        3.24 SHAREHOLDERS

        Schedule 3.24 contains a complete and accurate list, as of the Closing
Date of Seller's shareholders ("Seller's Shareholders") and the number of shares
of each class of capital stock 


                                       18


<PAGE>   19
of Seller beneficially owned by each, and indicates whether each such
shareholder is an "accredited investor." There are no options, warrants or other
rights to purchase shares of capital stock of Seller currently outstanding.

        3.25 TAX CONSEQUENCES

        Seller and each Principal has consulted with its, his or her own tax
advisor regarding the Tax consequences to Seller or such Principals arising out
of this Agreement, including, without limitation, its structure or terms or the
negotiation or consummation hereof, and will be solely responsible for any such
Tax consequences.

        3.26 YEAR 2000 COMPLIANCE

        There is no valid basis for any claim, including based on warranty,
against Seller relating to any failure of Seller's products to be able to
accurately process date/time data (including, but not limited to, calculating,
comparing and sequencing) from, into, and between the twentieth and twenty-first
centuries, and the years 1999 and 2000 and leap year calculations (that is, be
"Year 2000 Compliant"). Seller has not made claims, representations or
warranties to third parties misrepresenting its ability to be Year 2000
Complaint.

        3.27 INVENTORY

        All items in the inventory reflected in the Unaudited May 31, 1998
Balance Sheet or as currently owned by Seller (a) have been valued in accordance
with generally accepted accounting principles and (b) are of a quality and
quantity usable and salable in the ordinary course of business.

        3.28 PRODUCT WARRANTIES

        Schedule 3.28 sets forth Seller's warranties currently made with respect
to Seller's products, and current policies with respect to returns of such
products in the course of Seller's conduct of its business. Except as set forth
in Schedule 3.28, Seller has not made any express product warranties in
connection with the sale of its products. Except as set forth in Schedule 3.28,
Claims against Seller for warranty costs (individually or in the aggregate) with
respect to its products during each of the three 12-month periods ended December
31, 1995, 1996 and 1997 did not exceed $10,000 and there are no outstanding
Claims, or to the knowledge of Seller's officers threatened Claims, for any such
warranty costs. As used above, the term "warranty costs" shall mean costs and
expenses associated with correcting, returning or replacing defective or
allegedly defective products, whether such costs and expenses arise out of
Claims based on warranty, contract, tort or otherwise, excluding liabilities and
obligations relating to performance under product maintenance agreements with
Seller.


                                       19


<PAGE>   20
        3.29 INSURANCE

        Schedule 3.29 lists each insurance policy of Seller that protects
against such liabilities, Claims and risks.

        3.30 EXCLUDED ASSETS

        Except for the Excluded Assets, all assets associated with or currently
used in the conduct of the Seller's business are included in the Acquired
Assets.

        3.31 PERMITS AND QUALIFICATIONS

        All permits that are required for the ownership or operation of the
Acquired Assets or the conduct of the Seller's business (including, but not
limited to, the manufacture, use, marketing, promotion, sale or distribution of
the Seller's products) have been obtained by Seller and are in full force and
effect and are listed in Schedule 3.31(A), with their expiration dates, if any.
Seller is, and for the three years preceding the Closing Date, has been in
compliance with all such permits, and Seller has not received any notice of any
alleged violation (whether past or present and whether remedied or not) of, nor
any threat of the suspension, revocation, modification, invalidity or limitation
of, any such permit, nor is Seller aware of any basis for any claim of any such
violation or any such threat. With the exception of the permits listed on
Schedule 3.31(B), all such permits will be effectively assigned to Purchaser
without additional liability to Purchaser upon the Closing.

        3.32 FULL DISCLOSURE

        No information furnished by Seller to Purchaser in connection with this
Agreement (including, but not limited to, the Seller Financial Statements and
all information in the Schedules and Exhibits hereto) is false or misleading in
any respect. Seller has not made any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements made
or information delivered in or pursuant to this Agreement not misleading.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER

        Purchaser hereby represents and warrants to Seller, which
representations and warranties will survive the execution and delivery of this
Agreement to the extent provided herein, as follows:

        4.1 ORGANIZATION

        Purchaser is a corporation duly organized and validly existing under the
laws of the state of Washington. Purchaser has all requisite corporate power and
authority to own, operate and lease its properties and assets and to carry on
its business as now conducted and as proposed to be conducted.


                                       20


<PAGE>   21
        4.2 POWER AND AUTHORITY; ENFORCEABILITY

        Purchaser has full power and authority to execute, deliver and perform
its respective obligations under this Agreement and to consummate the
transactions contemplated hereby. All actions on the part of Purchaser and its
respective officers and directors necessary for the authorization, execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been taken or will be taken prior to the
Closing. This Agreement has been duly executed and delivered by Purchaser and
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against it in accordance with its terms.

