<PAGE>


                                              EXHIBIT 10.14


           AGREEMENT AND PLAN OF REORGANIZATION

                           AMONG

                 RESEARCH ENGINEERS, INC.

                   PACSOFT INCORPORATED

                            AND

                       KAREN HUNTER
                      WILLIAM SCHMIDT
                            AND
                         MAE WEBB




                      MARCH 31, 1999


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                     TABLE OF CONTENTS

     DESCRIPTION                                       PAGE NO.

     1.  EXCHANGE OF SHARES...............................1
              1.1 Exchange of Shares. ....................1
              1.2 Consideration and Exchange Ratio. ......1
              1.3 Tax Status of the Exchange..............1

     2.  REPRESENTATIONS AND WARRANTIES OF PACSOFT AND
         SELLERS..........................................1
              2.1 Organization; Good Standing;
                    Qualification and Power...............2
              2.2 Capital Structure.......................2
                       2.2.1 Stock........................2
                       2.2.2 No Other Commitments ........2
              2.3 Authority...............................2
                       2.3.1 Corporate Action.............2
                       2.3.2 Sellers' Authority...........3
                       2.3.3 No Conflict..................3
                       2.3.4 Governmental Consents........3
              2.4 Financial Statements. ..................3
              2.5 Compliance with Applicable Laws. .......3
              2.6 Insurance. .............................3
              2.7 Litigation. ............................4
              2.8 Employee Benefits. .....................4
              2.9 Absence of Undisclosed Liabilities. ....5
              2.10 Absence of Certain Changes or Events. .5
              2.11 No Defaults. ..........................6
              2.12 Certain Agreements. ...................6
              2.13 Taxes..................................7
              2.14 Intellectual Property..................9
              2.15 Fees and Expenses......................9
              2.16 Environmental Matters..................10
              2.17 Disclosure. ...........................10
              2.18 Restrictions on Business Activities. ..10
              2.19 Accounts Receivable....................10
              2.20 Personal Property. ....................10
              2.21 Real Property. ........................10
              2.22 Warranties. ...........................11
              2.23 Contracts. ............................11
              2.24 Products and Distribution. ............11
              2.25 Development Tools. ....................12
              2.26 Investment Representation. ............12
              2.27 Year 2000 Compliance. .................12



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     3.  REPRESENTATIONS AND WARRANTIES OF REI...........13
              3.1 Organization; Good Standing;
                    Qualification and Power..............13
              3.2 Capital Structure......................13
                       3.2.1 Stock, Options and Warrants.13
                       3.2.2 No Other Commitments........13
              3.3 Authority..............................13
                       3.3.1 Corporate Action............13
                       3.3.2 No Conflict.................14
                       3.3.3 Governmental Consents.......14
              3.4 Litigation. ...........................14
              3.5 Fees and Expenses......................14

     4.  PACSOFT AND SELLERS COVENANTS...................14
              4.1 Regulatory Approvals. .................14
              4.2 Necessary Consents. ...................15
              4.3 Cooperation in Audit. .................15

     5.  REI COVENANTS...................................15
              5.1 Regulatory Approvals. .................15
              5.2 Necessary Consents. ...................15

     6.  ADDITIONAL AGREEMENTS...........................15
              6.1 Employee Matters. .....................15
              6.2 Employment Agreement...................15
              6.3 PacSoft Office Location. ..............15
              6.4 Registration Rights. ..................16
                       6.4.1 Definitions.................16
                       6.4.2 Piggyback Registration......16
                       6.4.3 Obligations of REI..........16
                       6.4.4 Condition Precedent.........17
                       6.4.5 Underwriting Requirements...17
                       6.4.6 Indemnification.............17
                       6.4.7 Reports Under 1934 Act......19
                       6.4.8 Lock-up Agreement...........19
                       6.4.9 Delay of Registration.......19

     7.  INDEMNIFICATION OF THE PARTIES..................20
              7.1 Indemnification by Sellers.............20
              7.2 Indemnification by REI.................20
              7.3 Adjustments to Indemnification Payments20
              7.4 Indemnification Procedures.............20
              7.5 Manner of Indemnification. ............21



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     8.  CLOSING......................................... 21
              8.1 Closing Date. ......................... 22
              8.2 Deliveries  by  PacSoft  and  Sellers
                    at the Closing....................... 22
              8.3 Deliveries by REI at the Closing. ..... 22

