SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549
                      __________________________________

                                 FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934 

    For the fiscal year ended December 31, 1997    

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934

Commission File No. 1-10623 


                             Pamet Systems, Inc.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)


      Massachusetts                                         04-2985838
 ------------------------------                         ------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)


     1000 Main Street
   Acton, Massachusetts                                       01720
----------------------------                             ----------------
(Address of principal executive offices)                   (Zip Code)
 
Registrant's telephone number, including area code  (978) 263-2060
                                                   -------------------
Securities registered pursuant to Section 12(b) of the Act:

                                                         Name of each exchange
   Title of each class                                   on which registered 

           none                                                 none
   --------------------                                  ---------------------
     (Title of Class)


Securities registered pursuant to Section 12(g) of the Act:  

        
                         Common Stock $.01 par value
                       -------------------------------
                               (Title of Class)

Check whether the issuer (1) has filed all reports required to be filed 
by Section 13 or 15(d) of the Securities Exchange Act during the past 
12 months (or for such shorter period that the Registrant was required 
to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days.

                                        Yes   X     No
                                            -----      -----

Check if there is no disclosure of delinquent filers pursuant to Item 
405 of Regulation S-B contained in this form, and no disclosure will be 
contained to the best of the Registrant's knowledge, in definitive 
proxy or information statements incorporated by reference in Part III 
of this Form 10-KSB or any amendment to this Form 10-KSB.  [ ]

The issuer's revenues for its most recent fiscal year were  $2,077,896
                                                           ------------
The aggregate market value of the Registrant's common stock held by 
non-affiliates of the Registrant, based upon the average of the closing 
bid and asked prices on March 27, 1997 was  $6,010,956 .
                                           ------------
The number of shares outstanding of the Registrant's common stock, as 
of March 27, 1998 was  2,535,250  shares.
                      -----------

<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE


    Portions of the definitive proxy statement for the Annual 
Meeting of Stockholders (if filed pursuant to Regulation 14A within 
120 days of the close of the Company's fiscal year ended December 
31, 1997) shall be deemed to be incorporated by reference in Part 
III.)

<PAGE>

PART I

Item 1. Business

    This Form 10-K contains statements which are not historical 
facts. These forward-looking statements reflect management's 
current views, are based on many assumptions and factors and may 
involve risks and uncertainties. Certain factors and other 
information contained in this Form 10-K could cause such views, 
assumptions and factors and the Company's results of operations to 
be materially different.

    Pamet Systems, Inc. (the "Company" or "Pamet Systems") 
develops, markets and supports computer software and turnkey 
computer systems for organizations in the public safety and 
criminal justice sectors. The Company's products automate the 
acquisition, storage, processing, retrieval and communication of 
information for these organizations.  The Company specializes in 
the integration of computer software and hardware with 
communications and other technologies to provide total solutions.  
The Company's customers include law enforcement agencies, fire 
fighting agencies, and corrections facilities.

    The Company's principal product for law enforcement is 
PoliceServer(R), a fully integrated information management system 
providing agencies with the full spectrum of information-related 
functionality needed for agency operations and management.  
Designed primarily to serve agencies with fewer than 500 officers 
(99.4% of US police agencies), current users include both municipal 
agencies such as the Worcester Massachusetts Police and other 
agency types such as the Harvard University Police, the 
Metropolitan Atlanta Rapid Transit Authority (MARTA) Police, and 
the Boston Housing Authority Police. PoliceServer capabilities 
include computer-aided dispatch, criminal records management, 
department management, and personal productivity applications such 
as word processing. Designed to accommodate a wide diversity in 
agency type, PoliceServer is both easy to learn and to use.  
PoliceServer automates many of the complex and time consuming 
department functions such as arrest booking, crime analysis and 
reporting, and case management.  A number of interfaces are 
provided to other data sources such as the E911 network, various 
state Criminal Justice Information Systems, and the National Crime 
Information Center (NCIC).  The Company also provides interfaces 
with systems for digital imaging, mobile and remote access and for 
scanning and identification of fingerprints.
 
    FireServer(R) provides comparable functionality for fire 
fighting agencies.  A Computer Aided Dispatch (CAD) component is 
designed with a "look and feel" similar to that of the PoliceServer 
CAD in order to support integrated E911 dispatch centers. The fire 
records capability provides fire departments with data on 
structures, fire suppression plans, inspections data, and hazardous 
materials.

    JailServerTM provides corrections facility staff with the 
ability to capture, track and report a wide variety of data related 
to inmates.  The Company acquired the assets of Technology 
Assemblers, Inc. (TAI), which had developed this product, 
subsequent to the end of the 1997 period.  The acquisition was made 
to broaden the product offering of the Company. The addition of 
JailServer allows the company to expand its available market to 
include the County Sheriff agencies which have both a law 
enforcement role that could be served by PoliceServer and 
responsibility for the operation of the county jail which can be 
served by JailServer. The product is in use by a number of state 
and county level facilities, and interfaces, where appropriate, to 
other PoliceServer modules.

    The Company also offers several companion products, 
including ImageServerTM, an image capture, storage and printing 
system, and MobileServerTM, a mobile terminal allowing fully 
integrated communications with the department's internal system as 
well as other local, state and federal databases.

    The Company believes that the level and quality of its 
support service is vital to continuing customer satisfaction and 
the long-term success of the Company.  The Company has established 
a strong history of responsiveness to customer requirements and a 
high level of support which have resulted in a loyal customer base. 
The Company provides product updates and enhancements and customer 
support services under an annual maintenance program.  Annual fees 
are based on a percentage of the price paid for the licensed 
software products.  Historical renewal rates for annual maintenance 
for the Company's products has been in excess of 99%. 

    The Company's primary customer support center is located at 
the Company's headquarters in Acton, Massachusetts.  The Company 
also maintains a support center in Maitland, Florida, currently 
serving principally JailServer customers.  The standard support 
service provides access during business hours Monday through 
Friday, with 24 hour, 7-day service optionally available.

    As of December 31, 1997, the Company had installed 
PoliceServer in 103 police departments, FireServer in 32 fire 
departments, JailServer in 12 institutions, ImageServer in 31 
departments, and MobileServer in 14 departments.  These 
installations are located in 10 states in the Eastern US.

    Over the past five years the Company has expanded its 
markets beyond Massachusetts, and is constantly adapting and 
enhancing its products to fit the needs of these additional 
markets. Expansion has been predominantly in the Southeastern and 
lower Midwestern states.  Regional offices have been established in 
Charleston, SC and Maitland, FL to support sales activity in the 
Southeastern states. 

    In the 12 month period ended December 31, 1997 (the 1997 
period) a significant portion of sales to police departments was 
funded by federal grants associated with the "Violent Crime Control 
and Law Enforcement Act of 1994" (the 1994 Crime Bill) designed to 
provide automation grants to law enforcement agencies.  This grant 
program is expected to continue at least through 1998, and possibly 
through 1999.  In general, however, the long lead time and 
uncertainties of selling to the governmental sector continue and 
will continue to result in volatility in sales and cash flow. The 
Company continues to evaluate mergers, acquisitions and other 
business combinations, as well as capital raising alternatives to 
enhance its working capital. 

    The Company was incorporated in Massachusetts on November 
24, 1987 by Dr. Joel B. Searcy, Chairman of the Board.

    PoliceServer and FireServer are registered trademarks of the 
Company.  JailServer, ImageServer and MobileServer are trademarks 
of the Company.

Business of the Company

    Public safety agencies are paper-intensive organizations, 
which manage large amounts of information in their day-to-day 
activities. These agencies must collect, process, file and retrieve 
such information quickly, conveniently and cost effectively.  
Traditionally, police and fire departments have performed these 
tasks manually, resulting in significant resources and man-hours 
being spent processing and locating documents in large, sometimes 
haphazardly maintained, filing systems. Critical information can be 
inadvertently lost or misfiled, and information can only be 
accessed by one person at a time. In an attempt to more efficiently 
manage information and to improve personnel productivity and 
response time, many public safety agencies have computerized 
certain aspects of their business practices.

    Corrections facilities face a similar requirement to 
maintain information on the inmates under their custody.  In 
addition to background information and information on current 
status and assignments, there is a need to maintain readily 
accessible data on inmate health and to account for and control 
inmate funds.  Corrections officials must have ready access to data 
on all aspects of inmate life.

    Although its revenue for the 1997 period was less that the 
1996 period due to factors that will be discussed later, the 
Company continues to believe that the market for the computer 
systems it provides continues to be positioned for growth due to a 
number of major factors. The first factor is the passage of the 
1994 Crime Bill which will potentially allocate more than $33.0 
billion of funding for police and prison agencies over the first 
five years of the grant program, of which over $1.0 billion will be 
for the automation of police agencies. Approximately $300M has been 
allocated for automation thus far. Although the majority of the 
funding from the 1994 Crime Bill is earmarked for additional police 
presence on the street, automation and computerization of police 
agencies is encouraged if it can be demonstrated that this 
investment will allow additional police resources to be re-deployed 
or "put back on the street". The Company has designed and 
implemented a series of seminars to provide departments with the 
information necessary to demonstrate the cost effectiveness of the 
Company's products. The second factor is E911 systems currently 
being established around the country that require 24 hour dispatch 
centers for police, fire and EMS departments. Many smaller 
communities have not been able to afford to staff a dispatch center 
24 hours a day. This has lead to the establishment of regional 
dispatch centers serving a number of communities. This 
regionalization requires computer systems to enable the regional 
dispatchers to have timely access to the information needed to 
respond to varied situations in a diverse geography. The Company's 
products are designed and marketed with the option to be used in 
this type of regional application.  Currently five regional 
dispatch centers in Massachusetts and Georgia use the Company's 
product for this application. The third factor is the growing trend 
toward the use of mobile technologies. Given its existing product 
base, the Company believes that it is capable of meeting these 
needs with its current suite of products.

    Additional factors affecting the business include the 
following: the improving economy, which may provide greater 
availability of funding for public safety computerization; the 
requirement by potential customers for public safety applications 
to run only on the NT operating system; the emphasis municipalities 
are currently placing on crime prevention; the trend among public 
safety officials towards increasing effectiveness of operations 
through computers; the pressures to control personnel costs, which 
account for a major portion of municipal budgets; the need to 
achieve higher personnel productivity due to local budgetary 
constraints; and the availability of computer hardware that does 
not require special environmental systems and can, in fact, be used 
in a remote location such as a police cruiser.

    The corrections market also continues to grow in response to 
the need for prison space as well as continued pressure for 
economies in prison operations.  There is also an active trend in 
the corrections sector to move from older, main frame systems to 
more cost-effective computing platforms.

Products

    General.  In an effort to meet the demands of its market, 
which consists of approximately 15,000 police departments and 5,000 
fire departments nationwide, the Company has not only developed 
proprietary software but also offers its customers complete turnkey 
computer systems. The Company provides the customer with hardware, 
software, training, support, installation and initial maintenance 
for its products for an all-inclusive price.  The Company also 
sells hardware upgrades and supplies.

    The Company has developed and actively markets five software 
products: PoliceServer, a management information system for police 
departments; FireServer, a management information system for fire 
departments; ImageServer, an image capture, storage and printing 
system; MobileServer, a mobile terminal allowing fully integrated 
communications with the department's internal system as well as 
other local, state and federal databases and JailServer, an 
information management tool for corrections facilities with the  
capability to capture, track and report data on inmates. The 
Company owns the full and exclusive rights to the PoliceServer, 
FireServer, ImageServer and JailServer products and has a private 
label business relationship for the MobileServer product, which the 
Company licenses from the Cerulean Technologies.

    All the Company's products were developed using a 4 digit 
year designation. The 4 digit year allows for the calculation of 
dates beyond the date of January 1, 2000 to be correctly computed.  
The company has always considered its products to be "Year 2000 
compliant" and is currently completing testing to assure Year 2000 
compliance.

    The Company's PoliceServer and FireServer software are 
presently operational on Digital Equipment Corporation's Open VMS(R)
operating system and the ALPHAServer hardware. Consequently, the 
Company's turnkey computer systems presently employ Digital servers 
and operating system software. The Company's turnkey computer 
systems also include networked personal computers, networking 
equipment, printers and bundled nonproprietary software for word 
processing and spreadsheets, all of which the Company purchases 
from other companies and sells to the Company's users. Due to the 
increasing demand for Graphical User Interface (GUI) PC-based 
systems the Company is currently redeveloping its application to be 
operable on an even larger selection of operating systems including 
Windows NT. The Company's management believes that this development 
is of primary importance to the Company. Many Requests for 
Proposals (RFP's) presently specify applications that run only on 
the NT operating system. The Company's current NT development 
activity has helped position the PoliceServer and FireServer 
products to comply with these RFP's in a phased implementation 
proposal. The ImageServer, MobileServer and JailServer products are 
currently PC-based products and the base hardware is readily 
available from multiple sources

    PoliceServer.  PoliceServer is part of a comprehensive suite 
of law enforcement applications software, which performs the 
clerical and record keeping functions necessary for police 
department operation. PoliceServer includes a computer-aided 
dispatch and incident reporting function which assists dispatchers 
in allocating and controlling resources and logging and reporting 
incidents, and performs automatic checks for outstanding arrest 
warrants and gun permits.  The system's functions include an arrest 
booking system which collects, stores and reports data on arrests 
from the time of arrest through court appearances.  The system also 
automatically produces and prints all reports, forms and other 
documents needed in connection with a booking. In addition, the 
system provides access to the Federal Government's Computer Aided 
Management of Emergency Operations Hazardous Materials (CAMEO(R)) 
database. Other functions create and maintain records with respect 
to arrest warrants, alarm systems, citations, licenses, permits, 
personnel, payroll, property, equipment and vehicle maintenance, as 
well as provide word processing, electronic mail, spreadsheet and 
personal calendar management capabilities.

    PoliceServer automatically cross references and updates all 
appropriate files in the data base. This feature eliminates the 
need for repetitive input, saves man-hours, and ensures the timely 
and consistent updating of police records.  The Company estimates 
that after the first 6 to 20 months of operation, a PoliceServer 
system typically produces manpower savings whose dollar value 
equals the total system price.  The system provides multiple levels 
of security controls, which the Company believes limit the 
likelihood of tampering with police records.

    An important feature of PoliceServer is ease of use.  
Current customers find the system easy to learn and operate.  
PoliceServer is designed to be used by any member of the department 
to expedite the handling of departmental paperwork.  PoliceServer 
eliminates much of the manual process, replacing it with a series 
of simple interactive entry screens.  This single step both 
produces the needed paperwork on a laser printer and captures the 
data for storage and analysis.

    FireServer.  FireServer relies on the design approach taken 
with the PoliceServer and performs a number of similar functions.  
Like PoliceServer, the FireServer system assists dispatchers in 
allocating and controlling resources and logging and reporting 
incidents, as well as providing access to the CAMEO Hazardous 
Materials database.  In addition, FireServer permits a dispatcher 
to immediately print a fire suppression plan for use by 
firefighters at the scene, including incident location information; 
orders for first arriving units; emergency contact information; 
structure type, size and usage data; identification of any permits, 
inspection violations or hazardous material at the site and 
identification of individuals with special needs known to reside at 
the incident address.  FireServer's other functions create and 
maintain records with respect to hydrant location and history; 
permits, inspections, violations, street box and building alarm 
systems and personnel, payroll, property and equipment and vehicle 
maintenance, as well as provide word processing, electronic mail, 
spreadsheet and personal calendar management capabilities.

    JailServer.  JailServer is the latest product addition to 
the suite of the Company's products. It is an integrated technology 
solution utilizing barcode and video imaging technologies to ensure 
effective information collection, processing, and output for law 
enforcement agencies at city, county and state levels.   JailServer 
modules include tracking of inmate booking, arrest, housing, trusts 
accounting, medical, commissary, property, and visitation.
    
    ImageServer.  ImageServer is an image capture, storage and 
printing system that handles color or monochrome photo images (mug 
shots, crime scene etc.), and document imaging. The ImageServer 
product operates on a networked Pentium class computer system. The 
product can be fully integrated with the PoliceServer, FireServer 
and MobileServer systems, and supports unlimited numbers of images 
connected to Master Name File entries.  Photo lineup capability 
permits either video or printed lineups in either color or 
monochrome.  Documents relating to individuals or incidents can 
also be stored and printed with the document scan option. Incident 
or accident related images can be connected to incident reports and 
can include photo images or document images.  Images can also be 
associated with property and evidence and with department personnel 
files. The system has been designed for compatibility with new 
Federal standards (NCIC 2000), and will be evolved to maintain such 
compatibility as NCIC 2000 specifications evolve. In addition 
ImageServer can be integrated into other vendors' records and 
dispatch systems potentially broadening the market for this 
product. 

    MobileServer.  MobileServer mobile data terminals (MDT's) 
are a fully integrated companion product to the Company's other 
products. Based on the private branding agreement with Cerulean 
Technologies, the Company is able to offer a mobile date product 
that has many of the "Best in Class" mobile data capabilities.  The 
enhanced product allows communications from car to dispatch, car to 
car, as well as access into the files in PoliceServer and many 
government information systems. In addition all messages are fully 
encrypted and many officer safety and alarm features are standard 
in the product.  These systems increase officer efficiencies and 
minimize the need for the officer to return to the station. This 
system has also served to increase the police presence on the 
street, due to the fact that an officer, in the cruiser, has a link 
to the state CJIS information system and full access to all of the 
information in the entire PoliceServer system, that he is 
authorized to access.

    Product Pricing.  Complete turnkey systems including 
software, hardware, training, one year's hardware maintenance 
(provided by the hardware vendor) and six months of software 
support and update service, including a warranty against defects in 
the software, have sold for between $28,000 and $300,000, with most 
sales falling within the $50,000 - $100,000 range.  Pricing of the 
FireServer and PoliceServer software packages is identical, with a 
discount offered on the base software license when the packages are 
installed together on the same computer hardware. The majority of 
FireServer systems in operation utilize the same computer as the 
PoliceServer in that municipality.
    
    In addition to revenues generated by sales of the 
PoliceServer, FireServer, JailServer, ImageServer, MobileServer and 
software support fees, the Company generates operating revenues 
from the sale of additions to its existing systems, miscellaneous 
supplies, accessories and training.

Marketing

    The Company's marketing strategy is designed to attract 
potential customers from the existing base of law enforcement, fire 
agencies, and corrections facilities. The Company utilizes live 
demonstrations of its products, conducted in a way that emphasizes 
the operational features of the products rather than the 
operational technology. Seminars are held at various facilities 
selected to allow potential customer representatives to see the 
products in a relaxed, neutral environment. The 1994 Crime Bill 
also provided another marketing avenue as the Company conducted 
seminars to assist public safety agencies obtain grants as 
described below. 

