AGREEMENT AND PLAN OF MERGER

         AGREEMENT AND PLAN OF MERGER dated as of December 18, 1997 by and among
MEDIWARE  INFORMATION SYSTEMS,  INC., a corporation  organized under the laws of
the  State  of  New  York  ("Parent"),   MEDIWARE  ACQUISITION  CORPORATION,   a
corporation  organized  under the laws of the State of Oregon and a wholly-owned
subsidiary  of Parent  ("Acquisition")  and  INFORMEDICS,  INC.,  a  corporation
organized under the laws of the State of Oregon (the "Company").

         WHEREAS, the respective Boards of Directors of the Parent,  Acquisition
and  the  Company  have  approved  the  merger  of the  Company  with  and  into
Acquisition  (the "Merger"),  with Acquisition  being the surviving  corporation
upon the terms and subject to the conditions set forth herein;

         NOW,   THEREFORE,   in   consideration   of   the   mutual   covenants,
representations, warranties and agreements set forth herein, and intending to be
legally bound hereby, the parties hereby agree as follows:

                                 ARTICLE I
                                THE MERGER

         1.1 Surviving  Corporation.  In accordance  with the provisions of this
Agreement and the Oregon  Business  Corporation  Act (the "Oregon Act"),  at the
Effective  Date (as defined in Section 1.6,  below) the Company  shall be merged
with and into Acquisition,  with Acquisition being the surviving  corporation in
the  Merger,  with the initial  corporate  name of  Mediware  Acquisition  Corp.
(hereinafter  sometimes  called the "Surviving  Corporation").  At the Effective
Date,  the  separate  existence  of the Company  shall  cease and the  Surviving
Corporation  shall continue its corporate  existence under the laws of the State
of  Oregon  as  a  wholly-owned  subsidiary  of  Parent.  Without  limiting  the
generality of the  foregoing,  from and after the  Effective  Date the Surviving
Corporation shall possess all of the rights, privileges,  immunities, powers and
purposes, and shall assume and be liable for all of the liabilities, obligations
and penalties, of each of Acquisition and the Company, and the Merger shall have
all of the effects provided for in Section 60.497 of the Oregon Act.

         1.2  Articles  of  Incorporation.  The  Articles  of  Incorporation  of
Acquisition  as in  effect  at the  Effective  Date  shall  be the  Articles  of
Incorporation of the Surviving  Corporation until thereafter amended as provided
by law.

         1.3 By-Laws.  The By-Laws of  Acquisition as in effect at the Effective
Date shall be the By-Laws of the Surviving  Corporation until thereafter amended
as provided by law.

         1.4  Directors.  The directors of  Acquisition  at the  Effective  Date
shall,  from and after the  Effective  Date,  be the  directors of the Surviving
Corporation, all such directors to hold office until their respective successors
are duly  elected  and  qualified  in the manner  provided  in the  Articles  of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise provided
by law.
<PAGE>

         1.5 Officers.  The officers of Acquisition at the Effective Date shall,
from and after the Effective Date, be the officers of the Surviving Corporation,
all such  officers to hold office  until their  respective  successors  are duly
elected and  qualified in the manner  provided in the Articles of  Incorporation
and By-Laws of the Surviving Corporation, or as otherwise provided by law.

         1.6 Effective  Date. As soon as  practicable  following the Closing (as
defined in  Section  2.4,  below),  Articles  of Merger  shall be filed with the
Secretary of State of the State of Oregon.  The Merger shall become effective at
such time as the  Articles  of  Merger  are filed  with the  Secretary  of State
pursuant  to Section  60.494 of the Oregon Act.  The time when the Merger  shall
become effective is herein referred to as the "Effective Date."

         1.7 Additional  Actions.  If, at any time after the Effective Date, the
Surviving  Corporation  shall  consider or be advised  that any deeds,  bills of
sale,  assignments,  assurances  or any other  acts or things are  necessary  or
desirable to vest, perfect or confirm, of record or otherwise,  in the Surviving
Corporation, its right, title or interest in or to any of the rights, properties
or assets of Acquisition or the Company acquired or to be acquired by reason of,
or as a result of, the Merger,  or  otherwise  to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors shall
be authorized to execute and deliver,  in the name and on behalf of  Acquisition
or the Company, all such deeds, bills of sale, assignments and assurances and to
do, in the name and on behalf of Acquisition or the Company, all such other acts
and things necessary or desirable to vest, perfect or confirm any and all right,
title or  interest  in, to or under  such  rights,  properties  or assets in the
Surviving Corporation or otherwise to carry out the purposes of this Agreement.


                                ARTICLE II

                     CONSIDERATION; CONVERSION OF SHARES

     2.1    Merger  Consideration.  The consideration  payable in the Merger to
holders  of shares  of the  Company's  Common  Stock,  par value  $.01 per share
("Company Common Stock"), shall consist solely of a total of Four Hundred Twenty
One Thousand  Three Hundred Eighty Three  (421,383)  shares of the Common Stock,
par value $.10 per share,  of Parent  ("Parent  Common  Stock"),  such shares of
Parent Common Stock to be issuable at the Closing in  accordance  with the terms
of this  Agreement,  subject to increase  to reflect  exercises  of  outstanding
employee stock options prior to the Closing.

     2.2    Conversion of Shares; Cancellation of Options.

                  (a) Each share of Company Common Stock issued and  outstanding
as of the Effective Date (other than  Dissenting  Shares,  as defined in Section
2.2(e), below) shall, by virtue of the Merger and without any action on the part
of the holder thereof,  automatically  be converted into 0.1587301 of a share of
Parent Common Stock,  with the ratio of Company Common Stock  exchangeable  into
Parent  Common  Stock  being  6.3:1,  which  ratio is  referred to herein as the
"Exchange Ratio."

                  (b) All  options  and  warrants  to acquire  shares of Company
Common  Stock  (collectively,   "Company  Options")  that  are  outstanding  and
unexercised at the Effective Date and that are held by persons who are employees
of the  Company  prior to the  Merger  who will  continue  as  employees  of the
<PAGE>

Surviving  Corporation  following the Merger,  shall by virtue of the Merger and
without any action on the part of such Company Option holders,  automatically be
canceled and terminated in consideration for the issuance to such Company Option
holders of replacement  options with comparable  vesting  provisions to purchase
Parent Common Stock at the Exchange Ratio (i.e., for each option to purchase one
share of Company  Common  Stock,  the holder  thereof would receive an option to
purchase  0.1587301 of a share of Parent  Common  Stock) at the exercise  prices
applicable to Company Options prior to the Merger.

                  (c) All Company Options which have vested that are outstanding
and  unexercised at the Effective Date and that are held by persons who will not
be employees of the Surviving  Corporation following the Merger shall, by virtue
of the  Merger  and  without  any  action  on the part of such  Option  holders,
automatically be canceled and terminated in a cashless exchange in consideration
for the issuance of registered  shares of Parent Common Stock,  with each option
to acquire one share of Company  Common Stock being  converted into an option to
acquire  0.1587301 of a share of Parent Common Stock,  valuing the Parent Common
Stock for purposes of the cashless exercise at its closing price on the business
day prior to the Effective Date and  subtracting the exercise price to determine
the net value,  and dividing the net value by the closing price of Parent Common
Stock on the business day prior to the Effective Date to determine the number of
Parent  Common Stock share  equivalents  to be received in the Merger  (rounded,
however,  to the nearest whole number per option holder to avoid the issuance of
fractional shares).

                  (d) Each share of Company  Common Stock held in the  Company's
treasury as of the Effective  Date shall,  by virtue of the Merger,  be canceled
without payment of any consideration therefor.

                  (e)  Notwithstanding  the  foregoing,  any  shares of  Company
Common Stock issued and  outstanding  immediately  prior to the  Effective  Date
which are held by  shareholders  who have not voted such  shares in favor of the
Merger  and who have  complied  with all other  relevant  provisions  of Section
60.571 of the Oregon Act (the  "Dissenting  Shares") shall not be converted into
shares of Parent  Common  Stock in the manner  contemplated  by  Section  2.2(a)
above,  and the rights of holders of Dissenting  Shares shall be governed by the
provisions of the Oregon Act.

     2.3 Cancellation of Certificates. At the Closing, certificates representing
all of the issued and  outstanding  shares of Company  Common  Stock (other than
Dissenting Shares),  together with all instruments representing Company Options,
shall be  surrendered.  At the Effective Date,  each such  certificate  shall be
canceled and,  simultaneously  with such  cancellation,  a new  certificate  for
shares of  Parent  Common  Stock,  representing  the  number of shares of Parent
Common Stock into which the shares of Company Common Stock formerly  represented
by such certificate shall have been converted in the Merger,  shall be issued to
the holder thereof. At the Effective Date, each instrument  representing Company
Options  shall  be  canceled  and  terminated  and,   simultaneously  with  such
cancellation and termination,  either (i) a certificate representing replacement
options to  purchase  Parent  Common  Stock shall be issued in  accordance  with
Section  2.2(b) or (ii) the number of shares of Parent Common Stock  issuable to
each holder of Company  Options who is subject to Section 2.2(c) hereof shall be
issued to each such Company  Option holder.  From and after the Effective  Date,
each  certificate or instrument  which prior to the Effective  Date  represented
shares of Company Common Stock or Company Options as applicable, shall be deemed
to represent only the right to receive the  certificates  of Parent Common Stock
or options to acquire Parent Common Stock,  as the case may be,  contemplated by
the  preceding  two  sentences,  and the  holder  of each  such  certificate  or
instrument  shall cease to have any rights with respect to the shares of Company
Common  Stock or Company  Options (and the  underlying  Common  Stock)  formerly
represented thereby, except as otherwise provided herein or by law.
<PAGE>

        2.4  Closing.  Subject  to  Section  9.1  hereof,  the  closing  of  the
transactions  contemplated by this Agreement (the "Closing") shall take place at
the offices of Nordlicht & Hand, 645 Fifth Avenue,  New York, New York, at 10:00
A.M. local time, (i) as soon as practicable  after the later to occur of (x) the
date of the later of the shareholders' meeting referred to in Section 7.3 hereof
or (y) the day on which the last  condition  set forth in  Articles  VIII and IX
hereof shall have been fulfilled or waived, or (ii) at such other time as Parent
and the Company may mutually agree (the "Closing Date").

        2.5  Adjustment  Event.  If,  between the date hereof and the  Effective
  Date,  the issued and  outstanding  shares of Parent  Common  Stock or Company
  Common  Stock  shall have been  combined,  split,  reclassified  or  otherwise
  changed into a different  number of share or a different  class of shares,  an
  appropriate  adjustment  to the Exchange  Ratio shall be agreed upon by Parent
  and the Company.


                               ARTICLE III

                REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      The Company represents and warrants to Parent and Acquisition that:

        3.1 Corporate Organization.  The Company is a corporation duly organized
and validly  existing under the laws of the State of Oregon.  The Company has no
subsidiaries.  The Company has all  requisite  corporate  power and authority to
own,  operate  and lease the  properties  and assets it now owns,  operates  and
leases and to carry on its business as presently conducted.  Except as set forth
on Schedule 3.11 the Company is duly qualified to transact business as a foreign
corporation  and is in existence in the State of Oregon and in good  standing in
the  other  jurisdictions  set  forth  in  Schedule  3.1,  which  are  the  only
jurisdictions  where such  qualification  is required by reason of the nature of
the properties and assets currently owned,  operated or leased by the Company or
the business currently  conducted by it, except for such jurisdictions where the
failure  to be so  qualified  would not have a  material  adverse  effect on the
Company.  The Company has  previously  delivered to Parent  complete and correct
copies of its Articles of Incorporation  (certified by the secretary of state of
the  jurisdiction  in which it was formed as of a recent  date) and its  By-Laws
(certified  by the  Secretary of the Company as of a recent  date).  Neither the
Articles of Incorporation  nor the By-Laws of the Company has been amended since
the respective dates of certification thereof, nor has any action been taken for
the purpose of effecting any amendment of such instruments.

        3.2 Authorization. The Company has full corporate power and authority to
enter  into this  Agreement  and to  consummate  the  transactions  contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions  contemplated  hereby  have  been  duly  approved  by the  Board of
Directors  of the  Company,  and no other  corporate  action  on the part of the
Company is necessary to approve and authorize the execution and delivery of this
Agreement or the consummation of the transactions  contemplated  hereby (subject
to the approval of this Agreement and the  transactions  contemplated  hereby by
the  Company's  shareholders).  The  Board  of  Directors  of  the  Company  has
determined  that the Merger is in the best interests of the  shareholders of the
Company and will recommend to the shareholders of the Company that they vote any

--------------------
(1) All Schedules are made part of and  incorporated  in this Agreement and Plan
Merger.
<PAGE>

and all shares of Company  Common Stock owned by them on the date of the Meeting
of the  Company's  shareholders  described  in Section 7.3 hereof to approve the
Merger, this Agreement and the transactions  contemplated hereby. This Agreement
has been duly  executed and delivered by the Company and  constitutes  the valid
and binding agreement of the Company,  enforceable in accordance with its terms,
except  to  the  extent  that   enforceability  may  be  limited  by  applicable
bankruptcy,  reorganization,  insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general  principles of equity,
regardless of whether such  enforceability  is considered in a proceeding in law
or in equity.

       3.3 Consents and Approvals; No Violations. Subject to (a) the filing of a
Registration  Statement  on Form  S-4  (the  "Registration  Statement")  and the
prospectus  and  proxy  statement  contained  therein  with the  Securities  and
Exchange Commission (the "SEC") and appropriate regulatory authorities,  and any
required  actions under various state securities and blue sky laws in connection
with the  issuance  of shares of Parent  Common  Stock in the Merger and (b) the
filing of Articles of Merger with the Secretary of State of the State of Oregon,
the  execution  and  delivery  of  this  Agreement,   the  consummation  of  the
transactions  contemplated  hereby will not:  (i)  violate or conflict  with any
provision  of the  Articles of  Incorporation  or By-Laws of the  Company,  (ii)
breach,  violate or  constitute  an event of default (or an event which with the
lapse of time or the  giving  of  notice or both  would  constitute  an event of
default)  under,   give  rise  to  any  right  of   termination,   cancellation,
modification or acceleration  under,  or except as otherwise  disclosed  herein,
require  any  consent  or the  giving  of any  notice  under,  any  note,  bond,
indenture,  mortgage,  security agreement,  lease, license,  franchise,  permit,
agreement or other  instrument  or obligation to which the Company or any of the
Subsidiaries is a party,  or by which the Company or any of the  Subsidiaries or
any of their  respective  properties  or assets  may be bound,  or result in the
creation of any lien,  claim or encumbrance or other right of any third party of
any  kind  whatsoever  upon the  properties  or  assets  of the  Company  or the
Subsidiaries  pursuant to the terms of any such instrument or obligation,  (iii)
violate or conflict with any law, statute,  ordinance,  code, rule,  regulation,
judgment,  order, writ,  injunction,  decree or other instrument of any Federal,
state,  local or foreign court or  governmental  or regulatory  body,  agency or
authority applicable to the Company or the Subsidiaries or by which any of their
respective properties or assets may be bound or (iv) require, on the part of the
Company or any Subsidiary,  any filing or registration with, or permit, license,
exemption,  consent,  authorization  or approval of, or the giving of any notice
to, any governmental or regulatory body,  agency or authority.  Without limiting
the generality of clause (ii) above,  neither the Company nor any of the Company
Identified  Persons (as defined below) is a party to any agreement,  arrangement
or understanding  which contemplates the sale of the business of the Company and
its  Subsidiaries,  in whole or in part,  whether  by means of a sale of shares,
sale of assets, merger, consolidation or otherwise.

         3.4  Capitalization.

                  (a) The  authorized  capital stock of the Company  consists of
15,000,000  shares of Company Common Stock, of which 2,654,716 shares are issued
and outstanding and 5,000,000 shares of Series  Preferred Stock,  $.01 par value
none of which is issued and  outstanding.  Schedule 3.4(a) sets forth a complete
and  correct  list of the  record  and  beneficial  ownership  of the issued and
outstanding  shares of Company Common Stock.  All of the issued and  outstanding
shares of Company  Common Stock were duly  authorized and validly issued and are
fully paid and nonassessable, and were not issued in violation of any preemptive
rights,  rights of first refusal, or Federal or state securities laws. Except as
disclosed  in Schedule  3.4(a)  hereto,  the Company  has never  repurchased  or
redeemed any shares of its capital stock, and there are no amounts owed or which
may be owed to any  person  by the  Company  as a result  of any  repurchase  or
redemption  of shares of its  capital  stock.  Except as  disclosed  in Schedule
<PAGE>

3.4(a) hereto, there are no agreements,  arrangements or understandings to which
the  Company  is a party or by which it is bound to  redeem  or  repurchase  any
shares of its capital stock.  Except as set forth in Schedule 3.4(a),  there are
no outstanding  options,  warrants (including,  without limitation,  the Company
Options) or other  rights to purchase,  or any  securities  convertible  into or
exchangeable  for, shares of the capital stock of the Company,  and there are no
agreements, arrangements or understandings to which the Company is a party or by
which it is bound  pursuant  to which the Company is or may be required to issue
additional shares of its capital stock.