     9.  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
         COVENANTS....................................... 22

     10. MISCELLANEOUS................................... 22
              10.1 Governing Law. ........................22
              10.2 Assignment;  Binding Upon  Successors
                     and Assigns......................... 23
              10.3 Severability. .........................23
              10.4 Counterparts. .........................23
              10.5 Other Remedies. .......................23
              10.6 Amendment and Waivers. ................23
              10.7 Expenses. .............................23
              10.8 Attorneys' Fees. ......................23
              10.9 Notices. ..............................23
              10.10 Construction of Agreement.............24
              10.11 No Joint Venture......................25
              10.12 Further Assurances....................25
              10.13 Absence of Third Party Rights.........25
              10.14 Entire Agreement......................25
              10.15 Press Releases........................25



<PAGE>





           AGREEMENT AND PLAN OF REORGANIZATION


     THIS AGREEMENT AND PLAN OF REORGANIZATION  ("Agreement") is entered into as
of this 31st day of  March,  1999,  by and among  Research  Engineers,  Inc.,  a
Delaware corporation ("REI"),  PacSoft  Incorporated,  a Washington  corporation
("PacSoft"),  and Karen Hunter, an individual,  William Schmidt,  an individual,
and Mae Webb, an individual (collectively, "Sellers").

                         RECITALS

     A. Sellers own, in the aggregate,  all of the issued and outstanding shares
("Shares") of capital stock of PacSoft.

     B. REI desires to acquire  from Sellers the Shares,  and Sellers  desire to
acquire  from REI the Stock (as defined in Section 1.2 below),  on the terms and
conditions set forth in this Agreement.

     NOW, THEREFORE, the parties to this Agreement agree as follows:

EXCHANGE OF SHARES.

Exchange of Shares. Subject to the terms and conditions set forth herein, at the
     Closing (as defined in Section 8 below),  Sellers shall  transfer,  convey,
     assign and deliver  the Shares to REI,  and REI shall issue and deliver the
     Stock to Sellers.

Consideration and Exchange  Ratio.  The aggregate  consideration  to be given in
     exchange for the Shares  shall  consist of 50,000  shares of common  stock,
     $.01 par value per share,  of REI  ("Stock"),  which results in an exchange
     ratio of 83.3333 shares of Stock to be issued in exchange for each Share.

Tax Status of the Exchange. The exchange of the Shares for the Stock is intended
   to be a reorganization as described in Section 368(a) of the Internal Revenue
   Code of 1986 (the "Internal Revenue Code"), and this Agreement is intended to
   be  a  "plan  of  reorganization"  within  the  meaning  of  the  regulations
   promulgated under Section 368(a) of the Internal Revenue Code.

REPRESENTATIONS AND WARRANTIES OF PACSOFT AND SELLERS.



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                             8

         Except as set forth in a schedule  dated the date of this Agreement and
delivered  by  PacSoft  to REI  concurrently  herewith  ("Disclosure  Schedule")
specifically  identifying the Sections of this Agreement  requiring the delivery
of such  disclosure,  PacSoft and Sellers  jointly and  severally  represent and
warrant to REI as set forth  below.  In this  Agreement,  any  reference  to any
event,  change or effect being "material" with respect to any entity or group of
entities  means any material  event,  change or effect  related to the condition
(financial  or  otherwise),   properties,   assets,   liabilities,   businesses,
operations,  results  of  operations  or  prospects  of such  entity or group of
entities taken as a whole. In this Agreement, the term "Material Adverse Effect"
used in connection  with a party or any of that party's  subsidiaries  means any
event,  change or effect that is materially adverse to the condition  (financial
or otherwise), properties, assets, liabilities,  businesses, operations, results
of operations or prospects of that party and its subsidiaries, taken as a whole;
provided,  however, that a Material Adverse Effect shall not include any adverse
effect  resulting from general economic  conditions or conditions  affecting the
engineering software market.