        4.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS

        The execution, delivery and performance of this Agreement by Purchaser
and the consummation of the transactions contemplated hereby will not: (a)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any provision of law or any judgment, decree, order, regulation or
rule of any court, agency or other governmental authority applicable to
Purchaser; (b) require any consent, approval or authorization of any Person; (c)
conflict with or result in a breach of any provision of Purchaser's Articles of
Incorporation or Bylaws; (d) result in a default (with or without the giving of
notice or lapse of time, or both) under, an acceleration or termination of, or
the creation in any party of the right to accelerate, terminate, modify or
cancel any agreement, lease, note or other restriction, Encumbrance, obligation
or liability to which Purchaser is a party or by which it is bound; or (e)
invalidate or adversely affect any permit, license, authorization or status used
in Purchaser's conduct of its business.

        4.4 THE SHARES

        Except as provided in Section 2.2, at the Closing, Seller will acquire
good title to the Shares free and clear of all Encumbrances, other than any such
Encumbrances attributable to Seller, and will be entitled to the same voting and
dividend rights as the holders of the Purchaser's common stock. Upon delivery of
the Shares to Seller at Closing, the Shares will be validly issued, fully paid
and non-assessable.

        4.5 BROKER'S OR FINDER'S FEES

        Purchaser has retained Stanford Keene to advise it in connection with
this Agreement and the transactions contemplated hereby. Purchaser shall pay all
fees of Stanford Keene and shall indemnify and hold harmless Seller from and
against any claims by Stanford Keene arising out of the transactions
contemplated hereby. Purchaser has not incurred, and will not incur, directly or
indirectly, as a result of any action taken by or on its behalf, any other
liability for brokerage or finder's fees or agent's commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.


                                       21


<PAGE>   22
        4.6 FILINGS WITH THE SEC

        Purchaser has made all filings with the Securities and Exchange
Commission that it has been required to make within the past three years under
the Securities Act of 1934, as amended (the "Exchange Act") and the Securities
Act (collectively, the "Public Reports"). Each of the Public Reports has
complied with the Exchange Act and the Securities Act in all material respects.
None of the Public Reports, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Subsequent to the respective dates as of
which information is given in the Public Reports, there has been no material
adverse change in the business or financial condition of Purchaser.

        4.7 GOVERNMENTAL AUTHORIZATIONS AND COMPLIANCE WITH LAWS

        Purchaser has conducted its business in accordance with all applicable
foreign, federal, state and local laws, regulations, permits, licenses,
authorizations and other requirements of all governmental entities having
jurisdiction over Purchaser, the noncompliance with which, or the violation of,
or the failure to obtain or adhere to, could have a material adverse effect on
Purchaser. Purchaser has received all currently required governmental approvals,
authorizations, consents, licenses, orders, registrations and permits of all
agencies, whether federal, state, local or foreign, related to the operation of
Purchaser's business, the failure to obtain of which could have a material
adverse effect on Purchaser.

SECTION 5. COVENANTS AND AGREEMENTS

        The parties agree to perform and observe the following agreements:

        5.1 CONSUMMATE TRANSACTIONS; ACTIONS CONSISTENT WITH AGREEMENT

        Each of Purchaser, Seller and each Principal will use its best efforts
to cause the transactions contemplated by this Agreement to be consummated in
accordance with the terms hereof and to take all steps as may be necessary to
put Purchaser in possession and operating control of the Acquired Assets on the
Closing Date. Without limiting the generality of the foregoing, each of
Purchaser, Seller and each Principal will undertake its best efforts to obtain
all necessary approvals, consents, permits, licenses and other authorizations
required in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, from all governmental authorities and
agencies, and will make all filings with and give all notices to third parties
that may be necessary or reasonably required of Seller in order to consummate
the transactions contemplated hereby. Neither Seller nor any Principal will take
any action inconsistent with this Agreement or that would result in any of the
representations and warranties of Seller set forth herein being untrue, or in
any covenant of Seller or Principals being breached or in any of the conditions
precedent to this Agreement being unable to be satisfied at or prior to the
Closing. Purchaser will not take any action inconsistent with this Agreement or
that would result in any of the representations and 


                                       22


<PAGE>   23
warranties of Purchaser set forth herein being untrue, or in any covenant of
Purchaser being breached or in any of the conditions precedent to this Agreement
being unable to be satisfied at or prior to the Closing.

        5.2 FULL ACCESS

        Prior to Closing, Seller will give to Purchaser and its agents and
representatives (including, without limitation, its accountants and attorneys)
full access to all of Seller's personnel, premises, properties, assets,
financial statements and records, books, contracts, documents and commitments of
or relating to the Acquired Assets or Seller's business and will furnish
Purchaser and its agents and representatives with all such information as Seller
may have in its possession concerning Seller, the Acquired Assets or Seller's
business as they may reasonably request.