                  (b) The  Company  does not own,  directly or  indirectly,  any
equity  interest  in  any  other  corporation,  partnership,  limited  liability
company, or any other entity.

         3.5 SEC Reports and Financial  Statements.  The Company has  heretofore
delivered or made available to Parent complete and correct copies of all reports
and other filings  filed by the Company with the SEC pursuant to the  Securities
Exchange Act of 1934, as amended, and the rules and regulations  thereunder (the
"Exchange Act") during its past two fiscal years (such reports and other filings
collectively  referred to herein as the "Company  Exchange Act Filings").  As of
their  respective  dates,  the Company  Exchange Act Filings did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in light of the
circumstances   under  which  they  were  made,  not  misleading.   The  audited
consolidated  financial  statements of Company  included in the Company Exchange
Act Filings (i) were  prepared from the books and records of the Company and its
consolidated  subsidiaries,  (ii) were  prepared in  accordance  with  generally
accepted  accounting  principles applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and (iii) present fairly
the financial position of the Company as at the dates thereof and the results of
their  operations  and cash flows for the fiscal year ended October 31, 1996 and
earlier  years.  The  unaudited  financial  statements  included  in the Company
Exchange Act Filings  comply in all material  respects with the published  rules
and regulations of the SEC with respect  thereto;  and such unaudited  financial
statements  (i) were  prepared  from the books and records of the Company,  (ii)
were prepared in  accordance  with  generally  accepted  accounting  principles,
except  as  otherwise  permitted  under  the  Exchange  Act  and the  rules  and
regulations  thereunder,  on a  consistent  basis  (except  as may be  indicated
therein  or in the notes or  schedules  thereto)  and (iii)  present  fairly the
financial  position  of the  Company as at the dates  thereof and the results of
their  operations  and cash flows (or changes in  financial  condition)  for the
periods  then  ended,  subject  to  normal  year-end  adjustments  and any other
adjustments described therein or in the notes or schedules thereto.

         3.6  Absence  of  Undisclosed  Liabilities.  Except (i) as set forth on
Schedule 3.6, (ii) as set forth or reserved against in the consolidated  balance
sheet of the Company and its Subsidiaries  dated as of July 31, 1997 included in
the Financial  Statements and (iii) for  contractual  obligations  arising under
contracts  entered into in the ordinary course and disclosed in the Schedules to
this  Agreement  to the extent  such  contracts  are  required  to be  disclosed
hereunder,  and (iv) for liabilities or obligations incurred since July 31, 1997
in the  ordinary  course  of  business  for  which  the  Company's  undischarged
obligation is less than $25,000,  the Company and its  Subsidiaries  do not have
any  liabilities  or  obligations  of any  nature,  whether  accrued,  absolute,
contingent  or  otherwise,  which would be required to be reflected in a balance
sheet of the Company or the notes thereto  prepared in accordance with generally
accepted accounting principles as of the date hereof.

         3.7 Absence of Certain Changes or Events.  Except for the  transactions

<PAGE>

contemplated  by this Agreement and as set forth in Schedule 3.7, since July 31,
1997,  the  Company  has  carried on its  business  in the  ordinary  course and
consistent  with past  practice.  The Company has not since July 31,  1997:  (i)
incurred  any  material  obligation  or liability  (whether  absolute,  accrued,
contingent  or  otherwise)  except  in  the  ordinary  course  of  business  and
consistent with past practice;  (ii)  experienced any material adverse change in
its financial condition, results of operations, assets, liabilities, business or
operations;  (iii) made any change in any accounting principle or practice or in
its methods of applying any such  principle or practice or written up (or failed
to write  down in  accordance  with  generally  accepted  accounting  principles
consistent  with past  practice)  the value of any  inventories  or revalued any
assets of the Company;  (iv) suffered any material damage,  destruction or loss,
whether  or not  covered  by  insurance,  affecting  its  properties,  assets or
business;  (v)  mortgaged,  pledged or  subjected  to any lien,  charge or other
encumbrance,  or granted  to third  parties  any  rights in, any of its  assets,
tangible or intangible;  (vi) sold or transferred  any of its assets,  except in
the ordinary course of business and consistent  with past practice,  or canceled
or  compromised  any debts or waived any claims or rights of a material  nature;
(vii) issued any  additional  shares of capital stock or any rights,  options or
warrants to purchase, or securities convertible into or exchangeable for, shares
of its capital  stock  (other than the  issuance of shares upon the  exercise of
employee stock  options);  (viii)  declared or paid any dividends on or made any
distributions (however characterized) in respect of shares of its capital stock;
(ix)  repurchased or redeemed any shares of its capital  stock;  (x) granted any
general or specific increase in the compensation payable or to become payable to
any of its employees or any bonus or service award or other like benefit,  which
increase is in excess of 15% of the total of compensation  and bonus  previously
payable to any such Employee,  or instituted,  increased,  augmented or improved
any Benefit Plan (as defined in Section  3.13(c),  below);  or (xi) entered into
any agreement to do any of the foregoing.

         3.8 Legal Proceedings,  etc. Except as set forth in Schedule 3.8, there
are no suits,  actions,  claims,  proceedings  (including,  without  limitation,
arbitral or  administrative  proceedings) or  investigations  pending or, to the
best knowledge of the Company, threatened against the Company or its properties,
assets or  business  (or,  to the best  knowledge  of the  Company,  pending  or
threatened  against,  relating to or involving any of the  officers,  directors,
employees,  agents or consultants of the Company in connection with the business
of the  Company).  There are no such  suits,  actions,  claims,  proceedings  or
investigations  pending,  or, to the best knowledge of the Company,  threatened,
challenging the validity or propriety of the  transactions  contemplated by this
Agreement.  There is no judgment,  order,  injunction,  decree or award (whether
issued by a court,  an  arbitrator  or an  administrative  agency)  to which the
Company is a party, or involving the Company's  properties,  assets or business,
which is unsatisfied or which requires  continuing  compliance  therewith by the
Company.

         3.9      Taxes.

                  (a) The Company has duly and timely filed, or will duly and in
a timely manner file,  all tax returns and other filings in respect of Taxes (as
defined  in Section  3.9(c),  below)  required  to be filed by them or which are
required to be filed by them on or prior to the  Effective  Date,  and have in a
timely manner paid (or will in a timely manner pay) all Taxes which are (or will
be)  shown to be due on such  returns.  All tax  returns  and other  filings  in
respect of Taxes are true,  correct and complete in all material  respects.  The
provisions for Taxes payable reflected in the Financial  Statements are adequate
under generally accepted accounting principles.

                  (b) There are no actions or proceedings  currently pending or,
to the best  knowledge  of the Company,  threatened,  against the Company or any
Subsidiary by any  governmental  authority  for the  assessment or collection of
<PAGE>

Taxes,  no claim for the  assessment  or  collection  of Taxes has been asserted
against  the  Company,  and  there  are no  matters  under  discussion  with any
governmental  authority  regarding  claims for the  assessment  or collection of
Taxes.  Any  Taxes  that  have  been  claimed  or  imposed  as a  result  of any
examinations of any tax return of the Company by any governmental  authority are
being  contested in good faith and have been disclosed in writing to the Parent.
There are no agreements or  applications by the Company for an extension of time
for the assessment or payment of any Taxes.

                  (c) For  purposes  of this  Agreement,  the  terms  "Tax"  and
"Taxes" shall mean and include any and all United States,  state, local, foreign
or other income, sales, use, withholding,  employment, payroll, social security,
property  taxes and all other  taxes of any  kind,  deficiencies,  fees or other
governmental charges, including, without limitation, any installment payment for
taxes and contributions or other amounts determined with respect to compensation
paid to directors,  officers, employees or independent contractors, from time to
time imposed by or required to be paid to any governmental  authority (including
penalties and  additions to tax thereon,  penalties for failure to file a return
or report, and interest on any of the foregoing).

                  (d) The Company has not, with regard to any assets or property
held,  acquired  or to be  acquired  by the  Company,  filed  a  consent  to the
application of Section  341(f) of the Internal  Revenue Code of 1986, as amended
(the "Code").

                  (e) The Company has not  participated in or cooperated with an
international boycott within the meaning of Section 999(b) of the Code.

                  (f) The disclosure set forth in the Company's Annual Report on
Form 10-KSB for the fiscal year ended October 31, 1996 regarding  deferred taxes
and tax loss carry  forwards  is true and  complete as of the date hereof and no
events have occurred  since  October 31, 1996 which would make such  information
misleading or incomplete.

         3.10     Title to Properties and Related Matters.

                  (a) Except as set forth on Schedule  3.10(a),  the Company has
good and  marketable  title to all personal  property,  tangible or  intangible,
which the Company  purports to own,  including the  properties  reflected on its
July 31, 1997  Balance  Sheet or  acquired  after the date  thereof  (other than
properties  and assets sold or otherwise  disposed of in the ordinary  course of
business and consistent with past practice since July 31, 1997),  free and clear
of any claims,  liens,  pledges,  security interests or encumbrances of any kind
whatsoever (other than purchase money security interests and common law vendor's
liens,  in each case for goods  purchased on open account in the ordinary course
of  business  and  having a fair  market  value  of less  than  $10,000  in each
individual case).

                  (b)      The Company does not own any real property.

                  (c) Schedule 3.10(c) sets forth a complete and correct list of
all equipment, machinery,  instruments,  vehicles, furniture, fixtures and other
items of personal property currently owned, leased or used by the Company with a
book  value in each case of $5,000 or more.  All such  personal  property  is in
satisfactory   operating  condition  (ordinary  and  reasonable  wear  and  tear
excepted),  is  physically  located in or about one of the  Company's  places of
business  and is owned by the Company or is leased by the  Company  under one of
the leases set forth in  Schedule  3.10(d).  None of such  personal  property is
subject to any agreement or commitment  for its use by any person other than the
<PAGE>

Company.  The maintenance and operation of such personal property is appropriate
for personal property of such nature and is and has been in material conformance
with all  applicable  laws and  regulations.  There are no assets  leased by the
Company or used in the  business  of the  Company  that are owned,  directly  or
indirectly, by any Company Related Person (as defined in Section 3.22, below).

                  (d)  Schedule  3.10(d)  sets forth a complete and correct list
and summary  description  of all real property and personal  property  leases to
which the Company is a party,  as lessee or lessor.  The Company has  previously
delivered  to  Parent  complete  and  correct  copies  of each  lease  (and  any
amendments or supplements  thereto) listed in Schedule 3.10(d).  Each such lease
is valid and binding  and in full force and effect.  Neither the Company nor (to
the best  knowledge of the Company) any other party is in default under any such
lease, and no event has occurred which constitutes, or with the lapse of time or
the giving of notice or both would  constitute,  a default by the Company or (to
the best  knowledge  of the  Company)  a default by any other  party  under such
lease.  To the  best  knowledge  of  the  Company,  there  are  no  disputes  or
disagreements  between the Company and any other party with  respect to any such
lease.  The lessor under each such lease has  consented or been given notice (or
prior to the Closing  shall have  consented  or been given  notice),  where such
consent or the giving of such notice is  necessary,  sufficient  that such lease
shall  remain  in full  force  and  effect  following  the  consummation  of the
transactions  contemplated by this Agreement without  requiring  modification in
the rights or obligations of the lessee under any such lease.

                  (e) Schedule 3.10(e) sets forth a complete and correct list of
all inventory,  merchandise, work in process, finished goods, and raw materials,
and, all material  amounts of packaging,  supplies and other  personal  property
related to the business of the Company maintained,  held or stored by or for the
Company  and  any  prepaid  deposits  for  purchases  of any of  the  same  (the
"Inventory").  Except as  disclosed  on  Schedule  3.10(e),  the Company and its
Subsidiaries  have good and valid title to the  Inventory  free and clear of all
liens, claims,  security interests and encumbrances of any kind whatsoever.  The
Inventory does not include items that are obsolete,  damaged or slow-moving;  is
in good and merchantable condition in all material respects; and is suitable and
usable for the purposes for which it is intended. The Inventory does not consist
of any items held on consignment.

         3.11     Intellectual Property.

                   (a)  Schedule  3.11 hereto sets forth a complete  and correct
list of all patents,  patent  applications,  material unpatented  inventions set
forth  or  described  in  writing,  registered  trademarks  and  service  marks,
trademark  and service  mark  applications,  trade names,  copyrights,  software
documentation  and manuals  including  all versions  thereof  (collectively  the
"Intellectual  Property") which, to the Company's best knowledge,  are owned by,
registered  in the name of or used in the  business of the  Company  (including,
without limitation,  the copyright and all other rights in reports issued by the
Company to its clients in the conduct of its  business),  all of which are valid
and subsisting.  In each  registration or patent or application for registration
or patent listed in Schedule 3.11 held by  assignment,  the  assignment has been
recorded with the state or national  Patent and Trademark  Office from which the
original registration issued or before which the application for registration is
pending.  To the Company's  best  knowledge,  the rights of the Company in or to
such  Intellectual  Property  owned by the  Company  does not  conflict  with or
infringe on the rights of any third  party.  The Company  has not  received  any
written  claim or notice to such  effect.  The  Company  is not  subject  to any
judgment,  injunction,  decree,  order or agreement  restricting  its use of the

<PAGE>

Intellectual  Property,  except for such restrictions  contained in Intellectual
Property  licensed from third  parties,  which  licensed  Intellectual  Property
(other than "off the shelf"  software such as word  processing  and  spreadsheet
programs)  and material  restrictions  on the use thereof are listed in Schedule
3.11.

                  (b)  Except  set  forth in  Schedule  3.11,  the  Intellectual
Property owned by the Company is free and clear of all liens,  claims,  security
interests or encumbrances of any kind  whatsoever.  No actions have been made or
asserted or are pending or, to the best  knowledge  of the  Company,  threatened
against the Company  either (i) based upon or  challenging or seeking to deny or
restrict the use by the Company of any  Intellectual  Property or (ii)  alleging
that any services provided,  or products manufactured or sold by the Company are
being provided,  manufactured or sold in violation of any patents or trademarks,
or other rights of any third  party.  To the best  knowledge of the Company,  no
third party is using any patents, copyrights,  trademarks,  service marks, trade
names,  trade names,  trade  secrets or similar  property that infringe upon the
Intellectual  Property  owned by the  Company or upon the rights of the  Company
used in its or their business.  The Company has not granted any license or other
right to any third party with respect to the  Intellectual  Property  except for
licenses  of  software  to  customers.  The  consummation  of  the  transactions
contemplated  by this Agreement will not result in the termination or impairment
of any of the Intellectual Property owned by the Company.

                  (c) The  Company  has made  available  to Parent  correct  and
complete  copies of all  licenses  and  sublicenses  for  Intellectual  Property
licensed  from or to third  parties set forth in  Schedule  3.11 and any and all
ancillary  documents   pertaining  thereto  (including,   but  limited  to,  all
amendments,  consents and evidence of commencement  dates and expiration dates).
With respect to each of such licenses and sublicenses:

                      (i)  such  license  or   sublicense,   together  with  all
ancillary  documents  made  available  pursuant  to the first  sentence  of this
Section 3.11(c), is valid, binding, enforceable and in full force and effect and
represents the entire  agreement  between the  respective  licensor and licensee
with respect to the subject matter of such licensee or sublicense;

                      (ii)  subject  to  obtaining  any  necessary   consent  to
assignment  from the licensor or licensee,  such license or sublicense  will not
cease to be valid,  binding,  enforceable  and in full  force and  effect on the
terms currently in effect as a result of the  consummation  of the  transactions
contemplated by this Agreement,  nor will the  consummation of the  transactions
contemplated by this Agreement constitute a breach or default under such license
or sublicense or otherwise give the licensor or sublicensor a right to terminate
such license or sublicense;

                      (iii) with respect to each such license or sublicense; (A)
the Company has not received any notice of  cancellation  or  termination  under
such license or sublicense and no licensor, sublicensor, licensee or sublicensee
has any right to terminate or cancel such license or sublicense, (B) the Company
has not  received  any  notice or a breach or  default  under  such  license  or
sublicenses, which breach or default has not been cured, and (C) the Company has
not  granted to any third  party any rights,  adverse or  otherwise,  under such
licenses or sublicense (except for licenses of software to customers);

                      (iv) neither the Company, nor to the best knowledge of the
Company, any other party to such license or sublicense,  is in breach or default
in any material respect,  and no event has occurred with respect to the Company,
or to the best knowledge of the Company,  such other party, that, with notice or
<PAGE>

lapse of time would  constitute such a breach or default or permit  termination,
modification or acceleration under such license or sublicense;

                      (v) no actions  have been made or  asserted or are pending
or, to the best  knowledge  of the  Company,  have been  threatened  against the
Company, either (A) based upon or challenging or seeking to deny or restrict the
use by the Company of any licensed  Intellectual  Property or (B) alleging  that
any Intellectual Property is being licensed, sublicensed or used in violation of
any patents or trademarks, or any other rights of any third party; and

                      (vi) to the best knowledge of the Company,  no third party
is using any patents, copyrights,  trademarks, service marks, trade names, trade
secrets  or  similar  property  that  infringe  upon  the  use of  the  licensed
Intellectual Property by the Company or upon the rights of the Company therein.