Organization;  Good Standing;  Qualification adn Power. PacSoft is a corporation
     duly organized, validly existing and in good standing under the laws of the
     jurisdiction of its  incorporation,  has all requisite  corporate power and
     authority  to own,  lease and  operate its  properties  and to carry on its
     business as now being conducted, and is duly qualified and in good standing
     to do business in each  jurisdiction in which the nature of its business or
     the ownership or leasing of its properties makes  qualification  necessary,
     other than in  jurisdictions  where the failure to qualify would not have a
     Material Adverse Effect.  PacSoft does not have any  subsidiaries.  PacSoft
     has made available to REI or its counsel complete and correct copies of the
     certificate or articles of  incorporation  and bylaws of PacSoft as amended
     to the date of this  Agreement,  and copies of all minutes of meetings  and
     actions by written consent of shareholders, directors and board committees.

Capital Structure.

Stock. The  authorized  capital  stock of PacSoft  consists of 50,000  shares of
     Common Stock,  $1.00 par value per share ("PacSoft  Common Stock").  At the
     date of this  Agreement,  600 shares of PacSoft Common Stock are issued and
     outstanding.  All  outstanding  shares of PacSoft  Common Stock are validly
     issued,  fully paid and  nonassessable and not subject to preemptive rights
     and are held of record and  beneficially by Sellers,  free and clear of all
     claims, liens and encumbrances.  None of the shares of PacSoft Common Stock
     was issued in  violation of any federal or state  securities  laws or other
     legal requirements.

No  Other  Commitments.   There  are  no  options,   warrants,  calls,  rights,
     commitments,  conversion  rights or  agreements  of any  character to which
     PacSoft  is a party or by which  PacSoft  is bound  obligating  PacSoft  to
     issue,  deliver or sell,  or cause to be  issued,  delivered  or sold,  any
     shares of  capital  stock of  PacSoft  or  securities  convertible  into or
     exchangeable for shares of capital stock of PacSoft,  or obligating PacSoft
     to  grant,  extend  or  enter  into  any  option,   warrant,  call,  right,
     commitment,  conversion  right or agreement.  There are no voting trusts or
     other  agreements  or  understandings  to which PacSoft or any Sellers is a
     party with respect to the voting of the capital stock of PacSoft.

Authority.

Corporate Action.  PacSoft has all  requisite  corporate  power and authority to
     enter into this Agreement and to perform its  obligations  hereunder and to
     consummate the transactions  contemplated by this Agreement.  The execution
     and delivery of this Agreement by PacSoft and the  consummation  by PacSoft
     of the  transactions  contemplated  hereby have been duly authorized by all
     necessary corporate action on the part of PacSoft.  This Agreement has been
     duly executed and delivered by PacSoft and this  Agreement is the valid and
     binding  obligation of PacSoft,  enforceable in accordance  with its terms,
     except  that  such   enforceability  may  be  subject  to  (i)  bankruptcy,
     insolvency,  reorganization  or other similar laws affecting or relating to
     enforcement  of  creditors'  rights  generally  and (ii) general  equitable
     principles.


<PAGE>


Sellers'  Authority.  Sellers  have full power and  capacity  to enter into this
     Agreement.  This  Agreement has been duly executed and delivered by Sellers
     and  this  Agreement  is the  valid  and  binding  obligation  of  Sellers,
     enforceable in accordance with its terms, except that enforceability may be
     subject to (i) bankruptcy, insolvency, reorganization or other similar laws
     affecting or relating to  enforcement  of creditors'  rights  generally and
     (ii) general equitable principles.

No   Conflict.   Neither  the  execution,   delivery  and  performance  of  this
     Agreement, nor the consummation of the transactions contemplated hereby nor
     compliance with the provisions  hereof will conflict with, or result in any
     violations of, or cause a default (with or without notice or lapse of time,
     or  both)  under,  or  give  rise  to a right  of  termination,  amendment,
     cancellation or acceleration of any obligation contained in, or the loss of
     any material benefit under, or result in the creation of any lien, security
     interest,  charge or  encumbrance  upon any of the material  properties  or
     assets of  PacSoft  under  any  term,  condition  or  provision  of (x) the
     certificate  or articles of  incorporation  or bylaws of PacSoft or (y) any
     loan or credit agreement,  note, bond, mortgage,  indenture, lease or other
     material agreement,  judgment, order, decree, statute, law, ordinance, rule
     or regulation applicable to PacSoft or its respective properties or assets,
     other  than  any  such  conflicts,  violations,  defaults,  losses,  liens,
     security interests,  charges, or encumbrances which, individually or in the
     aggregate, would not have a Material Adverse Effect.