    The Company generally concentrates its marketing efforts on 
the police department using the integrated PoliceServer, 
ImageServer, and MobileServer systems, with approach to the fire 
department following success with the municipality's police 
department.  In locations where the police and fire departments are 
incorporated in a single Department of Public Safety, the Company's 
strategy is to sell the entire suite of products. The expanded use 
of E911 will add greater focus to the latter strategy.  In county 
sheriff departments, JailServer is offered to round out a 
comprehensive information system.

    The Company customizes its software by state, so that each 
state's prescribed reporting forms can be printed in accordance 
with such state's requirements.  In addition, the Company's 
software allows users to customize their reporting forms to their 
particular specifications.

    With the encouragement of the Company, active, independent 
user groups, consisting of the police departments using 
PoliceServer and fire departments using FireServer, have developed.  
Any department participating in the Company's annual support and 
update service may attend its group's monthly meetings.  Currently 
there are three police groups, one in each region, and one fire 
group, which is in the Northeast. Since each department uses 
identical software, the users are able to effectively discuss the 
application and development of the system, to support each other in 
identifying training techniques and new applications, and to 
discuss concerns encountered in using the system.  The groups have 
also served as a source of referrals of potential customers and as 
a source of satisfied customers willing to recommend the Company's 
products to prospective customers. The Company relies on the groups 
to determine the direction and development of updates or 
enhancements to be made to the software.

    In addition, Digital provides sales and marketing support 
through its sales representatives, assisting in the generation of 
leads for prospective customers.  The Company also attends public 
safety agency conventions and trade shows as part of its marketing 
efforts. The Company jointly sponsored COPS MORE seminars with 
Digital during the 1995 period that generated over $800,000 of 
revenue in the 1996 and 1997 periods. In late 1996 the Company 
sponsored seminars that focused on the COPS MORE 96 portion of the 
1994 Crime Bill for over 100 public safety agencies. The seminars 
were designed to inform these public safety agencies of what was 
included in the 1994 Crime Bill and also how to apply for 
automation grants under the "Cops More 96" section of the bill. 
Over $600,000 of revenue during the 1997 period was attributed to 
grants from "Cops More 96".  These seminars simplified the 
sometimes complex justifications that were required as part of the 
proposals and allowed many small to medium size agencies to submit 
proposals who otherwise might not have been able to do so. The 
Company has scheduled and plans to conduct a series of seminars to 
assist law enforcement agencies in applying for the next round of 
technology grants associated with the 1994 Crime Bill, due for 
announcement in late Spring of 1998.
 
    The Company's strategy is to continue to expand its current 
distribution approach by focusing in those states where the Company 
has established reference sites within the region.  The strategy is 
structured so as to permit the techniques and strategies developed 
in the New England area to be extended to those states covered by 
dedicated sales teams.

    The Company believes that the initial sale of its products 
in a state is critical to its marketing efforts and that subsequent 
sales within the same state will be easier due to the already-
achieved acceptance of its products and the ability to use the 
first installation as a reference and for demonstrations. As of 
March 1998, the Company has customers in Massachusetts, 
Connecticut, Rhode Island, Ohio, South Carolina, Florida, Georgia, 
Indiana, New Hampshire, Tennessee, and Missouri, and Pennsylvania.

    The Company markets its products in the New England area as 
well as in two additional regions of the country. The Company 
established offices in Charleston, South Carolina and Maitland, 
Florida to support sales activities in the Southeastern states.  
Marketing for the Midwest part of the country is now being 
coordinated through the Company's headquarters in Massachusetts. 

Competition

    The public safety software business is highly competitive. 
There are a large number of small local and regional vendors across 
the country who offer competing products on personal computers to 
agencies in the Company's target market.  There are also some 
medium sized companies that have a national marketing presence.  
The Company's management believes, that although it will not be the 
only supplier, it will be one of a small group of vendors providing 
an internally developed integrated suite of public safety products 
when the NT development is complete. 

    The Company expects to encounter future competition from 
established companies that are developing new products and from new 
companies that may develop comparable products.  

    The principal competitive factors that exist in the public 
safety software business are price, ease of use and sophistication 
of the system. Management believes the competitive advantages of 
the Company's products include sophisticated capabilities and 
relative ease of use within a fully integrated software suite. 
Based on the January 1997 study performed by the Massachusetts 
Executive Office of Public Safety, management believes that it is 
currently the largest supplier of integrated police and fire 
systems in Massachusetts.  Nevertheless, the Company believes that 
to stay competitive in its target market, it must continue to make 
its products available on a greater number of computer platforms. 

Principal Suppliers

    Through an arrangement between the Company and Hall-Mark 
Computer Products, a Digital Equipment Corporation authorized 
Distributor, the Company purchases Digital servers at a discount 
for resale as part of the Company's turnkey computer systems.  The 
Company re-sells the hardware at Digital's list price.  The Digital 
systems and components that the Company purchases are available 
from many suppliers and distributors. 

    The Company also purchases PC's, networking equipment and 
peripherals from a number of manufacturers and suppliers. The 
Company acquires it mobile date software from Cerulean 
Technologies. Cerulean Technologies sells the products to the 
Company at a discount and the Company resells them at the Cerulean 
list price.

Customers

    The Company's target market consists of police and fire 
departments serving populations under 250,000, campus police 
departments and other non-municipal public safety agencies such as 
transit authority police, state police and county sheriff 
departments.  The Company estimates that this target market 
nationally is comprised of approximately 15,000 police departments 
and 5,000 fire departments.  Currently, however, the Company is 
marketing its products to police and fire departments only in New 
England, the Midwest and the Southeast, and the largest portion of 
its sales to date have been in New England, particularly 
Massachusetts.  The Company has installed seven systems in the 
lower Midwest Region, which is composed of the states of Ohio, 
Indiana, Illinois, Kentucky and Missouri and has installed twelve 
systems in the Southeast Region, which is composed of Georgia, 
South Carolina, Alabama, and Tennessee. 

    In any given fiscal period, sales to any one purchaser of 
the Company's products may account for 10% or more of the Company's 
revenues for that fiscal period.  Because such sales usually 
involve a one-time purchase for the customer, the existence of such 
purchase is not indicative of future sales or the Company's 
dependence on any one customer.  During 1997 no one customer 
accounted for more than 10% of sales.  
    

Licensing and Support 

    The purchase price for the software system includes a 
perpetual license to use the software.  The Company typically 
enters into a software license agreement with its customers.

    Support and update service is priced at 14% of the cost of 
the software package per year after the initial six month warranty 
period. Payment of the annual support and update service fee 
automatically extends the Company's warranty against software 
defects for an additional year and entitles the licensee to receive 
all software upgrades and enhancements and to participate in the 
appropriate user group. In addition to providing licensees with 
updates and enhancements, the Company's annual fee also includes 
telephone support for all applications.  Currently all customers 
subscribe to this service, primarily to receive software updates 
and enhancements which average a minimum of one update per year. 
Maintenance charges on the hardware are not included in the 
Company's annual fee and are currently billed and collected 
directly by hardware maintenance suppliers.

    The Company generally relies upon contract, trade secret and 
copyright laws to protect its products.  The license agreement 
under which a customer uses the Company's products restricts the 
customer's use to its own operations and prohibits disclosure to 
third persons. Notwithstanding these restrictions, it may be 
possible for other persons to obtain copies of the Company's 
products.  The Company believes that such copying would have 
limited utility without access to the product's source code, which 
the Company keeps highly confidential.  The Company's products are 
encoded to run only on designated types and sizes of computers. The 
Company incorporates certain technological defenses into its 
products. The Company believes that because of the rapid pace of 
technological change in the computer industry, copyright and patent 
protection is of less significance than factors such as the 
knowledge and experience of the Company's personnel and their 
ability to develop, enhance, market and acquire new products.

    The Company also requires all of its employees to execute 
agreements requiring them to maintain the confidentiality of the 
Company's proprietary information.

Research and Development 

    The Company made significant research and development 
expenditures in 1997 in several areas totaling over $317,000. The 
majority of the expenditure was on the NT product development of 
PoliceServer 2.  Other expenditures included the MobileServer 
product, overall product quality and customer satisfaction and new 
product development.   Much of the additional expenditure is 
attributable to research and development spending on the mobile 
product interface to the state information system and development of 
a public safety intranet search product.  In all cases, the Company 
used outside resources to design and develop these projects with the 
least impact on the long-term financial commitments of the company.  
NT product development will continue throughout 1998 until all 
modules of the PoliceServer and FireServer have been ported to the 
NT platform, as the market currently demands.  

Employees

    As of December 31, 1997, the Company had 20 employees, of 
whom 6 were engaged in computer programming, 5 were engaged in 
documentation, training and software support and 9 were engaged in 
sales, marketing and administration. The Company considers its 
employee relations to be satisfactory.

<PAGE>

Item 2. Properties

    The Company's operations are located in Acton, 
Massachusetts, where the Company owns a 12,000 square foot office 
building.  This facility contains office, training, conference, 
development and shipping space.  The acquisition and renovation of 
the building had been financed from the Company's working capital. 
In April 1992 the Company mortgaged the facility through a local 
lending institution with a $560,000 mortgage on the improved 
facility, the balance of which was $495,959 at December 31, 1997. 
The building was designed to be adequate to house the training, 
development and other headquarters needs for the foreseeable 
future.   

Item 3. Legal Proceedings

    None

Item 4. Submission of Matters to a Vote of Security Holders

    Election of Board Members

Item 4A.    Executive Officers and Directors

    The present executive officers of the Company, who are 
elected by the Board of Directors on an annual basis at the meeting 
of the Board of Directors after each annual meeting of stockholders 
and serve at the discretion of the Board of Directors, are as 
follows:
  
Name                 Age  Position

David McKay           56  President and Chief Executive Officer 
                          of the Company since June 1997. Mr. 
                          McKay served as the Global Systems 
                          Manager for Mobil Oil, an oil 
                          production company from 1996 to 1997. 
                          From 1994 to 1996 was the Vice 
                          President of Information Systems at 
                          Moore Corporation, a business supply 
                          company.

Dr. Joel B. Searcy    62  Chairman of the Board of the Company 
                          since its inception, was Treasurer 
                          until May 1991, served as Clerk until 
                          September 1990 and President and CEO 
                          until June 1997.

Arthur V. Josephson,  55  Director of the Company since 
  Jr.                     January 1988 and has served as Clerk 
                          since September 1990.  In addition to 
                          his responsibilities to the Company, 
                          since 1985 Mr. Josephson has served 
                          as an accounting consultant to a 
                          number of clients in Massachusetts, 
                          as well as Treasurer of Assabet 
                          Valley Home Health Association, Inc., 
                          a visiting nurse agency, from 1977 
                          through October 1994.

Richard C. Becker     51  Director and Treasurer of the Company 
                          since May 1991, Vice President of 
                          Finance and Administration since June 
                          1997 and was Vice President - Chief 
                          Operating Officer from July 1993 to 
                          June 1997, Assistant Clerk since 
                          February 1991 and was Vice President -
                          Finance and Administration from 
                          January 1991 until July 1993. 

    There are no family relationships among any of the executive 
officers or directors of the Company.

<PAGE>

PART II

Item 5.  Market for the Company's Common Equity and Related
    Stockholder Matters.

         Shares of the Company's Common Stock are available for 
trading in the over-the-counter market.  The Common Stock is quoted 
under the symbol PAMT. 

The following table sets forth the high and low bid prices of the 
Common Stock as quoted on the OTC Bulletin Board.
                                        

<TABLE>
<CAPTION>            
FISCAL YEAR ENDED           
DECEMBER 31                                  COMMON STOCK
                                             ------------
                                             High    Low     
                                             ----    ----
<S>                                          <C>     <C>
1996
    First Quarter                            2.12    1.00        
    Second Quarter                           6.50    1.75        
    Third Quarter                            5.75    3.00    
    Fourth Quarter                           4.00    2.50    


1997
    First Quarter                            3.38    1.88        
    Second Quarter                           5.38    1.62    
    Third Quarter                            4.87    2.87        
    Fourth Quarter                           5.50    3.12    

</TABLE>

         The Company had 58 holders of record of Common Stock on 
March 27, 1998.  The Company has not paid any dividends to date.  
For the foreseeable future, it is anticipated that earnings, if any, 
will be used to finance the growth of the Company and that cash 
dividends will not be paid to stockholders.

<PAGE>

Item 6.  Management's Discussion and Analysis of Financial 
Condition and Results of Operations.

Overview

Pamet Systems, Inc. (the "Company" or "Pamet Systems"), founded in 
1987, designs and implements broad-based information technology 
solutions for public safety agencies enabling them to realize cost 
efficiencies and provide better service. The company's suite of 
products is composed of four major components: PoliceServer, 
FireServer, MobileServer and Imageserver. The Company's revenues 
consist primarily of sales of these software applications, the 
associated hardware and systems integration, and support and update 
service fees.
 
The Company's revenues for the 12 month period ended December 31, 
1997 (the 1997 period) decreased 15.8% from the 12 month period 
ending December 31, 1996 (the 1996 period).  During the period, the 
revenues showed a significant shift to the MobileServer product, 
which represented 28.4% of sales in the 1997 period, up from 3.2% 
in the 1996 period. The MobileServer product enables officers to 
submit reports and access critical databases from their cruisers 
increasing officer productivity.  As a result of this market shift 
to mobile products, the Company joined forces with Cerulean 
Technology, Inc. in November of 1997 to offer Cerulean's 
PacketCluster PatrolTM wireless client/server software under a 
three-year private branding agreement as its exclusive mobile 
information solution.  This Mobileserver market shift and the 
subsequent Cerulean agreement caused the Company to experience 
substantial one time product development, implementation 
engineering and staff training costs which affected the results of 
operations during the 1997 period.  In addition, a significant 
portion of the Company's 1997 MobileServer sales and current 
backlog are the result of the "Cops More 96" federal grant awards 
of the 1994 Crime Bill.  The pricing on these MobileServer sales 
reflects previous commitments made to customers during the grant 
application process and prior to the Cerulean agreement and, 
combined with the high hardware component of the MobileServer 
product, have resulted in lower product margins. 

The Company has continued to see increased revenues from software 
support and update service fees resulting from increases in the 
installed base and renewal rates approaching 100%.  The service 
revenues represented 22.3% of the Company's total revenues in the 
1997 period versus 15.7% in the 1996 period.
  
Market expectations for a complete Microsoft operating environment 
using Microsoft NT Server and a Windows 95 or NT Desktop graphical 
user interface have grown substantially in 1997, particularly in 
the Southeast market.  Consequently, the Company has begun 
rebuilding its products on the NT platform at considerable expense, 
which has affected the 1997 results of operation.   During the 1997 
period, the Company expended over $234,000 to design and begin the 
development of PoliceServer 2 and a network search product.  The 
company also expended considerable funds during the 1997 period on 
product quality improvements, testing and demonstration platforms, 
and product documentation to address competitive requirements and 
improve customer satisfaction.  In addition, the Company supported 
these efforts internally by re-deploying existing resources to 
address product quality, documentation and customer satisfaction 
issues.

The Company continues to believe there are significant market 
opportunities based on the federal Crime bill funding expected in 
1998 and beyond, the establishment of E911 centers, heightened 
emphasis on crime in most communities and the awareness by 
municipalities that computer systems can improve the efficiency and 
effectiveness of their public safety resources.  The Company has 
also seen increased emphasis on the coordination of public safety 
systems between neighboring towns, county, and state police 
organizations. The Registrant's products are designed and marketed 
with the option to be used in this type of regional application.

Results of Operations

Year Ended December 31, 1997 vs. Year Ended December 31, 1996.

During 1997, the Company's net sales decreased 15.8% to $2,077,896 
from $2,468,073 in the 1996.  The decrease in sales of turnkey 
systems and hardware upgrades of $1,101,970 or 70.0% to $470,432 for 
the 1997 period from $1,572,402 for the 1996 period had the most 
significant impact on the Company's total revenues.  The number of 
system sales decreased from 27 in the 1996 period to 6 in the 1997 
period. Hardware upgrades decreased to 5 in the 1997 period from 10 
in the 1996 period. This decrease in the total revenue and total 
number of systems sold can be partially attributed to communities 
delaying purchases of systems while they await more vendors offering 
products on a Microsoft operating environment using Microsoft NT 
Server and a Windows 95 or NT Desktop graphical user interface, 
particularly in the Southeast market. In addition, the Company 
believes that some business was lost in 1997 as a result of the 
Company not offering a PC-based police or fire system further 
highlighting importance of the migration to NT. System revenues 
resulting from the "COPS MORE 96" portion of the 1994 Crime bill 
were approximately $270,500 or 57.5% of turnkey system and hardware 
upgrade sales, representing 4 new system sales and 2 system 
upgrades. "COPS MORE 96" grants will continue to impact revenue in 
1998.

Sales of the MobileServer product increased 653.0% to $591,030 in 
the 1997 period from $78,490 in the 1996 period. Revenue from the 
ImageServer product decreased 11.8% to $217,501 for the 1997 period 
from $246,737 in the 1996 period. Support revenues increased $77,491 
or 19.3% to $479,498 for the 1997 period from $402,007 for the 1996 
period. This increase in the support revenues reflects the 
increasing customer base.

Cost of sales increased $107,610 or 11.5% to $1,043,293 for the 1997 
period from $935,683 for the 1996 period. Cost of sales increased 
despite the decrease in revenue due to a less profitable product mix 
and new product startup costs.  Gross margins decreased from 62.1% 
in the 1996 period to 49.8% in the 1997 period.  Margins on system 
sales and hardware upgrades remained relatively flat. However 
systems sales and hardware upgrades represented only 22.6% of 
revenues in the 1997 period versus 63.7% in the 1996 period 
significantly reducing their contribution to gross margin. 
The MobileServer product had the most significant unfavorable impact 
on gross margins as a result of a 653.0% increase in sales combined 
with the fact that 1997 margins were less than half of the margins 
earned on the Company's PoliceServer and FireServer systems.  The 
MobileServer margins were unfavorably impacted by startup costs 
associated with the Cerulean private branding agreement including 
upgrading existing customers to the Cerulean system, first-in-state 
discounts, and prior pricing commitments to customers for mobile 
systems funded by grants.   It is expected that margins on the 
MobileServer product will improve significantly during the second 
half of 1998 as a result of the implementation of more efficient 
implementation processes and pricing analysis tools.

In contrast, software support and update service revenues delivered 
traditionally high margins which increased from 95.5% in the 1996 
period to 96.0 in the 1997 period.  

The Company's operating expenses increased $768,343 or 63.3% to 
$1,981,539 for the 1997 period from $1,213,196 for the 1996 period.  
The Company's commitments in several areas including the 
MobileServer product, overall product quality and customer 
satisfaction, and other new product development contributed 
significantly to the increases in spending.  Of the increases,  
$317,612 or 41.3% is attributable to research and development 
spending on the mobile product interface to the state information 
system, a network search product (LENS), and NT product development 
of PoliceServer 2.   In all cases, the Company used outside 
resources to design and develop these projects creating minimal 
impact on the long-term financial commitments of the company.  NT 
product development will continue throughout 1998 until all modules 
of PoliceServer and FireServer have been ported to the NT platform, 
consistent with market demands.  During 1997, a significant number 
of the requests for proposals (RFP's) received by Pamet Systems have 
required either a functioning NT system or a transition plan to the 
NT platform.