                  (d) The Company is not aware of any reason that would  prevent
any pending applications to register trademarks,  service marks or copyrights or
any pending patent applications from being granted.

                  (e) All  rights of the  Company  in each item of  Intellectual
Property  owned  by the  Company  are  transferable  to  Acquisition  as  herein
contemplated  and such  transfer will not, with or without the giving of notice,
or lapse of time,  or both,  result in a default of any  agreement  to which the
Company  is a party or the  impairment  of any  rights  of the  Company  in such
intellectual  property which impairment would cause a material adverse effect on
the Company,  its business operations or its financial  statements . As a result
of the transactions  contemplated hereby, upon the Closing, subject to obtaining
necessary consents to transfer licensed Intellectual Property,  Parent shall own
or possess, or own or possess adequate and enforceable licenses,  sublicenses or
sublicenses or other rights to use, all the Intellectual Property.

                  (f) Other  than "off the  shelf"  software,  the  Intellectual
Property set forth in Schedule 3.11  constitutes all the  Intellectual  Property
used in or held by the Company and its Subsidiaries to be used in, and necessary
in the conduct of, the business of the Company and its Subsidiaries as currently
conducted  and there  are not  other  items of  Intellectual  Property  that are
material to the Company and its Subsidiaries or its or their business.

                  (g) Schedule 3.11(g) sets forth all of the Company's  software
products including all versions of each such product and the uses therefor.

         3.12     Contracts.

                   (a) Except as set forth in  Schedule  3.12(a)  the Company is
not a party to, or subject to:

                      (i) any contract, arrangement or understanding,  or series
of related  contracts,  arrangements  or  understandings,  which involves annual
expenditures  or receipts by the Company of more than $10,000 not  cancelable by
the Company on thirty days (or less) notice;
<PAGE>

                      (ii)  any  note,  indenture,  credit  facility,  mortgage,
security agreement or other contract,  arrangement or understanding  relating to
or evidencing indebtedness for money borrowed or a security interest or mortgage
in the assets of the Company;

                      (iii) any guaranty issued by the Company;

                      (iv) any contract,  arrangement or understanding  granting
to any person the right to use any  property  or  property  right of the Company
having a value in excess of $10,000;

                      (v) any material  contract,  arrangement or  understanding
restricting  the Company's  right to engage in any business  activity or compete
with any business;

                      (vi) any contract,  arrangement  or  understanding  with a
Company Related Person; or

                      (vii) any outstanding  offer,  commitment or obligation to
enter into any contract or  arrangement  of the nature  described in subsections
(i) through (vi) of this subsection 3.12(a).

                  (b) The Company has  provided to Parent  complete  and correct
copies (or, in the case of oral contracts,  a complete and correct  description)
of samples of each contract (and any amendments or supplements  thereto)  listed
on Schedule  3.12(a).  Each  contract  listed in  Schedule  3.12(a) is valid and
binding  and in full force and  effect.  Neither  the  Company  nor (to the best
knowledge of the Company) any other party is in default under any such contract,
and no event has occurred  which  constitutes,  or with the lapse of time or the
giving of notice or both would  constitute,  a default by the Company or (to the
best knowledge of the Company) a default by any other party under such contract.
To the best  knowledge  of the Company,  there are no disputes or  disagreements
between the Company and any other party with  respect to any such  contract  and
the Company has not received any notice of  cancellation  or  termination of any
such  contracts.  Each other party to each such  contract has  consented or been
given  notice  (or prior to the  Closing  shall  have  consented  or been  given
notice),  where  such  consent  or the  giving  of  such  notice  is  necessary,
sufficient  that such contract  shall remain in full force and effect  following
the  consummation of the  transactions  contemplated  by this Agreement  without
modification in the rights or obligations of the Company thereunder.

                  (c) All indebtedness of the Company for monies borrowed by the
Company is prepayable at any time at the option of the Company,  without premium
or penalty.

                   (d) Except as set forth and  described  in Schedule  3.12(d),
the  Company has not issued any  warranty  or any  agreement  or  commitment  to
indemnify any person.

                  (e) The Company has not disclosed  any secret or  confidential
Intellectual  Property  (except by way of  issuance  of a patent or subject to a
confidentiality   agreement)   or  permitted  to  lapse  or  go  abandoned   any
Intellectual  Property (or any  registration or grant thereof or any application
relating  thereto) to which, or under which, the Company has any rights,  title,
interest or license.

                   (f) Set  forth on  Schedule  3.12(f)  hereto is a list of the
Company's current customers.
<PAGE>


         3.13     Employees; Employee Benefits.

                  (a)  Schedule  3.13(a)  sets  forth the  names of all  current
employees of the Company  (the  "Employees")  and,  with respect to any Employee
whose  annual  compensation  exceeds  $50,000  such  Employee's  job title,  the
location of employment of such Employee,  such Employee's  current  salary,  the
date and amount of such  Employee's most recent salary  increase,  the amount of
any bonuses or other  compensation paid since October 31, 1996 to such Employee,
the date of birth of such Employee, the date of employment of such Employee, the
accrued  vacation time of such  Employee and a  description  of the annual total
compensation arrangements currently applicable to such Employee. The Company has
accrued on its books and records all  obligations  for  salaries,  benefits  and
other  compensation with respect to its Employees and former employees  ("Former
Employees"), to the extent required by generally accepted accounting principles,
including, but not limited to, vacation pay, severance,  bonuses,  incentive and
deferred   compensation,   and  all   commissions  and  other  fees  payable  to
salespeople,  sales  representatives  and other  agents.  Except as set forth on
Schedule 3.13,  there are no outstanding  loans from the Company to any officer,
director,  employee, agent or consultant of the Company, or to any other Company
Related  Person.  Complete  and correct  copies of all written  agreements  with
Employees and all employment policies,  including but not limited to policies on
severance  pay and  liability  for accrued but unused sick and vacation pay, and
all amendments and supplements  thereto,  have previously been delivered or made
available to the Parent,  and a list of all such  agreements and policies is set
forth on Schedule  3.13(a).  None of the Employees has, to the best knowledge of
the  Company,  indicated a desire to  terminate  his or her  employment,  or any
intention  to  terminate  his or her  employment  upon a sale  of,  or  business
combination  relating  to, the Company or in  connection  with the  transactions
contemplated by this Agreement.  Except as set forth on Schedule 3.13(a),  since
October 31, 1996 the  Company  and its  Subsidiaries  have not (i) except in the
ordinary  course of business and consistent  with past  practice,  increased the
salary or other compensation  payable or to become payable to or for the benefit
of any of the Employees, (ii) increased the term or tenure of employment for any
Employee,  except  in the  ordinary  course  of  business  consistent  with past
practice,  or provided any Employee with any increased  security of  employment,
(iii) increased the amounts payable to any of the Employees upon the termination
of any  such  person's  employment  or (iv)  adopted,  increased,  augmented  or
improved  benefits  granted to or for the benefit of any of the Employees  under
any Benefit Plan.

                  (b) The Company has  complied in all  material  respects  with
Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment  Act,  as amended,  the Fair Labor  Standards  Act,  as amended,  the
Immigration  Reform and Control Act of 1986, and all applicable  laws, rules and
regulations   governing  payment  of  minimum  wages  and  overtime  rates,  the
withholding  and payment of taxes from  compensation,  discriminatory  practices
with respect to employment and discharge,  or otherwise  relating to the conduct
of employers  with respect to Employees or potential  employees,  and there have
been no  claims  made  or,  to the best  knowledge  of the  Company,  threatened
thereunder  against the  Company  arising  out of,  relating to or alleging  any
violation of any of the foregoing. There are no material controversies, strikes,
work stoppages,  picketing or disputes pending or threatened between the Company
and any of the Employees or Former Employees. No labor union or other collective
bargaining  unit  represents  or has  ever  represented  any  of the  Employees,
including any "leased  employees"  (within the meaning of Section  414(n) of the
Code).  No  organizational  effort  by  any  labor  union  or  other  collective
bargaining unit currently is under way or, to the best knowledge of the Company,
threatened with respect to any Employees.  The Company is not required to obtain
the consent of any labor union or other collective bargaining unit to consummate
the transactions contemplated by this Agreement. The requirements of the Workers
Adjustment  and  Retraining  Notification  Act do not apply to the  transactions
contemplated by this Agreement.
<PAGE>

                  (c) Schedule 3.13(c) sets forth a list of each defined benefit
and defined  contribution  plan, stock ownership plan,  employment or consulting
agreement,  executive compensation plan, bonus plan, incentive compensation plan
or arrangement,  deferred compensation agreement or arrangement,  agreement with
respect to  temporary  employees  or "leased  employees"  (within the meaning of
Section 414(n) of the Code), vacation pay, sickness, disability or death benefit
plan  (whether  provided  through  insurance,  on a funded or unfunded  basis or
otherwise),  employee stock option,  stock appreciation rights or stock purchase
plan,  severance pay plan,  arrangement or practice,  employee relations policy,
practice  or  arrangement,  and each other  employee  benefit  plan,  program or
arrangement,  including, without limitation, each "employee benefit plan" within
the meaning of Section 3(3) of the Employee  Retirement  Income  Security Act of
1974,  as amended  ("ERISA"),  which has been  maintained by the Company for the
benefit of or relating to any of the  Employees  or to any Former  Employees  or
their dependents,  survivors or  beneficiaries,  whether or not legally binding,
whether  written  or oral or  whether  express  or  implied,  all of  which  are
hereinafter referred to as the "Benefit Plans."

                  (d) With Respect to the Benefit Plans, each Benefit Plan which
is an  "employee  pension  benefit  plan" (as defined in Section  3(2) of ERISA)
meets the requirements of Section 401(a) of the Code; the trust, if any, forming
part of such plan is exempt from U.S. federal income tax under Section 501(a) of
the Code;  a  favorable  determination  letter has been  issued by the  Internal
Revenue  Service  (the  "IRS")  with  respect  to each  plan and  trust and each
amendment thereto; and nothing has occurred since the date of such determination
letter that would adversely  affect the  qualification  of such plan. No Benefit
Plan is a "voluntary employees  beneficiary  association" (within the meaning of
Section  501(c)(9)  of the Code) and there have been no other  "welfare  benefit
funds"  (within the meaning of Section 419 of the Code) relating to Employees or
Former Employees;  no event or condition exists with respect to any Benefit Plan
that could  subject the Company to any material Tax under  Section  4980B of the
Code; each Benefit Plan has complied with the  requirements of Section 162(k) of
the Code.  With  respect  to each  Benefit  Plan,  the  Company  has  heretofore
delivered to Parent  complete  and correct  copies of the  following  documents,
where applicable and to the extent available:  (i) the most recent annual report
(Form 5500 series),  together with schedules,  as required,  filed with the IRS,
and any financial statements and opinion required by Section 103(a)(3) of ERISA,
(ii) the most  recent  determination  letter  issued by the IRS,  (iii) the most
recent  summary plan  description  and all  modifications,  as well as all other
descriptions  distributed  to  Employees  or set forth in any  manuals  or other
documents,  (iv) the text of the  Benefit  Plan and of any trust,  insurance  or
annuity  contracts  maintained in  connection  therewith and (v) the most recent
actuarial report, if any, relating to the Benefit Plan.

                  (e) Neither the Company nor any  corporation or other trade or
business  under  common  control  with the  Company (as  determined  pursuant to
Section 414(b) or (c) of the Code) (a "Common Control Entity") has maintained or
contributed to or in any way directly or indirectly  has any liability  (whether
contingent or otherwise)  with respect to any  "multiemployer  plan," within the
meaning of Section  3(37) of ERISA;  no Benefit Plan or similar  benefit plan of
any Common  Control  Entity has been  subject to Title IV of ERISA;  neither the
Company nor any Common Control  Entity is a party to or has any liability  under
any agreement imposing secondary  liability on it as a seller of the assets of a
business in accordance  with Section 4204 of ERISA or under any other  provision
of Title IV of ERISA or other  agreement;  no contingent or other liability with

<PAGE>

respect to which the Company has or could have any liability  exists under Title
IV of ERISA to the  Pension  Benefit  Guaranty  Corporation  ("PBGC")  or to any
Benefit Plan;  and no assets of the Company are subject to a lien under Sections
4064 or 4068 of ERISA.  The  Company  does not have any  obligation  to  provide
medical or other benefits to Employees or Former  Employees or their  survivors,
dependents  and  beneficiaries,  except as may be required  by the  Consolidated
Omnibus Budget  Reconciliation  Act of 1986 or applicable state medical benefits
continuation  law. The Company will not incur any liability  under any severance
agreement, deferred compensation agreement, employment or similar agreement as a
result of the consummation of the transactions contemplated by this Agreement.

                  (f)  None  of  the  Benefit   Plans  has  been  subject  to  a
"reportable  event," within the meaning of Section 4043 of ERISA (whether or not
waived);  there have been no  "prohibited  transactions",  within the meaning of
Section  4975 of the Code or Part 4 of  Subtitle B of Title I of ERISA;  none of
the Benefit Plans are subject to Section 412 of the Code; each Benefit Plan has,
in all material  respects,  been  administered  to date in  accordance  with the
applicable  provisions of ERISA,  the Code and applicable law and with the terms
and provisions of all documents,  contracts or agreements pursuant to which such
Benefit Plan is  maintained;  all reports and  information  required to be filed
with the  Department  of  Labor,  the  IRS,  the  PBGC or plan  participants  or
beneficiaries  with respect to any Benefit Plan have been timely filed; there is
no dispute,  arbitration,  claim,  suit, or  grievance,  pending or, to the best
knowledge  of the  Company,  threatened,  involving  a Benefit  Plan (other than
routine claims for benefits),  and, to the best knowledge of the Company,  there
is no basis  for such a  claim;  none of the  Benefit  Plans  nor any  fiduciary
thereof has been the direct or indirect  subject of a order or  investigation or
examination  by a  governmental  or  quasi-governmental  agency and there are no
matters  pending before the IRS, the Department of Labor,  the PBGC or any other
domestic or, to the best knowledge of the Company,  foreign  governmental agency
with respect to a Benefit Plan; there have been no claims,  or notice of claims,
filed under any fiduciary  liability insurance policy covering any Benefit Plan;
and there has been and will be no  "parachute  payment" (as that term is defined
in  Section  28OG(b)(2)  of the  Code)  to any of  the  Employees  prior  to the
Effective  Date.  No event or set of  conditions  exist which would  subject the
Company to any Tax under Section 4999 of the Code. No event or set of conditions
exist which would  subject the Company or any  Subsidiary  to any  material  Tax
under Sections 4972,  4974-76,  4979, 4980 or 5000 of the Code. No loan has been
made to a Benefit Plan,  which was intended to qualify under Section  4975(d)(3)
of the Code.

                  (g) Except as set forth on Schedule  3.13(g),  all  directors,
officers,  management employees, and technical and professional employees of the
Company have executed employee  confidentiality  agreements substantially in the
form attached as Exhibit 3.13(g).

         3.14     Compliance with Applicable Law.

                  (a) The Company is not to its best  knowledge  in violation of
any applicable safety, health,  environmental or other law, statute,  ordinance,
code,  rule,  regulation,  judgment,  order,  injunction,  writ or decree of any
Federal,  state,  local or foreign court or  governmental  or  regulatory  body,
agency or authority having,  asserting or claiming  jurisdiction over it or over
any part of its business,  operations,  properties  or assets,  except where any
such  violation  would  not have a  material  adverse  effect  on the  business,
operations  or assets of the  Company.  The Company has not  received any notice
alleging any such violation,  nor to the best knowledge of the Company, is there
any inquiry, investigation or proceedings relating thereto.
<PAGE>

                  (b) The  Company  is in  material  compliance  with the rules,
regulations,  guidelines and interpretations of the Food and Drug Administration
("FDA"),  including  the  registration  of  the  Company  as  a  medical  device
manufacture for blood bank software.  To the best knowledge of the Company,  the
FDA has no reason to deny the  registration  of the Company as a medical  device
manufacture for blood banks software.  The Company has never recalled any of its
products,  except as set forth in Schedule 3.14(c). The Company has delivered to
Parent true and complete copies of all of the Company's  correspondence with the
FDA.