Governmental  Consents.  No consent,  approval,  order or  authorization  of, or
     registration,  declaration or filing with, any court, administrative agency
     or commission or other governmental authority or instrumentality,  domestic
     or foreign (each a  "Governmental  Entity"),  is required to be obtained by
     PacSoft in connection  with the execution and delivery of this Agreement or
     the consummation of the transactions contemplated hereby.

Financial Statements.  PacSoft has furnished to REI copies of: (a) the unaudited
     balance  sheets of PacSoft at December 31, 1998 and February 28, 1999,  and
     the related  statements of income for the periods then ended. All financial
     statements referred to in this Section 2.4 ("PacSoft Financial Statements")
     are complete and correct,  have been prepared in accordance  with generally
     accepted  accounting  principles  applied on a consistent  basis during the
     respective  periods,  and fairly present the financial condition of PacSoft
     at the respective dates thereof and the results of operation of PacSoft for
     the respective  periods  covered by the  statements of income  contained in
     therein.  PacSoft does not have any material  obligations  or  liabilities,
     contingent  or  otherwise,  not fully  disclosed  by the PacSoft  Financial
     Statements.

Compliance with Applicable  Laws. The business of PacSoft is not being conducted
     in  violation  of any  law,  ordinance,  regulation,  rule or  order of any
     Governmental  Entity  where the  violation  would have a  Material  Adverse
     Effect.  PacSoft has not been notified by any Governmental  Entity that any
     investigation  or review with respect to PacSoft is pending or  threatened,
     nor has any  Governmental  Entity  notified  PacSoft  of its  intention  to
     conduct an investigation or review.  PacSoft has all permits,  licenses and
     franchises from  Governmental  Entities required to conduct its business as
     now being  conducted,  except  for  those  whose  absence  would not have a
     Material Adverse Effect.


<PAGE>


Insurance. PacSoft maintains and at all times since March 31,1996 has maintained
     fire and casualty and general liability  insurance that PacSoft believes to
     be  reasonably  prudent for its  business.  PacSoft has  delivered  or made
     available to REI complete and correct copies of all such policies, together
     with all riders and  amendments  thereto.  These policies are in full force
     and  effect,  and all  premiums  due  thereon  have been paid.  PacSoft has
     complied in all  material  respects  with the terms and  provisions  of the
     policies. The Disclosure Schedule sets out all claims made by PacSoft under
     any policy of insurance since March 31, 1996 and, in the opinion of PacSoft
     reasonably  formed and held,  there is no basis on which a claim  should or
     could be made under any such policy.

Litigation. There is no suit, action,  arbitration,  demand, claim or proceeding
     pending  or, to the best  knowledge  of  PacSoft  and  Sellers,  threatened
     against PacSoft,  nor is there any judgment,  decree,  injunction,  rule or
     order of any Governmental Entity or arbitrator  outstanding against PacSoft
     that,  individually  or in the aggregate,  could  reasonably be expected to
     have a Material Adverse Effect.

Employee Benefits.

                2. PacSoft has made  available to REI a list of all employees of
   PacSoft and their salaries as of the date of this Agreement. PacSoft has made
   available  to REI copies or  descriptions  of all written or formal  plans or
   agreements  involving direct or indirect  compensation or benefits (including
   any employment  agreements  entered into between  PacSoft and any employee of
   PacSoft, but excluding workers' compensation,  unemployment  compensation and
   other  government-mandated  programs)  currently  or  previously  maintained,
   contributed to or entered into by PacSoft under which PacSoft has any present
   or future obligation or liability  (collectively,  "PacSoft Employee Plans").
   Copies of all PacSoft  Employee  Plans (and,  if  applicable,  related  trust
   agreements) and all amendments  thereto and written  interpretations  thereof
   (including  summary plan descriptions) have been made available to REI or its
   counsel.  No  contributions  are due or past due from PacSoft with respect to
   any of the PacSoft Employee Plans. To PacSoft's and Sellers' knowledge,  each
   of the PacSoft  Employee  Plans has been  maintained in  compliance  with its
   terms and with the requirements  prescribed by any and all statutes,  orders,
   rules and  regulations  that are  applicable  to the PacSoft  Employee  Plans
   except for noncompliance which would not have a Material Adverse Effect.