Personnel costs increased 34.2% or $252,676 to $990,897 for the 1997 
period from $738,221 for the 1996 period. The most significant 
portion of the increased expense results from hiring David McKay as 
President and Chief Executive Officer while Dr. Joel Searcy, the 
Company's former President and Chief Executive officer, remains as 
Chairman of the Board. In addition, employee salary increases and 
incentive plans were implemented to bring employee compensation more 
in line with market rates.  The other significant impact on 
personnel costs was a 19.5% increase in employee health insurance 
costs. 

Rent, utilities and telephone increased 21.8% to $76,228 for the 
1997 period from $62,574 for the 1996 period as a result of 
increased telephone usage.  The most significant reason for this 
increase is telephone support for the Company's growing client base 
located outside of the Northeast.   

Travel and entertainment expenses increased $47,247 or 80.8% to 
$105,706 for the 1997 period from $58,459 for the 1996 period due to 
the increased travel associated with the customer satisfaction, 
program management and training activities in the Southeast region. 
The complex nature of the installation at Cherokee County, GA from a 
program management and technological standpoint stretched the 
Company's resources and required numerous site visits. This 
incremental spending was not planned and was not billable to the 
customer. The Company has taken steps to insure that travel, project 
management, bid and performance bond interest costs and conversion 
and interface costs are included in all future pricing decisions. 

Spending on professional fees increased $100,199 or 149% to $167,381 
for the 1997 period from $67,182 for the 1996 period. Consulting 
fees contributed $34,834 of the increase.  The most significant 
expenditures resulted from an outside marketing survey to determine 
the mobile product market demand and the cost of an outside firm 
hired to update existing product documentation.  These expenditures 
supported the ongoing mobile data terminal and product quality 
projects.  Legal fees increased 226.2% to $90,550 for the 1997 
period from $27,758 for the 1996 period as a result of the services 
that were required to complete a private placement of 200,000 shares 
of Company stock, to negotiate employment agreements with the 
Company's officers, and to support the acquisition of Technology 
Assembles Inc. in February 1998. 

Depreciation expense increased 18.9% to $72,472 for the 1997 period 
from $60,963 for the 1996 period reflecting the increased first year 
depreciation on the new computer equipment purchased as a result of 
the theft of nearly all the corporate computer equipment in June 
1997.  

Other operating expenses increased 11.3% or $25,446 to $251,243 for 
the 1997 period from $225,797 for the 1996 period.  The most 
significant components of the increase were the replacement 
purchases of a substantial amount of non-capitalizable assets, the 
upgrade of the corporate Internet access line, and the increased 
costs of officers' life insurance.  This increased spending was 
partially offset by a reduction in grant related marketing expenses.

Net interest expense decreased to $69,027 for the 1997 period 
compared to the net expense of $80,013 for the 1996 period. This 
decrease reflects the lower average balance on working capital loans 
obtained from Directors and Officers as well as the decreased 
balance and interest rate on the Company's mortgage note.   During 
1997, the Company completed a private placement of 200,000 shares of 
common stock at $2.75 per share reducing the need for Director and 
Officer debt financing.

As stated above, the Company experienced a theft of essentially all 
of its computer equipment in June 1997.  The Company's commercial 
insurance policy provided for replacement cost of the stolen 
equipment.  This theft generated other income of $61,649 for the 
Company because the majority of the equipment that was stolen was 
fully depreciated.

The loss for the 1997 period was $954,314 or $(.42) per share 
compared to a profit of $243,681 or $.10 per share for the 1996 
period assuming fully diluted shares outstanding.

Liquidity and Capital Resources 

The Company's working capital was a deficit of $430,122 at December 
31, 1997 compared to a deficit of $78,293 at December 31, 1996. Cash 
decreased to $40,522 at December 31, 1997 from $55,353 at December 
31, 1996. The deterioration in working capital reflects the 
investments in the business as well as the reduced gross margins 
generated from revenues for the year. Accounts receivable increased 
to $661,260 at December 31, 1997 from $600,672 at December 31, 1996, 
reflecting the increase in days sales outstanding.

The Company's backlog exclusive of support revenues was in excess of 
$600,000 at December 31, 1997. On March 27, 1998 the backlog was 
approximately $490,000. The trend that was exhibited in 1997 towards 
increased sales in the MobileServer product is anticipated to 
continue into 1998.  MobileServer represents over $386,000 or 79% of 
the backlog at March 27, 1997. The remaining awards from the "Cops 
More 96" grant submissions combined with sales of the Company's 
suite of products should help sustain sales growth in 1998.  In 
addition, the Company is continuing to consider projects to increase 
its cash position such as activities to raise capital, mergers, 
acquisitions or other business combinations. Subsequent to year-end, 
the Company completed a stock sale to a Director of 125,000 shares 
of stock at $4.25 per share raising $531,250.  Included with this 
sale of stock, the Director received 31,250 warrants exercisable at 
4.25 per share. The Company has also secured an additional line of 
credit for $300,000 from a Director, increasing the total available 
lines of credit to $600,000 from Directors.  The Company believes 
its existing backlog, the loan commitments, additional securities 
offerings and its current market position will be sufficient to 
ensure the continued operations through the end of the year.

As of December 31, 1997, the Registrant had accumulated 
approximately $4,700,000 and $2,800,000 in net operating loss 
carryforwards for federal and state income tax purposes 
respectively. The loss carryforwards expire in the year 2011.  Under 
the Internal Revenue Code of 1986, as amended, the rate at which a 
corporation may utilize its net operating losses to offset its 
income for federal tax purposes is subject to specified limitations 
during periods after the corporation has undergone an "ownership 
change".  It has been determined that an ownership change did take 
place at the time of the Registrant's initial public offering. 
However, the limitations on the loss carryforward exceed the 
accumulated loss at the time of the "ownership change".  Thus there 
is no restriction on its use.

Seasonality

The majority of the Company's installed base has a fiscal year that 
commences on July 1 and, therefore, the Company bills its customers 
for their annual software support and update service on July 1 of 
each year.  Consequently, cash flow representing software support 
revenues has tended to be higher in the second half of the 
Registrant's fiscal year, although software support revenues are 
recognized ratably throughout the fiscal year.  

Revenue Recognition

Revenues from software license fees are recognized when a contract 
has been executed, the product has been delivered, all significant 
contractual obligations have been satisfied and collection of the 
related receivable is probable.  Maintenance revenues, including 
those bundled with the initial license fee, are deferred and 
recognized ratably over the service period.  Consulting and training 
service revenues are recognized as the services are performed.  

In October 1997, the American Institute of Certified Public 
Accountants issued Statement of Position 97-2  "Software Revenue 
Recognition," (the "SOP").  This SOP is effective for transactions 
entered into in fiscal years beginning after December 15, 1997.  
This Company will adopt this SOP in its fiscal year 1998.  The 
application of this SOP is not expected to have a material effect on 
the Company's results of operations as reported herein as the 
revenue recognition rules utilized by the Company are substantially 
consistent with the provisions of the SOP.  Accordingly, adoption of 
this SOP will not have a material effect on future results of 
operations.

Recently Issued Accounting Standards

In July 1997, the FASB issued SFAS 130 "Reporting Comprehensive 
Income."  This statement is effective for fiscal years beginning after 
December 15, 1997.  The Company will implement this statement as 
required in fiscal year 1998.  The future adoption of SFAS 130 is not 
expected to have a material effect on the Company's financial position 
or results of operations.

Inflation

Inflation has not had a significant impact on the Registrant's 
operations to date.

<PAGE>

          Item 7.  Financial Statements and Supplementary Data.



                                    PAMET SYSTEMS, INC.

                               INDEX TO FINANCIAL STATEMENTS

                                                          Page


               Report of Independent Auditors   _________   F-2

               Financial Statements:

                 Balance Sheet - December 31, 1997   ____   F-3


                 Statements of Operations -
                   Years Ended December 31, 1997 and 1996   F-4

                 Statements of Stockholders' Equity -
                   Years Ended December 31, 1997 and 1996   F-5

                 Statements of Cash Flows -
                   Years Ended December 31, 1997 and 1996   F-6


               Notes to Financial Statements   __________   F-8


             All schedules for which provision is made in the applicable
             accounting regulations of the Securities and Exchange
             Commission are not required under the related instructions or
             are inapplicable, and therefore have been omitted.

<PAGE>

                              REPORT OF INDEPENDENT AUDITORS


           Board of Directors and Stockholders
           Pamet Systems, Inc.


           We have audited the accompanying balance sheet of Pamet Systems,
           Inc. as of December 31, 1997, and the related statements of
           operations, stockholders' equity and cash flows for each of the two
           years in the period ended December 31, 1997. These financial
           statements are the responsibility of the Company's management. Our
           responsibility is to express an opinion on these financial
           statements based on our audits.

           We conducted our audits in accordance with generally accepted
           auditing standards. Those standards require that we plan and
           perform the audit to obtain reasonable assurance about whether the
           financial statements are free of material misstatement. An audit
           includes examining, on a test basis, evidence supporting the
           amounts and disclosures in the financial statements. An audit also
           includes assessing the accounting principles used and significant
           estimates made by management, as well as evaluating the overall
           financial statement presentation. We believe that our audits
           provide a reasonable basis for our opinion.

           In our opinion, the financial statements referred to above present
           fairly, in all material respects, the financial position of Pamet
           Systems, Inc. as of December 31, 1997, and the results of its
           operations and its cash flows for each of the two years in the
           period ended December 31, 1997, in conformity with generally
           accepted accounting principles.


           Carlin, Charron & Rosen LLP

           March 27, 1998

<PAGE>

<TABLE>
<CAPTION>
          BALANCE SHEET
                                                    
          PAMET SYSTEMS, INC.

          ASSETS                                     December 31, 1997
                                                     -----------------
<S>                                                       <C>
          CURRENT ASSETS
            Cash                                               $40,522
            Accounts receivable, net of allowance for
              doubtful accounts of $60,000                     661,260
            Inventory, net of reserve of $15,000                89,811 
            Prepaid expenses and other current assets           39,594
                                                                ------
                                   TOTAL CURRENT ASSETS        831,187

          PROPERTY AND EQUIPMENT, NET                          945,970
          RESTRICTED CASH                                       27,860
                                                                ------
                                           TOTAL ASSETS     $1,805,017
                                                            ==========

          LIABILITIES AND STOCKHOLDERS' EQUITY

          CURRENT LIABILITIES
            Accounts payable                                  $627,227
            Accrued expenses                                   144,178
            Notes payable-related party                        192,439
            Deferred software maintenance revenue              279,823
            Current portion of long-term debt                   17,642
                                                                ------
                              TOTAL CURRENT LIABILITIES      1,261,309
                                                                       
          LONG TERM DEBT, less current portion                 478,317
          UNEARNED SUPPORT REVENUE                              28,962

          COMMITMENTS AND CONTINGENCIES

          STOCKHOLDERS' EQUITY
            Preferred stock, $.01 par value, 1,000,000
              shares authorized, none issued
            Common stock, $.01 par value, 7,500,000 shares
              Authorized, 2,410,250 issued and outstanding      24,103
            Additional paid-in capital                       4,776,821
            Accumulated deficit                             (4,764,495)
                                                           -----------
                      TOTAL STOCKHOLDERS' EQUITY                36,429
                                                                ------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $1,805,017
                                                            ==========

</TABLE>

          See accompanying notes to financial statements.

<PAGE>

<TABLE>
<CAPTION>
          STATEMENTS OF OPERATIONS

          PAMET SYSTEMS, INC.

                                                     Year Ended December 31,
                                                         1997       1996
                                                         ----       ----
<S>                                                  <C>         <C>
          Net hardware and software sales            $1,598,398  $2,066,066
          Support revenues                              479,498     402,007
                                                      ---------   ---------
                           TOTAL REVENUES             2,077,896   2,468,073

          Cost of sales                               1,043,293     935,683
                                                      ---------   ---------
                           GROSS PROFITS              1,034,603   1,532,390

          Operating expenses
           Personnel costs                              990,897     738,221
           Rent, utilities and telephone                 76,228      62,574
           Travel and entertainment                     105,706      58,459
           Professional fees                            167,381      67,182
           Depreciation                                  72,472      60,963
           Research and development                     317,612          --
           Other operating expenses                     251,243     225,797
                                                        -------     -------
                           TOTAL OPERATING EXPENSES   1,981,539   1,213,196
                                                      ---------   ---------

          Income (loss) from operations                (946,936)    319,194
          Interest income                                 1,265       1,243
          Interest expense                              (70,292)    (81,256)
          Gain on sale of property and equipment             --       4,500
          Gain on insurance settlement                   61,649          --
                                                      ---------   ---------

                           NET INCOME (LOSS)          $(954,314)   $243,681

                                                      =========    ========

          Earnings (loss) per common share               $(.42)        $.11
                                                           ====         ===

          Earnings (loss) per common share-                  --        $.10
          assuming dilution                           =========   =========

</TABLE>
                      See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>
        STATEMENTS OF STOCKHOLDERS' EQUITY

        PAMET SYSTEMS, INC.




                                          Additional                    Total
                           Common Stock      Paid-In Accumulated Stockholders'
                           Shares Amount     Capital     Deficit       Equity
                           ------ ------    -------      -------       ------
<S>                     <C>       <C>     <C>         <C>             <C>
      BALANCE AT
      JANUARY 1, 1996   2,018,250 $20,183 $4,072,629  $(4,053,862)    $38,950


      NET INCOME                                          243,681     243,681


      CONVERSION OF
      STOCK OPTIONS        84,000     840     34,976                   35,816
                        ---------  ------    -------     -------     --------
                                                                      
      BALANCE AT
      DECEMBER 31, 1996 2,102,250  21,023  4,107,605   (3,810,181)    318,447



      NET LOSS                                           (954,314)   (954,314)

      CONVERSION OF
      STOCK OPTIONS       108,000   1,080    121,216                  122,296

      PRIVATE PLACE-
      MENT OF STOCK       200,000   2,000    548,000                  550,000
                        ---------  ------    -------     -------     --------

      BALANCE AT
      DECEMBER 31, 1997 2,410,250 $24,103 $4,776,821  $(4,764,495)    $36,429
                        ========= ======= ==========  ============   ========

</TABLE>
                      See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>
          STATEMENTS OF CASH FLOWS

          PAMET SYSTEMS, INC.     

                                                    Year Ended December 31,
                                                     1997            1996
<S>                                               <C>             <C>
          OPERATING ACTIVITIES
           Net income (loss)                      $(954,314)      $243,681
           Adjustments to reconcile net income
             (loss) to net cash used for
             operating activities:
             Depreciation and amortization           72,473         60,963
             Gain on sale of property and
                equipment                                --         (4,500)
             Gain on Insurance settlement           (61,649)            --

           Changes in operating assets and
               liabilities:
             Accounts receivable                    (58,588)      (356,511)

             Inventory                              (21,121)       (58,994)
             Prepaid expenses and other current
                assets                              (19,342)        26,392
             Other assets                                --          1,025
             Restricted cash                           (714)          (696)
             Accounts payable                       312,498         69,213
             Accrued expenses                        37,044        (33,550)
           Deferred software maintenance and
              unearned support revenue               22,744         16,724
                                                     ------         ------ 
                  Net cash used for operating
                     activities                    (670,969)       (36,253)

          INVESTING ACTIVITIES

          Expenditures for property
             and equipment                         (129,835)       (56,809)
          Proceeds from sale of property and
             equipment                                   --          4,500
          Proceeds from insurance settlement        108,708             --
                                                    _______          ______

                Net cash used for investing
                   activities                       (21,127)       (52,309)

</TABLE>
                                                                  (Continued)

<PAGE>
<TABLE>
<CAPTION>
          STATEMENTS OF CASH FLOWS - CONTINUED

          PAMENT SYSTEMS, INC.                        Year Ended December 31,
                                                       1997            1996

<S>                                               <C>             <C>
          FINANCING ACTIVITIES

           Proceeds from notes payable-
             related party                          375,000         243,000
           Payment of notes payable-related party  (355,660)       (151,000)
           Payments of long-term debt               (14,371)        (12,165)
           Issuance of capital stock                672,296          35,816
                                                    -------         -------
             Net cash provided by
               financing activities                 677,265         115,651

                 NET INCREASE (DECREASE) IN CASH    (14,831)         27,089

            Cash at beginning of period              55,353          28,264
                                                     ------          ------

                 CASH AT END OF PERIOD              $40,522         $55,353
                                                    =======         =======


           SUPPLEMENTAL DISCLOSURES OF CASH
             FLOWS INFORMATION:
               Cash paid for interest               $74,000         $78,000
                                                    =======         =======

</TABLE>
                       See accompanying notes to financial statements

<PAGE>

          NOTES TO FINANCIAL STATEMENTS

          PAMET SYSTEMS, INC.


          NOTE A--NATURE OF OPERATIONS

          Pamet Systems, Inc. (the Company), a Massachusetts corporation, was
          formed in November 1987 to engage in the business of designing,
          developing, installing and servicing computer software systems for
          the municipal market throughout the Eastern United States,
          principally in the area of public safety.  Credit is granted to
          certain customers, most of which are municipalities. The Company
          generally does not require collateral.

          The Company's committed backlog at March 27, 1998 was in excess of
          $480,000 (unaudited). Management believes that this level of backlog
          and its anticipated sales are adequate to sustain operations through
          the end of fiscal year 1998.


          However, the ultimate success of the Company is still dependent upon
          its ability to secure financing adequate to meet its working capital
          and product development needs and the successful development of a
          Microsoft Windows NT computing platform for the Company's current
          applications that can be effectively marketed to expand the Company's
          operations. Some directors and officers of the Company, under certain
          circumstances, have agreed to provide short term financing on a
          temporary basis as needed. Management believes the Company's current
          sources of liquidity and funding are adequate to sustain operations.
          Management is also trying to enhance its financial position by
          obtaining permanent additional financing. There can be no assurance,
          however, that the Company's operations will be sustained or be
          profitable in the future, that adequate sources of financing will be
          available at all, when needed or on commercially acceptable terms, or
          that the Company's product development efforts will be successful.

          NOTE B--SIGNIFICANT ACCOUNTING POLICIES

          Restricted Cash:  In connection with its mortgage agreement, the
          Company is required to maintain an interest reserve account with the
          mortgagee. Withdrawals from the account are restricted to the payment
          of mortgage principal or interest.

