FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


(Mark One)

[  X  ]ANNUAL   REPORT   PURSUANT   TO   SECTION   13   OR   15(d)   OF THE   
       SECURITIES   EXCHANGE   ACT   OF  1934   (FEE  REQUIRED)

             For the fiscal year ended December 31, 1996

OR

[      ]TRANSITION   REPORT   PURSUANT   TO   SECTION   13   OR  15(d)   OF   
       THE   SECURITIES   EXCHANGE   ACT   OF   1934   (NO  FEE REQUIRED)

             For the transition period_______________ to _____________________

             Commission file number 0-6933
             
                              CAMBEX CORPORATION
             (Exact name of registrant as specified in its charter)


Massachusetts                                    04 244 2959
(State or other                                  (I.R.S. Employer
jurisdiction of                                  Identification No.)
incorporation or
organization)

360 Second Avenue                                02154
Waltham, Massachusetts                           (Zip Code)
(Address of principal
executive offices)

Registrant's telephone number, including area code:  617-890-6000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 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___________

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.   [     ]

An Exhibit Index setting forth the exhibits filed herewith or incorporated by 
reference herein is included herein at Page A-1.

The aggregate market value of the voting stock held by non-affiliates of Cambex 
Corporation as of March 27, 1997 was $10,256,577, based on the closing price of 
the common stock on the Nasdaq National Market reporting system on that date.

The number of shares of Cambex Corporation's common stock outstanding as of 
March 27, 1997:  9,080,683.


                     DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement filed not later than 120 days 
after the fiscal year ended December 31, 1996 are incorporated by reference 
into Items 11 and 12 of this report on Form 10-K.





















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<PAGE>
                                    PART I

                              Item 1.  Business.


General

The Company is engaged in the design, development, manufacture, lease and sale 
of direct access storage products used with IBM mainframe and client server 
computers. 

Products

The Company offers direct access storage products for use with IBM mainframe 
and client/server computers.  The products include memory, disk, RAID disk 
arrays and tape storage systems.   All products are priced for under $10,000 to 
approximately $200,000.  The Company also sells or leases trade-in memory which 
it acquires from its customers when this memory is replaced by new memory.  In 
most transactions, when the Company upgrades a computer system with its memory, 
the customer pays the Company in whole or in part with memory already resident 
on the machine. On certain occasions, the memory already resident on the 
customer's machine is more valuable than the Company's memory, and in those 
cases, the Company pays the difference to the customer, net of a customary 
gross profit for the Company. Under the terms of a manufacturing agreement
entered into in July, 1996, the Company also manufactures and distributes frame
relay access devices developed by Jupiter Technology, Inc.

Maintenance

The Company arranges for maintenance of its products at the time of lease or 
sale on a monthly or lifetime fee per system basis.  It normally provides this 
maintenance through its own maintenance personnel or through authorized 
maintenance companies supported by the Company's personnel.

Research and Development and New Products

The Company maintains a research and development program directed to the 
development of new products and systems, to the improvement and refinement of 
its present products and systems and to the expansion of their uses and 
applications.  The new products include memory and cached high availability 
RAID disk array products.  The dollar amount spent by the Company during each of
its last three fiscal years on such activities was approximately $3,433,000
in 1996, $1,659,000 in the four months ended December 31, 1995 and 
$6,345,000 and $6,417,000 in fiscal years ended August 31, 1995 and 1994. 





                                    - 3 -
<PAGE>

Manufacturing

The production of the Company's products involves primarily electronics 
assembly and testing.  These operations are performed primarily at the 
Company's plant in Waltham, Massachusetts. The Company also subcontracts some  
assembly operations to several circuit board assembly companies. Most of the 
electronic components used in the Company's products are purchased from outside 
suppliers and are either standard items or custom manufactured to the Company's 
design and specifications and are generally available from several sources.

Marketing

In the United States, Europe, the Far East and Canada, the Company has its own 
marketing organization, sales representatives and distributors.  Sales are made 
to end users, original equipment manufacturers and distributors.  The Company 
established European sales and marketing subsidiaries in the Netherlands, the 
United Kingdom and Germany during fiscal 1991 and in France during fiscal 1993.


Competition

The market for the Company's memory products is dominated by International 
Business Machines Corporation (IBM). In the disk storage market, the Company's 
current competitors include several large companies in addition to IBM.  IBM 
announcements concerning new systems, improved performance characteristics of 
existing systems and price reductions have had adverse effects on the markets 
for the Company's products in the past.

The Company believes that its success in competing with IBM is dependent upon 
its ability to offer products with substantially better cost/performance 
characteristics than those provided by IBM.  In relation to other independent 
companies with which it competes, the Company believes that the most important 
competitive factors are non-price factors such as product quality, reliability 
and product features, as well as service and support capability.

Competition in the IBM-compatible and disk array markets is intense.  The 
industry is one characterized by rapid technological advances resulting in the 
frequent introduction of new products and services and by price reductions in 
established product categories.  A number of other companies, some of which are 
substantially larger and have substantially greater resources than the Company, 
are engaged in the manufacture and marketing of products similar to those 
manufactured and marketed by the Company.



                                    - 4 -
<PAGE>
Backlog

As of December 31, 1996, the dollar amount of the Company's firm backlog was 
approximately $163,000.  On the same date of the preceding year, the comparable 
amount was approximately $267,000.  All such backlog was deliverable within a 
year.  Such backlog has no material seasonal characteristics.  All equipment 
ordered by customers is subject to acceptance and satisfactory performance as 
well as the Company's ability to meet delivery schedules.  The Company believes 
that backlog is not a meaningful indication of future business.  

Patents

Although the Company owns 26 patents, it does not consider its patent position 
to be significant from a competitive standpoint. 

Significant Customers

No single customer accounted for 10% or more of sales during fiscal years ended 
August 31, 1995 and August 31, 1994, and for the four month period ended 
December 31, 1995. During fiscal 1996, sales to one customer accounted for 14% 
of the Company's sales.

Employees

On March 27, 1997, the Company employed 67 persons. 



                             Item 2.  Properties

The Company leases approximately 68,000 square feet of floor space in Waltham, 
Massachusetts, under a lease for a term ending May 31, 2003. This facility 
consists of office, manufacturing and R & D space. The Company subleases 8,000 
square feet of this space to Jupiter Technology for a term ending 
December 31, 1998. The Company also leases additional sales and support 
offices throughout the United States, Europe and Canada.


                          Item 3.  Legal Proceedings


The Company is involved in certain legal proceedings arising in the ordinary 
course of business.  The Company believes that the outcome of these proceedings 
will not have a material adverse effect on the Company's financial condition.




                                    - 5 -
<PAGE>



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


On December 18, 1996, the Company announced that it has entered into an 
agreement to acquire privately held Jupiter Technology, Inc., a supplier of 
multiprotocol frame relay access devices (FRADs) and network integration 
systems.  

The acquisition will involve the issuance of Cambex common stock to Jupiter 
Technology shareholders and is subject to approval by the shareholders of both 
companies and the receipt of a fairness opinion from an independent investment 
bank.  Joseph F.Kruy, Chairman of Cambex, and members of his family are holders 
of the controlling interest in Jupiter, and for this reason the transaction has 
been negotiated and will be under the supervision of a committee of independent 
Directors of Cambex chaired by Phillip C. Hankins.

Under terms of the acquisition, 9,000,000 shares of Cambex common stock will be 
issued for shares of Jupiter Technology.  The proxy statement soliciting the 
approval of Cambex shareholders will contain detailed information about Jupiter 
as well as information on the proforma effect of the merger. 
























                                    - 6 -
<PAGE>
                                   PART II


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



The Company's common stock is traded on the Nasdaq Stock Market.  The 
approximate number of shareholders of record at March 27, 1997 was 708.  The 
high and low sales prices for the Company's stock for each quarter during the 
years ended December 31, 1996 and August 31, 1995 are as follows:



                                      1996                     1995      

                               High        Low          High        Low

       First Quarter           8-1/8       5-1/8        4-7/8       3-1/2
       Second Quarter          7-1/8       5-3/8        4-1/2       3-3/8
       Third Quarter           5-3/4       3            6-3/4       3-1/2
       Fourth Quarter          3-7/8       1-11/16      13          6-1/8



The Company has not paid dividends on its common stock in the past and does not 
expect to do so in the foreseeable future. 



                      Item 6.  Selected Financial Data.

The following selected financial data should be read in conjunction with the 
financial statements and related notes appearing elsewhere in this Form 10-K.