         3.15  Ability  to  Conduct  the   Business.   There  is  no  agreement,
arrangement  or  understanding,  nor any judgment,  order,  writ,  injunction or
decree of any court or  governmental  or regulatory  body,  agency or authority,
applicable  to the  Company or to which the Company is a party or by which it or
any of its  properties  or  assets is bound,  that will  prevent  the use by the
Surviving  Corporation,  after the Effective  Date, of the properties and assets
owned by, the business  conducted by or the services  rendered by the Company on
the date hereof,  in each case on  substantially  the same basis as the same are
used,  owned,  conducted  or  rendered  on the date  hereof.  The  Company is in
compliance  with  all  material  governmental  permits,  licenses,   exemptions,
consents,  authorizations  and  approvals,  including  without  limitation,  all
material  health,  safety,  environmental  and food and drug  permits used in or
required for the conduct of their business as presently conducted,  all of which
shall  continue in full force and  effect,  without  requirement  (except as set
forth in  Schedule  3.15) of any filing or the giving of any notice and  without
modification   thereof,   following  the   consummation   of  the   transactions
contemplated hereby. The Company has not received any notice of, and to the best
knowledge of the Company, there are no inquiries,  proceedings or investigations
relating to or which could result in the revocation or  modification of any such
permit,  license,  exemption,  consent,  authorization or approval,  nor are the
Company aware of any basis therefor.  The Company is in all material respects in
compliance with all such permits licenses, exemptions, consents,  authorizations
and approvals and all applicable laws. The Company is not party to any agreement
which would prohibit it from manufacturing, selling or distributing any products
or services.

         3.16 Consultants, Sales Representatives and Other Agents. Schedule 3.16
hereto sets forth a complete and correct list of the names and addresses of each
consultant,  sales  representative  or other  agent  (other than any such person
performing  solely clerical  functions)  currently engaged by the Company who is
not  an  employee  of  the  Company  and  who  has  or is  expected  to  receive
compensation  in excess of  $50,000 in  respect  of the  fiscal  year  beginning
November  1, 1996 and ending  October 31,  1997,  a summary  description  of the
services   provided  by  each  such  person,   the  commission  rates  or  other
compensation  applicable  with  respect  to each such  person  and the amount of
commissions  or other  compensation  earned by each such  person  for the fiscal
period  ended  October 31,  1996.  Complete  and  correct  copies of all current
agreements  between  the  Company  and any  such  person  have  previously  been
delivered or made available by the Company to the Parent.
<PAGE>

         3.17 Accounts Receivable. Attached hereto as Schedule 3.17 is a list of
all of the Company's accounts receivable. All accounts receivable of the Company
(i) arose from bona fide  transactions  in the  ordinary  course of business and
consistent  with past  practice,  (ii) except as set forth on Schedule 3.17, are
owned by the Company or the respective  Subsidiary  free and clear of any claim,
security interest, lien or other encumbrance and (iii) are accurately and fairly
reflected on the Balance Sheet,  or, with respect to accounts  receivable of the
Company  created on or after July 31, 1997, are accurately and fairly  reflected
in the books and records of the Company.

         3.18 Insurance. Schedule 3.18 hereto is a true and complete list of all
insurance  policies  carried by the Company,  together  with, in respect of each
such  policy,  the name of the  insurer,  the number of the  policy,  the annual
policy premium payable therefor,  the limits of coverage,  the deductible amount
(if any),  the  expiration  date  thereof  and each  pending  claim  thereunder.
Complete and correct copies of each  certificate  of insurance  have  previously
been delivered by the Company to the Parent. All such policies are legal, valid,
binding and enforceable in accordance with their terms and are in full force and
effect.  All premiums due thereon have been paid in a timely manner. The Company
believes  that the  insurance  carried  by the  Company  is,  as to  amount  and
coverage, consistent with the insurance practices of companies generally who are
engaged in  businesses  similar to that of the Company.  Neither the Company nor
any person  holding a policy or binder of insurance for the Company is in breach
or default with respect to any provision contained in any such policy or binder,
and no event  has  occurred  which,  with  notice  or the  lapse of time,  would
constitute such a breach or default or permit  termination or modification under
the  policy,  nor has the  Company or any such  policyholder  failed to give any
notice  of any claim  under  such  policy  or  binder in due or timely  fashion.
Neither the Company nor any such  policyholder  has  canceled or failed to renew
any such policy or binder,  has  knowledge  of any  material  inaccuracy  in any
application  for such policies or binders,  has failed to pay premiums when due,
has  knowledge  of any  similar  state or facts  that  might  form the basis for
termination of any such insurance, or given notice of any such circumstance.

         3.19 Information in Registration Statement and Proxy Statement. None of
the information relating to the Company, its business or any of its shareholders
supplied by the Company for  inclusion  or  incorporation  by  reference  in the
Registration  Statement to be filed under the Securities Act of 1933, as amended
(the "Securities Act"), and the prospectus contained therein, for the purpose of
registering  the shares of Parent  Common  Stock to be issued in the Merger (the
"Registration Statement") or the proxy statement to be distributed in connection
with the meetings of the  shareholders  of the Company and the  shareholders  of
Parent referred to in Section 7.3 (the "Proxy  Statement")  will, in the case of
the  Registration  Statement,  at  the  time  it  becomes  effective  under  the
Securities Act and at the Effective Date, or, in the case of the Proxy Statement
or any amendments thereof or supplements  thereto, at the time of the mailing of
the Proxy Statement and any amendments thereof or supplements thereto and at the
time of the meetings of  shareholders  referred to in Section  7.3,  contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the  circumstances  under  which  they are made,  not  misleading.  The
information in the  Registration  Statement and the Proxy Statement  provided by
the Company will comply as to form with the provisions of the Securities Act and
the Exchange Act.

         3.20 Bank  Accounts;  Powers of  Attorney.  Schedule  3.20 sets forth a
complete and correct list showing:

                  (a) all bank  accounts of the  Company,  together  with,  with
respect to each such account,  the account number,  the names of all signatories
thereof and the authorized powers of each such signatory; and

                   (b) the names of all persons holding powers of attorney from
the Company and a summary statement of the terms thereof.

         3.21 Minute Books,  etc. The minute book,  stock  certificate  book and
stock ledger of the Company are  complete  and correct in all material  respects
and fairly  reflect the conduct of the business of the Company.  The minute book
of the Company contains accurate and complete records of all meetings or written

<PAGE>

consents to action of the Board of Directors and shareholders of the Company and
accurately  reflects all corporate  actions of the Company which are required by
law to be passed upon by the Board of Directors or shareholders of the Company.

         3.22 Company Related Person  Indebtedness and Contracts.  Schedule 3.22
sets  forth a  complete  and  correct  summary  of all  contracts,  commitments,
arrangements  and  understandings  not  described  elsewhere  in this  Agreement
between the Company and any of the  following  (collectively,  "Company  Related
Persons"): (i) directors and officers who are identified in accordance with Item
402 of Regulation  S-B of the Exchange Act (the "Company  Identified  Persons");
(ii) the spouses,  children and other lineal  descendants  of any of the Company
Identified Persons,  (collectively,  "near relatives"):  (iii) any trust for the
benefit of any of the Company Identified  Persons,  any of their respective near
relatives; or (iv) any corporation,  partnership,  joint venture or other entity
or enterprise owned or controlled by any of the Company Identified Persons or by
any of their respective near relatives.

         3.23     Environmental Matters.

                  (a)  For  purposes  of  this  Section   3.23,   (i)  the  term
"Environmental Claim" shall mean any claim, action, proceeding, investigation or
notice  by  any  person  or  entity  alleging  actual  or  potential   liability
(including,  without limitation, actual or potential liability for investigatory
costs,  clean-up costs,  governmental response costs, natural resources damages,
property damages,  personal  injuries or penalties)  arising out of, based on or
resulting  from  (A) the  presence,  or  release  into the  environment,  of any
Material of Environmental  Concern (as that term is hereinafter  defined) at any
location  owned or used by the Company (or any of its  predecessors-in-interest)
prior to the  Effective  Date,  or (B)  circumstances  forming  the basis of any
violation of any Environmental Law (as that term is hereinafter  defined);  (ii)
the term "Environmental  Laws" shall mean all federal,  state, local and foreign
laws, rules and regulations  relating to (A) pollution,  environmental safety or
protection of human health from damage to the environment or (B) the environment
(including,  without limitation,  ambient air, surface water, ground water, land
surface or subsurface strata),  including,  without limitation,  laws, rules and
regulations relating to emissions,  discharges,  releases or threatened releases
of Materials of Environmental  Concern,  or use, treatment,  storage,  disposal,
transport or handling of Materials of Environmental  Concern; and (iii) the term
"Materials  of  Environmental  Concern"  shall mean any  chemicals,  pollutants,
contaminants,  wastes,  hazardous  or toxic  substances,  petroleum or petroleum
products.

                  (b) The Company is in material  compliance with all applicable
Environmental   Laws,   and  all   material   permits  and  other   governmental
authorizations,   if  any,  currently  held  by  the  Company  pursuant  to  the
Environmental  Laws are in full force and effect and shall  remain in full force
and effect upon consummation of the Merger.

                  (c)  There  is no  Environmental  Claim  pending  or,  to  the
knowledge of the Company,  threatened  against the Company or against any person
or entity whose liability the Company has or may have retained or assumed either
contractually or by operation of law.

                  (d) There are no past or present  actions or, to the knowledge
of the Company,  activities,  circumstances,  conditions,  events or  incidents,
including,  without  limitation,  the release or threatened  release,  emission,
discharge,  presence or disposal of any Material of Environmental  Concern, that
could  form the basis of any  Environmental  Claim  against  the  Company or any
person or entity whose liability for any Environmental  Claim the Company has or
may have retained or assumed either contractually or by operation of law.
<PAGE>

         3.24 Disclosure. No representation or warranty by the Company contained
in this  Agreement and no statement  contained in any Schedule,  certificate  or
other  document or  instrument  delivered  or to be  delivered  pursuant to this
Agreement  contains or will contain any untrue  statement of a material  fact or
omits or will omit to state any material fact  necessary to make the  statements
contained  therein not  misleading.  For the  avoidance  of doubt,  it is hereby
stipulated  that with respect to any oral  agreement or commitment  disclosed in
any  Schedule,  only those terms of such oral  agreement  expressly set forth in
such Schedule shall be deemed to have been disclosed.  The  representations  and
warranties  contained  in this  Article III and in Article IV hereof (and in the
Schedules referred to therein) constitute the sole and exclusive representations
and  warranties  made  by  the  Company  in  connection  with  the  transactions
contemplated hereby. Such representations and warranties are made by the Company
with the  knowledge  and  expectation  that Parent and  Acquisition  are placing
complete  reliance  thereon in entering into, and performing  their  obligations
under,  this  Agreement,  and the same  shall  not be  affected  in any  respect
whatsoever  by any  investigation  heretofore  or  hereafter  conducted by or on
behalf of Parent and Acquisition,  whether in contemplation of this Agreement or
otherwise.

         3.25 Company Identified Persons. There are no agreements,  arrangements
or understandings  to which each Company  Identified Person is a party involving
the purchase,  sale or other  acquisition  or  disposition  of the shares and/or
Options owned by such Identified Person.



                               ARTICLE IV

                      REPRESENTATIONS AND WARRANTIES
                        OF PARENT AND ACQUISITION

         Parent and Acquisition  jointly and severally  represent and warrant to
the Company and the Company's Shareholders that:

         4.1      Corporate Organization.

                  (a) Parent is a corporation  duly organized,  validly existing
and in good  standing  under the laws of the  State of New York.  Each of Parent
Subsidiaries  (as  defined  in  Section  4.1(b),  below) is a  corporation  duly
organized,  validly existing and in good standing under the laws of the state or
country  of its  formation.  Each of  Parent  and  Parent  Subsidiaries  has all
requisite corporate power and authority to own, operate and lease the properties
and assets it now owns,  operates and leases and to carry on its business as now
being  conducted.  Parent and Parent  Subsidiaries  are each duly  qualified  to
transact business as a foreign  corporation and are each in good standing in the
jurisdictions  set forth opposite their  respective names in Schedule 4.1, which
are the only jurisdictions where such qualification is required by reason of the
nature of the  properties  and assets  currently  owned,  operated  or leased by
Parent or Parent  Subsidiaries  or the  business  currently  conducted  by them,
except for such  jurisdictions  where the failure to be so  qualified  would not
have a material  adverse  effect on Parent and  Parent  Subsidiaries  taken as a
whole.  Parent has  previously  delivered  to the Company  complete  and correct
copies of (i) its  Certificate of  Incorporation  (certified by the Secretary of
State  of New  York as of a  recent  date)  and its  By-Laws  (certified  by the

<PAGE>

Secretary of Parent as of a recent date) and (ii) the Articles of  Incorporation
(or the foreign equivalent thereof) of Acquisition and all amendments thereto to
the date hereof  (certified  by the secretary of state of Oregon and the By-Laws
of  Acquisition  (certified in each case by the secretary of Acquisition as of a
recent date). Neither the Certificate of Incorporation nor the By-Laws of Parent
or of Acquisition has been amended since the respective  dates of  certification
thereof,  nor has any  action  been  taken  for the  purpose  of  effecting  any
amendment of such instruments.

                  (b) Set forth in  Schedule  4.1(b) is a  complete  list of all
corporations,  partnerships,  limited liability  companies and other entities in
which Parent owns,  directly or  indirectly,  any equity  interest  (the "Parent
Subsidiaries"),  including the authorized and issued and  outstanding  shares of
all classes of capital  stock of such  entities,  and the record and  beneficial
ownership  thereof.  There are no agreements or commitments to which any of such
entities is a party or by which it is bound for the repurchase, purchase or sale
of, and there are no options,  warrants or other rights to  subscribe  for or to
purchase,  any shares of capital  stock of such entity,  nor are there any other
agreements or commitments  under which such entity is or may become obligated to
issue any capital stock. Parent is the beneficial owner, directly or indirectly,
of all equity securities of the Parent  Subsidiaries in each case free and clear
of any pledges,  liens,  equities or other encumbrances,  except as set forth in
Schedule 4.1(b).

         4.2  Authorization.  Each of Parent and  Acquisition has full corporate
power and authority to execute and deliver this  Agreement and to consummate the
transactions  contemplated  hereby. The execution and delivery of this Agreement
and the  consummation  of the  transactions  contemplated  hereby have been duly
approved by the Boards of Directors of Parent and  Acquisition  and by Parent as
the sole shareholder of Acquisition,  and no other corporate  proceedings on the
part of Parent or  Acquisition  are  necessary  to  approve  and  authorize  the
execution and delivery of this Agreement or the consummation of the transactions
contemplated  hereby.  The Board of Directors of Parent has determined  that the
Merger is in the best interests of the  shareholders  of Parent.  This Agreement
has been duly executed and delivered by Parent and Acquisition  and,  subject to
the approval of this Agreement and the transactions  contemplated  hereby by the
Company's  shareholders,  constitutes the valid and binding  agreement of Parent
and Acquisition,  enforceable in accordance with its terms, except to the extent
that  enforceability  may be limited by applicable  bankruptcy,  reorganization,
insolvency,  moratorium or other laws  affecting the  enforcement  of creditors'
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or in law).

       4.3 Consents and Approvals;  No Violations.  Subject to (a) the filing of
the  Registration  Statement and the  prospectus and proxy  statement  contained
therein and any required  actions under various  state  securities  and blue sky
laws in  connection  with the  issuance of shares of Parent  Common Stock in the
Merger and (b) the filing of the Articles of Merger with the  Secretary of State
of the State of Oregon,  the  execution  and delivery of this  Agreement and the
consummation of the  transactions  contemplated  hereby will not: (i) violate or
conflict with any provisions of the Certificate of  Incorporation  or By-Laws of
Parent or the Articles of Incorporation  or By-Laws of Acquisition;  (ii) except
as set forth in Schedule 4.3, breach,  violate or constitute an event of default
(or an event  which with the lapse of time or the giving of notice or both would
constitute an event of default)  under,  give rise to any right of  termination,
cancellation,  modification or acceleration under, or require any consent or the
giving of any  notice  under,  any note,  bond,  indenture,  mortgage,  security
agreement, lease, license,  franchise,  permit, agreement or other instrument or

<PAGE>

obligation to which Parent,  Acquisition or any of the Parent  Subsidiaries is a
party, or by which any of them or any of their  respective  properties or assets
may be bound, or result in the creation of any lien, claim or encumbrance of any
kind whatsoever  upon the properties or assets of Parent,  Acquisition or any of
the  Parent  Subsidiaries  pursuant  to the  terms  of any  such  instrument  or
obligation,  which  breach,  violation  or event of  default  would  result in a
material adverse effect on Parent, Acquisition and the Parent Subsidiaries taken
as a whole;  (iii) violate or conflict with any law, statute,  ordinance,  code,
rule,  regulation,   judgment,  order,  writ,  injunction  or  decree  or  other
instrument  of any Federal,  state,  local or foreign court or  governmental  or
regulatory body, agency or authority applicable to Parent, Acquisition or any of
the Parent Subsidiaries or by which any of their respective properties or assets
may be bound; or (iv) require, on the part of Parent or Acquisition,  any filing
or registration with, or permit, license, exemption,  consent,  authorization or
approval  of, or the giving of any notice to,  any  governmental  or  regulatory
body, agency or authority. Without limiting the generality of clause (ii) above,
as of the date  hereof,  neither  the Parent  nor any of the  Parent  Identified
Persons  (as  defined  below)  is a  party  to  any  agreement,  arrangement  or
understanding  which contemplates the sale of the business of the Parent and the
Parent Subsidiaries,  in whole or in part, whether by means of a sale of shares,
sale of assets, merger, consolidation or otherwise.


