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                                                                    EXHIBIT 10.1



                                BTI MEDICAL INC.
                        2900 BRISTOL STREET, SUITE C-104
                              COSTA MESA, CA. 92626
                                 March 25, 1998
Legacy Software Inc.
5340 Alla Road
Los Angeles, Ca. 90066

     Re: Letter of Intent for Merger of Legacy Software, Inc. with BTI Medical,
Inc.

Officers and Directors:

This letter will confirm the various discussions that we have had regarding the
acquisition of BTI Medical, Inc., a Nevada corporation ("BTI"), by Legacy
Software, Inc., a Delaware corporation ("LGCY"), by means of share exchange
merger of BTI into LGCY. Subject to the preparation, execution and performance
of a definitive written merger agreement (the "Agreement") containing such
terms, conditions, covenants, representations and warranties as BTI or LGCY may
in good faith require, the parties agree to the following general terms:

1. MERGER. On or before April 30, 1998 (the "Closing Date"), BTI will merge into
LGCY with LGCY being the surviving entity of the merger (the "Merger"). LGCY and
BTI reserve the right to extend the Closing Date, based on mutual agreement, to
allow completion of activities required by established good business practices.
LGCY,as the surviving entity, will change its name to Legacy Interactive
Technologies, Inc.("LIT") or another name agreed to by the parties.

2. MERGER CONSIDERATION. As consideration for the Merger, the shareholders of
BTI will receive in the aggregate that number of shares of common stock of LIT,
as set forth in Addendum 1(a), for all of the outstanding shares of BTI stock
owned by the BTI Shareholders. BTI agrees to purchase 260,000 shares of LGCY for
$130,000.00, within 5 days of the execution of the agreement to merge, subject
to the completion of the debt conversion outlined in paragraph 3.

3. DEBT CONVERSION. In advance of the Closing Date, LGCY will arrange for the
certain outstanding loans to be converted to equity through subscription to a
Preferred Stock to be issued by LGCY. The terms of said Preferred Stock to be
mutually agreed upon by LGCY and BTI (the "Preferred Stock A "). The Preferred
Stock A shall be Senior cumulative convertible shares. as described in
Addendum"1b".


4. COSTS AND EXPENSES. All costs and expenses incurred by BTI in connection with
the Merger and the Preferred Stock financing, including, investor relations
expenses attorneys' fees as well as, all costs and expenses incurred by LGCY in
connection with the Preferred Stock financing and debt conversion shall be paid
by LIT after the consummation of the Merger. If the Merger is not consummated,
each party will bear its own costs and expenses and any/the Bridge Loans will be
repaid in accordance with its/their terms or as otherwise agreed to by BTI and
LGCY.

5. REGISTRATION. As soon as practicable after the closing date, LIT will file a
registration with the US Securities and Exchange Commission for the resale of
the shares received by the BTI Shareholders. This registration may also cover
other shares of LIT as determined by the board of directors. The parties agree
to work together to structure, as shall be mutually agreed, these share
issuances so as to comply with accounting and securities requirements.


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6.       BOARD OF DIRECTORS.
(a) The LIT board of directors will consist of seven members, three appointed by
BTI, three appointed by LGCY and Ariella Lehrer. (b) After the first anniversary
of the Closing Date, all directors whose terms are expiring will be elected at
the annual meeting of the stockholders.

 7. REPRESENTATIONS AND WARRANTIES. LGCY will make those representations and
warranties that are usual and customary in such a transaction, including,
without limitation, the following:

         (a) the clear and unencumbered title of LGCY to all of its assets;

         (b) the right and power of LGCY to assign all of its agreements and
contracts as part of the merger; and

(c) other representations and warranties essential to the transaction as shall
be required by BTI acting reasonably. Such representations and warranties shall
not extend beyond the closing of the Merger Agreement

BTI and its principal shareholders will make those representations and
warranties that are usual and customary in such a transaction, including,
without limitation, a statement that all of its assets are unencumbered and
completely and correctly described. The Corporate Plan dated January 31,1998,
 .and incorporated as a section of the definitive Merger Agreement, details the
general business activities of BTI and there are no undisclosed capital
transactions.

Legacy and BTI notes that these representations and warranties are not intended
to be exhaustive of all conditions to be included in the final Agreement.

8. INDEMNIFICATION. The Agreement will contain indemnities given by both parties
customary for transaction of this nature for failure to perform covenants and
for representations and warranties that prove incorrect.

9. EMPLOYMENT AGREEMENTS AND NON-COMPETITION PROVISIONS. As a condition to the
Merger, certain principal shareholders of BTI and LGCY will enter into
employment or consulting agreements with LIT, which agreements will include
"covenants not to compete" prohibiting such shareholders from engaging in any
type of business or enterprise competitive with the business of LIT, upon such
terms as shall be agreed to by LIT and such shareholders.