        5.3 REMOVAL OF SECURITY INTERESTS

        Seller will take all steps necessary to ensure that all creditors of
Seller listed in Schedule 3.21 are either paid in full or waive any claim they
may have in connection with the transactions contemplated by this Agreement and
that all Encumbrances on the Acquired Assets are released and removed prior to
the Closing Date.

        5.4 CONDITION OF ACQUIRED ASSETS; INSURANCE

        From the Closing Date and until 60 days after the Closing Date, Seller
will take reasonable actions that may be necessary to cause the coverage under
such policies to continue in full force and effect after the Closing Date with
respect to occurrences prior to the Closing Date and will take reasonable
actions necessary to preserve or protect rights under any such policies with
respect to any claim against Seller arising out of the Acquired Assets prior to
the Closing Date.

        5.5 SELLER'S EMPLOYEES

        Seller acknowledges that, within 10 business days after the Closing
Date, Purchaser shall offer to the employees of Seller listed on Schedule 5.5(a)
(the "Employees") employment with Purchaser pursuant to employment agreements
substantially in the form of Exhibit 5.5(b) and confidentiality agreements
substantially in the form of Exhibit 5.5(c). For a period of six months
following the Closing Date, Purchaser will not terminate the employment of any
Employee who was hired by Purchaser, other than terminations for cause. For a
period of two years following the Closing Date, Purchaser will not require any
Employee who was hired by Purchaser to relocate. Seller waives and releases any
claim Seller may have against Purchaser or any of Seller's employees in
connection with Purchaser's post-Closing employment of individuals who have been
employed at any time by Seller.


                                       23


<PAGE>   24
        5.6 AUDIT OF DECEMBER 31, 1997 SELLER FINANCIAL STATEMENTS

        Purchaser shall have the right to have the December 31, 1997 Seller
Financial Statements audited by an accounting firm selected by Purchaser (the
"Post-Closing Audit"). Seller agrees to cooperate fully with the Post-Closing
Audit and take reasonable action to ensure that the Post-Closing Audit is
completed as soon as practicable after the Closing Date. Purchaser shall pay all
fees and expenses related to the Post-Closing Audit; provided, however, that if
the Post-Closing Audit reveals that the Unaudited December 31, 1997 Balance
Sheet overstated the assets of Seller by $50,000 or more or understated the
liabilities of Seller by $50,000 or more, then Seller and the Principals shall
pay 50% of the total fees and expenses related to the Post-Closing Audit;
provided, however, that Seller's portion of such amount shall not exceed
$10,000. Seller acknowledges that neither this Section 5.6 nor the Post-Closing
Audit restricts or limits Seller's obligation to indemnify Purchaser pursuant to
Section 9 for any breach of Section 3.4 or any other provision of this
Agreement.

        5.7 POST-CLOSING CONSENTS AND APPROVALS

        Within 30 days of the Closing Date, Seller and the Principal will obtain
all consents, approvals and actions of third parties, including, without
limitation, all approvals from federal, state and local authorities as may be
required for consummation of the transactions contemplated hereby, which
consents and approvals will not contain any conditions or restrictions that are
not customary in transactions of this nature, or that materially adversely
affect the Acquired Assets or the consummation of the transactions contemplated
hereby.

        5.8 CONTINUING EXISTENCE OF SELLER

        Seller and the Principals shall maintain Seller as a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland until the Retained Amount has been disbursed in accordance with Section
2.3.

        5.9 AGREEMENTS AND PERFORMANCE GOALS

        The parties will meet promptly and use reasonable efforts to negotiate
the Performance Goals.

SECTION 6. CONDITIONS TO PURCHASER'S OBLIGATIONS

        The obligations of Purchaser to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it at or prior
to the Closing will be subject to satisfaction of the following conditions, any
or all of which may be expressly waived only in writing signed by Seller:


                                       24


<PAGE>   25
        6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES

        Each of Seller's representations and warranties contained in this
Agreement will be true and correct in each case as of the date hereof and on and
as of the Closing Date as though made on that date, except that to the extent
such representations and warranties are made as of a specified date, such
representations and warranties will be true and correct as of the specified
date.

        6.2 PERFORMANCE OF AGREEMENTS

        Seller will have performed and complied with all agreements, covenants
and conditions required by this Agreement to be performed or complied with by it
on or prior to the Closing Date.

        6.3 DOCUMENTS OF ASSIGNMENT

        Seller will have delivered to Purchaser such bills of sale, assignments
and other documents as Purchaser may reasonably request to effectuate the
transactions contemplated hereby and the other terms of this Agreement.

        6.4 CONSENTS AND APPROVALS

        Except as listed on Schedule 3.10, all consents, approvals and actions
of third parties, including, without limitation, all approvals from federal,
state and local authorities as may be required for consummation of the
transactions contemplated hereby, as of the Closing Date (as defined herein),
will have been obtained, which consents and approvals will not contain any
conditions or restrictions that are not customary in transactions of this
nature, or that materially adversely affect the Acquired Assets or the
consummation of the transactions contemplated hereby.