                3. PacSoft has made available to REI a list of each  employment,
   severance or other similar  contract,  arrangement or policy and each plan or
   arrangement  providing for insurance  coverage  (including  any  self-insured
   arrangements),  workers'  benefits,  vacation benefits,  severance  benefits,
   disability benefits,  death benefits,  hospitalization  benefits,  retirement
   benefits,  deferred  compensation,  profit-sharing,  bonuses,  stock options,
   stock purchase, phantom stock, stock appreciation or other forms of incentive
   compensation  or  post-retirement  insurance,  compensation  or benefits  for
   employees,  consultants  or  directors  which  (i) is not one of the  PacSoft
   Employee  Plans,  (ii) is entered into,  maintained or contributed to, as the
   case may be, by PacSoft and (iii) covers any  employee or former  employee of
   PacSoft.  The contracts,  plans and arrangements  described in this paragraph
   2.8(d) are referred to collectively as the "PacSoft Benefit Arrangements." To
   PacSoft's and Sellers'  knowledge,  each of the PacSoft Benefit  Arrangements
   has been  maintained in  substantial  compliance  with its terms and with the
   requirements   prescribed  by  any  and  all  statutes,   orders,  rules  and
   regulations which are applicable to PacSoft Benefit Arrangements. PacSoft has
   made  available  to REI  or its  counsel  a  complete  and  correct  copy  or
   description of each of the PacSoft Benefit Arrangements.


<PAGE>



                4. There has been no amendment  to,  written  interpretation  or
   announcement by PacSoft  relating to, or change in employee  participation or
   coverage  under,  any  of the  PacSoft  Employee  Plans  or  PacSoft  Benefit
   Arrangements  that would increase  materially the expense of maintaining  the
   PacSoft Employee Plans or PacSoft Benefit Arrangements above the level of the
   expense  incurred in respect  thereof for the fiscal year ended  December 31,
   1998.

                5. To PacSoft's and Sellers' knowledge, PacSoft is in compliance
   in all material  respects with all applicable laws,  agreements and contracts
   relating to employment,  employment  practices,  wages,  hours, and terms and
   conditions of employment.

Absence of  Undisclosed  Liabilities.  Except  as  disclosed  on the  Disclosure
     Schedule,  at February 28, 1999 ("PacSoft Balance Sheet Date"), (i) PacSoft
     has not had any  liabilities  or  obligations  of any  nature  (matured  or
     unmatured, fixed or contingent) which were material to PacSoft and were not
     provided for in the balance  sheet of PacSoft at the PacSoft  Balance Sheet
     Date, a copy of which has been delivered to REI ("PacSoft  Balance Sheet");
     and (ii) all reserves  established  by PacSoft and set forth in the PacSoft
     Balance Sheet were reasonably adequate.

Absence of Certain  Changes or Events.  Since the  PacSoft  Balance  Sheet Date,
     there has not occurred:

                6.  any  change  in  the  condition  (financial  or  otherwise),
   properties,   assets,  liabilities,   businesses,   operations,   results  of
   operations  or  prospects  of PacSoft  that  could  reasonably  constitute  a
   Material Adverse Effect;

                7.      any amendments or changes in the certificate or articles
   of  incorporation  or bylaws of PacSoft;

                8.      any  damage,  destruction  or loss, whether  covered  by
   insurance or not, that could reasonably constitute a Material Adverse Effect;

                9. any redemption,  repurchase or other acquisition of shares of
   PacSoft Common Stock by PacSoft, or any declaration, setting aside or payment
   of any dividend or other  distribution  (whether in cash,  stock or property)
   with respect to PacSoft Common Stock;

                10. any material increase in or modification of the compensation
   or benefits  payable or to become  payable by PacSoft to any of its directors
   or employees,  except in the ordinary course of business consistent with past
   practice;

                11.  any  material  increase  in or  modification  of any bonus,
   pension,  insurance or any of the PacSoft  Employee Plans or PacSoft  Benefit
   Arrangements  (including,  but not limited to, the granting of stock options,
   restricted  stock awards or stock  appreciation  rights) made to, for or with
   any of  its  employees,  other  than  in  the  ordinary  course  of  business
   consistent with past practice;