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<PAGE>


                     Year     Four      Year      Year      Year      Year
                     Ended   Months     Ended     Ended     Ended     Ended
                   December December   August    August    August    August
                     1996     1995      1995      1994      1993      1992

                        (In thousands, except per share amounts)

Revenues          $ 22,917    $8,509    $35,152  $40,549  $ 46,160  $52,083
Net income (loss)(   8,632)  ( 2,855)    ( 9,899)    590   (   2,407)  9,847

Per share data:
Net income(loss) (   0.96)   (  0.32)    (  1.14)   0.07  (    0.28)    1.13

Weighted Average
   Common and Common 
   Equivalent Shares
   Outstanding      9,000      8,920       8,700     8,550    8,650    8,680

Total assets     $ 13,033    $26,212     $32,027   $38,048 $ 36,119  $45,754

Long-term debt    ------     -------      ------       3,900   2,050   ------

       
           Item 7.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations.

Fiscal 1996 as compared with Fiscal 1995

The year to year comparisons as they relate to the results of operations are 
being made between the twelve months ended December 31, 1996 and the twelve 
months ended August 31, 1995.  The balance sheet comparisons are between  
December 31, 1996 and December 31, 1995.

The Company's revenues decreased 35% to $22,900,000 in 1996 as compared to 
$35,200,000 in 1995 due to lower mainframe memory and client/server product 
revenues and the delay in the development of the cost-reduced Cascade expanded 
disk array product.  During 1995, there was an unprecedented slowdown and price 
erosion in the ES/9000 mainframe computer market.  This slowdown continued 
throughout 1996 and the Company is unable to predict whether or when the market 
will return to its former position. The Company was unable to gain significant 
market share with its mainframe and client server disk storage products to 
offset the slowdown.




                                     - 8 -
<PAGE>
Gross profit decreased 53% to $5,600,000 (24% of revenues) in 1996 from 
$11,700,000(33% of revenues),before the recognition of the decline in value of 
IBM trade-in memory as described in the next section, in 1995.  The decrease in 
the gross profit percentage in 1996 is due to inventory write-downs and in-
crease in reserves approximating $3,000,000 in the aggregate, lower margins 
on the Company's mainframe disk storage products and significantly lower
which volume prevented the full absorption of manufacturing overhead.  

Operating expenses decreased 28% to $12,400,000 in 1996 from $17,200,000 in 
1995 due principally to cost savings achieved through several expense control 
actions.  Research and development expenses decreased 46% due to completion of 
major projects in 1995 in addition to the expense control actions.

Interest expense decreased to $244,000 in 1996 from $254,000 in 1995 due to 
lower bank borrowings.  Interest income decreased to $92,000 in 1996 from 
$108,000 in 1995.  Other expense included $1,842,000 in 1996 and $1,700,000 in 
1995 in amortization expenses related to a technology acquisition.  

The Company recorded a credit for income taxes in both 1996 and 1995.  The 
Company's prepaid tax asset is realizable through carrybacks against taxes paid 
in prior years.  The full amount of the prepaid taxes, as it related to the 
United States portion, was received from the Internal Revenue Service subsequent
to the end of 1996.Total accounts receivable decreased to $1,900,000 in 1996 
from $2,600,000 in 1995 due to lower revenues.  Inventories decreased to 
$6,200,000 in 1996 from $12,000,000 in 1995 due to decreased purchases, 
significantly lower levels of IBM trade-in memory and an additional $3,000,000 
in inventory writedowns and reserves in 1996.   Property and equipment (net) 
decreased to $1,000,000 in 1996 from $1,500,000 in 1995 since total purchases 
amounted to $100,000 while depreciation and amortization was $600,000.

Four months ended December 31, 1995 as compared with four months ended 
December 31, 1994.

Revenues for the four months ended December 31, 1995 decreased 26% from the 
comparable four months of the prior year due principally to decreased sales of 
the Company's STOR/9000 memory products for the IBM ES/9000 computers.

Operating expenses for the four months ended December 31, 1995 increased 6% 
from the comparable four months of the prior year.  Selling and general and 
administrative expenses increased 16% due to expansion in Europe.  Research and 
development expenses decreased 12% due to completion of major projects in  
fiscal 1995.  

Other expense in the four months ended December 31, 1995 and December 31, 1994 
included approximately $567,000 in amortization expenses relating to the 
Company's technology license/marketing agreement.  

Accounts receivable decreased due to a lower volume of sales. 


                                    - 9 -
<PAGE>
Fiscal 1995 as compared with Fiscal 1994

The Company's revenues decreased 13% to $35,200,000 in fiscal 1995 as compared 
to $40,500,000 in fiscal 1994 due to lower mainframe memory product revenues, 
partially offset by an increase in revenues in the Company's client/server 
products.

During fiscal 1995, there was an unprecedented slowdown and price erosion in 
the ES/9000 mainframe computer market, resulting in decreased revenues and a 
significant devaluation in the value of the Company's inventory of trade-in IBM 
memories.  The lower memory prices impacted revenues for the entire year, but 
most significantly in the fourth quarter.  As a result, the Company recorded a 
decline in the value of its IBM trade-in memory of $4,600,000 in the fourth 
quarter. 

Gross profit, before the recognition of the decline in value of IBM trade in 
memory, decreased 40% to $11,700,000 (33% of revenues) in fiscal 1995 from 
$19,500,000 (48% of revenues) in fiscal 1994.  The degradation in the gross 
profit percentage is due primarily to reduced volume and price erosion plus a 
$1,900,000 inventory valuation reduction which was provided in fiscal 1995. 
There were no write-downs or reserves in fiscal 1994.

Operating expenses increased 2% to $17,200,000 in fiscal 1995 from $16,900,000 
in fiscal 1994 and as a percent of revenues, increased to 49% from 42% in  
fiscal 1994.  Selling expenses increased 6% to $8,200,000 in fiscal 1995 from 
$7,800,000 in fiscal 1994 due to increased staffing in Europe. Research and 
development expenses and general and administrative expenses decreased slightly 
from fiscal 1994.  

Interest expense increased to $254,000 in fiscal 1995 from $203,000 in fiscal 
1994 due to higher bank borrowings and higher interest rates.  Interest income 
increased to $108,000 in fiscal 1995 from $96,000 in fiscal 1994.

Other expense in both fiscal 1995 and 1994 included $1,700,000 in amortization 
expenses related to a technology acquisition.  

The Company's effective tax rate was 43% in fiscal 1994.  The Company recorded 
a credit for income taxes in fiscal 1995.  The Company's prepaid tax asset is 
realizable through carrybacks against taxes paid in prior years.

Total accounts receivable decreased to $5,000,000 in fiscal 1995 from 
$6,900,000 in fiscal 1994 due to a decrease in orders shipped near the end of 
fiscal 1995.  Obligations for trade-in memory increased to $2,700,000 in fiscal 
1995 from $700,000 in fiscal 1994 due to the purchase of certain IBM trade-in 
memory, which was subsequently sold. Inventories decreased to $11,600,000 in 
fiscal 1995 from $14,200,000 in fiscal 1994 due to lower levels of IBM trade-in 
memory.

Prepaid expenses decreased to $200,000 in fiscal 1995 from $800,000 in fiscal 
1994 due to higher prepayments to customers for IBM trade-in memory in 1994.


                                    - 10 -
<PAGE>
Property and equipment (net) decreased to $1,600,000 in fiscal 1995 from 
$1,900,000 in fiscal 1994 since total purchases amounted to $500,000 while 
depreciation and amortization was $800,000.

Inflation

The Company did not experience any material adverse effects in 1996, 1995 and 
1994 due to general inflation.

Liquidity and Capital Resources

The Company's present operating plans indicate that available cash and invest-
ments and the expected cash flow generated from operations will be adequate to 
meet its obligations to creditors and will be sufficient to fund operations for 
the coming fiscal year. As discussed more fully in Note 1 to the financial 
statements, the Company has suffered recurring losses from operations that 
raises substantial doubt about its ability to continue as a going concern. The 
Company's management believes it has taken the appropriate corrective actions
to reduce expenses through consolidation of the workforce and to increase 
revenue through new strategic alliances and selling products with improved
gross margins. The Company's cash and marketable securities were $616,000 and 
$588,000 at December 31, 1996 and December 31, 1995, respectively.
Working capital was $3,160,000 at December 31, 1996 compared with $8,812,000 
at December 31, 1995. During 1996, the Company expended $140,000 for capital 
equipment to support its growth.  During fiscal 1997, the Company expects to
acquire approximately $100,000 of capital equipment.

During 1993, the Company obtained a $10 million unsecured, revolving line of 
bank credit, bearing interest at the prime rate plus one-half percent with a 
commitment fee of 3/8 of 1% per year on the unused portion.  The Company was 
required to repay any borrowings under this revolving credit line on March 29, 
1996.  

During the second quarter of 1996, the Company agreed with its bank to extend 
and modify its Revolving Credit Agreement.  Under the terms of the Modification 
Agreement, the outstanding balance at that time, $3,020,000 would be repaid, 
after an initial payment of $320,000, over a period of twenty four (24) months 
at $120,000 per month, with interest at the prime rate plus one percent.  The 
Company granted to its bank a security interest in the Company's accounts 
receivable, inventory and general intangibles.  In addition, the Company agreed 
to apply its anticipated refund from the Internal Revenue Service of not less 
than $1,900,000 to the outstanding balance upon receipt.