        6.5 PROCEEDINGS AND DOCUMENTS; SECRETARY'S CERTIFICATE

        All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions will have been reasonably approved by counsel to Purchaser. Seller
will have delivered to Purchaser certified copies of Seller's resolutions
pertaining to the authorization of this Agreement and consummation of the
transactions contemplated hereby, and a certificate executed by the Secretary of
Seller as to the due election, qualification, incumbency, authority and
signatures of each of the officers authorized to sign this Agreement or any
documents or certificates to be delivered hereunder.

        6.6 LEGAL PROCEEDINGS

        There will not be pending on the Closing Date any Claim to restrain,
condition or invalidate, in whole or in part, this Agreement or any of the
transactions contemplated hereby.


                                       25


<PAGE>   26
        6.7 MATERIAL ADVERSE CHANGE

        Since the date hereof and through the Closing, there will not have
occurred any material adverse change in Seller's business, operations, assets,
liabilities, earnings or conditions (financial or other) and, except as
disclosed on Schedule 6.7, no material adverse change will have occurred in any
third-party contractual or business relationships of Seller.

        6.8 DUE DILIGENCE

        Purchaser, to its sole satisfaction, will have (a) completed its legal,
accounting, financial and operational due diligence investigation as to Seller
and (b) not become aware of any facts or circumstances that it was not aware of
as of the date hereof that would, in its judgment, make it inadvisable to
consummate the transactions contemplated hereby.

        6.9 EMPLOYMENT AND NONCOMPETITION AGREEMENTS

        Purchaser will have entered into employment agreements, substantially in
the form of Exhibit 6.9 and effective as of Closing with each of the Principals
(collectively, the "Principal Employment and Confidentiality Agreements").

        6.10 SHAREHOLDER CONSENTS AND APPROVALS

        Seller will have obtained all approvals and consents of the
shareholders, in forms acceptable to Purchaser, required by applicable law or
otherwise necessary to consummate the transactions contemplated by this
Agreement.

        6.11 SELLER'S CREDITORS

        Except as set forth on Schedule 6.11, all Encumbrances on the Acquired
Assets have been released or removed as of the Closing Date.

SECTION 7. CONDITIONS TO SELLER'S OBLIGATION

        The obligation of Seller to perform and observe the covenants,
agreements, and conditions hereof to be performed and observed by it at or prior
to the Closing will be subject to satisfaction of the following conditions, any
or all of which may be expressly waived only in writing signed by Purchaser.

        7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES

        Each of Purchaser's representations and warranties contained in this
Agreement will be true and correct in each case as of the date hereof and on and
as of the Closing Date as though made on that date, except that to the extent
such representations and warranties are made as of a specified date, such
representations and warranties will be true and correct as of the specified
date.


                                       26


<PAGE>   27
        7.2 PERFORMANCE OF AGREEMENTS

        Purchaser will have performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed or complied
with by it on or prior to the Closing Date.

        7.3 PROCEEDINGS AND DOCUMENTS

        All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions will have been reasonably approved by counsel to Seller.

        7.4 LEGAL PROCEEDINGS

        There will not be pending on the Closing Date any Claim to restrain,
condition or invalidate, in whole or in part, this Agreement or the transaction
contemplated hereby.

SECTION 8. THE CLOSING

        8.1 CLOSING DATE AND PLACE

        The Closing will take place on June 30, 1998 (the "Closing Date") at 10
a.m. local time at the offices of Perkins Coie, 1201 Third Avenue, Seattle,
Washington, or at such other date, time or location as Purchaser and Seller will
agree.

        8.2 DOCUMENTS TO BE DELIVERED BY SELLER AT CLOSING

        At the Closing, Seller will deliver to Purchaser the following:

        (a) such bills of sale, assignments and other documents as Purchaser may
reasonably request to effectuate the transactions contemplated by this
Agreement, including, but not necessarily limited to, (i) the bill of sale
substantially in the form attached as Exhibit 8.2(a)(i), (ii) the assignment of
trademark rights substantially in the form attached as Exhibit 8.2(a)(ii), (iii)
the assignment of patent rights substantially in the form attached as Exhibit
8.2(a)(iii), and (iv) the assignment and assumption agreement substantially in
the form attached as Exhibit 8.2(a)(iv), each duly executed by an authorized
officer of Seller and dated as of the Closing Date;

        (b) all consents to assignment of the Acquired Assets to Purchaser from
any third parties as are necessary to effectuate the transactions contemplated
by this Agreement, each duly executed by such third parties and dated as of or
prior to the Closing Date;

        (c) an opinion of Seller's counsel, dated as of the Closing Date,
substantially in the form of Exhibit 8.2(c);