         4.4      Capitalization.

                  (a) The  sole  class of  authorized  capital  stock of  Parent
consists of 12,000,000  shares of Parent Common Stock, of which 5,532,042 shares
are issued and  outstanding on the date of this Agreement and 10,000,000  shares
of  Preferred  Stock,  par value  $.01 per  share,  of which none are issued and
outstanding. All of the issued and outstanding shares of Parent Common Stock are
(and all  shares of Parent  Common  Stock to be  issued in  connection  with the
Merger,  when  issued  in  accordance  with  this  Agreement,   shall  be)  duly
authorized,  validly  issued,  fully  paid and  nonassessable,  and none of such
shares has been issued in violation of any applicable  preemptive rights.  There
are no  agreements or  commitments  to which Parent is a party or by which it is
bound for the  redemption  or  repurchase  of any shares of its  capital  stock.
Except for options  issued  under the  Parent's  1982 and 1991  Incentive  Stock
Option  Plans,  its 1991  Non-Employee  Director  Stock Option Plan and the 1997
successor  thereto and  outstanding  options and warrants to purchase  shares of
Parent  Common  Stock,  as set forth in  Schedule  4.4(a)  hereto,  there are no
outstanding  options,  warrants  or other  rights  to  purchase,  or  securities
convertible into or exchangeable for, shares of the capital stock of the Parent,
and  except  as  contemplated  by this  Agreement,  there are no  agreements  or
commitments to which Parent is a party or by which it is bound pursuant to which
Parent is or may become  obligated  to issue  additional  shares of its  capital
stock.

                  (b) The authorized  capital stock of  Acquisition  consists of
1,000 shares of common stock,  par value $.01 per share, of which 100 shares are
issued and outstanding, all of which shares are owned beneficially and of record
by the Parent.  There are no  outstanding  options,  warrants or other rights to
purchase,  or securities  convertible  into or  exchangeable  for, shares of the
capital stock of  Acquisition,  and there are no agreements  or  commitments  to
which  Acquisition  is a  party  or by  which  it is  bound  pursuant  to  which
Acquisition is or may become obligated to issue additional shares of its capital
stock.

         4.5  SEC  Reports  and  Financial  Statements.  Parent  has  heretofore
delivered  or made  available  to Company  complete  and  correct  copies of all
reports and other  filings filed by Parent with the SEC pursuant to the Exchange

<PAGE>

Act  during  its  past  two  fiscal  years  (such   reports  and  other  filings
collectively  referred to herein as the "Parent  Exchange Act  Filings").  As of
their  respective  dates,  the Parent  Exchange  Act Filings did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in light of the
circumstances   under  which  they  were  made,  not  misleading.   The  audited
consolidated  financial statements of Parent included in the Parent Exchange Act
Filings  (i) were  prepared  from the books and  records of the  Company and its
consolidated  subsidiaries,  (ii) were  prepared in  accordance  with  generally
accepted  accounting  principles applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and (iii) present fairly
the  financial  position  of Parent as at the dates  thereof  and the results of
their  operations and cash flows the fiscal year ended June 30, 1996 and earlier
years.  The  unaudited  financial  statements  included in Parent  Exchange  Act
Filings comply in all material respects with the published rules and regulations
of the SEC with respect  thereto;  and such unaudited  financial  statements (i)
were  prepared  from the books and  records of  Parent,  (ii) were  prepared  in
accordance with generally accepted  accounting  principles,  except as otherwise
permitted under the Exchange Act and the rules and regulations thereunder,  on a
consistent  basis  (except  as may be  indicated  therein  or in  the  notes  or
schedules  thereto) and (iii) present fairly the financial position of Parent as
at the dates  thereof  and the  results of their  operations  and cash flows (or
changes in financial  condition)  for the periods then ended,  subject to normal
year-end adjustments and any other adjustments described therein or in the notes
or schedules thereto.

         4.6 Absence of  Undisclosed  Liabilities.  Parent has no liabilities or
obligations of any nature, whether accrued,  absolute,  contingent or otherwise,
which would be required  to be  reflected  in a  consolidated  balance  sheet of
Parent or the notes  thereto  prepared in  accordance  with  generally  accepted
accounting principles as of the date hereof, except (i) as set forth on Schedule
4.6, (ii) as set forth or reserved against in the Parent's  consolidated balance
sheet dated as of September  30, 1997  included in the  Parent's  Report on Form
10-Q for the fiscal period ended September 30, 1997 (the "Parent Balance Sheet")
or disclosed in the notes to the financial  statements  included in such Report,
or (iii)  liabilities  or obligations  incurred since  September 30, 1997 in the
ordinary  course of business  and  consistent  with past  practice  which in any
single  instance or in the  aggregate  are not material to Parent and the Parent
Subsidiaries taken as a whole.

         4.7   Absence  of  Certain   Changes.   Except  for  the   transactions
contemplated by this Agreement and as otherwise  reported in the Parent Exchange
Act Filings,  since  September  30, 1997,  the business of Parent and the Parent
Subsidiaries  has been conducted in the ordinary course and consistent with past
practice.  Except as described in the Parent Exchange Act Filings or on Schedule
4.7 hereto,  since September 30, 1997 there has been no material  adverse change
in the financial condition, results of operations,  business, operations, assets
or  liabilities  of Parent and  Parent  Subsidiaries  taken as a whole,  nor has
Parent or any  Parent  Subsidiary:  (i)  incurred  any  material  obligation  or
liability  (whether  absolute,  accrued,  contingent or otherwise) except in the
ordinary course of business consistent with past practice;  (ii) experienced any
material  adverse  change in its  financial  condition,  results of  operations,
assets,  liabilities,  business  or  operations;  (iii)  made any  change in any
accounting  principle  or  practice  or in its  methods  of  applying  any  such
principle or practice or written up (or failed to write down in accordance  with
generally  accepted  accounting  principles  consistent  with past practice) the
value of any inventories or revalued any assets of the Parent; (iv) suffered any
material  damage,  destruction  or loss,  whether or not  covered by  insurance,
affecting  their  assets,  properties  or business;  (v)  mortgaged,  pledged or
subjected to any lien, charge or other encumbrance,  or granted to third parties
any  rights  in,  any of their  assets,  tangible  or  intangible;  (vi) sold or

<PAGE>

transferred  any of their assets,  except in the ordinary course of business and
consistent  with past practice,  or canceled or compromised  any debts or waived
any claims or rights of a material nature; (vii) issued any additional shares of
capital  stock or any rights,  options or warrants to  purchase,  or  securities
convertible  into or  exchangeable  for,  shares of its  capital  stock,  (viii)
declared  or  paid  any  dividends  on  or  made  any   distributions   (however
characterized)  in respect of shares of its capital stock,  (ix)  repurchased or
redeemed  any shares of its capital  stock,  (x) granted any general or specific
increase  in  the  compensation  payable  or to  become  payable  to  any of its
employees or any bonus or service award or other like benefit, which increase is
in excess of 15% of the total of compensation, bonus or service award payable to
such employee or (xi) entered into any agreement to do any of the foregoing.

         4.8 Legal Proceedings, etc. Except as set forth in Schedule 4.8 hereto,
there are no suits, actions, claims,  proceedings (including without limitation,
arbitral or  administrative  proceedings) or  investigations  pending or, to the
best  knowledge  of the  Parent,  threatened  against  Parent  or any of  Parent
Subsidiaries or their properties,  assets or business (or, to the best knowledge
of the Parent,  pending or threatened  against,  relating to or involving any of
the  officers,  directors,  employees,  agents or  consultants  of Parent or any
Parent   Subsidiary  in  connection  with  the  business  of  Parent  or  Parent
Subsidiaries).  There  are  no  such  suits,  actions,  claims,  proceedings  or
investigations pending against Parent or any of the Parent Subsidiaries,  or, to
the best  knowledge  of the  Parent,  threatened  challenging  the  validity  or
propriety  of the  transactions  contemplated  by this  Agreement.  There  is no
judgment,  order,  injunction,  decree or award (whether  issued by a court,  an
arbitrator  or  an  administrative   agency)  to  which  Parent  or  the  Parent
Subsidiaries  is a  party,  or  involving  the  Parent's  or any  of the  Parent
Subsidiaries'  properties,  assets or business,  which is  unsatisfied  or which
requires continuing compliance therewith by Parent or any Parent Subsidiary.

         4.9      Taxes.

                  (a)  Parent  and each  Parent  Subsidiary  has duly and timely
filed,  or will duly and in a timely  manner  file,  all tax  returns  and other
filings in respect of Taxes  required to be filed by it or which are required to
be filed by it on or prior to the  Effective  Date,  and has in a timely  manner
paid (or will in a timely  manner pay) all Taxes which are (or will be) shown to
be due on such  returns.  All tax returns and other  filings in respect of taxes
are true,  correct and complete in all material  respects.  The  provisions  for
Taxes  payable  reflected  in the  Parent  Balance  Sheet,  are  adequate  under
generally accepted accounting principles.

                  (b) There are no actions or proceedings  currently pending or,
to the best  knowledge of the Parent,  threatened  against  Parent or any Parent
Subsidiary by any  governmental  authority  for the  assessment or collection of
Taxes,  no claim for the  assessment  or  collection  of Taxes has been asserted
against  Parent  or any  Parent  Subsidiary,  and  there  are no  matters  under
discussion with any governmental  authority  regarding claims for the assessment
or collection of Taxes.  Any Taxes that have been claimed or imposed as a result
of any examinations of any tax return of Parent or any Parent  Subsidiary by any
governmental authority are being contested in good faith and have been disclosed
in writing to the Company.  There are no agreements or applications by Parent or
any Parent  Subsidiary for an extension of time for the assessment or payment of
any Taxes.

                  (c) Parent  has not,  with  regard to any  assets or  property
held,  acquired  or to be  acquired  by the  Company,  filed  a  consent  to the
application of Section  341(f) of the Internal  Revenue Code of 1986, as amended
(the "Code").
<PAGE>

                  (d)  Parent has not  participated  in or  cooperated  with an
international boycott within the meaning of Section 999(b) of the Code.

                  (e) The disclosure set forth in the Parent's  Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1997 regarding deferred taxes and
tax loss carry forwards is true and complete as of the date hereof and no events
have occurred since June 30, 1997 which would make such  information  misleading
or incomplete.

         4.10  Title to  Properties  and  Related  Matters.  Parent  and  Parent
Subsidiaries do not own any real property. Except as set forth on Schedule 4.10,
Parent  and the  Parent  Subsidiaries  have  good  and  marketable  title to all
personal  property,  tangible  or  intangible,  on the Parent  Balance  Sheet or
acquired  after the date  thereof  (other  than  properties  and assets  sold or
otherwise  disposed of in the ordinary  course of business and  consistent  with
past practice since June 30, 1997; free and clear of any claims, liens, pledges,
security  interests or encumbrances of any kind whatsoever  (other than purchase
money security  interests and common law vendor's  liens, in each case for goods
purchased on open  account in the ordinary  course of business and having a fair
market value of less than $10,000 in each individual case).

         4.11     Intellectual Property.

                   (a)  Schedule  4.11 hereto sets forth a complete  and correct
list of all patents,  patent  applications,  material unpatented  inventions set
forth  or  described  in  writing,  registered  trademarks  and  service  marks,
trademark  and service  mark  applications,  trade names,  copyrights,  software
documentation  and manuals,  including all versions  thereof  (collectively  the
"Intellectual  Property")  which,  to Parent's best  knowledge,  are owned by or
registered  in the  name of or used in the  business  of  Parent  or any  Parent
Subsidiary (including, without limitation, the copyright and all other rights in
reports issued by Parent and Parent Subsidiaries to their clients in the conduct
of their business), all of which are valid and subsisting.. In each registration
or patent or application for registration or patent listed in Schedule 4.11 held
by  assignment,  the  assignment  has been  recorded  with the state or national
Patent and  Trademark  Office  from which the  original  registration  issued or
before which the  application  for  registration  is pending.  To Parent's  best
knowledge,  the  rights  of  Parent  and  Parent  Subsidiaries  in  or  to  such
Intellectual  Property owned by Parent and Parent Subsidiaries does not conflict
with  or  infringe  on  the  rights  of  any  third  party.  Parent  and  Parent
Subsidiaries  have not  received  any  written  claim or notice to such  effect.
Parent and Parent  Subsidiaries  are not  subject to any  judgment,  injunction,
decree, order or agreement  restricting their use of the Intellectual  Property,
except for such  restrictions  contained in Intellectual  Property licensed from
third parties,  which licensed Intellectual Property (other than "off the shelf"
software  such  as  word  processing  and  spreadsheet  programs)  and  material
restrictions on the use thereof are listed in Schedule 4.11.

                   (b)  Except  set forth in  Schedule  4.11,  the  Intellectual
Property owned by Parent and Parent Subsidiaries is free and clear of all liens,
claims,  security  interests or encumbrances of any kind whatsoever.  No actions
have been made or asserted or are  pending or, to the best  knowledge  of Parent
and Parent  Subsidiaries,  threatened  against  Parent  and Parent  Subsidiaries
either (i) based upon or  challenging  or seeking to deny or restrict the use by
Parent and Parent  Subsidiaries  of any  Intellectual  Property or (ii) alleging
that any  services  provided,  or  products  manufactured  or sold by Parent and
Parent Subsidiaries are being provided, manufactured or sold in violation of any

<PAGE>

patents or trademarks, or other rights of any third party. To the best knowledge
of  Parent  and  Parent  Subsidiaries,  no third  party is  using  any  patents,
copyrights,  trademarks,  service marks, trade names, trade names, trade secrets
or similar property that infringe upon the Intellectual Property owned by Parent
and Parent  Subsidiaries  or upon the  rights of Parent and Parent  Subsidiaries
used in its or their business.  Parent and Parent  Subsidiaries have not granted
any license or other right to any third party with  respect to the  Intellectual
Property except for licenses of software to customers.  The  consummation of the
transactions  contemplated  by this Agreement will not result in the termination
or impairment  of any of the  Intellectual  Property  owned by Parent and Parent
Subsidiaries.

                  (c) Parent  has made  available  to the  Company  correct  and
complete  copies of all  material  licenses  and  sublicenses  for  Intellectual
Property  licensed  from or to third  parties set forth in Schedule 4.11 and any
and all ancillary documents  pertaining thereto (including,  but limited to, all
amendments,  consents and evidence of commencement  dates and expiration dates).
With respect to each of such licenses and sublicenses:

                      (i)  such  license  or   sublicense,   together  with  all
ancillary  documents  made  available  pursuant  to the first  sentence  of this
Section 4.11(c), is valid, binding, enforceable and in full force and effect and
represents the entire  agreement  between the  respective  licensor and licensee
with respect to the subject matter of such licensee or sublicense;

                      (ii)  subject  to  obtaining  any  necessary   consent  to
assignment  from the licensor or licensee,  such license or sublicense  will not
cease to be valid,  binding,  enforceable  and in full  force and  effect on the
terms currently in effect as a result of the  consummation  of the  transactions
contemplated by this Agreement,  nor will the  consummation of the  transactions
contemplated by this Agreement constitute a breach or default under such license
or sublicense or otherwise give the licensor or sublicensor a right to terminate
such license or sublicense;

                      (iii) with respect to each such license or sublicense; (A)
Parent has not received any notice of  cancellation  or  termination  under such
license or sublicense and no licensor, sublicensor,  licensee or sublicensee has
any right to terminate or cancel such license or sublicense,  (B) Parent has not
received any notice or a breach or default  under such  license or  sublicenses,
which  breach or default has not been  cured,  and (C) Parent has not granted to
any third  party any  rights,  adverse  or  otherwise,  under such  licenses  or
sublicense (except for licenses of software to customers);

                      (iv) neither Parent,  nor to the best knowledge of Parent,
any other party to such  license or  sublicense,  is in breach or default in any
material  respect,  and no event has occurred with respect to Parent,  or to the
best knowledge of Parent,  such other party,  that, with notice or lapse of time
would constitute such a breach or default or permit termination, modification or
acceleration under such license or sublicense;

                      (v) no actions  have been made or  asserted or are pending
or, to the best knowledge of Parent, have been threatened against Parent, either
(A) based upon or  challenging  or seeking to deny or restrict the use by Parent
of any  licensed  Intellectual  Property or (B) alleging  that any  Intellectual
Property is being  licensed,  sublicensed or used in violation of any patents or
trademarks, or any other rights of any third party; and

                      (vi) to the best  knowledge  of Parent,  no third party is
using any patents,  copyrights,  trademarks,  service marks,  trade names, trade
secrets  or  similar  property  that  infringe  upon  the  use of  the  licensed
Intellectual Property by Parent or upon the rights of Parent therein.
<PAGE>

                  (d) Parent is not aware of any reason  that would  prevent any
pending applications to register trademarks,  service marks or copyrights or any
pending patent applications from being granted.