As of December 31, 1996, $1,800,000 remained outstanding under this Agreement.  
Subsequent to the end of the year, the Company received its refund from the 
Internal Revenue Service and repaid its bank in full and the agreement was 
terminated. Consequently, the bank released its security interest in the 
Company's accounts receivables, inventory and general intangibles. 



                                    - 11 -
<PAGE>

            Item 8.  Financial Statements and Supplementary Data.

See financial statements, beginning at page F-2, incorporated herein by 
reference. 

Unaudited quarterly financial data pertaining to the results of operations for 
1996 and 1995 are as follows:


                          Q1            Q2            Q3            Q4

                         (In thousands, except per share amounts)

December 31, 1996

Revenues                 $8,020       $7,124        $  4,193      $  3,580
Gross Profit (Loss)       3,538        3,789           1,604      (  3,370)
Net Income (Loss)       (  988)         204         (  1,919)     (  5,929)
Earnings (Loss)
  Per Share             (  0.11)        0.02        (   0.21)     (   0.96)


August 31, 1995

Revenues                $10,167       $10,511       $11,167       $  3,307
Gross Profit (Loss)       4,750         4,619         4,870        ( 7,149)
Net Income (Loss)          156           156             93        (10,304)
Earnings (Loss)
  Per Share                 .02          .02            .01        (  1.19)



          Item 9.   Changes in and Disagreements with Accountants on
                     Accounting and Financial Disclosure.



None.











                                    - 12 -
<PAGE>
                                   PART III


         Item 10. Director and Executive Officers of the Registrant.

Directors and Executive Officers of the Company are as follows:

                        Positions and Offices with the Company:
Name                    Business Experience During Last Five Years

Joseph F. Kruy          President and a Director from incorporation in
Age:  65                1968 to December, 1975 and from June, 1976 to date; 
                        Chairman of the Board of Directors from December, 1975 
                        to date.  Treasurer from June, 1985 to April, 1987 and 
                        January, 1988 to April, 1988.

Philip C. Hankins       Director since 1979.  President, Charter
Age:  65                Information Corporation (Information Processing).

C. V. Ramamoorthy       Director since 1968.  Professor of Electrical
Age:  70                Engineering and Computer Sciences, University of 
                        California at Berkeley.

Robert Spain            Director since 1995. President, CFC, Inc.
Age:  59                (Electronic Components Manufacturing)

Sheldon M. Schenkler    Vice President of Finance and Chief Financial
Age:  45                Officer from April, 1988 to date; Treasurer from April, 
                        1988 to June, 1991.



















                                    - 13 -
<PAGE>
                      Item 11.  Executive Compensation. 

The Company will file with the Securities and Exchange Commission a definitive 
Proxy Statement (the "Proxy Statement") not later than 120 days after the close 
of the fiscal year ended December 31, 1996.  The information required by this 
item is incorporated herein by reference to the section titled Remuneration in 
the Proxy Statement.

  Item 12.  Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is incorporated herein by reference in 
the section titled Election of Directors in the Proxy Statement.

Solely for the purpose of calculating the aggregate market value of voting 
stock held by non-affiliates of the Company as set forth on the Cover Page, it 
was assumed that only directors and executive officers on the calculation date 
together with spouses and dependent children of such persons constituted 
affiliates.

          Item 13.  Certain Relationships and Related Transactions. 

During the third quarter of 1996, the Company entered into a Manufacturing 
Agreement with Jupiter Technology, Inc. ("Jupiter"), the majority of which is 
owned by Joseph F. Kruy, Chairman and Chief Executive Officer of Cambex 
Corporation, and his son, Peter Kruy. Under the terms of this Agreement, Cambex 
agreed to manufacture, sell and deliver products exclusively to Jupiter. Cambex 
agreed to purchase approximately $300,000 of Jupiter inventory from Jupiter and 
paid Jupiter $100,000 towards that amount.  During 1996, the Company shipped 
and billed to Jupiter $298,000 for Jupiter products plus $43,000 for expenses 
related to a sublease agreement. As of December 31, 1996, Cambex owes Jupiter 
$256,000 for inventory purchases and Jupiter owes Cambex $341,000 for revenue 
shipments plus expenses. 

On December 18, 1996, the Company announced that it entered into an agreement 
to acquire privately held Jupiter Technology, Inc., a supplier of multiprotocol 
Frame Relay Access Devices (FRADs) and network integration systems.

The acquisition will involve the issuance of Cambex common stock to Jupiter 
Technology shareholders and is subject to approval by the shareholders of both 
companies and the receipt of a fairness opinion from an independent investment 
bank. Joseph F. Kruy, Chairman of Cambex, and members of his family are holders 
of the controlling interest in Jupiter, and for this reason the transaction has 
been negotiated and will be under the supervision of a committee of independent 
Directors of Cambex, chaired by Phillip C. Hankins.

Under terms of the acquisition, 9,000,000 shares of Cambex common stock will be 
issued for shares of Jupiter Technology. The proxy statement soliciting the 
approval of Cambex shareholders will contain detailed information about Jupiter 
as well as information on the proforma effect of the merger.


                                    - 14 -
<PAGE>

                                   PART IV


  Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

       (a)   The following documents are filed as part of this report:

             (1)   The financial statements listed in the index to financial 
                   statements appearing at page F-1 of this report, which index 
                   is incorporated in this item by reference.

             (2)   The financial statement schedules as set forth in the 
                   above-mentioned index to financial statements.

             (3)   See the exhibit index following on page A-1.

       (b)   No reports on Form 8-K were filed during the last quarter of the 
             period covered by this report.































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<PAGE>
                                EXHIBIT INDEX



The following exhibits are filed herewith or incorporated by reference herein.

Exhibit 

3.1       Articles of Organization of Cambex Corporation, as amended 
          (incorporated herein by reference to Exhibit 1.1 to Form 10-K for the 
          fiscal year ended August 31, 1981).

3.1.1     Articles of Amendment to Articles of Organization filed with the 
          Massachusetts Secretary of State on December 11, 1987 (incorporated 
          herein by reference to Exhibit 3.1.1 to Form 10-K for the fiscal year 
          ended August 31, 1987).

3.1.2     Articles of Amendment to Articles of Organization filed with the 
          Massachusetts Secretary of State on June 8, 1988 (incorporated herein 
          by reference to Exhibit 3.1.2 to Form 10-K for the fiscal year ended 
          August 31, 1988).

3.1.3     Articles of Amendment to Articles of Organization filed with the 
          Massachusetts Secretary of State on January 23, 1992 (incorporated 
          herein by reference to Exhibit 3.1.3 to Form 10-K for the fiscal year 
          ended August 31, 1993).

3.2       By-Laws of Cambex Corporation, as amended (incorporated herein by 
          reference to Exhibit 1.2 to Form 10-K for the fiscal year ended 
          August 31, 1981).

10.1      Employment Agreement between Joseph F. Kruy and Cambex Corporation, 
          dated as of April 22, 1987 (incorporated herein by reference to 
          Exhibit 10.1.1 to Form 10-K for the fiscal year ended August 31, 
          1987).

10.2      Incentive Bonus Plan (incorporated herein by reference to Exhibit 
          10.3 to Form 10-K for the fiscal year ended August 31, 1983).

10.4      1985 Non-Qualified Stock Option Plan (incorporated herein by 
          reference to Exhibit 10.6 to Form 10-K for the fiscal year ended 
          August 31, 1985).

10.6      1987 Combination Stock Option Plan (incorporated herein by reference 
          to Exhibit 10.8 to Form 10-K for the fiscal year ended August 31, 
          1987).

10.8      9021 Memory Products Business Acquisition Agreement dated January 10, 
          1992 between the Company and EMC Corporation (incorporated herein by 
          reference to Exhibit 1 to Form 8-K dated January 14, 1992).


                                    - 16 -
<PAGE>

                          Exhibit Index - Continued



Exhibit - Continued



10.9      Cambex Corporation Employee Stock Purchase Plan (incorporated herein 
          by reference to Exhibit 10.9 to Form 10-K for the fiscal year ended 
          August 31, 1994).

10.10     Revolving Credit Agreement dated April 15, 1993 between the Company 
          and the First National Bank of Boston (incorporated herein by 
          reference to Exhibit 10.10 to Form 10-K for the fiscal year ended 
          August 31, 1994). 