          Property and Equipment:  Property and equipment are stated at cost
          and are depreciated on the straight line or accelerated methods over
          their estimated useful lives.

          Inventory:  Inventory, which consists primarily of computer-related
          supplies, is stated at the lower of cost (first-in, first-out) or
          market value.


<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE B--SIGNIFICANT ACCOUNTING POLICIES (continued)

          Deferred Software Maintenance Revenue and Unearned Support Revenue:
          Deferred software maintenance revenue and unearned support revenue
          represent revenue relating to software support, updates and
          warranties which the Company has not yet earned.  Software
          maintenance fees are recognized ratably over the period of the
          service contract.  The portion of the maintenance fee associated with
          the sale of a first time system or software that relates to the
          initial maintenance period is also recognized ratably over the period
          of the extended service.

          Revenue Recognition:  The Company generally recognizes product
          revenue upon shipment. Revenues for products with extensive
          installation requirements under contractual agreements are recognized
          upon customer acceptance.

          Earnings (loss) per Common Share:  In 1997, loss per common share is
          computed using the weighted average number of shares of common stock
          outstanding during the period. Diluted per share computations are not
          presented since the effect would be antidilutive. In 1996, earnings
          per common share are also computed using the weighted average number
          of shares of common stock outstanding during the period. Diluted per
          share computations include dilutive common equivalent shares from
          stock options, using the treasury stock method.

          Stock-Based Compensation:  The Company measures compensation expense
          relative to employee stock-based compensation plans using the
          intrinsic value-based method of accounting as prescribed by
          Accounting Principles Board Opinion No. 25, "Accounting for Stock
          Issued to Employees". However, the Company will disclose the pro
          forma amounts of net income and earnings per share as if the fair
          value-based method of accounting prescribed by Statement of Financial
          Accounting Standards No. 123, "Accounting for Stock-Based
          Compensation" had been applied.  See the Stockholders' Equity
          footnote for these disclosures.

          Research and Development:  Research and development costs are charged
          to expense as incurred.

          Use of Estimates:  The preparation of financial statements in
          conformity with generally accepted accounting principles requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting
          period.  Actual results could differ from those estimates.

          Income Taxes:  The Company accounts for income taxes according to the
          liability method. Under this method, deferred tax assets and
          liabilities are determined based on differences between financial
          reporting and income tax bases of assets and liabilities and are
          measured using enacted tax rates and tax laws that will be in effect
          when the differences are expected to reverse.  The primary component
          of the Company's deferred tax asset as of December 31, 1997, which is
          fully reserved, is net operating loss carryforwards.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE C--RELATED-PARTY TRANSACTIONS

          Director Compensation:  The Company paid approximately $15,000 in
          1997 and $14,000 in 1996 to a stockholder and director for financial
          accounting consulting services.

<TABLE>
<CAPTION>
          Notes Payable - Related party consist of the following:

<S>                                                                <C>
                                                                       1997

          Notes payable to a director for unsecured advances.      $192,439
                                                                    =======
</TABLE>
          NOTE D--PROPERTY AND EQUIPMENT AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
          Property and equipment at December 31 is as follows:

                               Balance at
                                Beginning                        Balance at
                                       of  Additions                 End of
          Classification           Period    at Cost Retirements     Period


<S>                            <C>          <C>       <C>        <C>
          Year Ended December
             31, 1997:
           Land                  $231,283                          $231,283
           Building               758,728                           758,728
           Furniture and Fixtures 122,850                           122,850
           Computer Equipment     317,287   $129,835  $(76,610)     370,512
           Automobiles             24,894                            24,894
                                ---------   --------   --------  ----------
                       TOTALS  $1,455,042   $129,835  $(76,610)  $1,508,267
                                =========   ========   ========  ==========

          Year Ended December
             31, 1996:
           Land                  $231,283                          $231,283
           Building               758,728                           758,728
           Furniture and
              Fixtures            118,049     $4,801                122,850
           Computer Equipment     293,960     27,114   $(3,787)     317,287
           Automobiles             22,900     24,894   (22,900)      24,894
                                ---------   --------   --------  ----------
                      TOTALS   $1,424,920    $56,809  $(26,687)  $1,455,042
                                =========   ========   ========  ==========
</TABLE>

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE D--PROPERTY AND EQUIPMENT AND ACCUMULATED DEPRECIATION
          (Continued)

<TABLE>
<CAPTION>
          Accumulated depreciation at December 31 is as follows:

                               Balance at
                                Beginning  Additions             Balance at
                                       of    Charged                 End of
          Classification           Period To Expense Retirements     Period
<S>                              <C>         <C>      <C>          <C>
          Year Ended December
             31, 1997:
           Building              $135,972    $24,117               $160,089
           Furniture and
             Fixtures             108,567      8,102                116,669
           Computer Equipment     287,340     32,698  $(46,776)     273,262
           Automobiles              4,721      7,556                 12,277
                                 ________     ______   ________    ________
                       TOTALS    $536,600     72,473  $(46,776)    $562,297
                                 ========     ======  =========    ========

          Year Ended December
             31, 1996:
           Building              $111,849    $24,123               $135,972
           Furniture and
             Fixtures              98,689      9,878                108,567
           Computer Equipment     268,886     22,241   $(3,787)     287,340
           Automobiles             22,900      4,721   (22,900)       4,721
                                 ________    _______   ________    ________
                       TOTALS    $502,324    $60,963  $(26,687)    $536,600
                                 ========    =======  =========    ========
</TABLE>
<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE E--ACCRUED EXPENSES

<TABLE>
<CAPTION>
          Accrued expenses include the following:
                                                        December 31,
                                                                1997
                                                                ----
<S>                                                         <C>
          Accrued payroll and vacation                      $102,245
          Accrued and withheld payroll taxes                  19,895
          Other                                               22,038
                                                              ------
                                                            $144,178
                                                            ========
</TABLE>

          NOTE F--LONG TERM DEBT

          Long term debt represents a note secured by a mortgage on the
          Company's facility.  On October 21, 1997, the note was extended for a
          one year term with monthly payments determined according to a twenty-
          year amortization period.  $5,423, including interest at 10.00%, is
          payable monthly.  In addition, the note is subject to several
          conditions, including:

                   -  Four officers, directors and/or stockholders of the
                      Company are limited guarantors of the note to the extent
                      of $50,000 each. In connection with these guarantees
                      these four officers, directors and/or stockholders
                      received $1,500 in 1997 and 1996.

                   -  Payment of dividends is restricted, requiring approval of
                      the mortgagee.

                   -  Salary increases for officers above base levels are
                      restricted, requiring approval of the mortgagee.

          Subsequent to December 31, 1997, the bank issued a commitment letter
          that indicates this mortgage note will be renewed for one year, until
          October 1999. Payment terms and interest rates, although not
          finalized, are expected to remain consistent with current terms and
          rates. Maturities reflect these terms and rates.

<TABLE>
<CAPTION>
          Annual principal maturities of long-term debt are as follows:

<S>                                                  <C>
                  Year ending  December 31, 1998      $17,642
                               December 31, 1999      478,317
                                                      -------
                                             TOTAL   $495,959
                                                     ========
</TABLE>

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE G--STOCKHOLDERS' EQUITY

          Stock-based compensation expense under the fair value-based method of
          accounting would have resulted in pro forma net income and earnings
          (loss) per common share approximating the following amounts:

<TABLE>
<CAPTION>
                                     1997                       1996
                                     ----                       ----
                            As Reported  Pro Forma     As Reported  Pro Forma

<S>                          <C>        <C>              <C>         <C>
          Net Income (loss)  $(954,314) $(1,364,185)     $243,681    $186,967
                             ========== ============     ========    ========

          Earnings (loss)
          per common share       $(.40)       $(.60)         $.10        $.08
                                  =====       ======         ====        ====

</TABLE>

          The fair value for each option granted during 1997 and 1996,
          reflecting the basis for the above pro forma disclosures, was
          determined on the date of grant using the Black-Scholes option-
          pricing model.  The following assumptions were used in determining
          fair value through the model:

<TABLE>
<CAPTION>
                                              1997            1996
                                              ----            ----
<S>                                    <C>             <C>
          Expected Life                  5-8 years *     5-8 years *
          Risk-free interest rate      5.80%-6.68% *   6.23%-6.74% *
          Expected Volatility                 128%            136%
</TABLE>

          *Amounts vary due to graded vesting for options granted to employees
          and differences between options granted to employees and granted to
          directors.

          The Company recognizes forfeitures as they occur.

          The application of fair value-based accounting in arriving at the pro
          forma disclosures above is not an indication of future income
          statement effects.  The pro forma disclosures do not reflect the
          effect of fair-value accounting on stock-based compensation awards
          granted prior to 1995, if any.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE G--STOCKHOLDERS' EQUITY (Continued)

          Stock Option Plans:  In 1990, the Company adopted a Stock Option Plan
          under which the Board of Directors may grant incentive or non-
          qualified stock options to employees, directors and consultants of the
          Company.  The maximum number of shares of stock subject to issuance
          under the 1990 Stock Option Plan is 400,000 shares.  These options, of
          which a total of 109,000 had been exercised at December 31, 1997, are
          exercisable within a ten-year period from the date of the grant,
          generally fully exercisable when issued to directors and exercisable
          20% per year and continuing over five years for employees and
          consultants. The options are not transferrable except by will or
          domestic relations order.  The option price per share under the Plan
          is not less than the fair market value of the shares on the date of
          grant.

          Stock option activity for the 1990 Stock Option Plan for the two year
          period ended December 31, 1997 is as follows:

<TABLE>
<CAPTION>
                                                         Weighted Average
                                                  -----------------------------
                                         Exercise                       Remain-
                               Number       Price Exercise Fair Value       ing
                           Of Options   Per Share    Price   at grant      Life
                           ----------  ---------- -------- ---------- ----------
<S>                        <C>         <C>        <C>      <C>        <C>
          Outstanding                 
          January 1, 1996     320,500  $.02-$5.50    $.55             5.71 years
          Granted to
             Directors          8,000       $1.12   $1.12     $1.00
          Granted to
             Employees         54,500       $3.50   $3.50     $3.27

          Exercised           (34,000) $.02-$1.44    $.06
                           ----------  ---------- -------- ---------- ----------
          Outstanding
          December 31,
             1996             349,000  $.02-$5.50   $1.07             5.08 years
          Granted to
             Directors              0           0
          Granted to
             Employees              0           0
          Exercised           (58,000) $.02-$3.50    $.38
                           ----------  ---------- -------- ---------- ----------

          Outstanding
          December 31,
            1997              291,000 $.02-$5.50    $1.21             3.49 years
                            ========= ==========    =====  ========== ==========

          Exercisable at
          December 31, 1997   191,000 $.02-$5.50     $.83
                            ========= ==========    =====

          Exercisable at
          December 31, 1996   214,800 $.02-$5.50     $.60
                            ========= ==========    =====

          Available for
          Grant At December
          31, 1997 and 1996       -0-
                                 ====
</TABLE>

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE G--STOCKHOLDERS' EQUITY (Continued)

          In addition, the Company also issued stock options outside of any
          formalized plan that are exercisable within a ten-year period from the
          date of grant and are generally fully exercisable when issued to
          directors and exercisable 25% per year and continuing over four years
          for employees and consultants. The options are not transferable except
          by will or domestic relations order. The option price per share is not
          less than the fair market value of the shares on the date of grant.

          Stock option activity for stock options issued outside a formalized
          plan for the two year period ended December 31, 1997 follows:

<TABLE>
<CAPTION>
                                                         Weighted Average
                                                  -----------------------------
                                         Exercise                       Remain-
                               Number       Price Exercise Fair Value       ing
                           Of Options   Per Share    Price   at grant      Life
                           ---------- ----------- -------- ---------- ----------
<S>                        <C>        <C>         <C>      <C>        <C>
          Outstanding
            January 1,
            1996              120,000   $.68-$.80     $.73            9.60 years

          Exercised           (50,000)       $.68     $.68

          Cancelled            (5,000)       $.68     $.68
                           ----------  ---------- -------- ---------- ----------
          Outstanding                                                 
          December 31,
            1996               65,000   $.68-$.80     $.77            8.20 years

          Granted to
             Directors and
             officers in
             consideration
             of providing
             short-term
             financing        120,000       $2.00    $2.00     $1.51

          Granted to
             Directors          8,000       $2.75    $2.75     $2.39


          Granted to
             Employees        230,000 $2.75-$4.25    $3.07     $3.02

          Exercised          (50,000)       $2.00    $2.00
                           ---------- ----------- -------- ---------- ----------
          Outstanding
             December 31,
             1997            373,000   $.68-$4.25    $2.10            5.94 years
                           =========  =========== ======== ========== ==========

          Exercisable at
             December 31,
             1997            193,000   $.68-$2.75    $1.81
                           =========  =========== ========

          Exercisable at
             December 31,
             1996            65,000    $.68-$.80      $.77
                           =========  =========== ========
</TABLE>
          On January 1, 1998 options representing 8,000 shares were granted to
          directors at an exercise price of $4.25 per share.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE H--EARNINGS PER SHARE DISCLOSURE

          Earnings per share disclosures for the two year period ended December
          31, 1997 are as follows:

<TABLE>
<CAPTION>
                                         For the Year Ended December 31, 1997
                                         ------------------------------------
                                                       Weighted-
                                                       Average     Per Share
                                            Income     Shares      Amount
<S>                                       <C>          <C>         <C>
          Basic loss per common share
            Income available to common
            stockholders                  $(954,314)   2,265,321     ($.42)
                                          ==========   =========      ====
</TABLE>

<TABLE>
<CAPTION>
                                         For the Year Ended December 31, 1996
                                         ------------------------------------
                                                       Weighted-
                                                       Average     Per Share
                                            Income     Shares      Amount
<S>                                        <C>         <C>         <C>
          Basic earnings per common share
            Income available to common
            stockholders                    243,681    2,120,259      $.11
                                                                      ====


          Dilutive stock options               --        293,134
                                            -------    ---------

          Diluted earnings per common
          share
            Income available to common
            shareholders plus assumed
            conversions                     243,681    2,413,393      $.10
                                          =========    =========      ====
</TABLE>

          Options to purchase 64,500 shares of stock at values ranging from
          $3.50-$5.50 per share were outstanding during 1996 but were not
          included in the computation of diluted earnings per common share
          because the options' exercise price was greater than the average
          market price of the common shares.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS_CONTINUED

          PAMET SYSTEMS, INC.

          NOTE I--INCOME TAXES

          In 1997, there is no current provision for federal or state income
          taxes due to the Company's net operating loss. During 1997,the
          Company recorded deferred tax assets for the benefit of net operating
          losses in the amount of $227,000. The cumulative amount of these
          assets, which is $937,000 at December 31, 1997 is fully reserved due

          to the Company's history of operating losses. Thus, management has
          concluded that realization of the benefit is not likely. During 1996
          there was no current provision for federal or state income taxes due
          to the Company's utilization of pat operating loss carryforwards to
          completely offset taxable income.

<TABLE>
<CAPTION>
          The reconciliation of income tax attributable to operations computed
          at the U.S. federal statutory tax rates to income tax expense for
          1996 is as follows:

<S>                                     <C>                 <C>
          Tax at U.S. Statutory Rates    $82,852              34%

          State income taxes, net of
          Federal tax effect                  --              --


          Other                         $(15,403)           (34)%

          Effect of net operating
          Loss carryforwards            $(67,449)           (34)%
                                         ________           _____

          TOTALS                        $     --             -- %
                                        ========            =====

</TABLE>
          The Company has available for federal and state income tax purposes
          net operating loss carryforwards of approximately $4,700,000 and
          $2,800,000, respectively, which may be used to offset future taxable
          income. These net operating loss carryforwards, if unused, expire in
          2011.

          NOTE J--SIGNIFICANT CUSTOMERS

          There were no sales to individual customers that were greater than
          10% of total revenues for the years ended December 31, 1997 and 1996.

          NOTE K--ECONOMIC DEPENDENCY

          The Company obtained approximately 33% of its merchandise from two

          sources in 1997.  Management believes that if these suppliers ceased
          providing merchandise, the Company could find alternative suppliers
          without serious interruption of business.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS_CONTINUED

          PAMET SYSTEMS, INC

          NOTE L--PROFIT SHARING PLAN

          During 1997, the Company established a qualified contributory profit
          sharing plan [401(k) Plan]. The Plan covers substantially all
          eligible employees meeting certain age and service requirements.
          Employee contributions are voluntary, based on specific percentages
          of compensation. The Plan also provides for contributions by the

          Company in any amount approved by the Board of Directors. During
          1997, the Board elected to make contributions equal to 15% of
          employee contributions. The employees' and employer's contributions
          may not exceed maximum amounts established by the Internal Revenue
          Code. Total Company contributions to the plan were $4,914 during
          1997.

          NOTE M--GAIN ON INSURANCE SETTLEMENT

          During 1997, the Company was burglarized. The Gain on Insurance
          Settlement represents the net gain on the settlement with the
          insurance company for equipment and inventories lost in the burglary.

          NOTE N--EMPLOYMENT CONTRACT

          The Company has entered into employment contracts with three of its
          officers through 1999 that provide for minimum annual salaries,
          adjusted for cost-of-living changes, and incentives based on the
          Company's attainment of specified levels of sales and earnings. At
          December 31, 1997, the total salary commitment, excluding incentives,
          was $385,500.

          NOTE O--RESEARCH AND DEVELOPMENT

          Research and development costs in the current year represent costs
          associated with developing a Microsoft Windows NT computing platform
          for the Company's current computer applications as well as developing
          a mobile product interface to the state information system.

          NOTE P--SUBSEQUENT EVENT

          On March 2, 1998, the Company had a private placement in which an
          investor purchased 125,000 shares of the Company's common stock at a
          price of $4.25 per share.

          February 4, 1998, the Company acquired Technology Assemblers, Inc.
          (TAI). TAI is a Florida based software company whose customers are
          correctional institutions. The acquisition will be accounted for as a
          purchase and includes one year employment contracts and 30,000 stock
          options granted to three key TAI employees.

<PAGE>

          NOTES TO FINANCIAL STATEMENTS--CONTINUED

          PAMET SYSTEMS, INC.

          NOTE Q--QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
          Summarized quarterly financial data for 1997 and 1996 is as follows:

                                           Quarter Ended
                                           -------------

                          March 31,     June 30,  September 30,  December 31,
                               1997         1997           1997          1997
                          ---------     --------  -------------  ------------
<S>                       <C>           <C>       <C>            <C>
          Revenues         $607,506     $432,105       $506,455      $531,830
          Gross Profits     349,290      182,168        281,822       221,323
          Operating Income
            (loss)           30,270     (213,630)      (158,448)     (605,128)
          Net Income
            (loss)           12,228     (191,174)      (156,556)     (618,812)
          Income (loss)
            per share          $.01        $(.08)         $(.07)        $(.28)
</TABLE>
<TABLE>
<CAPTION>
                                           Quarter Ended
                                           -------------

                          March 31,     June 30,  September 30,  December 31,
                               1996         1996           1996          1996
                          ---------     --------  -------------  ------------
<S>                       <C>          <C>        <C>            <C>
          Revenues        $ 238,204    $ 759,321       $788,402      $682,146
          Gross Profits     164,413      496,540        468,604       402,833
          Operating Income
            (loss)          (86,133)     215,006        120,233        70,088
          Net Income
            (loss)         (101,280)     193,073         97,403        54,485 
          Income (loss)
            per share     $    (.05)   $     .08      $     .04       $   .03


<PAGE>

 Item 8.  Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure.