                  (e) Other  than "off the  shelf"  software,  the  Intellectual
Property set forth in Schedule 4.11  constitutes  all the material  Intellectual
Property  used in or held by  Parent  and its  Subsidiaries  to be used in,  and
necessary  in the conduct of, the  business  of Parent and its  Subsidiaries  as
currently conducted and there are not other items of Intellectual  Property that
are material to Parent and its Subsidiaries or its or their business.

                  (f) Schedule 4.11(f) sets forth all of the Company's  software
products including all versions of each such product and the uses therefor.

         4.12   Contracts.

                  (a) Except as set forth in Schedule 4.12,  neither Parent nor
any Parent Subsidiary is a party to:

                      (i) any contract, arrangement or understanding,  or series
of related  contracts,  arrangements  or  understandings,  which involves annual
expenditures  or receipts by the Company of more than $10,000 not  cancelable by
the Company on thirty days (or less) notice;


                      (ii)  any  note,  indenture,  credit  facility,  mortgage,
security agreement or other contract,  arrangement or understanding  relating to
or evidencing  indebtedness for money borrowed,  or granting a security interest
or mortgage in the assets of Parent or any Parent  Subsidiary,  for an amount in
excess of $10,000;

                      (iii)  any  guaranty   issued  by  Parent  or  any  Parent
Subsidiary;

                      (iv) any contract,  arrangement or understanding  granting
to any person the right to use any  property or property  right of Parent or any
Parent Subsidiary with a value exceeding $10,000;

                      (v) any contract, arrangement or understanding restricting
in any material respect the Parent's or any Parent  Subsidiary's right to engage
in any business activity or compete with any business;

                      (vi) any contract,  arrangement  or  understanding  with a
Parent Related Person as defined in Section 4.21 hereof; or

                      (vii) any outstanding  offer,  commitment or obligation to
enter into any contract or  arrangement  of the nature  described in subsections
(i) through (vi) of this subsection 4.12(a).

                (b)  Parent  has  not  disclosed  any  secret  or   confidential
Intellectual  Property  (except by way of  issuance  of a patent or subject to a

<PAGE>

confidentiality   agreement)   or  permitted  to  lapse  or  go  abandoned   any
Intellectual  Property (or any  registration or grant thereof or any application
relating  thereto)  to which,  or under  which,  Parent has any  rights,  title,
interest or license.

         4.13 Employee  Benefit Plans.  The employee benefit plans of Parent and
the Parent  Subsidiaries  have been  operated  in material  compliance  with all
applicable  laws.  Parent  and the Parent  Subsidiaries  have not  incurred  any
material  liability  under Title IV of ERISA,  and none of the employee  benefit
plans of  Parent or any of the  Parent  Subsidiaries  has  incurred  a  material
funding deficiency under Section 412 of the Code (whether or not waived).  There
have been no material changes to the funding status of any employee benefit plan
of Parent or any of the Parent  Subsidiaries  since the date of the most  recent
Exchange  Act  Filings.  Each  employee  benefit  plan of Parent  and the Parent
Subsidiaries  which is an "employee pension benefit plan" (as defined in Section
3(2) of ERISA)  intended  to qualify  under  Section  401(a) of the Code and the
trust, if any, forming part of such plan has received a favorable  determination
letter from the Internal Revenue Service with respect to its qualification under
Sections  401(a) and 501(a) of the Code and nothing has occurred  since the date
of such  determination  letter that would adversely affect the  qualification of
such plan. A list of all such material "employee pension benefit plans" ("Parent
Plans") is set forth in Schedule 4.13 hereto.

         4.14   Compliance with Applicable Law; Ability to Conduct the Business.

                  (a) Parent and Parent Subsidiaries are not in violation of any
applicable safety, health, environmental or other law, statute, ordinance, code,
rule, regulation,  judgment,  order, injunction,  writ or decree of any Federal,
state,  local or foreign court or  governmental  or regulatory  body,  agency or
authority having, asserting or claiming jurisdiction over it or over any part of
its business, operations,  properties or assets, except where any such violation
would  not  have  a  material  adverse  effect  on  the  consolidated  business,
operations or assets of Parent. Parent and Parent Subsidiaries have not received
any notice alleging any such violation,  nor to the best knowledge of Parent and
Parent Subsidiaries, is there any inquiry, investigation or proceedings relating
thereto.

                  (b) Parent and Parent  Subsidiaries are in material compliance
with the rules, regulations, guidelines and interpretations of the Food and Drug
Administration ("FDA"), including the registration of Parent as a medical device
manufacture  for blood bank software.  To the best knowledge of Parent,  the FDA
has no reason  to deny the  registration  of the  Company  as a  medical  device
manufacture  for blood  banks  software.  Parent has never  recalled  any of its
products,  except as set forth in  Schedule  4.14(b).  Parent  will  deliver  to
Company true and complete copies of all of Parent's  correspondence with the FDA
no later than thirty days after the date hereof.

                  (c) Parent is in  compliance  with all  material  governmental
permits, licenses, exemptions, consents, authorizations and approvals, including
without limitation, all material health, safety, environmental and food and drug
permits  used in or  required  for the  conduct  of its  business  as  presently
conducted,  all of which  shall  continue  in full  force  and  effect,  without
requirement  (except  as set forth in  Schedule  4.14(c))  of any  filing or the
giving  of  any  notice  and  without   modification   thereof,   following  the
consummation  of the  transactions  contemplated  hereby.  The  Parent  has  not
received any notice of, and to the best  knowledge  of the Parent,  there are no
inquiries,  proceedings or  investigations  relating to or which could result in
the revocation or modification of any such permit, license, exemption,  consent,
authorization  or approval,  nor is the Parent aware of any basis therefor.  The
Parent is in all material respects in compliance with all such permits licenses,
exemptions, consents,  authorizations and approvals and all applicable laws. The
Parent is not party to any agreement which would prohibit it from manufacturing,
selling or distributing any products or services.
<PAGE>

         4.15  Accounts  Receivable.  All accounts  receivable of Parent and the
Parent Subsidiaries (i) arose from bona fide transactions in the ordinary course
of  business  and  consistent  with past  practice,  (ii) except as set forth on
Schedule 4.15, are owned by Parent and the Parent Subsidiaries free and clear of
any claim, security interest, lien or other encumbrance and (iii) are accurately
and fairly reflected on Parent's June 30, 1997  consolidated  balance sheet, or,
with  respect to  accounts  receivable  of Parent  and the  Parent  Subsidiaries
created on or after June 30, 1997, are  accurately  and fairly  reflected in the
books and records of the Company.

         4.16 Insurance. Schedule 4.16 hereto is a true and complete list of all
insurance policies carried by Parent and the Parent Subsidiaries with respect to
their respective businesses,  together with, in respect of each such policy, the
name of the insurer, the number of the policy, the annual policy premium payable
therefor, the limits of coverage, the deductible amount (if any), the expiration
date thereof and each pending claim  thereunder.  Complete and correct copies of
each such policy have  previously  been made  available by Parent to the Company
for inspection and photocopying. All such policies are in full force and effect.
All premiums due thereon have been paid in a timely manner.

           4.17 Information in Registration Statement and Proxy Statement.  None
of the information relating to Parent or the Parent Subsidiaries or any of their
shareholders or their respective  businesses supplied by Parent for inclusion or
incorporation  by reference in the  Registration  Statement  and the  prospectus
contained  therein or the Proxy Statement will, in the case of the  Registration
Statement,  at the time it becomes effective under the Securities Act and at the
Effective Date, or, in the case of the Proxy Statement or any amendments thereof
or supplements  thereto,  at the time of the mailing of the Proxy  Statement and
any amendments thereof or supplements  thereto and at the time of the meeting of
shareholders  referred  to in Section  6.3,  contain any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances under which they are made, not misleading.  The information in the
Registration Statement and the Proxy Statement provided by Parent will comply as
to form with the provisions of the Securities Act and the Exchange Act.

        4.18      Environmental Matters.

                  (a)  Parent  and  each  Parent   Subsidiary   is  in  material
compliance  with all applicable  Environmental  Laws.  All material  permits and
other  governmental  authorizations,  if any,  currently  held by Parent and the
Parent  Subsidiaries  pursuant to the  Environmental  Laws are in full force and
effect  and shall  remain in full  force and  effect  upon  consummation  of the
Merger.

                  (b)  There  is no  Environmental  Claim  pending  or,  to  the
knowledge  of Parent,  threatened  against  Parent or any Parent  Subsidiary  or
against any person or entity whose liability Parent or any Parent Subsidiary has
or may have retained or assumed either contractually or by operation of law.

                  (c)  There are no  actions  or, to the  knowledge  of  Parent,
activities,  circumstances,  conditions, events or incidents, including, without
limitation, the release or threatened release, emission,  discharge, presence or
disposal of any Material of Environmental  Concern,  existing on the date hereof
that  could  form the basis of any  Environmental  Claim  against  Parent or any
Parent  Subsidiary or any person or entity whose liability for any Environmental
Claim Parent or any Parent Subsidiary has or may have retained or assumed either
contractually or by operation of law.
<PAGE>

         4.19 Disclosure. No representation or warranty by Parent or Acquisition
contained  in  this  Agreement  and no  statement  contained  in  any  Schedule,
certificate  or  other  document  or  instrument  delivered  or to be  delivered
pursuant to this  Agreement  contains or will contain any untrue  statement of a
material fact or omits or will omit to state any material fact necessary to make
the statements contained therein not misleading.  For the avoidance of doubt, it
is hereby  stipulated  that with  respect to any oral  agreement  or  commitment
disclosed in any Schedule, only those terms of such oral agreement expressly set
forth  in  such  Schedule   shall  be  deemed  to  have  been   disclosed.   The
representations  and  warranties  contained  in  this  Article  IV  (and  in the
Schedules  thereto)  constitute  the  sole  and  exclusive  representations  and
warranties  made by  Parent in  connection  with the  transactions  contemplated
hereby.  Such  representations and warranties are made by Parent and Acquisition
with the  knowledge  and  expectation  that the  Company  are  placing  complete
reliance thereon in entering into, and performing their obligations  under, this
Agreement,  and the same shall not be affected in any respect  whatsoever by any
investigation  heretofore or hereafter conducted by or on behalf of the Company,
whether in contemplation of this Agreement or otherwise.

         4.20 Minute Books,  etc. The minute book,  stock  certificate  book and
stock  ledger of the Parent and  Acquisition  are  complete  and  correct in all
material  respects and fairly  reflect the conduct of the business of the Parent
and Acquisition. The minute book of the Parent and Acquisition contains accurate
and complete  records of all meetings or written consents to action of the Board
of Directors  and  shareholders  of the Parent and  Acquisition  and  accurately
reflects all corporate  actions of the Parent and Acquisition which are required
by law to be passed upon by the Board of Directors or shareholders of the Parent
and Acquisition.

        4.21 Parent Related  Person  Indebtedness  and Contracts.  Schedule 4.21
sets  forth a  complete  and  correct  summary  of all  contracts,  commitments,
arrangements  and  understandings  not  described  elsewhere  in this  Agreement
between  the  Parent and any of the  following  (collectively,  "Parent  Related
Persons"): (i) directors and officers who are identified in accordance with Item
402 of  Regulation  S-B of the Exchange Act (the "Parent  Identified  Persons");
(ii) the spouses,  children and other  lineal  descendants  of any of the Parent
Identified Persons,  (collectively,  "near relatives"):  (iii) any trust for the
benefit of any of the Parent  Identified  Persons,  any of their respective near
relatives; or (iv) any corporation,  partnership,  joint venture or other entity
or enterprise owned or controlled by any of the Parent Identified  Persons or by
any of their respective near relatives.

        4.22 Parent Identified Persons.There are no agreements,  arrangements or
understandings  to which each Parent  Identified Person is a party involving the
purchase,  sale or other acquisition or disposition of the shares and/or Options
owned by such Parent Identified Person;

                               ARTICLE V

              CONDUCT OF BUSINESS OF THE COMPANY AND THE PARENT
                       PRIOR TO THE EFFECTIVE DATE

         5.1 Conduct of Business of the Company. During the period commencing on
the date hereof and continuing until the Effective Date, the Company agrees that
except as otherwise  expressly  contemplated  by this  Agreement or agreed to in
writing by the Parent, it:
<PAGE>

                   (a) subject to the  fiduciary  duties of  Company's  Board of
Directors as advised in writing by counsel,  will carry on its business  only in
the ordinary course and consistent with past practice;

                   (b) will not declare or pay any dividend on or make any other
distribution (however characterized) in respect of shares of its capital stock;

                   (c) will not,  directly or indirectly,  redeem or repurchase,
or agree to redeem or repurchase, any shares of its capital stock;

                   (d) will not amend its Articles of Incorporation or By-Laws;

                   (e) will not  issue,  or agree to  issue,  any  shares of its
capital stock, or any options, warrants or other rights to acquire shares of its
capital stock, or any securities  convertible into or exchangeable for shares of
its capital stock;

                   (f)  will not  combine,  split or  otherwise  reclassify  any
shares of its capital stock;

                   (g) subject to the fiduciary duties of the Company's Board of
Directors,  as advised in writing by counsel, will use all reasonable efforts to
preserve intact its present business  organization,  keep available the services
of its officers and key  employees and preserve its  relationships  with clients
and others  having  business  dealings  with it to the end that its goodwill and
ongoing business shall not be materially impaired at the Effective Date;

                   (h) will not make any capital  expenditures  individually  in
excess of $50,000 or in the aggregate in excess of $100,000,  (ii) enter into or
terminate  (except in the ordinary  course of business and consistent  with past
practice) any lease of, or purchase or sell, any real property, (iii) enter into
any leases of  personal  property  involving  individually  in excess of $25,000
annually  or in the  aggregate  in excess of  $50,000  annually,  (iv)  incur or
guarantee any  additional  indebtedness  for borrowed money except draw downs on
its line of credit and in the ordinary course of business,  (v) create or permit
to become  effective  any security  interest,  mortgage,  lien,  charge or other
encumbrance on its properties or assets,  or (vi) enter into any agreement to do
any of the foregoing;

                   (i) will not, other than as set forth in Schedule  5.1(i) and
other than in the ordinary  course of business,  adopt or amend any Benefit Plan
for the benefit of Employees,  or (except for such  increases in salary or other
compensation  payable to any  Employee as the Board of  Directors of the Company
may reasonably  determine are necessary to retain the services of such Employee)
increase  the  salary  or other  compensation  (including,  without  limitation,
bonuses)  payable or to become  payable to its  Employees  (except  pursuant  to
existing  contractual  obligations  which  have  been  disclosed  to  Parent  or
consistent  with past  practice),  or enter into any  agreement to do any of the
foregoing;

                   (j) will promptly  advise Parent of the  commencement  of, or
threat  of (to the  extent  that  such  threat  comes  to the  knowledge  of the
Company), any material claim, action, suit, proceeding or investigation against,
relating  to or  involving  the  Company  or  any of  its  directors,  officers,
employees,  agents or  consultants  in  connection  with its  businesses  or the
transactions contemplated hereby;
<PAGE>

                   (k) will  maintain  in full force and  effect  all  insurance
policies maintained by the Company on the date hereof;

                   (l) will not enter  into any  agreement  to  dissolve,  merge
(other than as  contemplated by this  Agreement),  consolidate or, except in the
ordinary  course,  sell any Company  Common Stock or any material  assets of the
Company to any third party, and if the Company should, in the performance by the
Company's Board of Directors of their fiduciary duties,  nevertheless enter into
such an agreement, shall promptly provide Parent with notice thereof including a
copy of such  agreement,  or a written  summary of its terms if the agreement is
not in writing,  and Parent shall have a right of first  refusal for a period of
sixty (60) days after  receipt of the  aforesaid  notice to cause the Company to
close the  transaction  with Parent on the same terms as the agreement  with the
third party;

                   (m) will make efforts to in a timely  manner make all filings
it is required to make with the  Securities  and Exchange  Commission  and other
regulatory organizations and provide copies thereof to Parent;

                   (n) will not breach any  material  provision of or default or
commit any act or fail to take any action necessary which with the giving notice
or lapse of time,  would  constitute a default  under any  material  contract or
instrument to which it is a party or by which it is bound; and

                   (o) will  promptly  notify  Parent in writing of any material
problem with any Employee,  customer or supplier, if any key employee leaves the
Company for any reason, or if any material customer  terminates its relationship
with the Company.