                                       27


<PAGE>   28
        (d) a confirmation of loan satisfaction, written consent to the sale and
transfer of the Acquired Assets, release of security interest, confirmation of
payment and other documents requested by Purchaser, each in form and content
acceptable to Purchaser, relating to any and all outstanding indebtedness of
Seller to each creditor of Seller listed on Schedule 3.21, each duly executed by
such creditors;

        (e) all tangible embodiments of the Acquired Assets (including, without
limitation, copies of the Source Code);

        (f) a certificate, substantially in the form of Exhibit 8.2(f) and dated
as of the Closing Date, certifying that the conditions to Purchaser's
obligations listed in Section 6 have been fulfilled and that the representations
and warranties of Seller made in Section 3 are true, complete and correct on and
as of the Closing Date with the same force and effect as though made on the
Closing Date, except that any representation and warranty made as of a specified
date will be true and correct as of the specified date, duly executed by Seller;

        (g) a certificate of valid corporate existence of Seller of recent date
from the Secretary of State of the state of Maryland and similar certificates
from all foreign jurisdictions in which Seller is qualified to do business;

        (h) a lien and judgment search in the office of the Secretary of State
of the state of Maryland and the office of the county clerk of appropriate
counties therein, dated not earlier than two days prior to the Closing Date, the
results of which are consistent with Seller's representations contained herein;

        (i) a certificate, substantially in the form of Exhibit 8.2(i), executed
by the Secretary of Seller as to the due election, qualification, incumbency,
authority and signatures of each of the officers authorized to sign this
Agreement or any documents or certificates to be delivered hereunder;

        (i) the Escrow Agreement;

        (j) the Principal Employment and Confidentiality Agreements, each duly
executed by the applicable Principal;

        (k) the Escrow Agreement, duly executed by Seller, each Principal and
the Shareholders' Representative (as such term is defined in the Escrow
Agreement); and

        (l) all such other documents, instruments and writings required to be
delivered by Seller to Purchaser hereunder prior to Closing.

        8.3 DOCUMENTS TO BE DELIVERED BY PURCHASER AT CLOSING

        At the Closing, Purchaser will deliver to Seller the following:


                                       28


<PAGE>   29
        (a) stock certificates evidencing the Shares (which Shares will then be
immediately delivered for holding by a third-party escrow agent until vested in
accordance with Section 2.2);

        (b) an opinion of Purchaser's counsel, dated as of the Closing Date,
substantially in the form of Exhibit 8.3(b);

        (c) a certificate, substantially in the form of Exhibit 8.3(c) and dated
as of the Closing Date, certifying that the conditions to Seller's obligations
listed in Section 7 have been fulfilled and that the representations and
warranties of Purchaser made in Section 4 are true, complete and correct on and
as of the Closing Date with the same force and effect as though made on the
Closing Date, except that any representation and warranty made as of a specified
date will be true and correct as of the specified date, duly executed by
Purchaser;

        (e) a certificate, substantially in the form of Exhibit 8.3(d), executed
by the Secretary of Purchaser as to the due election, qualification, incumbency,
authority and signatures of each of the officers authorized to sign this
Agreement or any documents or certificates to be delivered hereunder;

        (f) the Principal Employment and Confidentiality Agreements, duly
executed by Purchaser;

        (g) the Escrow Agreement, duly executed by Purchaser and the escrow
agent; and

        (h) all such other documents, instruments and writings required to be
delivered by Purchaser to Seller hereunder prior to Closing.

        8.4 APPORTIONMENT OF TAXES

        As to any liability for Taxes attributable to any taxable period that
includes, but does not end on, the Closing Date, such liability will be
apportioned as follows: (a) if such liability is attributable to a single event
(such as the purchase and sale of the Acquired Assets) that occurs on or prior
to the Closing Date, all such liability will be borne by Seller; (b) if such
liability accrues over time as a result of ownership of the Acquired Assets or
ongoing business operations relating to the Acquired Assets, then the
liabilities will be prorated between Seller and Purchaser prior to and after the
Closing Date during the tax period in question; and (c) if such liability is
attributable to a single event that occurs after the Closing Date, all such
liability will be borne by Purchaser.

SECTION 9. SURVIVAL; INDEMNITY; ESCROW

        9.1 SURVIVAL

        All provisions of this Agreement, including without limitation all
representations and warranties contained in this Agreement, in the schedules
hereto, or in any agreement, 


                                       29


<PAGE>   30
certificate or other instrument delivered pursuant hereto, will survive for
three years after the Closing Date.