<PAGE>


                12.     any   acquisition   or  sale  of  a
   material amount of property or assets of PacSoft,  other
   than in the ordinary course of business  consistent with
   past practices;

                13.     any  alteration  in any term of any
   outstanding security of PacSoft;

                14. any (A)  incurrence,  assumption  or guarantee by PacSoft of
   any  debt  for  borrowed  money;  (B)  issuance  or  sale  of any  securities
   convertible  into or  exchangeable  for debt  securities  of PacSoft;  or (C)
   issuance or sale of options or other rights to acquire from PacSoft, directly
   or indirectly,  debt securities of PacSoft or any securities convertible into
   or exchangeable for any such debt securities;

                15.     any  creation  or   assumption   by
   PacSoft of any mortgage,  pledge,  security  interest or
   lien or other encumbrance on any asset;

                16. any making of any loan,  advance or capital  contribution to
   or  investment  in any person other than (i) travel loans or advances made in
   the ordinary course of business of PacSoft,  (ii) other loans and advances in
   an aggregate amount which does not exceed $10,000 outstanding at any time and
   (iii) purchases on the open market of liquid, publicly traded securities;

                17. any entering into, amendment of, relinquishment, termination
   or non-renewal by PacSoft of any contract,  lease transaction,  commitment or
   other right or obligation other than in the ordinary course of business;

                18. any transfer or grant of a right under the PacSoft IP Rights
   (as defined in Section 2.14),  other than those transferred or granted in the
   ordinary course of business;

                19. any labor dispute or charge of unfair labor practice  (other
   than routine  individual  grievances),  any activity or proceeding by a labor
   union or  representative  thereof to organize any employees of PacSoft or any
   campaign  being  conducted  to solicit  authorization  from  employees  to be
   represented by the labor union; or

                20. any  agreement  or  arrangement  made by PacSoft to take any
   action  which,  if taken  prior  to the  date  hereof,  would  have  made any
   representation  or warranty set forth in this  Agreement  untrue or incorrect
   unless otherwise disclosed.

No   Defaults. PacSoft has not been in default under, and there exists no event,
     condition or  occurrence  which,  after  notice or lapse of time,  or both,
     would  constitute  a default by PacSoft  under any contract or agreement to
     which PacSoft is a party and which would, if terminated or modified, have a
     Material Adverse Effect.



<PAGE>


Certain Agreements. Neither the execution and delivery of this Agreement nor the
     consummation of the transactions contemplated hereby will (i) result in any
     payment   (including,   without   limitation,    severance,    unemployment
     compensation,  golden  parachute,  bonus or otherwise)  becoming due to any
     director  or  employee of PacSoft  from  PacSoft,  under any of the PacSoft
     Employee Plans, PacSoft Benefit Arrangements or otherwise,  (ii) materially
     increase any benefits  otherwise  payable under any of the PacSoft Employee
     Plans, the PacSoft Benefit Arrangements or otherwise or (iii) result in the
     acceleration of the time of payment or vesting of any benefits.

Taxes.

                21.  For  purposes  of this  Agreement,  "Tax"  or  collectively
   "Taxes"  means  any  and  all  federal,  state,  local,  and  foreign  taxes,
   assessments,   and  other  governmental  charges,  duties,  impositions,  and
   liabilities,  including  taxes  based  upon or  measured  by gross  receipts,
   income,  profits,  sales,  use and  occupation,  and value added, ad valorem,
   transfer, franchise,  withholding, payroll, recapture, employment, estimated,
   excise  and  property  taxes,  together  with all  interest,  penalties,  and
   additions imposed with respect to those amounts and any obligations under any
   agreements  or  arrangements  with any other  person  with  respect  to those
   amounts and including any liability for taxes of a predecessor entity.