         5.2 Conduct of Business of the Parent.  During the period commencing on
the date hereof and  continuing  until the Effective  Date,  Parent agrees that,
except as expressly  contemplated  by this  Agreement or agreed to in writing by
the Company, the Parent:

                   (a) subject to the fiduciary  duties of the Parent's Board of
Directors,  as advised in writing by counsel, will carry on its business only in
the ordinary course consistent with past practice;

                   (b) will not declare or pay any dividend on or make any other
distribution (however characterized) in respect of shares of its capital stock;

                   (c) will not,  directly or indirectly,  redeem or repurchase,
or agree to redeem or repurchase, any shares of its capital stock;

                   (d)  will not  amend  its  Certificate  of  Incorporation  or
By-Laws;

                   (e) except as described in Schedule  5.2(e),  will not issue,
or agree to issue, any shares of its capital stock, or any options,  warrants or
other  rights  to  acquire  shares  of its  capital  stock,  or  any  securities
convertible into or exchangeable for shares of its capital stock, other than the
issuance  of  common  stock  upon the  exercise  of  options  granted  under its
Incentive Stock Option Plan;

                   (f)  will not  combine,  split or  otherwise  reclassify  any
shares of its capital stock;

                   (g) will not sell or pledge, or agree to sell or pledge,  any
shares of the capital stock of any of Parent  Subsidiaries,  except as disclosed
in Schedule 5.2(g) hereof;
<PAGE>

                   (h) will promptly advise the Company of the  commencement of,
or threat of (to the extent that such threat comes to the knowledge of Parent or
any  Parent  Subsidiary),  any  material  claim,  action,  suit,  proceeding  or
investigation against,  relating to or involving Parent or any Parent Subsidiary
or any of  their  directors,  officers,  employees,  agents  or  consultants  in
connection with their businesses or the transactions contemplated hereby;

                   (i)  subject to the  fiduciary  duties of  Parent's  Board of
Directors, will not enter into any agreement to dissolve, merge, consolidate or,
except in the ordinary course,  sell any material assets of the Parent or any of
the  Parent  Subsidiaries  to any third  party,  and if the Parent or any of the
Parent Subsidiaries should, in performance by the Parent's Board of Directors of
their fiduciary duties,  nevertheless  enter into such an agreement,  the Parent
shall promptly provide the Company with notice thereof;

                   (j) will not, other than in the ordinary  course of business,
adopt or amend any Benefit  Plan for the benefit of  employees  of Parent or any
Parent Subsidiary, or (except for such increases in salary or other compensation
payable  to any  employee  of Parent or any  Parent  Subsidiary  as the Board of
Directors of Parent or Parent Subsidiary may reasonably  determine are necessary
to  retain  the  services  of  such  employee)  increase  the  salary  or  other
compensation  (including,  without  limitation,  bonuses)  payable  or to become
payable to such employees (except pursuant to existing  contractual  obligations
or consistent with past practice),  or enter into any agreement to do any of the
foregoing;

                   (k) subject to the fiduciary  duties of the Parent's Board of
Directors,  as advised in writing by counsel, will use all reasonable efforts to
preserve intact its present business  organization,  keep available the services
of its officers and key  employees and preserve its  relationships  with clients
and others  having  business  dealings  with it to the end that its goodwill and
ongoing business shall not be materially impaired at the Effective Date;

                   (l) will make efforts to in a timely  manner make all filings
it is required to make with the  Securities  and Exchange  Commission  and other
regulatory organizations and provide copies thereof to the Company;

                   (m) will not breach any  material  provision of or default of
commit any act or fail to take any action  necessary  which the giving of notice
or lapse of time,  would  constitute a default  under any  material  contract or
instrument to which it is a party or by which it is bound;

                   (n) will  promptly  notify  the  Company  in  writing  of any
material problem with any employee,  customer,  or supplier, if any key employee
leaves the Parent or any Parent  Subsidiary  for any reason,  or if any material
customer  terminates its relationship with the Parent or any Parent  Subsidiary;
and

                   (o) will  maintain  in full force and  effect  all  insurance
policies maintained by the Company on the date hereof.

         5.3 Conduct of Business of Acquisition. During the period commencing on
the date hereof and continuing until the Effective Date,  Acquisition  shall not
engage in any activities of any nature except as provided in or  contemplated by
this Agreement.
<PAGE>


                               ARTICLE VI

                         ADDITIONAL AGREEMENTS

         6.1  Access  to  Properties  and  Records.  Between  the  date  of this
Agreement  and the  Effective  Date,  the Company  will  provide  Parent and its
accountants,  counsel and other authorized advisors, and Parent (with respect to
itself and Parent  Subsidiaries)  will provide the Company and its  accountants,
counsel and other authorized advisors,  with full access, during business hours,
to their  respective  premises and  properties  and their  respective  books and
records (including,  without limitation,  contracts, leases, insurance policies,
litigation files, minute books,  accounts,  working papers and tax returns filed
and in preparation) and each will cause its officers to furnish to the other and
its authorized  advisors such additional  financial,  tax and operating data and
other  information  pertaining  to its  business as the other shall from time to
time reasonably  request.  All of such data and information  shall be subject to
the terms and conditions of the  confidentiality  agreement,  dated June 4, 1997
between the Company and the Parent, with respect to information  provided by the
Company, and the confidentiality  agreement dated as of December 4, 1997 between
Parent and the Company, with respect to information provided by the Parent.

         6.2 Registration Statement. As soon as reasonably practicable after the
execution and delivery of this  Agreement,  and subject to the  availability  of
year end  financial  statements,  Parent shall prepare and file with the SEC the
Registration  Statement,  which shall  cover all of the shares of Parent  Common
Stock to be issued in connection  with the Merger,  and shall use all reasonable
efforts to have the  Registration  Statement  declared  effective  by the SEC as
promptly as practicable.  Parent shall also take such actions as may be required
under state blue sky or  securities  laws in  connection  with such  issuance of
shares of Parent Common Stock in connection  with the Merger.  The Company shall
cooperate  fully  with  Parent and shall  furnish  Parent  with all  information
concerning the Company and the Informedics  Shareholders and shall take all such
other  action as Parent  may  reasonably  request  in  connection  with any such
actions.

         6.3  Shareholders'  Approvals.  Promptly after the effectiveness of the
Registration  Statement and  compliance  with all state  securities and blue sky
laws,  each of  Acquisition  and the Company shall take all action  necessary to
convene meetings of their respective shareholders for the purpose of voting upon
the  transactions   contemplated  hereby  and  such  other  matters  as  may  be
appropriate at such meetings, and in connection therewith the Company shall in a
timely  manner mail to its  shareholders  the Proxy  Statement  contained in the
Registration  Statement and, if necessary  after the Proxy  Statement shall have
been  mailed,  shall  promptly  and in a  timely  manner  circulate  amended  or
supplemental  materials and (if necessary)  resolicit  proxies.  The Company and
Parent will,  through their  respective  Board of Directors,  recommend to their
respective  shareholders  approval  of the  transactions  contemplated  by  this
Agreement.

         6.4 Reasonable Efforts; etc. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use his/its reasonable efforts to
take,  or cause to be taken,  all actions,  and to do, or cause to be done,  all
things  necessary,  proper or advisable under applicable laws and regulations to
consummate and make effective the  transactions  contemplated by this Agreement,
including obtaining any consents, authorizations, exemptions and approvals from,

<PAGE>

and making all filings with, any governmental or regulatory authority, agency or
body which are necessary in connection  with the  transactions  contemplated  by
this Agreement.

         6.5 Material  Events.  At all times prior to the Effective  Date,  each
party shall promptly notify the others in writing of the occurrence of any event
which  will or may  result  in the  failure  to  satisfy  any of the  conditions
specified in Article VII or Article VIII hereof.

         6.6      Exclusivity.

                  (a)  Following the  execution of this  Agreement,  neither the
Company,  any of the Company's officers,  employees,  representatives or agents,
nor any of the Company Identified Persons (the "Company Group") will directly or
indirectly solicit or accept any offers or solicit or initiate any discussion or
negotiations  with,   participate  in  any  negotiations  with  or  provide  any
information  to or otherwise  cooperate in any other way with,  or facilitate or
encourage  any  effort or attempt by any  corporation,  partnership,  persons or
other entity or group, other than Parent and its directors, officers, employees,
representatives  and agents (the "Parent Group") concerning any merger,  sale of
assets,  sale of shares of capital  stock or similar  transaction  involving the
Company or its business.

                  (b) If any  member of the  Company  Group  violates  the above
Section 6.6(a), or should any "person" (as such term is defined In Section 13d-3
of the Exchange Act) other than persons who are part of the Parent Group, become
after the date  hereof the  "beneficial  owner" (as such term ins defined in the
Exchange Act) of ten percent (10%) or more of the  outstanding  Common Stock and
discloses (by press  release,  public filing or otherwise) its opposition to the
transaction contemplated herein or publicly announces a tender or exchange offer
with the intent to accomplish the type of  transaction  described in Section 6.6
(a), above, then, if such a transaction  results,  simultaneous with the closing
of that transaction,  the Company shall deliver to Parent an amount equal to the
sum of (i) the fees and expenses  paid or payable by or on behalf of the Company
to   its   attorneys,   accountants,   environmental   consultants,   management
consultants,   and  other  consultants  and  advisors  in  connection  with  the
negotiation,  execution and delivery of this  Agreement,  performing  diligence,
preparing  documentation,  structuring  and  negotiating  this Agreement and the
transactions contemplated hereby, and to all banks, investment banking firms and
other  financial  institutions  for  arranging  or  providing  any  financing or
financial  commitments in connection with the transactions  contemplated  hereby
plus (ii) a  non-accountable  expense  reimbursement  of  $500,000  for  various
out-of-pocket  and  general  costs  incurred  by Parent  and its  affiliates  in
connection with this transaction.

                  (c) The  provisions  of this Section 6.6 shall  terminate if a
Closing does not occur by April 30,  1998,  or if this  Agreement is  terminated
prior thereto for any reason other than a violation of this Section 6.6.

         6.7    No Issuance of Company  Preferred  Stock.  The Company  agrees 
not to issue any shares of CompanyPreferred Stock after the execution and 
delivery of this Agreement.

         6.8 Tax  Consequences.  From and after the Effective  Date, none of the
parties  will take any position in or with regard to their  respective  Federal,
state  and  local  income  tax  returns  (or  any  amendments  thereto)  that is
inconsistent with the treatment of the Merger as a tax-free  reorganization  for
Federal income tax purposes under Section 368 of the Code or with respect to the
tax consequences  contemplated  thereby (including those related to the basis of
stock and assets).
<PAGE>


                                   ARTICLE VII

                          CONDITIONS TO THE OBLIGATIONS OF
                              PARENT AND ACQUISITION

      The obligation of Parent and  Acquisition  to consummate the  transactions
contemplated  hereby  shall be subject to the  satisfaction,  on or prior to the
Closing Date, of each of the following conditions (any of which may be waived in
writing by Parent and Acquisition in their sole discretion):

         7.1  Representations  and  Warranties  True.  The  representations  and
warranties of the Company which are contained in this Agreement, or contained in
any Schedule,  certificate  or other  instrument or document  delivered or to be
delivered pursuant to this Agreement,  shall be true and correct in all material
respects  at and as of the  Closing  Date as  though  such  representations  and
warranties  were made on and as of the  Closing  Date,  and at the  Closing  the
Company shall have delivered to Parent and Acquisition a certificate  (signed on
behalf of the Company by the  President and the Chief  Financial  Officer of the
Company) to that effect with respect to all such  representations and warranties
made by the Company.

         7.2  Performance.  The Company shall have performed and complied in all
material  respects with all of the  obligations  under this Agreement  which are
required to be performed or complied with by it on or prior to the Closing Date,
and at the Closing the Company shall have delivered to Parent and  Acquisition a
certificate  (duly  executed on behalf of the Company by the  President  and the
Chief Financial  Officer of the Company) to that effect with respect to all such
obligations  required to have been  performed or complied with by the Company on
or before the Closing Date.

         7.3 Authorization of Merger. This Agreement and the consummation of the
transactions  contemplated  hereby shall have been duly  approved and adopted by
the  requisite  affirmative  vote of the  Company's  shareholders  and  Parent's
shareholders in accordance with applicable laws and regulations.

         7.4 Registration  Statement;  Blue Sky Laws. The Registration Statement
shall have been declared  effective  under the  Securities  Act and shall not be
subject  to a stop order or any  threatened  stop  order.  All  necessary  state
securities  and blue sky permits,  approvals  and exemption  orders  required in
connection with the transactions  contemplated by this Agreement shall have been
obtained.

         7.5 Absence of Litigation.  No statute,  rule or regulation  shall have
been enacted or promulgated, and no order, decree, writ or injunction shall have
been  issued  and  shall  remain in  effect,  by any  court or  governmental  or
regulatory  body,  agency or  authority  which  restrains,  enjoins or otherwise
prohibits the  consummation  of the  transactions  contemplated  hereby,  and no
action,  suit or proceeding before any court or governmental or regulatory body,
agency or authority  shall have been  instituted by any person (or instituted or
threatened by any governmental or regulatory body, agency or authority),  and no
investigation by any governmental or regulatory body,  agency or authority shall
have been commenced with respect to the transactions contemplated hereby or with
respect to the Company which,  in the reasonable  judgment of the Parent's Board
of  Directors,  would  have  a  material  adverse  effect  on  the  transactions
contemplated hereby or on the business of the Company.
<PAGE>

         7.6   Additional  Agreements.  The  Company  shall  have  delivered 
(or  cause to be  delivered)  duly executed counterparts of the following 
agreements:

                   (a) a Consulting Agreement, duly executed by the President of
the Company; and

                   (b) a consent  from the  lessor of the  Company's  facilities
waiving  any  default  under  said  lease   resulting   from  the   transactions
contemplated  herein and permitting  assignment of said lease to Acquisition and
any  other  entry  which  acquires  all  of  the  outstanding  stock  or  all or
substantially all of the assets of Acquisition.

         7.7      Legal  Opinion.  The Parent shall have received an opinion of 
Tonkon,  Torp,  Galen,  Marmaduke & Booth, counsel to the Company, in a form 
reasonably satisfactory to the Parent.

         7.8 Delivery of Certificates for Cancellation.  The share  certificates
representing all of the issued and outstanding shares of Company Common Stock as
of the  Closing  Date  (other  than  Dissenting  Shares),  and  the  instruments
representing  all Options which are  outstanding  and unexercised on the Closing
Date,  in each case duly  endorsed  in blank,  shall have been  surrendered  for
cancellation.

         7.9  Appraisal Rights.  The holders of five percent (5%) or more of the
 issued and outstanding shares of Company Common Stock shall not have demanded
 appraisal rights in respect of the Merger.

         7.10  Comfort  Letter.  Prior to the  Registration  Statement  becoming
effective, Deloitte & Touche, independent accountants to the Company, shall have
delivered  to Parent a "comfort"  letter,  addressed  to Parent and dated within
three days of the date on which the Registration Statement became effective,  in
such form and substance as is customary in connection with such transactions and
is satisfactory to the Parent.

        7.11  Articles of Merger.  The Company shall have executed and delivered
to Parent  counterparts of the Articles of Merger to be filed with the Secretary
of State of the State of Oregon in connection with the Merger.

        7.12 Schedules and Deliveries.  The Parent and  Acquisition  acknowledge
and agree that certain of the schedules and items to be delivered by the Company
pursuant to this  Agreement  have not yet been  provided by the Company.  All of
such  schedules  and other items which have not been  delivered  shall have been
delivered  by the Company to Parent no later than 30 days from the date  hereof,
and such schedules and other items shall have been  reasonably  satisfactory  to
the  Parent,  such  approval  not to be  unreasonably  withheld.  Company  shall
cooperate  with  Parent  and work  diligently  to modify any  schedule  or other
deliverable  which  Parent  does  not  approve  so that it meets  with  Parent's
reasonable satisfaction.