        9.2 INDEMNIFICATION OF PURCHASER

        (a) Seller and the Principals will severally defend, indemnify and hold
harmless Purchaser and Purchaser's officers, directors and shareholders (each, a
"Purchaser Indemnified Party") from and against any claims, losses, liabilities,
actions, damages, costs and expenses (including reasonable attorneys' fees) (a
"Loss") incurred by any Purchaser Indemnified Party arising out of or in
connection with (a) any breach of the representations or warranties made by
Seller or a Principal under this Agreement or in any agreement, certificate or
other instrument delivered by Seller pursuant to this Agreement; (b) any failure
by Seller or a Principal to perform any of its covenants or agreements contained
in this Agreement or in any agreement, certificate or other instrument delivered
by Seller pursuant to this Agreement; (c) any claim by any third party
(including, without limitation, a claim by Seller's receiver, by Seller as a
debtor in possession or a trustee or other representative of Seller's bankruptcy
estate) arising out of Seller's ownership, use or distribution of the Acquired
Assets, other than the Assumed Liabilities, on or before the Closing Date; (d)
any damages suffered as a result of Seller's failure to satisfy any of its
obligations other than the Assumed Liabilities; (e) any claim by a Principal or
any other current or former shareholder of Seller that Seller or any affiliate
or significant shareholder of Seller failed to comply with applicable law in
connection with any transfer of capital stock of Seller on or prior to the
Closing Date; (f) any failure of the transactions contemplated by this Agreement
to comply with applicable creditor protection or similar laws; (g) any Employee
Benefit Plan or (h) any claims brought by third parties relating to the Excluded
Assets, including, but not limited to, the Excluded Contracts; provided,
however, that the maximum aggregate liability for indemnification under this
Section 9.2 shall be limited to $3,750,000 until the first anniversary of the
Closing Date (the "First Year Cap") and the then-current Unvested Shares Value
(as defined below) until the third anniversary of the Closing Date (the "Second
and Third Year Cap" and, together with the First Year Cap, the "Indemnification
Cap").

        (b) Any liability of Seller or any Principal for indemnification under
this Section 9.2 shall be satisfied first from the Unvested Shares pursuant to
Section 2.2. If such liability exceeds the then current amount of the Unvested
Shares, the Seller and the Principals shall pay the balance of such liability
either in Shares or in cash, at the option of each indemnifying person, to
Purchaser. For the purposes of determining the number of Unvested Shares to be
transferred from Seller and Principals to Purchaser, the value of each such
share of Unvested Shares shall be the average closing price of the Purchaser's
common stock as reported by the Nasdaq National Market for the five trading days
immediately preceding the two trading days immediately preceding the date such
shares are transferred (the "Unvested Shares Value").

        (c) Notwithstanding any other provision of this Section 9, (i) no
Principal shall be liable for Losses in an amount greater than such Principal's
pro rata share of the 


                                       30


<PAGE>   31
Indemnification Cap then in effect and (ii) all claims made after the first
anniversary of the Closing Date shall be satisfied solely from the Unvested
Shares.

        9.3 INDEMNIFICATION OF SELLER AND PRINCIPALS

        Purchaser will defend, indemnify and hold harmless Seller, the
Principals and Seller's officers, directors and shareholders (each, a "Seller
Indemnified Party") from and against any Losses incurred by the Seller
Indemnified Party arising out of or in connection with (a) any breach of the
representations or warranties made by Purchaser under this Agreement or in any
agreement, certificate or other instrument delivered by Purchaser pursuant to
this Agreement; (b) any failure by Purchaser to perform any of its covenants or
agreements contained in this Agreement or in any agreement, certificate or other
instrument delivered by Purchaser pursuant to this Agreement; (c) any claim by
any third party (including, without limitation, a claim by Purchaser's receiver,
by Purchaser as a debtor in possession or a trustee or other representative of
Purchaser's bankruptcy estate) arising out of Purchaser's ownership, use or
distribution of the Acquired Assets, other than the Excluded Liabilities, after
the Closing Date; (d) any damages suffered as a result of Seller's failure to
satisfy any of its Assumed Liabilities after the Closing Date; provided,
however, that, the maximum aggregate liability for indemnification under this
Section 9.3 shall be limited to the Indemnification Cap then in effect.

        9.4 PROCEDURE

        (a) In the event that any Purchaser Indemnified Party or Seller
Indemnified Party (an "Indemnitee") sustains or incurs any Losses in respect of
which indemnification may be sought pursuant to this Section 9, such Indemnitee
will assert a claim for indemnification ("Indemnification Claim") by giving
written notice thereof (the "Claim Notice") to the indemnifying party, which
will describe in reasonable detail the facts and circumstances upon which the
asserted claim for indemnification is based. The indemnifying party or parties,
by delivery of written notice to the Indemnitee within 30 days of notice of a
Claim Notice, may elect to assume the defense of such Indemnification Claim at
the indemnifying party's expense; provided, however, that (i) counsel
undertaking such defense shall be reasonably acceptable to the Indemnitee and
(ii) the indemnifying parties shall mutually elect to contest such
Indemnification Claim and shall conduct and settle such contest in a joint
manner, and if the indemnifying parties shall fail at any time to agree, the
Indemnitee shall have no obligation to contest such Indemnification Claim. The
indemnifying parties shall have the right to settle, compromise or discharge a
third party claim (other than any such third party claim in which criminal
conduct is alleged) without the Indemnitee's consent if such settlement,
compromise or discharge (i) constitutes a complete and unconditional discharge
and release of all affected Indemnitees and (ii) provides for no relief other
than the payment of monetary damages and such monetary damages are paid in full
by the indemnifying party, and in all other cases may not so settle without the
prior written consent of the Indemnitee. If the indemnifying parties do not
jointly elect to contest an indemnifiable matter, they shall cooperate with the
Indemnitee to the extent any of them has knowledge of facts or circumstances
relating to such 