    During the Registrant's fiscal years ended December 31, 1997 
and 1996 there were no disagreements with it's auditing firm, 
Carlin, Charron & Rosen, LLP on any matters. 


PART III


Item 9.     Directors and Executive  Officers of the Registrant.


Item 10.    Executive Compensation.


Item 11.    Security Ownership of Certain Beneficial Owners and Management.


Item 12.    Certain Relationships and Related Transactions.

    If the Registrant's definitive proxy statement is filed 
within 120 days of the close of the Registrant's fiscal year ended 
December 31, 1997, the information called for by Items 9, 10, 11, 
and 12 (except to the extent set forth in Item 4A above) shall be 
deemed incorporated herein by reference to the Registrant's 
definitive proxy statement relating to the Annual Meeting of 
Stockholders.

<PAGE>

 Item 13.   Exhibits. Financial Statement Schedules, and Reports on 
        Form 8-K

(a) Exhibits

    3.1 Restated and Amended Articles of Organization (filed by 
        reference to Exhibit 3.1 to the Registrant's Annual 
        Report on Form 10-K for the fiscal year ended December 
        31, 1990)
    3.2 By-Laws, as amended (filed by reference to Exhibit 3.2 
        to Registration Statement No. 33-36989)
    4.2 Specimen Common Stock Certificate (filed by reference to 
        Exhibit 4.2 to Registration Statement No. 33-36989)
   10.1 Form of Employment agreement between the Registrant and 
        Dr. Joel B. Searcy (filed by reference to Exhibit 10.1 
        to Registration Statement No. 33-36989)
   10.3 Stock Option Plan (filed by reference to Exhibit 10.3 to 
        Registration Statement No. 33-36989)
   10.5 Form of License Agreement (filed by reference to Exhibit 
        10.5 to Registration Statement No. 33-42819)
   10.8 Commercial real estate promissory note to Lexington 
        Savings Bank dated April 21, 1992 (filed by reference to 
        Exhibit 28.1 to the Registrant's Quarterly Report of 
        Form 10-Q for the Quarter Ended June 30, 1992)
   10.9 Mortgage security agreement, and assignment granted to 
        Lexington Savings Bank, dated April 21, 1992 (filed by 
        reference to Exhibit 28.2 to the Registrant's Quarterly 
        Report of Form 10-Q for the Quarter Ended June 30, 1992)
  10.10 Mortgage guaranty by six Pamet Systems, Inc. Directors 
        and Officers, dated April 21, 1992 (filed by reference 
        to Exhibit 28.3 to the Registrant's Quarterly Report of 
        Form 10-Q for the Quarter Ended June 30, 1992)  
  10.11 Mortgage security extension (one year) Agreement granted 
        to Lexington Savings Bank, dated 21 June 1996 (Filed by 
        reference to Exhibit 10.12 to the Registrant's Quarterly 
        Report of Form 10-Q for the Quarter Ended June 30, 1996.
  10.12 Mortgage guaranty for five Pamet Systems, Inc. Directors 
        and Officers, Dated June 21, 1996 (Filed by reference to 
        Exhibit 10.12 to the Registrant's Quarterly Report of 
        Form 10-Q for the Quarter Ended June 30, 1996.
  10.13 Form of Employment agreement between the Registrant and 
        Dr. Joel B. Searcy
  10.14 Form of Employment agreement between the Registrant and 
        David T. McKay
  10.15 Form of Employment agreement between the Registrant and 
        Richard C. Becker
     11 None
     12 None
     13 None
     16 None
     18 None
     19 None
     22 None
     23 Consent of Carlin, Charron & Rosen LLP
     24 None
     25 None
     29 None 
----------------------

(b)  Reports on Form 8-K - none

<PAGE>

SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the 
Securities Exchange Act of 1934, the Registrant has duly caused 
this report to be signed on its behalf by the undersigned, 
thereunto duly authorized.


                                PAMET SYSTEMS, INC.
                                   (Registrant)

                                By JOEL B. SEARCY     
                                     Dr. Joel B. Searcy
                                     Chairman


                                Date March 30, 1998      

    Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.

       Name              Capacity                         Date

JOEL B. SEARCY           ________________________               
Dr. Joel B. Searcy       Chairman of the Board            March 30, 1998 
    

DAVID T. MCKAY           ________________________
David T. McKay           President and Chief Executive   March 30, 1998
                         Officer

RICHARD C. BECKER        ________________________
Richard C. Becker        Vice President, Finance         March 30, 1998
                         And Administration,     
                         Treasurer, Director 
                         (Principal Financial and 
                         Accounting Officer)  

LAURENCE B. BERGER       ________________________            
Laurence B. Berger       Director                        March 30, 1998


ARTHUR V. JOSEPHSON, JR. ________________________     
Arthur V. Josephson, Jr. Director                        March 30, 1998

BRUCE J. ROGOW           ________________________
Bruce J. Rogow           Director                        March 30, 1998


STANLEY J. ROBBOY, M.D.  ________________________
Stanley J. Robboy, M.D.  Director                        March 30, 1998


LEE SPELKE               ________________________                    
Lee Spelke               Director                        March 30, 1998

<PAGE>

INDEX OF EXHIBITS
 

    Exhibit                                                  Page

    
     10.13  Form of Employment agreement between
            the registrant and Dr. Joel B. Searcy

     10.14  Form of Employment agreement between 
            the registrant and David T. McKay

     10.15  Form of Employment agreement between 
            the registrant and Richard C. Becker

        23  Consent of Carlin, Charron & Rosen LLP

            Financial Data Sheet

<PAGE>

Exhibit 10.13

                             Employment Agreement

This Employment Agreement is made as of this 30th day of May, 
1997 (this "Agreement") by and between Joel B. Searcy (the 
"Employee") and Pamet Systems, Inc., a Massachusetts corporation (the 
"Company").

In consideration of the terms and mutual covenants herein 
contained, the Employee and the Company hereby agree as follows:

1.  Position, Responsibilities and Term of Employment.

    1.01    Position.  The Employee will serve as the Chairman of the 
Board of Directors of the Company and have the responsibilities and 
duties customarily associated with such position as the Board of 
Directors of the Company (the "Board") may, from time to time, 
designate or as may otherwise be appropriate and/or necessary in 
connection with his employment.

    1.02    Full Efforts.  The Employee will devote his full 
professional and business time and best efforts to the performance of 
his duties to the Company.  Except with the prior written consent of 
the Board, the Employee will not undertake or engage in any other 
employment, occupation or business enterprise.  Further, the Employee 
agrees not to acquire, assume or participate in any position, 
investment or interest adverse or antagonistic to the Company, its 
business or prospects, financial or otherwise, or take any direct or 
indirect action intended to achieve any of the foregoing.  This 
Agreement shall not be construed as preventing or otherwise 
restricting the Employee from serving on the boards of directors of 
charitable organizations or engaging in charitable activities and 
community affairs, or serving on the board of directors of a for-
profit organization that is not in competition with the Company 
provided that such service does not substantially interfere with his 
duties hereunder.

    1.03    Board Membership.  The Employee will serve as a member of 
the Board during his employment by the Company, subject to the 
provisions of the Company's Articles of Organization and By-laws.

    1.04    Term of Agreement.  Unless sooner terminated pursuant to 
Section 6 below, the term of the Employee's employment hereunder is 
from the date of this Agreement until the close of business on 
December 31, 1999.  The term of this Agreement shall be automatically 
extended for one  (1) additional year beyond its initial term or any 
extensions thereof if this Agreement is still in force immediately 
prior to such extension unless, at least one hundred and eighty days 
(180) prior to such expiration date, either party shall have given 
written notice to the other that it elects not to extend the term of 
this Agreement.  The actual term of the Employee's employment 
hereunder, giving effect to any early termination or extension of the 
term hereunder, is hereinafter referred to as the "Term."  The 
scheduled end date of the Employee's employment hereunder, giving 
effect to any extension of the term hereunder, is hereinafter 
referred to as the "Expiration Date."

    1.05    Location of Employee.  The Employee's primary place of 
residence will be in the greater Boston area but he will be expected 
to travel and work in any of a number of Company and customer 
locations on a regular basis.

    1.06    Policies and Procedures.  It is also understood and agreed 
that, except as otherwise specifically stated herein, the Employee 
shall be subject to certain Company or executive-wide operational 
policies and procedures, which policies and procedures may be 
implemented, amended or terminated by the Company at any time.

2.  Compensation and Benefits.

For the services to be rendered by the Employee pursuant to this 
Agreement, the Employee will be entitled to the following 
compensation and benefits during the Term:

    2.01    Base Salary.  The Company will pay to the Employee a salary 
at a rate of not less than One Hundred Thirty-Two Thousand Dollars 
($132,000) per annum, payable in equal semi-monthly installments, 
subject to reduction for lawful withholding.  Such salary is 
hereinafter referred to as the Employee's "Base Salary."  Such salary 
normally will be reviewed by the Company once at the beginning of 
each calendar year.  The Board, in its discretion, may increase the 
amount of the Employee's Base Salary.

    2.02    Bonuses.  In addition to his Base Salary, the Employee 
shall be entitled to receive such additional compensation, including 
grants of stock options or other equity of the Company pursuant to 
Company plans or otherwise, as shall be determined by the Board, or a 
committee thereof, in its discretion, based upon the reasonable value 
of his services to the Company.

Moreover, the Employee will also be entitled to receive 
from the Company bonus compensation in accordance with any long-term 
and/or annual incentive compensation plans as may be maintained by 
the Company for the benefit of its executives and to participate in 
any other bonus plans maintained by the Company for the benefit of 
its executives.

    2.03    Stock Options.  To the extent that Employee receives any 
stock option(s), the exercise of which would give rise to 
compensation income pursuant to Section 83 of the Internal Revenue 
Code of 1986, as amended (the "Code"), and the compensation element 
of such option(s) would not qualify as "performance based 
compensation" within the meaning of Code Section 162(m)(4)(C), then:

        (i) notwithstanding anything to the contrary, in any fiscal 
        year, Employee shall not be entitled to exercise any stock 
        options, whether granted hereunder or otherwise, to the 
        extent that, following such exercise, Employee's aggregate 
        total compensation from the Company during such fiscal year 
        (including Employee's Base Salary and any bonuses, fringe 
        benefits or other compensation which would constitute 
        "applicable employee remuneration" for purposes of Section 
        162(m) of the Code) would exceed One Million Dollars 
        ($1,000,000) and any of such applicable employee 
        remuneration would not be deductible to the Company as a 
        result of the application of Code Section 162(m); and

        (ii)    in the event that, pursuant to Section 2.03(i) above, 
        Employee is not permitted to exercise any fully vested 
        stock options in any fiscal year in which such stock 
        options would otherwise be exercisable and are due to 
        expire, then the term of such options shall be extended 
        until such time as such options may be exercised by 
        Employee without resulting in applicable employee 
        remuneration which would not be deductible to the Company 
        as a result of the application of Code Section 162(m); 
        provided, however, that the limitations set forth in 
        Section 2.03(i) above shall continue to apply to the 
        Employee's exercise of such stock options.

2.04    Fringe Benefits.  The Employee will be entitled to 
participate in any (i) pension or profit sharing or other retirement 
plans, (ii) life, health, hospitalization or disability insurance 
plans, or (iii) other benefit plans that are provided by the Company 
for its employees generally or for its executives.  The Employee
will be entitled to twenty-five (25) working days' paid vacation for
each calendar year, and a pro rata number of working days paid
vacation for any partial calendar year.

    2.05    Company Automobile.  The Company will provide the Employee 
with the use of an automobile and will pay all expenses related to 
the operation of said vehicle, including insurance, gas, taxes, 
registration fees and maintenance. Upon termination of the Employee's 
employment with the Company for any reason, the Employee will return 
the automobile to the Company or else immediately pay the Company the 
fair market value of such automobile, determined as of the date of 
the termination of his employment.

    2.06    Reimbursement.  The Company will promptly reimburse the 
Employee for all reasonable business expenses incurred by him in 
connection with his performance of his duties to the Company, upon 
substantiation of such expenses in accordance with the policies of 
the  Company.

3.  Proprietary Information.

    3.01    Access to Information.  The Employee recognizes that his 
relationship with the Company is one of high trust and confidence by 
reason of his access to and contact with the confidential, 
proprietary or secret information owned, possessed, or used by the 
Company and/or its affiliates (collectively, "Proprietary 
Information").  By way of illustration, but not limitation, 
Proprietary Information includes creative ideas and concepts; 
contemplated or planned advertising or public relations plans, 
methods or techniques; slogans, copy, names, layout, formulas, 
compositions, projects, developments, media or marketing plans; 
research data, personnel data, computer programs, whether or not 
copyrightable, trademarkable or licensable; trade secrets, processes, 
forecasts, unpublished financial statements, budgets, and licenses; 
and information concerning prices, costs, employees, customers and 
suppliers.

    3.02    Nondisclosure.  The Employee will not at any time, either 
during his employment with the Company or thereafter, disclose to 
others, or use for his own benefit or the benefit of others, any 
Proprietary Information.

    3.03    Return of Information.  Upon the termination of the 
Employee's employment with the Company for any reason, or at any 
other time upon the request of the Company, the Employee will 
promptly deliver to the Company all letters, notes, memoranda, data, 
notebooks, sketches, drawings, records, reports, files and other 
written, photographic or other tangible material (and all copies or 
reproductions of such materials) in his possession or under his 
control, whether prepared by him or others, which contain Proprietary 
Information.  The Employee acknowledges that this material is the 
sole property of the Company and is to be used by the Employee only 
for the Company's benefit in the performance of his duties to the 
Company.

    3.04    Remedies.  The restrictions contained in this Section 3 are 
necessary for the protection of the business of the Company and are 
considered by the Employee to be reasonable for this purpose.  The 
Employee agrees that any breach of this Section 3 will cause the 
Company substantial and irrevocable damage and, therefore in the 
event of any such breach, in addition to such other remedies as may 
be available, the Company will have the right to seek specific 
performance and injunctive relief.  The Employee further agrees that 
his obligations and the Company's rights under this Section 3 shall 
survive the termination of this Agreement.  The Employee also 
acknowledges that in the event that this Agreement is terminated in 
circumstances in which payments are made to the Employee in 
accordance with Section 6, such payments shall constitute additional 
consideration for the Employee's agreement to and compliance with 
this Section 3 and that such payments shall terminate immediately in 
the event that the Employee shall breach any of his covenants 
contained in this Section 3.

4.  Inventions and Patents.

    4.01    Disclosure of Developments.  The Employee will make full 
and prompt disclosure to the Company of all inventions, improvements, 
ideas, concepts, discoveries, methods, developments, software, and 
works of authorship, whether or not copyrightable, trademarkable or 
licensable, which are created, made, conceived or reduced to practice 
either by the Employee, under his direction or jointly with others 
during his employment with the Company, whether or not during normal 
working hours or on the premises of the Company (all of which are 
collectively referred to in this Agreement as "Developments").  All 
Developments shall be the sole property of the Company, and the 
Employee hereby assigns to the Company, without further compensation, 
all his right, title and interest in and to such Developments and any 
and all related patents, patent applications, copyrights, copyright 
applications, trademarks, and trade names in the United States and 
elsewhere.

    4.02    Assistance in Obtaining Patents. The Employee will assist 
the Company in obtaining, maintaining and enforcing patent, copyright 
and other forms of legal protection for intellectual property in any 
country. Upon the request of the Company, the Employee will sign all 
applications, assignments, instruments and papers and perform all 
acts necessary or desired by the Company in order to protect its 
rights and interests in any Developments.

During his employment with the Company, the Employee will 
perform his obligations under this subsection 4.02 without further 
compensation, except for reimbursement of expenses incurred at the 
request of the Company. If the Employee is not employed by the 
Company as an employee at the time he is requested to perform any 
obligations under this subsection 4.02, he will receive for such 
performance a reasonable per diem fee, as well as reimbursement of 
any expenses incurred at the request of the Company.

    4.03    Remedies.  The Employee agrees that any breach of this 
Section 4 will cause irreparable damage to the Company and that, in 
the event of such breach, the Company will have, in addition to any 
and all remedies of law, including rights which the Company may have 
to damages,  the right to equitable relief including, as appropriate, 
all injunctive relief or specific performance or other equitable 
relief.

5.  Non-Competition.

    5.01    Subsequent Employment.  The Employee agrees that, for a 
period of twenty-four (24) months following the termination of his 
employment with the Company, he will not, whether personally or as 
agent for another or as an employee, partner, joint venturer, 
principal, consultant, lender, guarantor or owner of five percent or 
more of any Organization, engage, directly or indirectly, anywhere in 
the United States, in competition with any service or product made, 
sold or provided by the Company, without the express written consent 
of the Company.  If any restriction set forth in this subsection 5.01 
is found by any court of competent jurisdiction to be unenforceable 
because it extends for too long a period of time or over too great a 
range of activities or in too broad a geographic area, it shall be  
interpreted to extend only over the maximum period of time, range of 
activities or geographic areas to which it may be enforceable.  
"Organization" shall mean any firm, association, syndicate, 
corporation or other business entity.

    5.02    No Solicitation.  The Employee agrees that, during his 
employment with the Company and during the twenty-four (24) month 
period following the termination of his employment with the Company, 
he will not directly or indirectly:

        (i) recruit employees or other agents of the Company or 
        its affiliates or take any steps to induce any such 
        employees or agents to terminate their employment or 
        other association with the Company; or

        (ii)    contact, solicit, or sell to any of the customers or 
        prospective customers of the Company or its affiliates 
        which the Employee had contact with while employed by 
        the Company, with respect to any product or service 
        which is competitive with any product or service sold 
        by the Company or its affiliates or planned to be sold 
        by the Company or its affiliates during his employment 
        with the Company or during the twenty-four (24) month 
        period following the termination of his employment.