        7.13  Completion of Financial Due Diligence.  The Parent and Acquisition
shall have  completed  their  financial due  diligence  review of the Company to
their reasonable satisfaction, including but not limited to discussions with the
Company's auditors and financial personnel.
<PAGE>



                                 ARTICLE VIII

                      CONDITIONS TO THE OBLIGATIONS OF THE
                                   COMPANY

         The   obligation  of  the  Company  to  consummate   the   transactions
  contemplated  by this Agreement  shall be subject to the  satisfaction,  on or
  prior to the Closing Date, of each of the following  conditions  (any of which
  may be waived in writing by the Company in its sole discretion):

         8.1  Representations  and  Warranties  True.  The  representations  and
warranties of each of Parent and  Acquisition  contained in this  Agreement,  or
contained in any Schedule, certificate or other instrument or document delivered
or to be delivered pursuant to this Agreement,  shall be true and correct in all
material  respects at and as of the Closing Date as though such  representations
and warranties  were made on and as of the Closing Date, and at the Closing each
of Parent and  Acquisition  shall have  delivered  to the Company a  certificate
(signed on its behalf by its President and its Chief Financial  Officer) to that
effect with  respect to all such  representations  and  warranties  made by such
entity.

         8.2  Performance.  Each of Parent and Acquisition  shall have performed
and complied in all material  respects  with all of the  obligations  under this
Agreement  which are  required to be  performed  or complied  with by them on or
prior to the Closing  Date,  and at the Closing  each of Parent and  Acquisition
shall have delivered to the Company a  certificate,  signed on its behalf by its
President and its Chief  Financial  Officer,  to that effect with respect to all
such obligations required to have been performed or complied with by such entity
on or before the Closing Date.

                  8.3   Authorization   of  Merger.   This   Agreement  and  the
transactions  contemplated  hereby shall have been duly  approved and adopted by
the requisite  affirmative vote of the Company's  shareholders and Acquisition's
shareholders in accordance with applicable laws and regulations.

         8.4 Registration  Statement;  Blue Sky Laws. The Registration Statement
shall have been declared  effective  under the  Securities  Act and shall not be
subject  to a stop order or any  threatened  stop  order.  All  necessary  state
securities  and blue sky permits,  approvals  and exemption  orders  required in
connection with the transactions  contemplated by this Agreement shall have been
obtained.

         8.5 Absence of Litigation.  No statute,  rule or regulation  shall have
been enacted or promulgated. and no order, decree, writ or injunction shall have
been  issued  and  shall  remain in  effect,  by any  court or  governmental  or
regulatory  body,  agency or  authority  which  restrains,  enjoins or otherwise
prohibits the  consummation  of the  transactions  contemplated  hereby,  and no
action,  suit or proceeding before any court or governmental or regulatory body,
agency or authority  shall have been  instituted by any person (or instituted or
threatened by any governmental or regulatory  body,  agency or authority) and no
investigation by any governmental or regulatory body,  agency or authority shall
have been commenced with respect to the transactions contemplated hereby or with
respect to Parent or Parent  Subsidiaries  which, in the reasonable  judgment of
the Company's  Board of Directors,  would have a material  adverse effect on the
transactions  contemplated  hereby  or on the  business  of  Parent  and  Parent
Subsidiaries taken as a whole.

         8.6  Additional  Agreements.  Parent shall have  executed and delivered
(and shall have agreed to cause the Surviving Corporation to execute and deliver
immediately  following the Effective  Date, as applicable)  counterparts  of the
following agreements:
<PAGE>

                   (a) the  Consulting  Agreement  referred to in Section 8.7(a)
hereof.

         8.7 Legal Opinion.  The Company shall receive an opinion of Nordlicht &
Hand, and/or Winthrop,  Stimson,  Putnam & Roberts, as appropriate,  counsels to
Parent and Acquisition, in a form reasonably satisfactory to the Company.

         8.8 Articles of Merger.  Parent and Acquisition shall have executed and
delivered to the Company counterparts of the Articles of Merger to be filed with
the Secretary of the State of the State of Oregon in connection with the Merger.

         8.9 Schedules and Deliveries.  The Company acknowledges and agrees that
certain of the schedules and items to be delivered by the Parent and Acquisition
pursuant to this  Agreement  have not yet been  provided by the Company.  All of
such  schedules  and other items which have not been  delivered  shall have been
delivered  by Parent and  Acquisition  to the Company no later than 30 days from
the date  hereof,  and such  schedules  and other items  remain  shall have been
reasonably  satisfactory to the Company.  Parent and Acquisition shall cooperate
with the Company and work diligently to modify any schedule or other deliverable
which  the  Company  does  not  approve  so that it  meets  with  the  Company's
reasonable satisfaction.

        8.10  Completion  of Financial  Due  Diligence.  The Company  shall have
completed its financial  due  diligence  review of the Parent to its  reasonable
satisfaction,  including  but not  limited  to  discussions  with  the  Parent's
auditors and financial personnel.


                               ARTICLE IX

                              TERMINATION

         9.1 Termination.  This Agreement may be terminated at any time prior to
  the Effective  Date,  whether prior to or after approval of this Agreement and
  the transactions contemplated hereby by the Company's shareholders:

                   (a) by the mutual written  consent of the Boards of Directors
of the Company and the Parent;

                   (b) by either the Company or the Parent

                      (i) if any court or  governmental  or  regulatory  agency,
authority or body shall have enacted,  promulgated or issued any statute,  rule,
regulation,  ruling, writ or injunction, or taken any other action, restraining,
enjoining or otherwise prohibiting the transactions  contemplated hereby and all
appeals and means of appeal therefrom have been exhausted;

                      (ii) if the  Effective  Date shall not have occurred on or
before  April 30, 1998;  provided,  however,  that the right to  terminate  this
Agreement  pursuant to this  Section 9.1 (b)(ii)  shall not be  available to any
party whose (or whose affiliate(s)') breach of any representation or warranty or
failure to perform or comply with any  obligation  under this Agreement has been
the cause of, or resulted in, the failure of the  Effective  Date to occur on or
before such date;
<PAGE>

                      (iii)  if  the   shareholders   of  the   Company  or  the
shareholders  of  Acquisition  shall have  failed to  approve  the Merger at the
meetings referred to in Section 6.3;

                   (c) by the  Company,  if any of the  conditions  specified in
Article  VIII have not been met or waived  prior to such time as such  condition
can no longer be satisfied; or

                   (d) by the  Parent,  if any of the  conditions  specified  in
Article  VII  shall  not have  been  met or  waived  prior to such  time as such
condition can no longer be satisfied.

                  9.2 Effect of Termination. In the event of termination of this
Agreement,  this  Agreement  shall  forthwith  become void and there shall be no
liability on the part of any of the parties hereto or their respective  officers
or directors, except for Sections 11.6 and 11.8 and the last sentence of Section
6.1, which shall remain in full force and effect, and except that nothing herein
shall relieve the Company from its  obligations  under Section 6.6 hereof or any
party from  liability for a breach of this  Agreement  prior to the  termination
hereof.

                                  ARTICLE X
                  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         10.1   Survival   of   Representations   and    WarrantiesSurvival   of
Representations  and Warranties.  All  representations  and warranties set forth
herein shall survive only until the Effective Date and not beyond.

                                  ARTICLE XI
                            MISCELLANEOUS PROVISIONS

         11.1  Amendment.  This  Agreement  may be amended by written  agreement
among the Company and Parent prior to the  Effective  Date,  whether prior to or
after approval hereof by the Company's shareholders, but after any such approval
no amendment  shall be made to the Exchange Ratio pursuant to which  outstanding
shares of Company  Common Stock are converted into shares of Parent Common Stock
pursuant to the Merger, without the further approval of such shareholders.

         11.2  Waiver  of  Compliance.  Except  as  otherwise  provided  in this
Agreement,  any  failure of any of the  parties to comply  with any  obligation,
covenant or agreement  contained  herein may be waived only by a written  notice
from the party or parties  entitled to the benefits  thereof.  No failure by any
party hereto to exercise, and no delay in exercising, any right hereunder, shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right  hereunder  preclude  any other or future  exercise  of that right by that
party.

         11.3 Notices. All notices and other  communications  hereunder shall be
deemed given if given in writing and  delivered  personally,  by  registered  or
certified  mail,  return receipt  requested,  postage  prepaid,  or by overnight
courier for which a receipt  confirming  delivery is  provided,  to the party to
receive  the same at its  respective  address  set forth below (or at such other
address  as may from time to time be  designated  by such party to the others in
accordance with this Section 11.3):
<PAGE>

                  (a)      if to the Company, to:

                           Informedics, Inc.
                           4000 Kruse Way Plaza
                           Building 3, Suite 155
                           Lake Oswego, Oregon  97035
                           Attention:  Mr. John Tortorici

                  with copies to:

                           Tonkon, Torp, Galen, Marmaduke & Booth
                           1600 Pioneer Tower
                           888 S.W. Fifth Avenue
                           Portland, Oregon  97204
                           Attention:  Ronald L. Greenman, Esq.

                  (c)      if to Parent or Acquisition, to:

                           Mediware Information Systems, Inc.
                           1121 Old Walt Whitman Road
                           Melville, New York  11747
                           Attention:  President

                with copies to:

                           Nordlicht & Hand
                           645 Fifth Avenue
                           New York, New York  10022
                           Attention:  Ira S. Nordlicht, Esq.

                           and

                           Winthrop, Stimson, Putnam & Roberts
                           One Battery Park Plaza
                           New York, New York  10004
                           Attention:  Jonathan H. Churchill, Esq.

         All such  notices and  communications  hereunder  shall be deemed given
when  received,  as  evidenced  by the signed  acknowledgment  of receipt of the
person  to  whom  such  notice  or  communication  shall  have  been  personally
delivered,  the  acknowledgment  of  receipt  returned  to  the  sender  by  the
applicable  postal  authorities or the confirmation of delivery  rendered by the
applicable overnight courier service.

         11.4 Assignment.  This Agreement and all of the provisions hereof shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective  successors  and permitted  assigns.  Neither this  Agreement nor any
rights,  duties or obligations  hereunder  shall be assigned by any party hereto
without the prior written consent of the other parties hereto.
<PAGE>

         11.5 No  Third  Party  Beneficiaries.  Neither  this  Agreement  or any
provision  hereof nor any Schedule,  certificate or other  instrument  delivered
pursuant  hereto,  nor any agreement to be entered into  pursuant  hereto or any
provision hereof,  is intended to create any right,  claim or remedy in favor of
any person or entity,  other than the parties  hereto and their  respective  and
permitted assigns.

         11.6 Expenses. Each party shall pay its own expenses in connection with
this  Agreement.  the  agreements,  to be entered into  pursuant  hereto and the
transactions contemplated hereby.

         11.7 Public Announcements. Promptly upon execution and delivery of this
Agreement,  Parent and the Company  shall issue a press  release in such form as
they shall mutually  agree.  Thereafter,  and prior to the  consummation  of the
Merger or the termination of this  Agreement,  none of the parties hereto shall,
except  as  mutually  agreed  by  Parent  and the  Company,  or except as may be
required by law or applicable regulatory authority, issue any reports, releases,
announcements  or other  statements to the public  relating to the  transactions
contemplated hereby.

         11.8 Brokers and Finders. The Company, Parent and Acquisition represent
and warrant  that,  no broker,  finder or  investment  banker is entitled to any
brokerage,  finder's or other fee or commission based on arrangements made by or
on behalf of any of them.  The  Company  and Parent  shall each pay the fees and
other  compensation of any broker,  finder or investment banker engaged by it or
on its behalf.

         11.9     Dispute Resolution

                  (a) In the event of any controversy,  claim or dispute,  other
than  for  which  equitable  relief  is  available,  the  party  initiating  the
controversy,  claim or dispute shall provide to the other party a written notice
containing a brief and concise  statement of the matter,  together with relevant
supporting  facts.  During a period of thirty (30) days or such longer period as
mutually  agreed,  the parties  shall attempt to settle the matter by good faith
negotiation.   Such  efforts  shall  include,   but  not  be  limited  to,  full
presentation  by each  party of its  claims,  with or  without  counsel,  to the
President of the other party.

                  (b) If efforts under Section 11.9(a) are not successful,  such
dispute shall be settled by binding arbitration in New York, New York, under the
Commercial Rules of the American Arbitration  Association then in effect (except
as  otherwise  set forth in the  Agreement).  The failure to comply with Section
11.9(a) with respect to such dispute shall be an absolute bar to the institution
of  arbitration  proceedings  with respect  thereto.  The  arbitration  shall be
conducted in the English  language before a panel of three  arbitrators,  one of
whom is selected by the Company,  one of whom is selected by Parent,  and one of
whom  is  selected  by the two  arbitrators  so  designated.  The  parties  will
cooperate with each other in causing the  arbitration to be held in as efficient
and  expeditious  a manner as  practicable.  If either party fails to appoint an
arbitrator  in thirty  days,  the  other  party may  request  that the  American
Arbitration Association make such appointment.  The arbitrators will be required
to render a full and complete written report of their decision.  The decision of
a majority of the arbitrators  will constitute the  arbitrators'  decision.  Any
award rendered by the  arbitrators  shall be binding upon the parties hereto and
shall be final, subject to review by a court of competent jurisdiction under the
statutory  standard of review applicable to arbitrations.  Judgment on the award
may be entered in any court of record having competent jurisdiction.  Each party
shall pay its own expenses of  arbitration  and the expenses of the  arbitrators
shall be equally shared except that if, in the opinion of the  arbitrators,  any
claim or position by a party  hereto,  or any  defense or  objection  thereto by

<PAGE>

another  party was  unreasonable  or  frivolous,  the  arbitrators  may in their
discretion  assess  as part of their  award  all or any part of the  arbitration
expenses of the other party or parties  (including  reasonable  attorneys' fees)
and expenses of the arbitrators against such party. Nothing herein shall prevent
the parties from settling any dispute by mutual  agreement at any time.  The law
of the State of New York  shall  govern the  validity,  scope and effect of this
Section 11.9.

         11.10  Counterparts.  This  Agreement  may be executed in any number of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

         11.11  Headings.  The article and section  headings  contained  in this
Agreement are solely for convenience of reference, are not part of the agreement
of the parties and shall not be used in construing  this Agreement or in any way
affect the meaning or interpretation of this Agreement.

         11.12 Entire Agreement. This Agreement, and the Schedules, certificates
and other instruments and documents delivered pursuant hereto, together with the
other  agreements  referred to herein and to be entered  into  pursuant  hereto,
embody the entire  agreement  of the parties  hereto with respect to the subject
matter hereof, and supersede all prior agreements or understandings,  written or
oral, among the parties relating to, the subject matter hereof.

         11.13 Governing Law. The parties hereby agree that this Agreement,  and
the respective rights, duties and obligations of the parties hereunder, shall be
governed by and construed in accordance  with the laws of the State of New York,
without giving effect to principles of conflicts of law  thereunder,  except for
the  provisions  of  Article  I hereto  setting  forth  the  provisions  for the
consummation and effects of the Merger, which shall be governed by and construed
in accordance with the laws of the State of Oregon.

          11.14  Severability.  If any term or other provision of this Agreement
is invalid,  illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement  shall  nevertheless  remain in
full force and effect.  Upon such determination that any term or other provision
is invalid,  illegal or incapable of being  enforced,  the parties  hereto shall
negotiate  in good faith to modify this  Agreement  so as to effect the original
intent of the parties as closely as possible  in an  acceptable  manner in order
that  the  transactions   contemplated  hereby  are  consummated  as  originally
contemplated to the greatest extent possible.

          11.15 Specific Performance.  The parties hereto agree that irreparable
damage  would  occur  in the  event  any  provision  of this  Agreement  was not
performed  in  accordance  with the terms  hereof and that the parties  shall be
entitled to specific  performance of the terms hereof,  in addition to any other
remedy at law or equity without the necessity of demonstration the inadequacy of
monetary damages.

          11.16  Schedules  and  Exhibits.  The  Schedules  and Exhibits to this
Agreement  shall be construed  with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.

<PAGE>








      IN WITNESS  WHEREOF,  the Parent,  Acquisition and the Company have caused
this  Agreement  to be duly  executed  and  delivered as of the date first above
written.


                                       MEDIWARE INFORMATION SYSTEMS, INC.

                                       By: /s/ George J. Barry
                                          ------------------------
                                            Name: George J. Barry
                                            Title: CFO


                                       MEDIWARE ACQUISITION CORPORATION

                                       By: /s/ George J. Barry
                                          ------------------------
                                             Name: George J. Barry
                                             Title: CFO

                                       INFORMEDICS, INC.

                                       By: /s/ J. Tortorici
                                          ------------------------
                                             Name: J. Tortorici
                                             Title: Chairman & CFO