                                       31


<PAGE>   32
matter, and the Indemnitee shall have the exclusive right to prosecute, defend,
compromise, settle or pay any Indemnification Claim, but the Indemnitee shall
not be obligated to do so; provided, however, that, should the Indemnitee elect
not to exercise its right exclusively to prosecute, defend, compromise, settle
or pay such Indemnification Claim, any indemnifying party may elect to do so at
such party's sole expense.

        (b) With respect to claims for indemnification hereunder resulting from
or in connection with any legal proceeding commenced by a third party, the
Indemnitee will promptly provide written notice of such claims to each
indemnifying party and, if reasonably possible, give the Claim Notice to each
indemnifying party no later than ten (10) days prior to the time any initial
answer or response to the asserted claim is legally required under any
applicable court or procedural rule.

        (c) No Indemnitee shall be entitled to receive any indemnification
payment with respect to an Indemnification Claim under this Section 9 until the
aggregate Losses that such Indemnitee would otherwise be entitled to receive as
indemnification exceeds $100,000 (the "Basket Amount"); provided, however, that
once the aggregate Losses exceed the Basket Amount, the Indemnitee shall be
entitled to receive indemnification payments for the aggregate Losses that it
would be entitled to receive without regard to the Basket Amount.

        9.5 INVESTIGATIONS; WAIVERS

        An Indemnitee's right to indemnification provided for in this Section 9
will remain in effect notwithstanding any waiver by any party hereto of any
condition to such party's obligations to consummate the transactions
contemplated hereby.

        9.6 RESOLUTION OF CONTESTED INDEMNIFICATION CLAIMS

        All contested Indemnification Claims shall be resolved by the parties
either (i) in accordance with either a mutual agreement among Purchaser and
Seller, which shall be memorialized in writing, or (ii) by submission to binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect (the "AAA Rules"), conducted by one
arbitrator either mutually agreed upon by the parties or chosen in accordance
with the AAA Rules.

SECTION 10. MISCELLANEOUS

        10.1 EXPENSES

        Each party will bear its own expenses incident to the negotiation,
preparation, authorization and consummation of this Agreement and the
transactions contemplated hereby, including, without limitation, all fees and
expenses of its counsel and accountants, whether or not such transactions are
consummated.


                                       32


<PAGE>   33
        10.2 NOTICES

        All notices, claims and other communications hereunder will be in
writing and will be made by hand delivery, registered or certified mail (postage
prepaid, return receipt requested), facsimile (receipt confirmed) or overnight
air courier guaranteeing next-day delivery:


<TABLE>
<S>                                                       <C>
        (a)    If to Purchaser, to:                       with a copy to:
               INTERLINQ Software Corporation             Perkins Coie LLP
               11255 Kirkland Way                         1201 Third Avenue, 40th Floor
               Kirkland, WA  98033                        Seattle, Washington  98101
                                                          Attention:  Linda A. Schoemaker, Esq.
                                                          Facsimile: (206) 583-8500

        (b)    If to Seller, to:                          with a copy to:
               Logical Software Solutions Corporation     Tucker, Flyer & Lewis
               Suite 200                                  1615 L Street, N.W., Suite 400
               301 Evergreen                              Washington, D.C.  20036
               Bozeman, MT  59715                         Attention: Thomas J. Knox
                                                          Facsimile:  (202) 429-3231

        (c)    If to Seller, to:                          with a copy to:
                                                          Tucker, Flyer & Lewis
               Mary Collier                               1615 L Street, N.W., Suite 400
               3550 Jackson Ct. Rd.                       Washington, D.C.  20036
               Bozeman, MT  59715                         Attention: Thomas J. Knox
               Facsimile: (406) 585-0096                  Facsimile:  (202) 429-3231

               Michael Bennett
               3550 Jackson Ct. Rd.
               Bozeman, MT  59715
               Facsimile (406) 585-0096

               Keith Bluford
               6925 Forbes Blvd.
               Lanham, MD  20706
               (301) 794-6896
</TABLE>


or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
11.2. All such notices and communications will be deemed to have been duly given
at the time delivered by hand, if personally delivered; and upon receipt, if
faxed, mailed or if sent by an overnight air courier service guaranteeing
next-day delivery.