                22.     Except   as   set   forth   in  the
   Disclosure Schedule:

                  (i)  PacSoft  has  prepared  and filed all  required  federal,
state,  local,  and foreign  returns,  estimates,  information  statements,  and
reports relating to any and all Taxes ("Returns")  concerning or attributable to
PacSoft  that are required to be filed by or with respect to PacSoft on or prior
to the date of this Agreement,  and each of the Returns shall be true,  correct,
and  complete  in all  material  respects  and  shall  have  been  completed  in
accordance with applicable law;

                  (ii)  PacSoft:  (A) has paid or  accrued  in  accordance  with
generally accepted accounting principles all Taxes concerning or attributable to
PacSoft  relating  to  periods  ending on or before  the date of this  Agreement
regardless of whether  reflected on Returns and (B) has withheld with respect to
its employees all federal and state income taxes,  FICA,  FUTA,  and other Taxes
required to be withheld;

                  (iii)....PacSoft has not been delinquent in the payment of any
Tax nor is there any Tax deficiency  outstanding,  proposed or assessed  against
PacSoft, nor has PacSoft executed any waiver of the statute of limitations on or
extending the period for the assessment or collection of any Taxes;

                  (iv) No audit or other examination of any Return of PacSoft is
presently in progress, nor has PacSoft been notified of any request for an audit
or examination;

                  (v) PacSoft does not have any  liabilities for unpaid federal,
state,  local and  foreign  Taxes  which have not been  accrued or  reserved  in
accordance with generally accepted accounting  principles on the PacSoft Balance
Sheet,  and PacSoft  does not have  knowledge  of any  reasonable  basis for the
assertion  of any  liability  attributable  to  PacSoft or any of its assets and
operations;

                  (vi) PacSoft has made  available to REI and its counsel copies
of all federal and state  income and all state sales and use Tax Returns for all
periods since December 31, 1995;


<PAGE>


                  (vii)....There  are  no  liens,  pledges,   charges,   claims,
security interests, or other encumbrances of any sort ("Liens") on the assets of
PacSoft relating or attributable to Taxes other than liens for sales and payroll
taxes not yet due and payable;

                  (viii)...Neither  PacSoft  nor Sellers  has  knowledge  of any
reasonable  basis for the  assertion of any claim  relating or  attributable  to
Taxes which, if adversely determined,  would result in any Lien on the assets of
PacSoft;

                  (ix)  None  of the  assets  of  PacSoft  is  property  that is
required to be treated as owned by any other person pursuant to the "safe harbor
lease"  provisions of former Code Section  168(f)(8),  and none of the assets is
treated as "tax-exempt use property" within the meaning of Code Section 168(h);

                  (x)  PacSoft  has not  been  included  in any  "consolidated,"
"unitary," or "combined"  Return provided for under the law of the United States
or any state or locality with respect to Taxes for any taxable period;

                  (xi)  PacSoft  is not a party  to a tax  sharing,  allocation,
indemnification  or similar  agreement or arrangement,  nor does PacSoft owe any
amount under any agreement or arrangement;

                  (xii)....No Return of PacSoft contains a disclosure  statement
under Code Section 6662 (or predecessor  provision) or any similar  provision of
state, local, or foreign law;

                  (xiii)...PacSoft  is not nor has it at any time been a "United
States real  property  holding  corporation"  within the meaning of Code Section
897(c)(2);

                  (xiv)....No   indebtedness   of   PacSoft
consists of  "corporate  acquisition  indebtedness"  within
the meaning of Code Section 279;

                  (xv) PacSoft has not taken any action not in  accordance  with
past  practice  that would have the effect of  deferring  any Tax  liability  of
PacSoft  from any period  ending on or before the  Closing  Date to any  taxable
period ending after the Closing Date;

                  (xvi)....PacSoft  was  not  acquired  in  a  "qualified  stock
purchase"  under Code Section  338(d)(3),  and no  elections  under Code Section
338(g),  protective carryover basis elections,  or offset prohibition  elections
are applicable to PacSoft or any predecessor corporations; and

                  (xvii)...The  tax bases of the assets of PacSoft for  purposes
of determining future amortization,  depreciation,  and other federal income tax
deductions are accurately reflected on the tax books and records of PacSoft.


<PAGE>



                            24

Intellectual Property.