23.       Consent of Independent Public Accountants. 




























                                    - 17 -
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                 (Information required by Part II, Item 8 and
                        Part IV, Item 14 of Form 10-K)


                             FINANCIAL STATEMENTS

                                                                Page

Report of Independent Public Accountants                        F - 2

Consolidated Balance Sheets - December 31, 1996 and 1995        F - 3

Consolidated Statements of Operations for the Years
       Ended December 31, 1996, August 31, 1995 and 
       August 31, 1994 and for the Four Months Ended
       December 31, 1995                                        F - 4

Consolidated Statements of Stockholders' Investment
       for the Years Ended December 31, 1996, 
       August 31, 1995 and August 31, 1994 and for 
       the Four Months Ended December 31, 1995                  F - 5

Consolidated Statements of Cash Flows for the 
       Years Ended December 31, 1996, August 31, 1995           F - 6
       and August 31, 1994 and for the Four Months              
       Ended December 31, 1995                                  

Notes to Consolidated Financial Statements                      F - 7


                            SUPPLEMENTARY SCHEDULE

                   FOR THE YEARS ENDED DECEMBER 31, 1996, 
               AUGUST 31, 1995 AND AUGUST 31, 1994 AND FOR THE
                     FOUR MONTHS ENDED DECEMBER 31, 1995

Schedule Number


       II         Valuation and Qualifying Accounts             F-23


Schedules other than those referred to above have been omitted, as they are not 
required or the information is included elsewhere in the financial statements 
or the notes thereto.


                                    - 18 -


                                                                F-1
<PAGE>

               REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To The Stockholders of Cambex Corporation:


We have audited the accompanying consolidated balance sheets of Cambex 
Corporation (a Massachusetts corporation) and subsidiaries as of December 31, 
1996 and 1995, and the related consolidated statements of operations, stock-
holders' investment and cash flows for the years ended August 31, 1994, August 
31, 1995, the four month period ended December 31, 1995 and the year ended 
December 31, 1996. These financial statements and the schedule referred to 
below are the responsibility of the Company's management. Our responsibility 
is to express an opinion on these financial statements based on our audits. 

We have 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 Cambex Corporation and 
subsidiaries as of December 31, 1996 and 1995, and the results of their 
operations and their cash flows for the years ended August 31, 1994, August 
31, 1995, the four month period ended December 31, 1995 and the year ended 
December 31, 1996, in conformity with generally accepted accounting 
principles.

The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern.  As discussed in Note 1 to the 
financial statements, the Company has suffered recurring losses from 
operations that raises substantial doubt about its ability to continue as a 
going concern.  Management's plans in regard to these matters are also 
described in Note 1.  The financial statements do not include any adjustments 
relating to the recoverability and classification of asset carrying amounts or 
the amount and classification of liabilities that might result should the 
Company be unable to continue as a going concern.

Our audits were made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  The schedule listed in the index of 
the financial statements is presented for the purpose of complying with the 
<PAGE>
Report of Independent Public Accounts
Page - 2 -



Securities and Exchange Commission's rules and is not part of the basic 
financial statements.  This schedule has been subjected to the auditing 
procedures applied in our audits of the basic financial statements and, in our 
opinion, fairly states, in all material respects, the financial data required 
to be set forth therein in relation to the basic financial statements taken as 
a whole.






























ARTHUR ANDERSEN LLP

Boston, Massachusetts
March 4, 1997

                                    F-2

                                  - 19 - 
<PAGE>
<TABLE>

                                                       CAMBEX CORPORATION AND SUBSIDIARIES
                                                           CONSOLIDATED BALANCE SHEETS
                                                         DECEMBER 31, 1996 and 1995
     
                                           ASSETS
     
<S>     <C>                                                 1996          1995
     CURRENT ASSETS:                                     -----------    ----------
     
       Cash and cash equivalents                         $   615,949   $   588,322
       Accounts receivable, less reserves of $131,000      
         in 1996 and $136,000 in 1995                      1,934,708     2,628,778
      
       Current portion of investment in sales-type
         leases, net of unearned interest income of
         $34,000 in 1996 and $31,000 in 1995                 423,220       393,284
       Inventories                                         6,200,033    12,030,324
       Refundable income taxes                             2,335,295     6,388,659
       Prepaid expenses                                      135,721       178,991
                                                         ------------  ------------
           Total current assets                          $11,644,926   $22,208,358
                                                         ------------  ------------
     
     LONG-TERM INVESTMENT IN SALES-TYPE LEASES,
       net of unearned interest income of $5,000
       in 1996 and $19,000 in 1995                       $   162,971   $   362,992
                                                         ------------  ------------
     
     LEASED EQUIPMENT, at cost, net of
       accumulated depreciation of $244,000
       in 1996 and $245,000 in 1995                      $   140,417   $   300,174
                                                         ------------  ------------
     
     PROPERTY AND EQUIPMENT, at cost
         Machinery and equipment                         $ 7,379,202   $ 7,257,673
         Furniture and fixtures                              304,666       303,428
         Leasehold improvements                              620,949       606,454
                                                         ------------  ------------
                                                         $ 8,304,817   $ 8,167,555
     
         Less- Accumulated depreciation and amortization   7,258,383     6,706,326
                                                         ------------  ------------
     
                                                         $ 1,046,434   $ 1,461,229
                                                         ------------  ------------
     
     OTHER ASSETS
       Technology License/Marketing Agreement,
         net of accumulated amortization of $8,500,000
         in 1996 and $6,658,000 in 1995                  $     -       $ 1,841,671
       Other                                                  37,830        37,875
                                                         ------------  ------------
     
         Total Assets                                    $13,032,578   $26,212,299
                                                         ============  ============
</TABLE>
 The accompanying notes are an integral part of these consolidated financial 
 statements.    
                                                       -20-
<PAGE>
                      CAMBEX CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995
     
                      LIABILITIES AND STOCKHOLDERS' INVESTMENT
     
<TABLE>
<S>     <C>
       
                                                    1996          1995
       CURRENT LIABILITIES:                      ------------   ------------
         Revolving Credit Agreement              $  1,800,000   $ 3,200,000
     
     
         Accounts payable                           4,329,638     4,538,852
         Obligations for trade-in memory            1,036,235     1,939,657
         Accrued expenses -                        
           Payroll and related                        839,945     1,193,775
           Income and other taxes                     176,991     2,277,317
           Other                                      302,301       246,599
           
                                                 -------------  ------------
             Total current liabilities           $  8,485,110   $13,396,200
                                                 -------------  ------------
                                                                
       DEFERRED REVENUE                          $  1,022,751   $   917,087
                                                                
     
       COMMITMENTS AND CONTINGENCIES
     
        STOCKHOLDERS' INVESTMENT
         Preferred Stock, $1.00 par value per share -
           Authorized--3,000,000 shares
           Issued--None                          $              $     -
         Common Stock, $.10 par value per share -  
           Authorized--25,000,000 shares
           Issued- 10,614,139 shares in 1996 and
           10,452,987 shares in 1995                1,061,414     1,045,299
         Capital in excess of par value            15,792,105    15,446,004
         Cumulative translation adjustment            183,355       287,763
         Retained earnings (deficit)              (12,657,391)   (4,025,288)
         Less - Cost of shares held in treasury--
           1,534,356 shares in 1996 and 1995         (854,766)     (854,766)
        
                                                 -------------  ------------

           Total Stockholders' Investment        $  3,524,717   $11,899,012
                                                 -------------  ------------
           Total Liabilities and Stockholders' 
            Investment                           $ 13,032,578   $26,212,299
                                                 =============  ============
     
</TABLE>
                      F-3                                        -20-
     
     
<PAGE>
<TABLE>
                                                                 CAMBEX CORPORATION AND SUBSIDIARIES
                                                                  CONSOLIDATED STATEMENTS OF OPERATIONS
 
<S>     <C>
   
                                                                   Four Months
                                                    Year Ended        Ended         Year Ended      Year Ended
                                                   December 31,    December 31,     August 31,      August 31,
                                                       1996            1995            1995            1994
                                                  -----------     ----------      ------------     -----------
     REVENUES 
       Sales                                      $ 17,741,399    $  5,913,934    $  28,038,337    $33,041,745
       Maintenance and operating leases              5,083,624       2,561,759        7,013,674      7,407,619
       License fees                                     91,667          33,333          100,000        100,000
                                                  -------------   -------------   -------------    -----------
               Total revenues                     $ 22,916,690    $  8,509,026    $  35,152,011    $40,549,364
     
     COST OF SALES                                  17,355,948       5,029,670       23,414,676     21,087,303
     
     DECLINE IN VALUE OF IBM TRADE-IN MEMORY            -               -             4,647,499          -
                                                   ------------   -------------   --------------   ------------
               Gross profit                       $  5,560,742    $  3,479,356    $   7,089,836    $19,462,061
                                                  -------------   -------------   --------------   ------------
     