10. ACCESS TO RECORDS. Each party:

         (a) will grant, and will cause any subsidiaries and affiliates to
grant, the other party and its representatives access to its and their premises
and books and records and

         (b) will furnish to the other party and its representatives such
financial, operating and other information with respect to its business and
properties as the other party shall from time to time reasonably request. In
connection with its examination of the other party, a party and its
representatives may communicate with any person having business dealings with
the other party. All of such access, investigation and communication by a party
and its representatives will be conducted in a manner designed not to interfere
unduly with the normal business of the other party.

11. EXCLUSIVITY. In consideration for the expenditures of time, effort and
expense to be undertaken by LGCY and BTI in connection with the preparation and
execution of the Agreement, LGCY and BTI agree that, between the date of the
execution of this letter and the execution of a Merger Agreement, LGCY will not
solicit, entertain or enter into any agreement or understanding with respect to
the acquisition (by purchase, merger or otherwise) of any or all of the capital
stock of LGCY or the sale of any material portion of the assets of LGCY. LGCY or
any of the principal shareholders will promptly notify BTI if they receive an
unsolicited offer for such a transaction, or obtain information that such an
offer is likely to be made, which notice will include the identity of the
prospective offeror and the price and terms of the proposed offer. These
exclusivity provisions will expire if BTI fails to deposit $130,000.00 in escrow
or complete the acquisition of 260,000 LGCY shares as detailed in paragraph 2 on
or before March 31, 1998


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12. PUBLIC STATEMENTS. Each party agrees that it will not release or issue any
statements or releases pertaining to this letter of intent and the
implementation hereof without the prior consent of the other parties hereto
except to professional advisors under a duty of confidentiality and as required
in disclosure by public companies.

13. CONFIDENTIALITY. BTI and LGCY agree that any non-public information or
material which is obtained in due diligence review will be used solely for the
purposes of evaluation in connection with the transactions contemplated by this
letter and that such information will not be disclosed and used other than in
furtherance of such purpose.

14. TERM OF LETTER OF INTENT. This letter shall terminate only upon the earliest
to occur of :

         (a) the execution and delivery by the parties of the Agreement;

         (b) the notification by any party to the other parties hereto of the
election to terminate this letter of intent if the Agreement has not been
entered into by the parties on or before April 30, 1998; or

         (c) the notification by any party to the other parties hereto of the
election to terminate this letter of intent for material departure by the other
party from the provisions set forth in this letter; provided., however, the
confidentiality obligation of a party under paragraphs 10 and 14 shall survive
any such termination as to confidential information disclosed to such party so
long as the disclosing party treats such information as confidential.

15 NON-BINDING AGREEMENT. Except as provided in Paragraphs 12, 13, 14, and 15
hereof, which are intended to represent binding agreements of the parties
hereto, this letter is intended to be, and shall be construed only as, a letter
of intent summarizing and evidencing the discussions between LGCY and BTI and
the principal shareholders to the date hereof. Except as otherwise provided in
the preceding sentence, the respective rights and obligations of LGCY and BTI
remain to be defined in the Agreement, into which this letter and our prior
discussions shall merge.

If the foregoing correctly expresses our understanding, please indicate your
agreement by signing and dating the enclosed copy of this letter in the space
indicated below and returning it to the address indicated above. It is agreed
that we are executing this letter in advance of the completion of certain
addendums, and that this agreement shall be subject to the written mutual
acceptance of each and every above mentioned addendum. Upon receipt of a signed
copy of this letter, I will instruct our attorneys to prepare a draft of the
Agreement and related documentation for review by you and your counsel. This
Agreement has been bound by Legacy's receipt of $30,000.00 prior to execution of
this agreement..

Yours very truly,

BTI MEDICAL INC.                       THE UNDERSIGNED AGREES TO THE FOREGOING
                                       LEGACY SOFTWARE, INC.

BY: /S/ Edward C. Andercheck           BY: /s/ Ariella J. Lehrer



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                               BTI Medical, Inc.
                                 Addendum 1(a)


<TABLE>
<CAPTION>
                                          Average      Current
                           Shares         Price        Market         CASH                 LIT Shares       Percent
                          ---------------------------------------------------------        ----------------------------
<S>                       <C>             <C>       <C>                                      <C>                <C>
 LGCY                     2,655,003       $ 0.70    $ 1,858,502                              2,655,003          58.0%



BTI purchase of
LGCY stock                  260,000       $ 0.50                     $ 130,000          ***

LGCY exchange for
BTI Shares                3,340,000       $ 0.40    $ 1,336,000                              1,922,588
                                                                                       ----------------
BTI Ownership                                                                                1,922,588          42.0%

Total Shares                                                                                 4,577,591         100.0%
</TABLE>

*** BTI shares of LGCY placed in Treasury after the merger.