                                       33


<PAGE>   34
        10.3 ENTIRE AGREEMENT

        This Agreement, together with the Exhibits and Schedules hereto and,
solely for the period from the Effective Date to the Closing Date, the
Nondisclosure Agreement, between Seller and Purchaser, dated as of December 7,
1997, constitutes the entire agreement among the parties concerning the subject
matter hereof, supersedes all other agreements and understandings, whether oral
or written (including the Letter of Intent, dated May 6, 1998, between the
parties hereto), and may not be changed, modified, altered or terminated except
by an agreement in writing executed by the parties hereto. Any waiver by any
party of any of its rights under this Agreement or of any breach of this
Agreement will not constitute a waiver of any other rights or of any other or
future breach.

        10.4 GOVERNING LAW; JURISDICTION AND VENUE

        This Agreement will be governed by and construed and enforced in
accordance with and subject to the internal laws and decisions of the state of
Washington, regardless of its or any other jurisdiction's conflict of law
provisions. The parties hereto agree that venue for any dispute hereunder, or
action on any obligation under this Agreement, will be in King County,
Washington or the United States District Court for the Western District of
Washington, and the parties hereto submit to the jurisdiction of the state and
federal courts of the state of Washington for any dispute hereunder or action on
any obligation under this Agreement.

        10.5 COUNTERPARTS; ELECTRONIC SIGNATURE

        This Agreement may be executed in counterparts, each of which will be
deemed an original, and all of which together constitute one and the same
instrument. To expedite the process of entering into this Agreement, the parties
acknowledge that Transmitted Copies of the Agreement will be equivalent to
original documents until such time as original documents are completely executed
and delivered. "Transmitted Copies" will mean copies which are reproduced or
transmitted via photocopy, facsimile, or other process of complete and accurate
reproduction and transmission.

        10.6 WAIVERS

        No provision of this Agreement will be deemed waived by course of
conduct, unless such waiver is in writing and is signed by the party against
which enforcement is sought and states specifically that it was intended to
modify this Agreement. Any waiver of any term or condition of this Agreement or
any breach hereof shall not operate as a waiver of any such other term,
condition or breach, and no failure to enforce any provision hereof shall
operate as a waiver of such provision or any other provision hereof.

        10.7 SUCCESSORS AND ASSIGNS

        This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Seller or any
Principal will not have the right to 


                                       34


<PAGE>   35
assign this Agreement or any of its rights or obligations hereunder to any
Person without Purchaser's prior written consent; provided, however, that Seller
will have the right to distribute the Shares to the Accredited Shareholders and
title the Shares in the name of the Accredited Shareholders.

        10.8 FURTHER ASSURANCES

        Each party will, at the request of any other party hereto from time to
time, execute and deliver such other assignments, transfers, conveyances and
other instruments and documents and do and perform such other acts and things as
may be reasonably necessary or desirable for effecting complete consummation of
this Agreement and the transactions contemplated hereby.

        10.9 CONFIDENTIALITY

        Neither Seller (including the Principals) nor Purchaser will make any
public announcement or other disclosure with regard to the transactions
contemplated hereby or the material terms hereof (including, without limitation,
the Purchase Price and form of consideration to be paid pursuant to Section 2)
without the prior consent of the other party hereto; provided, however, that
nothing herein will restrict Seller or Purchaser from disclosing or using for
its own benefit or for any other purpose any such information which is readily
available to the general public (so long as such information did not become
readily available to the general public as a direct or indirect result of the
disclosing party's breach of this Agreement) or is required by law to be
disclosed by Seller or Purchaser (however in such event the disclosing party
will, if possible, give the other party hereto advance notice of any such
required disclosure and assist the other party hereto in attempting to limit the
scope of any such disclosure).

        10.10 SEVERABILITY

        In the event that any term or provision of this Agreement is determined
to be illegal, invalid or unenforceable, the remainder of this Agreement will
continue in full force and effect, provided that such continuation would not
materially alter the terms hereof or materially diminish the benefits or
materially increase the burdens of this Agreement for any party.


                                       35


<PAGE>   36

        IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.

                           INTERLINQ SOFTWARE CORPORATION


                           By:    /s/ STEPHEN A. YOUNT
                              -------------------------------------------

                           Name:  Stephen A. Yount
                                -----------------------------------------

                           Title: Vice President, Finance & CFO
                                 ----------------------------------------


                           LOGICAL SOFTWARE SOLUTIONS
                           CORPORATION


                           By:    /s/ MARY F. COLLIER
                              -------------------------------------------

                           Name:  Mary F. Collier
                                -----------------------------------------

                           Title: President
                                 ----------------------------------------

                                  /s/ MARY F. COLLIER
                           ----------------------------------------------
                                  Mary Collier

                                  /s/ KEITH E. BLUFORD
                           ----------------------------------------------
                                  Keith Bluford

                                  /s/ MICHAEL K. BENNETT
                           ----------------------------------------------
                                  Michael Bennett



                                       36