     OPERATING EXPENSES:
       Research and development                   $  3,432,772    $  1,659,480    $   6,345,165    $ 6,417,053
       Selling                                       6,839,807       3,156,471        8,242,981      7,794,597
       General and administrative                    2,146,060         916,718        2,606,476      2,685,990
                                                   ------------   -------------   --------------   ------------
                                                  $ 12,418,639    $  5,732,669    $  17,194,622    $16,897,640
                                                   ------------   -------------   --------------   ------------
     OPERATING INCOME (LOSS)                      $ (6,857,897)   $ (2,253,313)   $ (10,104,786)   $ 2,564,421
     
     OTHER INCOME (EXPENSE):
       Interest expense                               (243,694)        (92,726)        (253,747)      (202,533)
       Interest income                                  92,361          43,217          107,559         96,222
       Other income (expense)                       (1,822,873)       (549,103)      (1,426,935)    (1,426,057)
                                                   ------------   -------------   --------------   ------------
     INCOME (LOSS) BEFORE INCOME TAXES            $ (8,832,103)   $ (2,851,925)   $ (11,677,909)   $ 1,032,053
     
       Credit (Provision) for income taxes             200,000          (3,000)       1,779,000       (442,000)
                                                  -------------   -------------   --------------   ------------
     NET INCOME (LOSS)                            $ (8,632,103)   $ (2,854,925)   $  (9,898,909)   $   590,053
                                                  =============   =============   ==============   ============
     
      NET INCOME (LOSS) PER COMMON SHARE              $(0.96)         $(0.32)          $(1.14)          $.07
                                                      =====           =====            =====           ====
      Weighted Average Common and 
     Common Equivalent Shares Outstanding            9,000,000       8,920,000        8,700,000      8,550,000
                                                    ==========      ==========      ===========     ==========
</TABLE>
     
                                 The accompanying notes are an integral
                            part of these consolidated financial statements.
     
                                                   -21-
<PAGE>
                                          CAMBEX CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT

<TABLE>
<S>     <C>
      
                                                      Common Stock    Capital in           Cumulative      Retained        Cost of
                                                         $.10          Excess of           Translation     Earnings     Shares Held
                                                       Par Value       Par Value           Adjustment     (Deficit)     in Treasury
                                                     ------------    ------------          ---------    -------------  -------------
     
     BALANCE AT AUGUST 31, 1993                      $ 1,000,693     $13,745,348          $(187,223)    $  8,138,493  $   (854,766)
     
     ADD:
        Net income                                   $     -         $     -              $    -        $    590,053     $     -
        Exercise of employee stock options                 1,515          11,969               -              -                -
        401(k) Employer match                              5,457         219,660               -              -                -
        Stock Purchase Plan Shares                         4,291         146,323               -              -                -
        Exercise of Warrants                               3,750          10,313               -              -                -
        Tax benefits related to stock options              -              20,903               -              -                -
        Translation adjustment                             -               -                256,085           -                -
                                                     ------------    ------------          ---------    ------------- -------------
     BALANCE AT AUGUST 31, 1994                      $ 1,015,706     $14,154,516          $  68,862     $  8,728,546  $   (854,766)
     ADD:
        Net loss                                     $     -         $     -              $    -        $ (9,898,909)    $     -
        Exercise of employee stock options                12,524         230,985               -              -                -
        401(k) Employer match                              4,354         202,456               -              -                -
        Stock Purchase Plan Shares                         9,444         274,166               -              -                -
        Tax benefits related to stock options              -             299,857               -              -                -
        Translation adjustment                             -               -                178,752           -                -
                                                     ------------    ------------          ---------    ------------- -------------
     BALANCE AT AUGUST 31, 1995                      $ 1,042,028     $15,161,980          $ 247,614     $ (1,170,363) $   (854,766)
     ADD:
        Net loss                                     $     -         $     -              $    -        $ (2,854,925)    $     -
        Exercise of employee stock options                 3,080         224,706               -              -                -
        401(k) Employer match                                191          22,419               -              -                -
        Tax benefits related to stock options              -              36,899               -              -                -
        Translation adjustment                             -               -                 40,149           -                -
                                                     ------------    ------------          ---------    ------------- -------------
     BALANCE AT DECEMBER 31, 1995                    $ 1,045,299     $15,446,004          $ 287,763     $ (4,025,288)    $   (854,7
66)
     ADD:
        Net loss                                     $     -         $     -              $    -        $ (8,632,103)    $     -
        Exercise of employee stock options                 7,627          53,864               -              -                -
        401(k) Employer match                              3,482         100,990               -              -                -
        Stock Purchase Plan Shares                         5,006         191,247               -              -                -
        Translation adjustment                             -               -               (104,408)          -                -
                                                     ------------    ------------          ---------    ------------- -------------
     BALANCE AT DECEMBER 31, 1996                    $ 1,061,414     $15,792,105          $ 183,355     $(12,657,391)$ (854,766)
     
     The accompanying notes are an integral part of these consolidated financial statements.
                                                                                             
</TABLE>
                                                                   - 22 -
<PAGE>
<TABLE>
<S>     <C>
                                                                            CAMBEX CORPORATION AND SUBSIDIARIES
                                                                            CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                             
                                                      YEAR ENDED      FOUR MONTHS ENDED     YEAR ENDED       YEAR ENDED
                                                     DECEMBER 31,      DECEMBER 31,         AUGUST 31,       AUGUST 31,
                                                         1996              1995               1995             1994
  CASH FLOWS FROM OPERATING ACTIVITIES:             -------------     -------------      -------------     -------------
  Net income (loss)                                 $ (8,632,103)      $ (2,854,925)      $ (9,898,909)     $    590,053
  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
    Depreciation                                    $    658,191       $    262,460       $    879,659      $  1,012,998
    Amortization                                       1,841,671            566,668          1,700,004         1,700,004
    Provision for losses on accounts receivable           -                  -                  -               (150,000)
    Provision for losses on inventory                  2,800,000             -               1,881,428            -
    Amortization of prepaid expenses                      14,074              9,383             23,135            25,934
    Common stock/warrants issued in lieu of cash         104,472             22,610            206,810           225,117
    Decline in value of IBM trade-in memory               -                  -               4,647,499            -
    Change in assets and liabilities:                                                                            
       Decrease (increase) in accounts receivable        694,070          2,516,198          1,708,257        (3,399,325)
       Decrease (increase) in inventory                3,030,291           (462,252)        (3,943,260)       (1,087,588)
       Decrease (increase) in investment in sales-ty     170,085            165,968            (41,722)           41,720
       Decrease (increase) in prepaid taxes            4,053,364            116,370         (3,559,004)        1,517,880
       Decrease (increase) in prepaid expenses            29,196             54,507            491,056          (695,406)
       Decrease in other assets                               45                 20                 63                64
       Increase (decrease) in accounts payable          (209,214)        (1,094,333)         1,224,438          (138,500)
       Increase (decrease) in obligations for trade-    (903,422)          (772,660)         2,050,250        (2,406,567)
       Increase (decrease) in accrued liabilities     (2,398,454)          (363,533)          (292,878)        1,980,316
       Increase (decrease) in deferred revenue           105,664           (406,330)          (107,894)         (359,295)
                                                    -------------       ------------      -------------       -------------
         Total adjustments                          $  9,990,033        $    615,076       $  6,867,841      $ (1,732,648)
                                                    -------------          -------------   -------------     -------------
         Net cash provided by (used in) operating ac$  1,357,930        $ (2,239,849)      $ (3,031,068)     $ (1,142,595)
    CASH FLOWS FROM INVESTING ACTIVITIES:                                                                           
       Purchases of equipment, net                  $    (83,639)       $    (73,016)      $   (645,444)     $   (596,947)
                                                    -------------       -------------      -------------     -------------
        Net cash used in investing activities       $    (83,639)       $    (73,016)      $   (645,444)     $   (596,947)
    CASH FLOWS FROM FINANCING ACTIVITIES:
      Decrease in notes payable                     $     -             $     -            $   (159,152)     $   (266,991)
        Proceeds from sale of common stock               257,744             264,685            826,976           199,064
        Net borrowings (repayments) under revolving   (1,400,000)           (650,000)           (50,000)        1,850,000
                                                    -------------       -------------      -------------     -------------
        Net cash provided by (used in) financing act$ (1,142,256)       $   (385,315)      $    617,824      $  1,782,073
     Effect of exchange rate changes on cash            (104,408)             40,149            178,752           256,085
<PAGE>
                                                    -------------        -------------     -------------     -------------
    Net increase (decrease) in cash and cash equival$     27,627         $ (2,658,031)     $ (2,879,936)     $    298,616
    Cash and cash equivalents at beginning of year       588,322            3,246,353         6,126,289         5,827,673
                                                    -------------        -------------     -------------     -------------
    Cash and cash equivalents at end of year        $    615,949         $    588,322      $  3,246,353      $  6,126,289
                                                    =============        =============     =============     =============
  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:  Interest         $    269,364         $     92,096      $    241,491      $    188,274
                                    Income Taxes          13,613               19,947            34,941            55,123
    Refunds received from the Internal Revenue Servic  2,189,984              144,630            -              1,234,495
</TABLE>
  
            The accompanying notes are an integral part of these consolidated 
            financial statements. 
                                                                 -23-
                                                                          F-6
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

(1)    Liquidity

       The Company has suffered recurring losses from operations that raises 
       substantial doubt about its ability to continue as a going concern.  The 
       Company's management believes it has taken the appropriate corrective 
       actions to reduce expenses through consolidation of the workforce and to 
       increase revenue through new strategic alliances and selling products 
       with improved gross margins. These consolidated financial statements do 
       not include any adjustments relating to the recoverability and 
       classification of asset carrying amounts or the amount and 
       classification of liabilities that might result should the company be 
       unable to continue as a going concern. 