    5.03    Remedies.  The restrictions contained in this Section 5 are 
necessary for the protection of the business and goodwill of the 
Company and are considered by the Employee to be reasonable for this 
purpose. The Employee agrees that any breach of this Section 5 will 
cause the Company substantial and irrevocable damage and, therefore, 
in the event of any such breach, in addition to such other remedies 
as may be available, the Company will have the right to seek specific 
performance and injunctive relief.  The Employee further agrees that 
his obligations and the Company's rights under this Section 5 shall 
survive the termination of this Agreement.  The Employee also 
acknowledges that in the event that this Agreement is terminated in 
circumstances in which payments are made to Employee in accordance 
with Section 6, such payments shall constitute additional 
consideration for the Employee's agreement to and compliance with 
this Section 5 and that such payments shall terminate immediately in 
the event that the Employee shall breach any of his covenants 
contained in this Section 5.

6.  Termination.

    6.01    Termination Upon Death or Disability.  If the Employee dies 
while still employed by the Company, his employment will terminate as 
of the date of his death.  If the Employee, by virtue of ill health 
or other disability, is unable to perform substantially and 
continuously the duties assigned to him for a period in excess of one 
hundred twenty (120) consecutive or non-consecutive days during any 
twelve (12) month period, the Company shall have the right to 
terminate his employment upon notice in writing to the Employee.

    6.02    Termination for Cause.  If the Employee has (i) engaged in 
wilful or repeated breach of his duties hereunder, or (ii) committed 
any act of gross negligence, fraud, misappropriation, embezzlement or 
dishonesty in the performance of his duties hereunder, or (iii) been 
convicted of, or entered a plea of guilty or nolo contendre to, a 
felony (all of which are collectively referred to in this Agreement 
as "Cause"), the Company may, by written notice to the Employee, 
immediately terminate his employment.

    6.03    Termination Without Cause or Upon a Change in Control.  The 
Company may, by written notice to the Employee, terminate his 
employment at any time without Cause. Further, any "Constructive 
Termination" will constitute termination without Cause.  For purposes 
of this Agreement, "Constructive Termination" shall mean the removal 
of the Employee from, or appointment of the Employee to lesser 
positions than, the position set forth in Section 1; material 
diminution in the nature or scope of the authorities, powers, 
functions, duties or responsibilities attached to the position 
described in Section 1; or material reduction in the compensation or 
benefits provided to the Employee in violation of Section 2.  In 
addition, the employment of the Employee shall be deemed to have been 
terminated without Cause if, within ninety (90) days of a Change of 
Control (as defined below in this subsection), he resigns or the 
Company terminates his employment for any reason, including Cause.

A "Change of Control" shall be deemed to have taken place 
upon the occurrence of any of the following events:

        (i) a majority of the directors elected at any annual 
        or special meeting of stockholders or by 
        stockholder consent are not individuals nominated 
        by the Company's incumbent Board of Directors; or

        (ii)    the acquisition of beneficial ownership (as such 
        term is defined in Rule 13d-3 as promulgated 
        under the Securities Exchange Act of 1934, as 
        amended (the "Exchange Act")) by any "person" (as 
        such term is used in Section 13(d) and 14(d) of 
        the Exchange Act), other than (w) the Company, 
        (x) the Employee, (y) any group of which the 
        Employee is a member (within the meaning of Rule 
        13d-1(f) as promulgated under the Exchange Act) 
        or (z) any person who is a member of the Board of 
        Directors as of June 1, 1997, directly or 
        indirectly, of securities representing 30% or 
        more of the total number of votes that may be 
        cast for the election of directors of the 
        Company; provided, that the acquisition by the 
        Company of another company or the assets thereof 
        or a similar  transaction in which the Company 
        issues securities representing 30% or more of the 
        total number of votes that may be cast for the 
        election of directors of the Company shall not 
        constitute a "Change in Control" if (1)  the 
        Company is the surviving corporation (2) the 
        Chairman of the Board of Directors, the President 
        and the Chief Executive Officer of the Company 
        immediately preceding the signing of the 
        acquisition (or similar) agreement relating to 
        such transaction shall serve as such immediately 
        after the closing of such transaction and (3) the 
        Board of Directors of the Company shall not 
        change, in connection with such transaction, by 
        more than 30%.

    6.04    Termination upon the Employee's Resignation.  The Employee 
may, by giving at least two (2) months' written notice to the 
Company, terminate his employment.

    6.05    Payments Upon Termination.

In the event that the Employee's employment is terminated 
pursuant to subsection 6.02 or 6.04 above, the Employee will be 
entitled only to compensation and benefits accrued pursuant to 
Section 2 to the date of the termination of his employment.

In the event that the Employee's employment is terminated 
pursuant to Section 6.03 following a Change in Control, then (i) the 
Company shall pay the Employee his Base Salary as in effect at the 
time of the termination of his employment as well as all bonus 
compensation accrued through the date of the termination of his 
employment and (ii) in lieu of all salary and bonus compensation 
payments which the Employee would have earned under this Agreement 
but for his early termination, the Company shall pay to the Employee 
as liquidated damages a lump sum amount equal to 2.99 multiplied by 
the sum of (x) the Employee's annual Base Salary in effect as of the 
date of the termination of his employment and (y) all bonus 
compensation paid or payable to the Employee for the most recent 
year.  All such payments will be made on or before the fifth day 
following the date of the termination of his employment.

In all other events, upon the early termination of the 
Employee's employment hereunder, the Employee (or, in the event of 
his death, his Estate) (i) will continue to receive (x) his Base 
Salary as in effect at the time of the termination of his employment 
and (y) his fringe benefits as set forth in subsection 2.04 to the 
extent permitted by law and any contracts related to such benefits, 
until the later of (a) twelve (12) months from the date of the 
termination of his employment, or (b) the Expiration Date and (ii) 
will receive, with respect to the period beginning on the date the 
Employee's employment is terminated and ending on the later of (A) 
the date that is twelve (12) months from the date of said termination 
or (B) the Expiration Date, an additional bonus amount for each 
twelve (12) month portion of said period equal to the highest 
annualized bonus paid to the Employee by the Company during the Term 
(or prorated portion of such annualized bonus in the event such 
additional bonus amount is paid with respect to a portion of said 
period equal to less than twelve (12) months).  If the employment of 
the Employee is terminated as a result of a Constructive Termination 
relating to a reduction in his compensation, then for purposes of 
calculating the foregoing payments, the Employee's Base Salary shall 
be his Base Salary in effect immediately prior to such reduction.

The Company may, in its sole discretion, accelerate the 
payment of any amount payable under this Section 6.

7.  Indemnification.  Unless otherwise prohibited by law, if the 
Employee is a party or is threatened to be made party to any 
threatened, pending or completed action, suit or proceeding, whether 
civil, criminal, administrative or investigative, by reason of the 
fact that the Employee is or was a director, executive, employee or 
agent of the Company, the Company will indemnify the Employee against 
expenses (including reasonable attorneys' fees), judgments, fines and 
amounts paid in settlement actually and reasonably incurred by the 
Employee in connection with such action; provided, however, that the 
Employee will not be entitled to any indemnification hereunder for 
any claim which is determined by a nonappealable court order to have 
resulted from the gross negligence or willful misconduct of the 
Employee.

8.  Notices.  All notices required or permitted hereunder shall be 
in writing (including facsimile or similar writing) and shall be 
deemed to have been duly given (i) on the date of service if 
personally served, (ii) on the third day after mailing if mailed to 
the party to whom notice is to be given, by first class mail, 
registered, return receipt requested, postage prepaid, or (iii) on 
the date sent if sent by facsimile, to the parties at the following 
addresses or facsimile numbers (or at such other address or facsimile 
number for a party as shall be specified by like notice):   

    Joel B. Searcy              Pamet Systems, Inc.
    ________________                1000 Main Street
    ________________                Acton, MA 01720     
    Fax:                        Fax:

9.  Severability.  The invalidity or unenforceability of any 
provision of this Agreement shall not affect the validity or 
enforceability of any other provision of this Agreement. Further, a 
court shall have authority to reform any invalid or unenforceable 
provision so it will be valid and enforceable.

10. Entire Agreement.  This Agreement constitutes the entire 
agreement between the parties, supersedes all prior agreements, 
communications and understandings, whether oral or written, relating 
to the subject matter of this Agreement, and shall not be amended or 
modified except by a further written agreement signed by the Company 
and the Employee.

11. Waiver.  The waiver by the Company of the Employee's breach of 
any provision of this Agreement shall not operate or be construed as 
a waiver of any subsequent breach thereof.

12. Governing Law.  This Agreement shall be construed, 
interpreted and enforced in accordance with the internal laws of 
the Commonwealth of Massachusetts.

13. Counterparts.  This Agreement may be executed in one or 
more counterparts, each of which shall be deemed to be an 
original but all of which together shall constitute one and the 
same instrument.

14. Successors.  This Agreement is not assignable by the 
Employee and will be binding upon any successors or assigns of 
the Company.

15. Independent Legal Advice.  The Employee acknowledges that 
he has been afforded the opportunity to obtain independent legal 
advice in connection with this Agreement and further 
acknowledges that he has read, understands and agrees to be 
bound by all of the terms and conditions contained herein.

IN WITNESS WHEREOF, the undersigned parties have executed 
this Agreement as of the date first above written.

                                PAMET SYSTEMS, INC.

                            By     _______________________
                                   David McKay
                            Title  _______________________
                                   President

                            _____________________________
                            Joel B. Searcy

<PAGE>

Exhibit 10.14

                             Employment Agreement

This Employment Agreement is made as of this 30th day of May, 1997 
(this "Agreement") by and between David McKay (the "Employee") and 
Pamet Systems, Inc., a Massachusetts corporation (the "Company").

In consideration of the terms and mutual covenants herein 
contained, the Employee and the Company hereby agree as follows:

1.  Position, Responsibilities and Term of Employment.

    1.01    Position.  The Employee will serve as the President and Chief 
Executive Officer of the Company, having the responsibilities and 
duties described in Exhibit A attached hereto and such other 
responsibilities and duties customarily associated with such position 
as the Board of Directors of the Company (the "Board") may, from time 
to time, designate or as may otherwise be appropriate and/or necessary 
in connection with his employment.

    1.02    Full Efforts.  The Employee will devote his full professional 
and business time and best efforts to the performance of his duties to 
the Company.  Except with the prior written consent of the Board, the 
Employee will not undertake or engage in any other employment, 
occupation or business enterprise.  Further, the Employee agrees not to 
acquire, assume or participate in any position, investment or interest 
adverse or antagonistic to the Company, its business or prospects, 
financial or otherwise, or take any direct or indirect action intended 
to achieve any of the foregoing.  This Agreement shall not be construed 
as preventing or otherwise restricting the Employee from serving on the 
boards of directors of charitable organizations or engaging in 
charitable activities and community affairs, or serving on the board of 
directors of a for-profit organization that is not in competition with 
the Company provided that such service does not substantially interfere 
with his duties hereunder.

    1.03    Board Membership.  The Employee will serve as a member of the 
Board during his employment by the Company, subject to the provisions 
of the Company's Articles of Organization and By-laws.

    1.04    Term of Agreement.  Unless sooner terminated pursuant to 
Section 6 below, the term of the Employee's employment hereunder is 
from June 1, 1997 until the close of business on the first anniversary 
of such date (the "Initial Term").  The term of this Agreement shall be 
automatically extended for one  (1) additional year (the "Second Year") 
beyond the Initial Term if this Agreement is still in force immediately 
prior to such extension unless, at least ninety (90) days prior to such 
expiration date, either party shall have given written notice to the 
other that it elects not to extend the term of this Agreement (a 
"Notice of Non-Renewal").  Commencing upon the first day after the end 
of the Second Year, this Agreement shall be automatically extended for 
two (2) additional years unless, at least ninety (90) days prior to 
such expiration date, either party shall have given a Notice of Non-
Renewal.  The actual term of the Employee's employment hereunder, 
giving effect to any early termination or extension of the term 
hereunder, is hereinafter referred to as the "Term."  The scheduled end 
date of the Employee's employment hereunder, giving effect to any 
extension of the term hereunder, is hereinafter referred to as the 
"Expiration Date."

    1.05    Location of Employee.  The Employee's primary place of 
residence will be in the greater Boston area but he will be expected to 
travel and work in any of a number of Company and customer locations on 
a regular basis.

    1.06    Policies and Procedures.  It is also understood and agreed 
that, except as otherwise specifically stated herein, the Employee 
shall be subject to certain Company or executive-wide operational 
policies and procedures, which policies and procedures may be 
implemented, amended or terminated by the Company at any time.

2.  Compensation and Benefits.

For the services to be rendered by the Employee pursuant to this 
Agreement, the Employee will be entitled to the following compensation 
and benefits during the Term:

    2.01    Base Salary.  The Company will pay to the Employee a salary 
at a rate of not less than One Hundred Sixty Thousand Dollars 
($160,000) per annum, payable in equal semi-monthly installments, 
subject to reduction for lawful withholding.  Such salary normally will 
be reviewed by the Company once at the beginning of each calendar year 
and will be adjusted to reflect the minimum annual levels for Base 
Salary as outlined in Exhibit B.  Such salary is hereinafter referred 
to as the Employee's "Base Salary."

    2.02    Bonuses.  In addition to his Base Salary, the Employee shall 
be eligible to receive an annual performance bonus as outlined in 
Exhibit B.  Such bonus, reduced by lawful withholdings, will be paid no 
later than April 1 of the year next succeeding the year in which it is 
earned.  If the Employee's employment is terminated before the 
completion of a full fiscal year, the bonus shall be pro-rated and 
based on performance through the last fully-completed fiscal quarter.

Moreover, the Employee will also be eligible to receive from 
the Company such additional compensation, as shall be determined by the 
Board, or a committee thereof, in its sole discretion, and in 
accordance with any long-term and/or annual incentive compensation 
plans as may be maintained by the Company for the benefit of its 
executives and to participate in any other bonus plans maintained by 
the Company for the benefit of its executives.

    2.03    Stock Options.  (a) Employee shall be granted, on the date of 
the commencement of his employment, an option to purchase 50,000 shares 
of the common stock of the Company at an exercise price per share equal 
to the fair market value per share of the common stock of the Company 
on the date of such grant.  Such options shall be immediately 
exercisable and shall have a term of ten years.  The unexercised 
portion of such option shall terminate sixty (60) days after the date 
of termination of Employee's employment hereunder except that such 
unexercised portion shall terminate (i) immediately upon termination of 
employment in the event Employee's employment is terminated pursuant to 
Section 6.02 hereof, (ii) one (1) year after termination of employment 
in the event Employee's employment is terminated pursuant to Section 
6.01 hereof and (iii) six (6) months after termination of employment in 
the event the Company gives the Employee a Notice of Non-Renewal.

(b) On August 25, 1997, assuming Employee is employed on such 
date, Employee shall be granted an option to purchase a minimum of 
100,000 shares of common stock of the Company at an exercise price per 
share equal to the fair market value per share of the common stock of 
the Company on the date of such grant.  These options will vest at a 
rate no slower than 25% per year commencing on the first anniversary of 
such grant, unless the Board of Directors or committee thereof provides 
for a faster vesting schedule; provided, that in the event of a Change 
in Control (as hereafter defined), all unvested options shall become 
immediately exercisable.  All other terms of these options shall be 
substantially similar to those described in Section 2.03(a) above.

(c) Notwithstanding anything to the contrary, in any fiscal year, 
Employee shall not be entitled to exercise any stock options, whether 
granted hereunder or otherwise, to the extent that, following such 
exercise, Employee's aggregate total compensation from the Company 
during such fiscal year (including Employee's Base Salary and any 
bonuses, fringe benefits or other compensation which would constitute 
"applicable employee remuneration" for purposes of Section 162(m) of 
the Internal Revenue Code of 1986, as amended (the "Code")) would 
exceed One Million Dollars ($1,000,000) and any of such applicable 
employee remuneration would not be deductible to the Company as a 
result of the application of Code Section 162(m).

(d) In the event that, pursuant to Section 2.03(c) above, 
Employee is not permitted to exercise any fully vested stock options in 
any fiscal year in which such stock options would otherwise be 
exercisable and are due to expire, then the term of such options shall 
be extended until such time as such options may be exercised by 
Employee without resulting in applicable employee remuneration which 
would not be deductible to the Company as a result of the application 
of Code Section 162(m); provided, however, that the termination 
provisions set forth in Section 2.03(a) above and the limitations set 
forth in Section 2.03(c) above shall continue to apply to the 
Employee's exercise of such stock options.

    2.04    Fringe Benefits.  The Employee will be entitled to 
participate in any (i) pension or profit sharing or other retirement 
plans, (ii) life, health, hospitalization or disability insurance 
plans, or (iii) other benefit plans that are provided by the Company 
for its employees generally or 
for its executives.  The Employee will be entitled to twenty-five (25) 
working days' paid vacation for each calendar year, and a pro rata 
number of working days paid vacation for any partial calendar year.

    2.05    Reimbursement.  The Company will promptly reimburse the 
Employee for all reasonable business expenses incurred by him in 
connection with his performance of his duties to the Company, upon 
substantiation of such expenses in accordance with the policies of the 
 Company.

3.  Proprietary Information.

    3.01    Access to Information.  The Employee recognizes that his 
relationship with the Company is one of high trust and confidence by 
reason of his access to and contact with the confidential, proprietary 
or secret information owned, possessed, or used by the Company and/or 
its affiliates (collectively, "Proprietary Information").  By way of 
illustration, but not limitation, Proprietary Information includes 
creative ideas and concepts; contemplated or planned advertising or 
public relations plans, methods or techniques; slogans, copy, names, 
layout, formulas, compositions, projects, developments, media or 
marketing plans; research data, personnel data, computer programs, 
whether or not copyrightable, trademarkable or licensable; trade 
secrets, processes, forecasts, unpublished financial statements, 
budgets, and licenses; and information concerning prices, costs, 
employees, customers and suppliers.

    3.02    Nondisclosure.  The Employee will not at any time, either 
during his employment with the Company or thereafter, disclose to 
others, or use for his own benefit or the benefit of others, any 
Proprietary Information.

    3.03    Return of Information.  Upon the termination of the 
Employee's employment with the Company for any reason, or at any other 
time upon the request of the Company, the Employee will promptly 
deliver to the Company all letters, notes, memoranda, data, notebooks, 
sketches, drawings, records, reports, files and other written, 
photographic or other tangible material (and all copies or 
reproductions of such materials) in his possession or under his 
control, whether prepared by him or others, which contain Proprietary 
Information.  The Employee acknowledges that this material is the sole 
property of the Company and is to be used by the Employee only for the 
Company's benefit in the performance of his duties to the Company.

    3.04    Remedies.  The restrictions contained in this Section 3 are 
necessary for the protection of the business of the Company and are 
considered by the Employee to be reasonable for this purpose.  The 
Employee agrees that any breach of this Section 3 will cause the 
Company substantial and irrevocable damage and, therefore in the event 
of any such breach, in addition to such other remedies as may be 
available, the Company will have the right to seek specific performance 
and injunctive relief.  The Employee further agrees that his 
obligations and the Company's rights under this Section 3 shall survive 
the termination of this Agreement.  The Employee also acknowledges that 
in the event that this Agreement is terminated in circumstances in 
which payments are made to the Employee in accordance with Section 6, 
such payments shall constitute additional consideration for the 
Employee's agreement to and compliance with this Section 3 and that 
such payments shall terminate immediately in the event that the 
Employee shall breach any of his covenants contained in this Section 3.