(2)    Summary of Significant Accounting Policies

       Principles of Consolidation

       The accompanying consolidated financial statements include the accounts 
       of Cambex Corporation and its wholly-owned subsidiaries (the Company).  
       All material intercompany transactions and balances have been eliminated 
       in consolidation.

       Revenue Recognition

       The Company manufactures equipment for sale or lease.  Revenue from 
       product sales is recognized at the time the hardware and software are 
       shipped.  The Company accepts memory in trade as consideration in 
       certain revenue transactions.  Revenue is recorded at the estimated net 
       realizable value of the memory received plus the net cash received.  If 
       the memory is subsequently sold at a price in excess of the estimated 
       net realizable value, the excess is recorded as revenue.  Service and 
       other revenues are recognized ratably over the contractual period or as 
       the services are provided.  Under certain equipment leases which qualify 
       as sales type leases, the present value of noncancelable payments is 
       currently included in revenues as sales, and all related costs, 
       exclusive of the residual value of the equipment, are currently included 
       in cost of sales.  The unearned interest is recognized over the non-
       cancelable term of the lease.  The Company has deferred revenue 
       associated with the sale of certain products that have future perform-
       ance obligations.

       For equipment leased under operating lease agreements, revenue is 
       recognized over the lease term and the equipment is depreciated over its 
       estimated useful life.

                                    - 24 -
                                                       F-7
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(2)    Summary of Significant Accounting Policies - Continued

       License fees are amortized over the useful life of the technologies 
       being licensed.

       Inventories

       Inventories, which include materials, labor and manufacturing overhead, 
       are stated at the lower of cost (first-in, first-out) or market and 
       consist of the following:
                                             December 31,       December 31,
                                                 1996               1995

       Raw materials                         $ 2,386,454        $ 2,600,433
       Work-in-process                           861,073          1,017,749
       Finished goods                          2,765,006          7,097,086
       Trade-in memory                           187,500          1,315,056

                                             $ 6,200,033        $12,030,324

       Property and Equipment

       The Company provides for depreciation and amortization on a straight- 
       line basis to amortize the cost of property and equipment over their 
       estimated useful lives as follows:

             Leasehold improvements          2-10 Years
             Machinery and equipment         3- 8 Years
             Furniture and fixtures          3- 8 Years
             Leased equipment                3- 5 Years

       Maintenance and repair items are charged to expense when incurred; 
       renewals or betterments are capitalized.

       If property is sold or otherwise disposed of, the Company's policy is to 
       remove the related cost and accumulated depreciation from the accounts 
       and to include any resulting gain or loss in income.



                                    - 25 -

                                                                F-8
<PAGE>
                     CAMBEX CORPORATOIN AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(2)    Summary of Significant Accounting Policies - Continued

       Net Income (Loss) Per Common Share

       Income (loss) per share amounts are based on the weighted average number 
       of common shares and common share equivalents outstanding during each 
       year.  Common share equivalents consist of dilutive stock options and 
       warrants, in certain circumstances, under the modified treasury stock 
       method.

       On March 3, 1997, the Financial Accounting Standards Board issued SFAS 
       No. 128, "Earnings Per Share".  The new standard must be applied 
       beginning in 1998 and at that time will require restatement of 
       previously reported earnings per share.  The new statement cannot be 
       applied early.  The Company believes that the effect of applying the new 
       standards will not be material. 

       Cash and Cash Equivalents

       Cash and cash equivalents are recorded at cost which approximates market 
       value.  Cash equivalents include certificates of deposit, government 
       securities and money market instruments purchased with maturities of 
       less than three months.

       Stock Options and Employee Stock Purchase Plan

       Proceeds from the sale of newly issued stock to employees under the 
       Company's stock option plans and Employee Stock Purchase Plan are 
       credited to common stock to the extent of par value and the excess to 
       capital in excess of par value.  Income tax benefits attributable to 
       stock options are credited to capital in excess of par value.

       Disclosures about the Fair Value of Finanical Instruments

       The Company's financial instruments consist mainly of cash, cash 
       equivalents, accounts receivable, investment in sales-type leases, 
       property held for sale, accounts payable, notes payable, and a revolving 
       credit agreement.  The carrying amounts of these financial instruments 
       approximate their fair value due to the short-term nature of these 
       instruments. 


                                    - 26 -
                                                                F-9
<PAGE>
                     CAMBEX CORPORATIONA ND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)

(2)    Summary of Significant Accounting Policies - Continued

       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 disclosures of contingent assets and liabilities as of the date of 
       the financial statements, and the reported amounts of income and 
       expenses during the reporting periods.  Actual results could differ from 
       those estimates.

       Accounting for Impairment of Long-Lived Assets and for Long-Lives Assets 
       To Be Disposed Of

       On January 1, 1996, the Company adopted Statement of Financial 
       Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of 
       Long-Lived Assets and for Long-Lived Assets To Be Disposed Of".  SFAS 
       No. 121 requires that long-lived assets and certain identifiable 
       intangibles to be held and used by an entity be reviewed for impairment 
       whenever events or changes in circumstances indicate that the carrying 
       amount of an asset may not be recoverable.  The statement also requires 
       that certain long-lived assets and identifiable intangibles to be 
       disposed of be reported at the lower of the carrying amount or fair 
       value less cost to sell.  Based on its review, the Company does not 
       believe that any material impairment of its long-lived assets has 
       occurred.  The Company's review was based on the assumption that the 
       Company continues as a going concern.  The financial statements do not 
       include any adjustments relating to the recoverability and 
       classification of asset carrying amounts or the amount and 
       classification of liabilities that might result should the company be 
       unable to continue as a going concern.

       Investment Securities

       On January 1, 1994, the Company adopted SFAS No. 115, "Accounting for 
       Certain Investments in Debt and Equity Securities."  This statement 
       addresses the accounting and reporting for all investments in debt 
       securities and for investments in equity securities that have readily 
       determinable fair values.  When securities are purchased, they are 
       classified as securities held to maturity if it is management's intent 
       and ability to hold them until maturity.  These securities are carried

                                    - 27 -

                                                                F-10
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996
                                 (Continued)

(2)    Summary of Significant Accounting Policies - Continued

       Investment Securities - Continued

       at cost, adjusted for amortization of premiums and accretion of 
       discounts, both computed by the effective yield method.  If it is 
       managements intent at the time of purchase not to hold the securities to 
       maturity, these securities are classified as securities available for 
       sale and are carried at market value with unrealized gains and losses 
       reported, net of the related tax effect, as a separate component of 
       stockholders' equity.  When securities are sold, the adjusted cost of 
       the specific security sold is used to compute gain or loss on the sale.  
       The Company had no investment securities as of December 31, 1996.

       Stock-Based Compensation

       SFAS No. 123, "Accounting for Stock-Based Compensation", encourages but 
       does not require companies to record compensation cost for stock-based 
       employee compensation plans at fair value.  The Company has chosen to 
       continue to account for such plans using the intrinsic value method 
       prescribed in Accounting Principles Board Opinion No. 25.  Accordingly, 
       compensation cost for stock options is measured as the excess, if any, 
       of the quoted market price of the Company's stock at the date of grant 
       over the exercise price of the stock (See Note 8).

(3)    Business, Operations and Segment Information

       The Company is in the business of developing and manufacturing hardware 
       and software for use with a variety of IBM computer systems.  The 
       Company's principal products include memory storage systems for 
       large-scale IBM mainframe computers and storage subsystems for client 
       server platforms. 

       The Company sells its equipment to both end users and to distributors. 
       The Company's principal customers operate in a wide variety of 
       industries and in a broad geographical area. No single customer or 
       distributor accounted for 10% or more of total sales in fiscal years 
       ended August 31, 1995 and 1994 or the four month period ended December 
       31, 1995.  During 1996, one customer accounted for 14% of total 
       revenues. Foreign sales were 20% in 1996 and 17% in fiscal 1994 and less 
       than 10% of total revenues in fiscal 1995.


                                    - 28 -
                                                                F-11

<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANICAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(4)    Income Taxes

       In accordance with SFAS No. 109, "Accounting For Income Taxes", deferred 
       tax assets and liabilities are determined based on the difference 
       between the financial statement and tax basis of assets and liabilities 
       using enacted tax rates in effect for the year in which the differences 
       are expected to reverse.

       The following table presents the components of income (loss) before 
       income taxes:

                                Four months
               Year ended         ended          Year ended       Year ended
               December 31,     December 31,     August 31,       August 31,
                 1996             1995             1995             1994

<TABLE>
<S>     <C>

Domestic       $(6,506,000)     $(2,191,000)     $( 8,552,000)    $  262,000

Foreign         (2,326,000)      (  661,000)      ( 3,126,000)       770,000

               $(8,332,000)     $(2,852,000)     $(11,678,000)    $1,032,000

</TABLE>
















                                    - 29 -


                                                                  F-12
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(4)    Income Taxes - Continued

       The following table presents a reconciliation between taxes provided at 
       the statutory federal income tax rate and the actual tax provision 
       recorded for the following periods:

                                    Four months
                       Year ended    ended          Year ended      Year ended
                       December      December       August          August
                        1996          1995           1995            1994

Provision (credit) at 
federal statutory rate $(3,003,000)  $(  969,000)   $(3,970,000)    $  351,000

State tax provision 
(credit), net of federal 
tax benefit           (  380,000)   (  143,000)   (   700,000)        43,000

Foreign and other losses 
for which no benefits have 
been recorded            853,000       155,000        973,000        147,000

Change in valuation
allowances            2,711,000       759,000      1,976,000     (  250,000)

Other                (   381,000)      201,000    (    58,000)   (  151,000)    
                     $(  200,000)  $    3,000     $(1,779,000)       442,000

The 1996 and 1995 tax benefit recognized is primarily for current federal and 
foreign tax refunds receivable. 

The 1994 provision includes a deferred provision of approximately $130,000, 
offset by a reduction of a previously established valuation allowance of
approximately $250,000.  




                                        - 30 -
                              
                                                           F-13
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(4)   Income Taxes - Continued

      Refundable income taxes as of December 31, 1996 and 1995 and August 31, 
      1995 consisted of approximately $2,335,000, $6,389,000 and $6,505,000 of 
      federal and foreign incomes taxes refundable as a result of taxable 
      losses incurred during fiscal 1995, 1994 and 1993.

      The tax effects of the significant items which comprise the deferred tax 
      liability and tax asset, as of fiscal 1996 and 1995 are as follows:

                                   December        December        August
                                    1996            1995            1995

Assets
Reserves not currently deductible
   for tax purposes                $ 1,186,000     $   961,000     $ 1,290,000
State tax net operating loss
   carryforward                      1,223,000         844,000         700,000
Federal net operating loss
   carryforward                      2,965,000         813,000         - - -
Employee benefits                      112,000         148,000         152,000
Other                                   75,000         112,000         166,000

   Total deferred tax assets       $ 5,561,000     $ 2,878,000     $ 2,308,000

Liabilities
Fixed asset basis difference       $(   67,000)    $(   95,000)    $(  145,000)
Other                               (   48,000)     (   48,000)     (  187,000)

   Total deferred tax liabilities  $(  115,000)    $(  143,000)    $(  332,000)

Net deferred tax asset             $ 5,446,000     $ 2,735,000     $ 1,976,000
Valuation allowance                 (5,446,000)     (2,735,000)     (1,976,000)
Tax asset                               0               0                  0

Tax refunds receivable               2,335,000       6,389,000       6,505,000

Total tax asset                    $ 2,335,000     $ 6,389,000     $ 6,505,000



                                    - 31 -
                                    
                                                                   F-14
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996


                                 (Continued)


(4)   Income Taxes - Continued

      Due to the uncertainty of the realizability of the deferred tax assets,  
      the Company has established a valuation allowance for the net deferred 
      tax assets. 


(5)   Technology/Marketing Agreement

      During the second quarter of fiscal 1992, the Company acquired from EMC 
      Corporation technology rights, inventory, and other assets associated 
      with EMC's IBM 3090 and ES/9000, Model 9021 compatible mainframe memory 
      products. The purchase price of $11,500,000 was paid in fiscal 1992 and 
      1993.  The use of the technology is exclusive to Cambex for five years.  

      The financial statement impact included the recording of inventory in the 
      amount of $3,000,000, a marketing agreement in the amount of $7,500,000 
      and a technology license amounting to $1,000,000.  The marketing agree-
      ment and technology license were amortized over a five-year period, 
      ending December 31, 1996.  Amortization of $1,700,000 related to the 
      technology license and marketing agreement was recognized as other 
      expense in fiscal 1995, $1,842,000 in 1996 and $567,000 for the four 
      months ended December 31, 1995. 

(6)   Revolving Credit Agreement

      During 1993, the Company obtained a $10 million unsecured, revolving line 
      of bank credit, bearing interest at the prime rate plus one-half percent 
      with a commitment fee of 3/8 of 1% per year on the unused portion.  The 
      Company was required to repay any borrowings under this revolving credit 
      line on March 29, 1996.  




                                    - 32 -
                                                                  F-15
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)



(6)   Revolving Credit Agreement - Continued

      During the second quarter of 1996, the Company agreed with its bank to 
      extend and modify its Revolving Credit Agreement.  Under the terms of the 
      Modification Agreement, the outstanding balance at that time, $3,020,000 
      would be repaid, after an initial payment of $320,000, over a period of 
      twenty four (24) months at $120,000 per month, with interest at the prime 
      rate plus one percent.  The Company granted to its bank a security 
      interest in the Company's accounts receivable, inventory and general 
      intangibles.  In addition, the Company agreed to apply its anticipated 
      refund from the Internal Revenue Service of not less than $1,900,000 to 
      the outstanding balance upon receipt.


      As of December 31, 1996, $1,800,000 remained outstanding under this 
      Agreement.  Subsequent to the end of the year, the Company received its 
      refund from the Internal Revenue Service and repaid its bank in full and 
      the agreement was terminated.  Consequently, the bank released its 
      security interest in the Company's accounts receivables, inventory and 
      general intangibles. 


      The Company's debt consists of the following at December 31, 1996 and 
      1995:


                                                    1996            1995

      Revolving Credit Agreement                   $1,800,000     $3,200,000




                                    - 33 -
                                                                  F-16
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(7)   Commitments and Contingenices

      At December 31, 1996, the Company had minimum rental commitments under 
      long-term, noncancelable operating leases for facilities and other 
      equipment as follows:

            Due during Fiscal Year

                  1997              $  705,915
                  1998              $  381,924
                  1999              $  381,924
                  2000              $  381,924
                  2001-2003         $  922,983
                                    $2,774,670

      Total rental expense, including the cost of short-term equipment leases, 
      real estate taxes and insurance paid to the landlord and charged to 
      operations approximated $1,691,000 for the year ended December 31, 1996, 
      $436,000 for the four months ended December 31, 1995, $1,733,000 for the 
      year ended August 31, 1995, and $1,934,000 for the year ended August 31, 
      1994.

      In the ordinary course of business, the Company is involved in legal 
      proceedings.  The Company believes that the outcome of these proceedings 
      will not have a material adverse effect on the Company's financial 
      condition or results of operations.

(8)   Stock Options and Warrants

      At December 31, 1996, the Company had two stock option plans for officers 
      and certain employees under which 630,130 shares were reserved and 
      options for 261,310 shares were available for future grants.  Options are 
      granted at not less than 85%, or in certain cases, not less than 100%, of 
      the fair market value of the common stock on the date of grant.  Options 
      outstanding have a term of ten years and become exercisable in 
      installments as determined by the Board of Directors. The plan's options 
      vest between one through six years and all expire between January 21, 
      1996 and November 11, 2006. 



                                    - 34 -

                                                                  F-17
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)



(8)   Stock Options and Warrants - Continued

      Stock option activity for the three years and four months ended December 
      31, 1996 was as follows:


      Option Shares                         Number             Option Price

      Outstanding at August 31, 1993         474,388           .25    -   16.15

      Granted                                199,950          3.40    -    4.68
      Exercised, cancelled or
         expired                            ( 98,250)          .29    -   16.15
      Outstanding at August 31, 1994         576,088           .25    -   16.15

      Granted                                138,250          3.19    -   10.41
      Exercised, cancelled or
         expired                             (276,830)         .27    -   16.15
      Outstanding at August 31, 1995          437,508          .25    -   16.15

      Granted                                 182,500         7.22    -    7.65
      Exercised, cancelled or
         expired                             (148,550)         .92    -   11.69
      Outstanding at December 31, 1995        471,458          .25    -   16.15

      Granted                                 217,000         2.23    -    5.95
      Exercised, cancelled or
         expired                             (319,638)        3.19    -   11.69
      Outstanding at December 31, 1996        368,820          .25    -   16.15


      As of December 31, 1996 and 1995, options for 140,218 and 86,490 shares 
      were exercisable at aggregate option prices of $435,613 and $523,632, 
      respectively.