4.  Inventions and Patents.

    4.01    Disclosure of Developments.  The Employee will make full and 
prompt disclosure to the Company of all inventions, improvements, 
ideas, concepts, discoveries, methods, developments, software, and 
works of authorship, whether or not copyrightable, trademarkable or 
licensable, which are created, made, conceived or reduced to practice 
either by the Employee, under his direction or jointly with others 
during his employment with the Company, whether or not during normal 
working hours or on the premises of the Company (all of which are 
collectively referred to in this Agreement as "Developments").  All 
Developments shall be the sole property of the Company, and the 
Employee hereby assigns to the Company, without further compensation, 
all his right, title and interest in and to such Developments and any 
and all related patents, patent applications, copyrights, copyright 
applications, trademarks, and trade names in the United States and 
elsewhere.

    4.02    Assistance in Obtaining Patents. The Employee will assist the 
Company in obtaining, maintaining and enforcing patent, copyright and 
other forms of legal protection for intellectual property in any 
country. Upon the request of the Company, the Employee will sign all 
applications, assignments, instruments and papers and perform all acts 
necessary or desired by the Company in order to protect its rights and 
interests in any Developments.

During his employment with the Company, the Employee will 
perform his obligations under this subsection 4.02 without further 
compensation, except for reimbursement of expenses incurred at the 
request of the Company. If the Employee is not employed by the Company 
as an employee at the time he is requested to perform any obligations 
under this subsection 4.02, he will receive for such performance a 
reasonable per diem fee, as well as reimbursement of any expenses 
incurred at the request of the Company.

    4.03    Remedies.  The Employee agrees that any breach of this 
Section 4 will cause irreparable damage to the Company and that, in the 
event of such breach, the Company will have, in addition to any and all 
remedies of law, including rights which the Company may have to 
damages,  the right to equitable relief including, as appropriate, all 
injunctive relief or specific performance or other equitable relief.

5.  Non-Competition.

    5.01    Subsequent Employment.  The Employee agrees that, for a 
period of twenty-four (24) months (except that in the case of 
termination of employment during the Initial Term other than pursuant 
to Section 6.02, such period shall be twelve (12) months) following the 
termination of his employment with the Company, he will not, whether 
personally or as agent for another or as an employee, partner, joint 
venturer, principal, consultant, lender, guarantor or owner of five 
percent or more of any Organization, engage, directly or indirectly, 
anywhere in the United States, in competition with any service or 
product made, sold or provided by the Company, without the express 
written consent of the Company.  If any restriction set forth in this 
subsection 5.01 is found by any court of competent jurisdiction to be 
unenforceable because it extends for too long a period of time or over 
too great a range of activities or in too broad a geographic area, it 
shall be  interpreted to extend only over the maximum period of time, 
range of activities or geographic areas to which it may be enforceable. 
 "Organization" shall mean any firm, association, syndicate, 
corporation or other business entity.

    5.02    No Solicitation.  The Employee agrees that, during his 
employment with the Company and during the twenty-four (24) month 
period following the termination of his employment with the Company, he 
will not directly or indirectly:

        (i) recruit employees or other agents of the Company or its 
        affiliates or take any steps to induce any such 
        employees or agents to terminate their employment or 
        other association with the Company; or

        (ii)    contact, solicit, or sell to any of the customers or 
        prospective customers of the Company or its affiliates 
        which the Employee had contact with while employed by 
        the Company, with respect to any product or service 
        which is competitive with any product or service sold by 
        the Company or its affiliates or identified and planned 
        to be sold by the Company or its affiliates during his 
        employment with the Company or during the twenty-four 
        (24) month period following the termination of his 
        employment.

    5.03    Remedies.  The restrictions contained in this Section 5 are 
necessary for the protection of the business and goodwill of the 
Company and are considered by the Employee to be reasonable for this 
purpose. The Employee agrees that any breach of this Section 5 will 
cause the Company substantial and irrevocable damage and, therefore, in 
the event of any such breach, in addition to such other remedies as may 
be available, the Company will have the right to seek specific 
performance and injunctive relief.  The Employee further agrees that 
his obligations and the Company's rights under this Section 5 shall 
survive the termination of this Agreement.  The Employee also 
acknowledges that in the event that this Agreement is terminated in 
circumstances in which payments are made to Employee in accordance with 
Section 6, such payments shall constitute additional consideration for 
the Employee's agreement to and compliance with this Section 5 and that 
such payments shall terminate immediately in the event that the 
Employee shall breach any of his covenants contained in this Section 5.

6.  Termination.

    6.01    Termination Upon Death or Disability.  If the Employee dies 
while still employed by the Company, his employment will terminate as 
of the date of his death.  If the Employee, by virtue of ill health or 
other disability, is unable to perform substantially and continuously 
the duties assigned to him for a period in excess of one hundred twenty 
(120) consecutive or non-consecutive days during any twelve (12) month 
period, the Company shall have the right to terminate his employment 
upon notice in writing to the Employee.

    6.02    Termination for Cause.  If the Employee has (i) engaged in 
wilful or repeated breach of his duties hereunder, or (ii) committed 
any act of gross negligence, fraud, misappropriation, embezzlement or 
dishonesty in the performance of his duties hereunder, or (iii) been 
convicted of, or entered a plea of guilty or nolo contendre to, a 
felony (all of which are collectively referred to in this Agreement as 
"Cause"), the Company may, by written notice to the Employee, 
immediately terminate his employment. 

    6.03    Termination Without Cause or Upon a Change in Control.  The 
Company may, by written notice to the Employee, terminate his 
employment at any time without Cause. Further, any "Constructive 
Termination" will constitute termination without Cause.  For purposes 
of this Agreement, "Constructive Termination" shall mean the removal of 
the Employee from, or appointment of the Employee to lesser positions 
than, the position set forth in Section 1; material diminution in the 
nature or scope of the authorities, powers, functions, duties or 
responsibilities attached to the position described in Section 1; or 
material reduction in the compensation or benefits provided to the 
Employee in violation of Section 2.  In addition, the employment of the 
Employee shall be deemed to have been terminated without Cause if, 
within ninety (90) days of a Change of Control (as defined below in 
this subsection), he resigns or the Company terminates his employment 
for any reason, including Cause.

A "Change of Control" shall be deemed to have taken place 
upon the occurrence of any of the following events:

        (i) a majority of the directors elected at any annual 
        or special meeting of stockholders or by 
        stockholder consent are not individuals nominated 
        by the Company's incumbent Board of Directors; or

        (ii)    the acquisition of beneficial ownership (as such 
        term is defined in Rule 13d-3 as promulgated under 
        the Securities Exchange Act of 1934, as amended 
        (the "Exchange Act")) by any "person" (as such term 
        is used in Section 13(d) and 14(d) of the Exchange 
        Act), other than (w) the Company, (x) the Employee, 
        (y) any group of which the Employee is a member 
        (within the meaning of Rule 13d-1(f) as promulgated 
        under the Exchange Act) or (z) any person who is a 
        member of the Board of Directors as of June 1, 
        1997, directly or indirectly, of securities 
        representing 30% or more of the total number of 
        votes that may be cast for the election of 
        directors of the Company; provided, that the 
        acquisition by the Company of another company or 
        the assets thereof or a similar transaction in 
        which the Company issues securities representing 
        30% or more of the total number of votes that may 
        be cast for the election of directors of the 
        Company shall not constitute a "Change in Control" 
        if (1)  the Company is the surviving corporation 
        (2) the Chairman of the Board of Directors, the 
        President and the Chief Executive Officer of the 
        Company immediately preceding the signing of the 
        acquisition (or similar) agreement relating to such 
        transaction shall serve as such immediately after 
        the closing of such transaction and (3) the Board 
        of Directors of the Company shall not change, in 
        connection with such transaction, by more than 30%.

    6.04    Termination upon the Employee's Resignation.  The Employee 
may, by giving at least two (2) months' written notice to the Company, 
terminate his employment.

    6.05    Payments Upon Termination.

In the event that the Employee's employment is terminated 
pursuant to subsection 6.02 or 6.04 above, the Employee will be 
entitled only to compensation and benefits accrued pursuant to Section 
2 to the date of the termination of his employment.

In the event that the Employee's employment is terminated 
pursuant to Section 6.03 following a Change in Control, then (i) the 
Company shall pay the Employee his Base Salary as in effect at the time 
of the termination of his employment as well as all bonus compensation 
accrued through the date of the termination of his employment and (ii) 
in lieu of all salary and bonus compensation payments which the 
Employee would have earned under this Agreement but for his early 
termination, the Company shall pay to the Employee as liquidated 
damages a lump sum amount equal to 2.99 multiplied by the sum of (x) 
the Employee's annual Base Salary in effect as of the date of the 
termination of his employment and (y) all bonus compensation paid or 
payable to the Employee for the most recent year.  All such payments 
will be made on or before the fifth day following the date of the 
termination of his employment.

In all other events, upon the early termination of the 
Employee's employment hereunder, the Employee (or, in the event of his 
death, his Estate) (i) will continue to receive (x) his Base Salary as 
in effect at the time of the termination of his employment and (y) his 
fringe benefits as set forth in subsection 2.04 to the extent permitted 
by law and any contracts related to such benefits, until the later of 
(a) twelve (12) months from the date of the termination of his 
employment, or (b) the Expiration Date and (ii) will receive, with 
respect to the period beginning on the date the Employee's employment 
is terminated and ending on the later of (A) the date that is twelve 
(12) months from the date of said termination or (B) the Expiration 
Date, an additional bonus amount for each twelve (12) month portion of 
said period equal to the highest annualized bonus paid to the Employee 
by the Company during the Term (or prorated portion of such annualized 
bonus in the event such additional bonus amount is paid with respect to 
a portion of said period equal to less than twelve (12) months).  
Notwithstanding the foregoing, if, during (a) the Initial Term or (b) 
the Second Year, the Employee's employment is terminated, the maximum 
period during which the Employee may receive compensation shall be (a) 
three (3) months and (b) six (6) months, respectively.  If the 
employment of the Employee is terminated as a result of a Constructive 
Termination relating to a reduction in his compensation, then for 
purposes of calculating the foregoing payments, the Employee's Base 
Salary shall be his Base Salary in effect immediately prior to such 
reduction.  If the Company gives a Notice of Non-Renewal to the 
Employee during (a) the Initial Term or (b) the Second Year, the 
Employee shall receive compensation for (a) three (3) months and (b) 
six (6) months, respectively, after the date of termination.

The Company may, in its sole discretion, accelerate the 
payment of any amount payable under this Section 6.

7.  Indemnification.  Unless otherwise prohibited by law, if the 
Employee is a party or is threatened to be made party to any 
threatened, pending or completed action, suit or proceeding, whether 
civil, criminal, administrative or investigative, by reason of the fact 
that the Employee is or was a director, executive, employee or agent of 
the Company, the Company will indemnify the Employee against expenses 
(including reasonable attorneys' fees), judgments, fines and amounts 
paid in settlement actually and reasonably incurred by the Employee in 
connection with such action; provided, however, that the Employee will 
not be entitled to any indemnification hereunder for any claim which is 
determined by a nonappealable court order to have resulted from the 
gross negligence or willful misconduct of the Employee.

8.  Notices.  All notices required or permitted hereunder shall be in 
writing (including facsimile or similar writing) and shall be deemed to 
have been duly given (i) on the date of service if personally served, 
(ii) on the third day after mailing if mailed to the party to whom 
notice is to be given, by first class mail, registered, return receipt 
requested, postage prepaid, or (iii) on the date sent if sent by 
facsimile, to the parties at the following addresses or facsimile 
numbers (or at such other address or facsimile number for a party as 
shall be specified by like notice): 

    David McKay                     Pamet Systems, Inc.
    825 West Street                 1000 Main Street
    Carlisle, MA  01741             Acton, MA 01720
    Fax:  508-371-3155              Fax:  508-263-4158

9.  Severability.  The invalidity or unenforceability of any provision 
of this Agreement shall not affect the validity or enforceability of 
any other provision of this Agreement. Further, a court shall have 
authority to reform any invalid or unenforceable provision so it will 
be valid and enforceable.

10. Entire Agreement.  This Agreement constitutes the entire agreement 
between the parties, supersedes all prior agreements, communications 
and understandings, whether oral or written, relating to the subject 
matter of this Agreement, and shall not be amended or modified except 
by a further written agreement signed by the Company and the Employee.

11. Waiver.  The waiver by the Company of the Employee's breach of any 
provision of this Agreement shall not operate or be construed as a 
waiver of any subsequent breach thereof.

12. Governing Law.  This Agreement shall be construed, interpreted and 
enforced in accordance with the internal laws of the Commonwealth of 
Massachusetts.

13. Counterparts.  This Agreement may be executed in one or more 
counterparts, each of which shall be deemed to be an original but all 
of which together shall constitute one and the same instrument.

14. Successors.  This Agreement is not assignable by the Employee and 
will be binding upon any successors or assigns of the Company.

15. Independent Legal Advice.  The Employee acknowledges that he has 
been afforded the opportunity to obtain independent legal advice in 
connection with this Agreement and further acknowledges that he has 
read, understands and agrees to be bound by all of the terms and 
conditions contained herein.

IN WITNESS WHEREOF, the undersigned parties have executed this 
Agreement as of the date first above written.

                                PAMET SYSTEMS, INC.

                                   By _______________________
                                      Joel B. Searcy

                                Title _______________________
                                      Chairman

                                _____________________________
                                David McKay

<PAGE>

                                  Exhibit A

The responsibilities and duties of the position of President and CEO 
are described but not limited to the following:

    Overall multi year direction and strategies employed by the company
    Development of the annual operating plan
    Quarterly and annual operating results of the company 
    Effective relationship with the Board of Directors
    Appropriate return on equity for the stockholders
    Compliance with all laws, regulations and procedures required for a 
        public company
    Ensure product marketing and development strategies are in place
    Ensure sales and business operations strategies are in place
    Ensure administrative and financial strategies are in place
    Effectiveness of the organization and resources used within the company

<PAGE>

                                  Exhibit B

1997 Compensation & Performance Targets

Salary for 1997 on an annualized basis will be $160,000 (base salary) 
for sales up to $3,000,000 (threshold level), $240,000 if sales exceed 
$3,600,000 and profit exceeds 1.5% (target level), and $320,000 if 
sales exceed $4,200,000 and profit exceeds 4% (high water level). The 
salary will be prorated for levels that fall in between.  For 
calculation, 30% will be allocated to profit targets, 50% to revenue 
targets and 20% for personal performance.  Profit margins shall not 
fall below zero after calculation of salary.  For purposes of 
calculating profit margins, 1) the salary above is to be included, 
while 2) any costs related to research development, porting, or 
acquisitions that in aggregate exceed 30% of revenues shall be 
excluded. Based on a hire date of June 1, 1997, the salary for 1997 
will be prorated to 7/12ths and the annualized salary.

The base salary will be reviewed yearly by the Compensation Committee. 
Performance targets for sales and profit levels for 1998 and each 
succeeding year will be set during the first month after the new fiscal 
year commences. 

If need be, the compensation levels and performance targets will be 
subjected to the recommendation of a 3 person ad-hoc committee 
consisting of: 

Mr. McKay (or his representative), 
the Chairman of Pamet's Compensation Committee (or his designee, who 
must also be an outside director), and 
a third person jointly agreed upon by both of the above parties.

<PAGE>

Exhibit 10.14

                             Employment Agreement

This Employment Agreement is made as of this 30th day of May, 
1997 (this "Agreement") by and between Richard C. Becker (the 
"Employee") and Pamet Systems, Inc., a Massachusetts corporation (the 
"Company").

In consideration of the terms and mutual covenants herein 
contained, the Employee and the Company hereby agree as follows:

1.  Position, Responsibilities and Term of Employment.

    1.01    Position.  The Employee will serve as the Vice President of 
the Company and have the responsibilities and duties customarily 
associated with such position as the Board of Directors of the 
Company (the "Board") may, from time to time, designate or as may 
otherwise be appropriate and/or necessary in connection with his 
employment.

    1.02    Full Efforts.  The Employee will devote his full 
professional and business time and best efforts to the performance of 
his duties to the Company.  Except with the prior written consent of 
the Board, the Employee will not undertake or engage in any other 
employment, occupation or business enterprise.  Further, the Employee 
agrees not to acquire, assume or participate in any position, 
investment or interest adverse or antagonistic to the Company, its 
business or prospects, financial or otherwise, or take any direct or 
indirect action intended to achieve any of the foregoing. This 
Agreement shall not be construed as preventing or otherwise 
restricting the Employee from (i) serving on the boards of directors 
of charitable organizations, (ii) engaging in charitable activities 
and community affairs, (iii) continuing his activities in the 
consumer products distribution business provided that such activities 
do not substantially interfere with his duties hereunder, or (iv) 
serving on the board of directors of a for-profit organization that 
is not in competition with the Company provided that such service 
does not substantially interfere with his duties hereunder.

    1.03    Board Membership.  The Employee will serve as a member of 
the Board during his employment by the Company, subject to the 
provisions of the Company's Articles of Organization and By-laws.

    1.04    Term of Agreement.  Unless sooner terminated pursuant to 
Section 6 below, the term of the Employee's employment hereunder is 
from June 1, 1997 until the close of business on December 31, 1999.  
The term of this Agreement shall be automatically extended for one  
(1) additional year beyond its initial term or any extensions thereof 
if this Agreement is still in force immediately prior to such 
extension unless, at least one hundred and eighty days (180) prior to 
such expiration date, either party shall have given written notice to 
the other that it elects not to extend the term of this Agreement.  
The actual term of the Employee's employment hereunder, giving effect 
to any early termination or extension of the term hereunder, is 
hereinafter referred to as the "Term."  The scheduled end date of the 
Employee's employment hereunder, giving effect to any extension of 
the term hereunder, is hereinafter referred to as the "Expiration 
Date."

    1.05    Location of Employee.  The Employee's primary place of 
residence will be in the greater Boston area but he will be expected 
to travel and work in any of a number of Company and customer 
locations on a regular basis.

    1.06    Policies and Procedures.  It is also understood and agreed 
that, except as otherwise specifically stated herein, the Employee 
shall be subject to certain Company or executive-wide operational 
policies and procedures, which policies and procedures may be 
implemented, amended or terminated by the Company at any time.

2.  Compensation and Benefits.

For the services to be rendered by the Employee pursuant to this 
Agreement, the Employee will be entitled to the following 
compensation and benefits during the Term:

    2.01    Base Salary.  The Company will pay to the Employee a salary 
at a rate of not less than Ninety-Three Thousand Five Hundred Dollars 
($93,500) per annum, payable in equal semi-monthly installments, 
subject to reduction for lawful withholding.  Such salary is 
hereinafter referred to as the Employee's "Base Salary."  Such salary 
normally will be reviewed by the Company once at the beginning of 
each calendar year.  The Board, in its discretion, may increase the 
amount of the Employee's Base Salary.

    2.02    Bonuses.  In addition to his Base Salary, the Employee 
shall be entitled to receive such additional compensation, including 
grants of stock options or other equity of the Company pursuant to 
Company plans or otherwise, as shall be determined by the Board, or a 
committee thereof, in its discretion, based upon the reasonable value 
of his services to the Company.

Moreover, the Employee will also be entitled to receive 
from the Company bonus compensation in accordance with any long-term 
and/or annual incentive compensation plans as may be maintained by 
the Company for the benefit of its executives and to participate in 
any other bonus plans maintained by the Company for the benefit of 
its executives.

    2.03    Stock Options. To the extent that Employee receives any 
stock option(s), the exercise of which would give rise to 
compensation income pursuant to Section 83 of the Internal Revenue 
Code of 1986, as amended (the "Code"), and the compensation element 
of such option(s) would not qualify as "performance based 
compensation" within the meaning of Code Section 162(m)(4)(C), then:

        (i) notwithstanding anything to the contrary, in any fiscal 
        year, Employee shall not be entitled to exercise any stock 
        options, whether granted hereunder or otherwise, to the 
        extent that, following such exercise, Employee's aggregate 
        total compensation from the Company during such fiscal year 
        (including Employee's Base Salary and any bonuses, fringe 
        benefits or other compensation which would constitute 
        "applicable employee remuneration" for purposes of Section 
        162(m) of the Code) would exceed One Million Dollars 
        ($1,000,000) and any of such applicable employee 
        remuneration would not be deductible to the Company as a 
        result of the application of Code Section 162(m); and

        (ii)    in the event that, pursuant to Section 2.03(i) above, 
        Employee is not permitted to exercise any fully vested 
        stock options in any fiscal year in which such stock 
        options would otherwise be exercisable and are due to 
        expire, then the term of such options shall be extended 
        until such time as such options may be exercised by 
        Employee without resulting in applicable employee 
        remuneration which would not be deductible to the Company 
        as a result of the application of Code Section 162(m); 
        provided, however, that the limitations set forth in 
        Section 2.03(i) above shall continue to apply to the 
        Employee's exercise of such stock options.

    2.04    Fringe Benefits.  The Employee will be entitled to 
participate in any (i) pension or profit sharing or other retirement 
plans, (ii) life, health, hospitalization or disability insurance 
plans, or (iii) other benefit plans that are provided by the Company 
for its employees generally or for its executives.  The Employee
will be entitled to twenty-five (25) working days' paid vacation for
each calendar year, and a pro rata number of working days paid
vacation for any partial calendar year.

    2.05    Reimbursement.  The Company will promptly reimburse the 
Employee for all reasonable business expenses incurred by him in 
connection with his performance of his duties to the Company, upon 
substantiation of such expenses in accordance with the policies of 
the  Company.

3.  Proprietary Information.

    3.01    Access to Information.  The Employee recognizes that his 
relationship with the Company is one of high trust and confidence by 
reason of his access to and contact with the confidential, 
proprietary or secret information owned, possessed, or used by the 
Company and/or its affiliates (collectively, "Proprietary 
Information").  By way of illustration, but not limitation, 
Proprietary Information includes creative ideas and concepts; 
contemplated or planned advertising or public relations plans, 
methods or techniques; slogans, copy, names, layout, formulas, 
compositions, projects, developments, media or marketing plans; 
research data, personnel data, computer programs, whether or not 
copyrightable, trademarkable or licensable; trade secrets, processes, 
forecasts, unpublished financial statements, budgets, and licenses; 
and information concerning prices, costs, employees, customers and 
suppliers.

    3.02    Nondisclosure.  The Employee will not at any time, either 
during his employment with the Company or thereafter, disclose to 
others, or use for his own benefit or the benefit of others, any 
Proprietary Information.

    3.03    Return of Information.  Upon the termination of the 
Employee's employment with the Company for any reason, or at any 
other time upon the request of the Company, the Employee will 
promptly deliver to the Company all letters, notes, memoranda, data, 
notebooks, sketches, drawings, records, reports, files and other 
written, photographic or other tangible material (and all copies or 
reproductions of such materials) in his possession or under his 
control, whether prepared by him or others, which contain Proprietary 
Information.  The Employee acknowledges that this material is the 
sole property of the Company and is to be used by the Employee only 
for the Company's benefit in the performance of his duties to the 
Company.

    3.04    Remedies.  The restrictions contained in this Section 3 are 
necessary for the protection of the business of the Company and are 
considered by the Employee to be reasonable for this purpose.  The 
Employee agrees that any breach of this Section 3 will cause the 
Company substantial and irrevocable damage and, therefore in the 
event of any such breach, in addition to such other remedies as may 
be available, the Company will have the right to seek specific 
performance and injunctive relief.  The Employee further agrees that 
his obligations and the Company's rights under this Section 3 shall 
survive the termination of this Agreement.  The Employee also 
acknowledges that in the event that this Agreement is terminated in 
circumstances in which payments are made to the Employee in 
accordance with Section 6, such payments shall constitute additional 
consideration for the Employee's agreement to and compliance with 
this Section 3 and that such payments shall terminate immediately in 
the event that the Employee shall breach any of his covenants 
contained in this Section 3.

4.  Inventions and Patents.

    4.01    Disclosure of Developments.  The Employee will make full 
and prompt disclosure to the Company of all inventions, improvements, 
ideas, concepts, discoveries, methods, developments, software, and 
works of authorship, whether or not copyrightable, trademarkable or 
licensable, which are created, made, conceived or reduced to practice 
either by the Employee, under his direction or jointly with others 
during his employment with the Company, whether or not during normal 
working hours or on the premises of the Company (all of which are 
collectively referred to in this Agreement as "Developments").  All 
Developments shall be the sole property of the Company, and the 
Employee hereby assigns to the Company, without further compensation, 
all his right, title and interest in and to such Developments and any 
and all related patents, patent applications, copyrights, copyright 
applications, trademarks, and trade names in the United States and 
elsewhere.

    4.02    Assistance in Obtaining Patents. The Employee will assist 
the Company in obtaining, maintaining and enforcing patent, copyright 
and other forms of legal protection for intellectual property in any 
country. Upon the request of the Company, the Employee will sign all 
applications, assignments, instruments and papers and perform all 
acts necessary or desired by the Company in order to protect its 
rights and interests in any Developments.

During his employment with the Company, the Employee will 
perform his obligations under this subsection 4.02 without further 
compensation, except for reimbursement of expenses incurred at the 
request of the Company. If the Employee is not employed by the 
Company as an employee at the time he is requested to perform any 
obligations under this subsection 4.02, he will receive for such 
performance a reasonable per diem fee, as well as reimbursement of 
any expenses incurred at the request of the Company.

    4.03    Remedies.  The Employee agrees that any breach of this 
Section 4 will cause irreparable damage to the Company and that, in 
the event of such breach, the Company will have, in addition to any 
and all remedies of law, including rights which the Company may have 
to damages,  the right to equitable relief including, as appropriate, 
all injunctive relief or specific performance or other equitable 
relief.

5.  Non-Competition.

    5.01    Subsequent Employment.  The Employee agrees that, for a 
period of twenty-four (24) months following the termination of his 
employment with the Company, he will not, whether personally or as 
agent for another or as an employee, partner, joint venturer, 
principal, consultant, lender, guarantor or owner of five percent or 
more of any Organization, engage, directly or indirectly, anywhere in 
the United States, in competition with any service or product made, 
sold or provided by the Company, without the express written consent 
of the Company.  If any restriction set forth in this subsection 5.01 
is found by any court of competent jurisdiction to be unenforceable 
because it extends for too long a period of time or over too great a 
range of activities or in too broad a geographic area, it shall be  
interpreted to extend only over the maximum period of time, range of 
activities or geographic areas to which it may be enforceable.  
"Organization" shall mean any firm, association, syndicate, 
corporation or other business entity.

    5.02    No Solicitation.  The Employee agrees that, during his 
employment with the Company and during the twenty-four (24) month 
period following the termination of his employment with the Company, 
he will not directly or indirectly:

        (i) recruit employees or other agents of the Company or 
        its affiliates or take any steps to induce any such 
        employees or agents to terminate their employment or 
        other association with the Company; or

        (ii)    contact, solicit, or sell to any of the customers or 
        prospective customers of the Company or its affiliates 
        which the Employee had contact with while employed by 
        the Company, with respect to any product or service 
        which is competitive with any product or service sold 
        by the Company or its affiliates or planned to be sold 
        by the Company or its affiliates during his employment 
        with the Company or during the twenty-four (24) month 
        period following the termination of his employment.

    5.03    Remedies.  The restrictions contained in this Section 5 are 
necessary for the protection of the business and goodwill of the 
Company and are considered by the Employee to be reasonable for this 
purpose. The Employee agrees that any breach of this Section 5 will 
cause the Company substantial and irrevocable damage and, therefore, 
in the event of any such breach, in addition to such other remedies 
as may be available, the Company will have the right to seek specific 
performance and injunctive relief.  The Employee further agrees that 
his obligations and the Company's rights under this Section 5 shall 
survive the termination of this Agreement.  The Employee also 
acknowledges that in the event that this Agreement is terminated in 
circumstances in which payments are made to Employee in accordance 
with Section 6, such payments shall constitute additional 
consideration for the Employee's agreement to and compliance with 
this Section 5 and that such payments shall terminate immediately in 
the event that the Employee shall breach any of his covenants 
contained in this Section 5.

6.  Termination.

    6.01    Termination Upon Death or Disability.  If the Employee dies 
while still employed by the Company, his employment will terminate as 
of the date of his death.  If the Employee, by virtue of ill health 
or other disability, is unable to perform substantially and 
continuously the duties assigned to him for a period in excess of one 
hundred twenty (120) consecutive or non-consecutive days during any 
twelve (12) month period, the Company shall have the right to 
terminate his employment upon notice in writing to the Employee.

    6.02    Termination for Cause.  If the Employee has (i) engaged in 
wilful or repeated breach of his duties hereunder, or (ii) committed 
any act of gross negligence, fraud, misappropriation, embezzlement or 
dishonesty in the performance of his duties hereunder, or (iii) been 
convicted of, or entered a plea of guilty or nolo contendre to, a 
felony (all of which are collectively referred to in this Agreement 
as "Cause"), the Company may, by written notice to the Employee, 
immediately terminate his employment.

    6.03    Termination Without Cause or Upon a Change in Control.  The 
Company may, by written notice to the Employee, terminate his 
employment at any time without Cause. Further, any "Constructive 
Termination" will constitute termination without Cause.  For purposes 
of this Agreement, "Constructive Termination" shall mean the removal 
of the Employee from, or appointment of the Employee to lesser 
positions than, the position set forth in Section 1; material 
diminution in the nature or scope of the authorities, powers, 
functions, duties or responsibilities attached to the position 
described in Section 1; or material reduction in the compensation or 
benefits provided to the Employee in violation of Section 2.  In 
addition, the employment of the Employee shall be deemed to have been 
terminated without Cause if, within ninety (90) days of a Change of 
Control (as defined below in this subsection), he resigns or the 
Company terminates his employment for any reason, including Cause.

A "Change of Control" shall be deemed to have taken place 
upon the occurrence of any of the following events:

        (i) a majority of the directors elected at any annual 
        or special meeting of stockholders or by 
        stockholder consent are not individuals nominated 
        by the Company's incumbent Board of Directors; or

        (ii)    the acquisition of beneficial ownership (as such 
        term is defined in Rule 13d-3 as promulgated 
        under the Securities Exchange Act of 1934, as 
        amended (the "Exchange Act")) by any "person" (as 
        such term is used in Section 13(d) and 14(d) of 
        the Exchange Act), other than (w) the Company, 
        (x) the Employee, (y) any group of which the 
        Employee is a member (within the meaning of Rule 
        13d-1(f) promulgated under the Exchange Act) or 
        (z) any person who is a member of the Board of 
        Directors as of June 1, 1997, directly or 
        indirectly, of securities representing 30% or 
        more of the total number of votes that may be 
        cast for the election of directors of the 
        Company; provided, that the acquisition by the 
        Company of another company or the assets thereof 
        or a similar transaction in which the Company 
        issues securities representing 30% or more of the 
        total number of votes that may be cast for the 
        election of directors of the Company shall not 
        constitute a "Change in Control" if (1)  the 
        Company is the surviving corporation (2) the 
        Chairman of the Board of Directors, the President 
        and the Chief Executive Officer of the Company 
        immediately preceding the signing of the 
        acquisition (or similar) agreement relating to 
        such transaction shall serve as such immediately 
        after the closing of such transaction and (3) the 
        Board of Directors of the Company shall not 
        change, in connection with such transaction, by 
        more than 30%.

    6.04    Termination upon the Employee's Resignation.  The Employee 
may, by giving at least two (2) months' written notice to the 
Company, terminate his employment.

    6.05    Payments Upon Termination.

In the event that the Employee's employment is terminated 
pursuant to subsection 6.02 or 6.04 above, the Employee will be 
entitled only to compensation and benefits accrued pursuant to 
Section 2 to the date of the termination of his employment.

In the event that the Employee's employment is terminated 
pursuant to Section 6.03 following a Change in Control, then (i) the 
Company shall pay the Employee his Base Salary as in effect at the 
time of the termination of his employment as well as all bonus 
compensation accrued through the date of the termination of his 
employment and (ii) in lieu of all salary and bonus compensation 
payments which the Employee would have earned under this Agreement 
but for his early termination, the Company shall pay to the Employee 
as liquidated damages a lump sum amount equal to 2.99 multiplied by 
the sum of (x) the Employee's annual Base Salary in effect as of the 
date of the termination of his employment and (y) all bonus 
compensation paid or payable to the Employee for the most recent 
year.  All such payments will be made on or before the fifth day 
following the date of the termination of his employment.

In all other events, upon the early termination of the 
Employee's employment hereunder, the Employee (or, in the event of 
his death, his Estate) (i) will continue to receive (x) his Base 
Salary as in effect at the time of the termination of his employment 
and (y) his fringe benefits as set forth in subsection 2.04 to the 
extent permitted by law and any contracts related to such benefits, 
until the later of (a) twelve (12) months from the date of the 
termination of his employment, or (b) the Expiration Date and (ii) 
will receive, with respect to the period beginning on the date the 
Employee's employment is terminated and ending on the later of (A) 
the date that is twelve (12) months from the date of said termination 
or (B) the Expiration Date, an additional bonus amount for each 
twelve (12) month portion of said period equal to the highest 
annualized bonus paid to the Employee by the Company during the Term 
(or prorated portion of such annualized bonus in the event such 
additional bonus amount is paid with respect to a portion of said 
period equal to less than twelve (12) months).  If the employment of 
the Employee is terminated as a result of a Constructive Termination 
relating to a reduction in his compensation, then for purposes of 
calculating the foregoing payments, the Employee's Base Salary shall 
be his Base Salary in effect immediately prior to such reduction.

The Company may, in its sole discretion, accelerate the 
payment of any amount payable under this Section 6.

7.  Indemnification.  Unless otherwise prohibited by law, if the 
Employee is a party or is threatened to be made party to any 
threatened, pending or completed action, suit or proceeding, whether 
civil, criminal, administrative or investigative, by reason of the 
fact that the Employee is or was a director, executive, employee or 
agent of the Company, the Company will indemnify the Employee against 
expenses (including reasonable attorneys' fees), judgments, fines and 
amounts paid in settlement actually and reasonably incurred by the 
Employee in connection with such action; provided, however, that the 
Employee will not be entitled to any indemnification hereunder for 
any claim which is determined by a nonappealable court order to have 
resulted from the gross negligence or willful misconduct of the 
Employee.

8.  Notices.  All notices required or permitted hereunder shall be 
in writing (including facsimile or similar writing) and shall be 
deemed to have been duly given (i) on the date of service if 
personally served, (ii) on the third day after mailing if mailed to 
the party to whom notice is to be given, by first class mail, 
registered, return receipt requested, postage prepaid, or (iii) on 
the date sent if sent by facsimile, to the parties at the following 
addresses or facsimile numbers (or at such other address or facsimile 
number for a party as shall be specified by like notice):   

    Richard C.  Becker              Pamet Systems, Inc.
    ________________                1000 Main Street
    ________________                Acton, MA 01720     
    Fax:                        Fax:


9.  Severability.  The invalidity or unenforceability of any 
provision of this Agreement shall not affect the validity or 
enforceability of any other provision of this Agreement. Further, a 
court shall have authority to reform any invalid or unenforceable 
provision so it will be valid and enforceable.

10. Entire Agreement.  This Agreement constitutes the entire 
agreement between the parties, supersedes all prior agreements, 
communications and understandings, whether oral or written, relating 
to the subject matter of this Agreement, and shall not be amended or 
modified except by a further written agreement signed by the Company 
and the Employee.

11. Waiver.  The waiver by the Company of the Employee's breach of 
any provision of this Agreement shall not operate or be construed as 
a waiver of any subsequent breach thereof.

12. Governing Law.  This Agreement shall be construed, 
interpreted and enforced in accordance with the internal laws of 
the Commonwealth of Massachusetts.

13. Counterparts.  This Agreement may be executed in one or 
more counterparts, each of which shall be deemed to be an 
original but all of which together shall constitute one and the 
same instrument.

14. Successors.  This Agreement is not assignable by the 
Employee and will be binding upon any successors or assigns of 
the Company.

15. Independent Legal Advice.  The Employee acknowledges that 
he has been afforded the opportunity to obtain independent legal 
advice in connection with this Agreement and further 
acknowledges that he has read, understands and agrees to be 
bound by all of the terms and conditions contained herein.

IN WITNESS WHEREOF, the undersigned parties have executed 
this Agreement as of the date first above written.

                                PAMET SYSTEMS, INC.

                                   By _______________________
                                      David McKay

                                Title _______________________
                                      President

                                _____________________________
                                Richard C. Becker

<PAGE>

Exhibit 23






                       Consent of Independent Auditors
                       -------------------------------

We consent to the incorporation by reference in the Registration 
Statement (Form S-8 No. 33-41029) pertaining to the Pamet Sytsems, 
Inc. 1990 Stock Option Plan of our report dated March 27, 1998, 
with respect to the financial statements of Pamet Systems, Inc. 
included in its Annual Report (Form 10-KSB) for the year ended 
December 31, 1997, filed with Securities and Exchange Commission.



                                Carlin, Charron & Rosen LLP


Worcester, Massachusetts
March 27, 1998


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