                                    - 35 -
                                                             F-18
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(8)   Stock Options and Warrants - Continued

      Had compensation cost for these plans been determined consistent with 
      SFAS No. 123, the Company's net loss and loss per share would have been 
      increased to the following pro forma amounts:
                                                      Four months
                                        Year ended    ended         Year ended
                                        December 31,  December 31,  August 31,
                                          1996         1995          1995

Net Income (Loss): As Reported (000's)  (8,632)       (2,855)       ( 9,899)
                   Pro Forma            (9,456)       (3,120)       (10,280)

Primary EPS:       As Reported          (  .96)       (  .32)       (  1.14)
                   Pro Forma            ( 1.05)       (  .35)       (  1.18)

      The fair value of each option grant is estimated on the date of the grant 
      using the Black-Scholes option pricing model with the following weighted 
      average assumptions and values for grants in the periods presented.

                                                      Four months
                                        Year ended    ended         Year ended
                                        December 31,  December 31,  August 31,
                                          1996         1995          1995

Assumptions:
      Risk free interest rate            6.35%        6.03%         6.58%
      Expected dividend yield               0%           0%            0%
      Expected life in years               10           10            10
      Expected volatility               65.56%        65.56%        65.56%

Values:
      Weighted average fair
         value of options granted        4.35         7.22          8.95

      Weighted average exercise price    4.58         7.64          9.40

      Because the SFAS No. 123 method of accounting has not been applied to 
      options granted prior to September 1, 1994, the resulting pro forma 
      compensation cost may not be representative of that to be expected in 
      future years.  

                                    - 36 -
                                                      F-19
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(9)   Incentive Bonus Plan and 401(k) Profit Sharing Retirement Plan

      The Company has an incentive bonus plan under which certain key employees 
      as a group are entitled to receive additional compensation up to a 
      maximum of 15% of the Company's pre-tax income, as defined.  The pro-
      vision for incentive bonus amounted to approximately $35,000, $55,000, 
      and $138,000 in fiscal years 1996, 1995 and 1994, respectively and $5,000 
      for the four month period ended December 31, 1995.

      On September 1, 1988, the Company established the Cambex Corporation 
      401(k) Profit Sharing Retirement Plan (the Plan).  Under the Plan, 
      employees are allowed to make pre-tax retirement contributions.  In 
      addition, the Company may provide matching contributions based on 
      pre-established rates as determined by the Board of Directors.  The 
      Company provided approximately $400,000 in fiscal year 1994 for matching 
      contributions. In fiscal 1995, the Company recorded a net reversal of 
      prior accruals of approximately $200,000. The Company's contributions 
      have been in the form of Cambex common stock since fiscal 1994.  

      The Company offers no post-retirement benefits other than those provided 
      under the Plan.

(10)  Employee Stock Purchase Plan

      On December 20, 1993, the Company established the Cambex Corporation 
      Employee Stock Purchase Plan (the Plan), which was approved by the 
      shareholders.  Under the Plan, employees may elect to have a specified 
      percentage of their wages withheld through payroll deduction and purchase 
      common stock shares at 85% of the lower of the fair market value of 
      Common Stock on the first or last trading day of each Purchase Period.  
      There are two (2) Purchase Periods each year - the first six months and 
      the last six months of each calendar year.  During fiscal 1996 and fiscal 
      1995, there were 50,060 and 94,440 shares issued under the Plan, 
      respectively.  At December 31, 1996, there were 212,590 shares reserved 
      for issuance under the Plan.




                                    - 37 -

                                                           F-20
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)


(11)  Decline in Value of IBM Trade-In Memory

      During the year ended August 31, 1995, the Company was negatively 
      impacted by the decreasing demand and rapidly declining prices in the 
      ES/9000 mainframe memory market.  Consequently, the Company wrote down 
      the value of its ES/9000 trade-in memory by $4,647,000 in fiscal 1995 to 
      levels that were expected to be realized in light of the changes in 
      market conditions. These charges have been shown separately in the 
      financial statements as "Decline in Value of IBM Trade-In Memory."

(12)  Related Party Transactions and Proposed Acquisition

      During the third quarter of 1996, the Company entered into a 
      Manufacturing Agreement with Jupiter Technology, Inc. ("Jupiter"), the 
      majority of which is owned by Joseph F. Kruy, Chairman and Chief 
      Executive Officer of Cambex Corporation, and members of his family. 
      Jupiter is a supplier of multiprotocol frame relay access devices (FRADs) 
      and network integration systems. Under the terms of this Agreement, 
      Cambex agreed to manufacture, sell and deliver products exclusively to 
      Jupiter.  Cambex agreed to purchase approximately $300,000 of Jupiter 
      inventory from Jupiter and paid Jupiter $100,000 towards that amount.  
      During 1996, the Company shipped and billed to Jupiter $298,000 for 
      Jupiter products plus $43,000 for expenses related to a sublease 
      agreement.  As of December 31, 1996, Cambex owes Jupiter $256,000 for 
      inventory purchases and Jupiter owes Cambex $341,000 for revenue 
      shipments plus expenses.  

      On December 18, 1996, the Company announced that it has entered into an 
      agreement to acquire Jupiter.

      The acquisition will involve the issuance of Cambex common stock to 
      Jupiter Technology shareholders and is subject to approval by the 
      shareholders of both companies and the receipt of a fairness opinion from 
      an independent investment bank.  Since Joseph F. Kruy and members of his 
      family are holders of the controlling interest in Jupiter, the 
      transaction has been negotiated and will be under the supervision of a 
      committee of independent Directors of Cambex, chaired by Phillip C. 
      Hankins.



                                    - 38 -

                                                           F-21
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              December 31, 1996

                                 (Continued)



(12)  Related Party Transactions and Proposed Acquisition - Continued

      Under terms of the acquisition, 9,000,000 shares of Cambex common stock 
      will be issued for shares of Jupiter Technology.  The proxy statement 
      soliciting the approval of Cambex shareholders will contain detailed 
      information about Jupiter as well as information on the proforma effect 
      of the merger.

(13)  Events (Unaudited) Subsequent to date of Report of Independent Public 
      Accountants

      On March 7, 1997, the Company established the 1997 Stock Option Plan 
      (subject to stockholder approval).  The 1997 Stock Option Plan provides 
      for the issuance of up to 1,000,000 shares in the aggregate and up to 
      300,000 shares to any one employee.  

























                                    - 39 -

                                                             F-22
<PAGE>





                                        CAMBEX CORPORATION AND SUBSIDIARIES
                                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
      
     
                                               Additions
                                              Charged To
                                   Balance at (Recovered             Balance
                                   Beginning   From)      Writeoffs/  at End
                                   of Year     Income     Deductions  of Year
                                   ----------  ---------  ---------- --------
     
     
     YEAR ENDED AUGUST 31, 1994:
     
       Reserve for doubtful accounts $324,000 $(150,000) $(36,000) $  138,000
     
     
     
     
     YEAR ENDED AUGUST 31, 1995:
     
       Reserve for doubtful accounts $138,000  $    -    $ (3,000) $  135,000
     
     
     
     
     FOUR MONTHS ENDED DECEMBER 31, 1995:
     
       Reserve for doubtful accounts $135,000  $    -   $   1,000 $  136,000
     
     
     
     
     YEAR ENDED DECEMBER 31, 1996:
     
       Reserve for doubtful accounts $136,000 $   -   $ (5,000) $  131,000
     
     
     
     
     
                                         -40-
     
                                                                       F-23
     
<PAGE>
<PAGE>

                                  SIGNATURES



Pursuant to the requirements of Section 13 of the Securities Exchange Act of 
1934, the Company has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.


CAMBEX CORPORATION


By:   /s/Joseph F. Kruy                 
         Joseph F. Kruy, President                           March 27, 1997



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 Company 
and in the capacities indicated as of March 27, 1997.


By:   /s/   Joseph F. Kruy
            Joseph F. Kruy, Chairman of the Board, President and Director
            (Principal Executive Officer)


By:   /s/   Sheldon M. Schenkler
            Sheldon M. Schenkler, Vice President of Finance
            (Principal Financial and Accounting Officer)


By:   /s/   Robert J. Spain
            Robert J. Spain, Director


By:   /s/   Philip C. Hankins
            Philip C. Hankins, Director


By:   /s/   C. V. Ramamoorthy
            C. V. Ramamoorthy, Director





                                    - 41 -
<PAGE>
                   CONSENT_OF_INDEPENDENT_PUBLIC_ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation of 
our report included in this Form 10-K, into the Company's previously filed 
Registration Statements on Form S-8 (File Nos. 2-77667 and 33-18072).


Boston, Massachusetts
March 28, 1997




























                                    - 42 -