                23.  PacSoft  owns or has  acquired  all  material  Intellectual
   Property  Rights (as defined below),  including  rights to make, use and sell
   goods and services,  as necessary or required for the conduct of its business
   as presently conducted (the Intellectual Property Rights being referred to as
   the "PacSoft IP Rights"),  and these rights are reasonably sufficient for the
   conduct of its business;

                24. the  execution,  delivery and  performance of this Agreement
   and  the  consummation  of the  transactions  contemplated  hereby  will  not
   constitute a material  breach of any  instrument  or agreement  governing any
   PacSoft  IP  Rights  ("PacSoft  IP  Rights  Agreements"),  will not cause the
   forfeiture  or  termination  or  give  rise  to  a  right  of  forfeiture  or
   termination of any PacSoft IP Right or materially impair the right of PacSoft
   or REI to use,  sell or  license  any  PacSoft  IP Right or  portion  thereof
   (except where the breach, forfeiture or termination would not have a Material
   Adverse Effect);

                25.  neither  the  manufacture,   marketing,  license,  sale  or
   intended  use of any  product  currently  licensed  or  sold  by  PacSoft  or
   currently  under  development  by PacSoft  violates  any license or agreement
   between  PacSoft and any third party or infringes any  Intellectual  Property
   Right of any other  party;  and there is no  pending or  threatened  claim or
   litigation contesting the validity,  ownership or right to use, sell, license
   or dispose of any PacSoft IP Right nor is there any basis for any claim,  nor
   has PacSoft  received any written notice  asserting that any PacSoft IP Right
   or the proposed use, sale,  license or disposition  thereof conflicts or will
   conflict  with the rights of any other party,  nor is there any basis for any
   assertion; and

                26. PacSoft has taken reasonable and practicable  steps designed
   to safeguard and maintain its proprietary  rights in all material  PacSoft IP
   Rights. All officers,  employees and consultants of PacSoft have executed and
   delivered to PacSoft an agreement  regarding the  protection  of  proprietary
   information and the assignment to PacSoft of all Intellectual Property Rights
   arising from the services performed for PacSoft by those persons.  No current
   or prior  officer,  employee or  consultant  of PacSoft  claims an  ownership
   interest in any PacSoft IP Rights as a result of having been  involved in the
   development of that property  while employed by or consulting to PacSoft,  or
   otherwise.

              The term  "Intellectual  Property Rights" shall mean all worldwide
industrial and intellectual  property  rights,  including,  without  limitation,
patents,   patent   applications,    patent   rights,   trademarks,    trademark
registrations,  trademark registration applications, trade names, service marks,
service mark registrations, service mark registration applications,  copyrights,
copyright  registrations,   copyright  registration  applications,   franchises,
licenses,  inventories,  know-how,  trade secrets,  customer lists,  proprietary
processes and formulae, all source and object codes,  algorithms,  architecture,
structure,  display  screens,  layouts,  inventions,  development  tools and all
documentation  and media  constituting,  describing  or  relating  to the above,
including, without limitation, manuals, memoranda and records.

Fees and  Expenses.  PacSoft has not paid or become  obligated to pay any fee or
     commission to any broker,  finder or  intermediary  in connection  with the
     transactions contemplated by this Agreement.

<PAGE>





Environmental Matters.

                27.  None of the  properties  or  facilities  of  PacSoft  is in
   violation of any federal, state or local law, ordinance,  regulation or order
   relating to industrial  hygiene or to the environmental  conditions on, under
   or about the  properties or facilities,  including,  but not limited to, soil
   and ground water  condition,  except where the violations  individually or in
   the aggregate would not constitute a Material Adverse Effect. During the time
   that PacSoft has owned or leased its respective  properties  and  facilities,
   neither  PacSoft nor, to PacSoft's and Sellers'  knowledge,  any third party,
   has released, used, generated,  manufactured or stored on, under or about the
   properties  or  facilities  or  transported  to or  from  the  properties  or
   facilities any hazardous materials.

                28. There has been no litigation  brought or threatened  against
   PacSoft by, or any  settlement  reached by PacSoft with, any party or parties
   alleging  the  presence,  disposal,  release  or  threatened  release  of any
   hazardous  materials  on, from or under any of the  properties  or facilities
   owned or leased by PacSoft.

Disclosure. No representation or warranty made by PacSoft in this Agreement, nor
     any document, written information,  written statement, financial statement,
     certificate  or  exhibit  prepared  and  furnished  or to be  prepared  and
     furnished  by  PacSoft  or  its  representatives   pursuant  hereto  or  in
     connection with the transactions  contemplated hereby, when taken together,
     contains  any  untrue  statement  of a material  fact,  or omits to state a
     material fact necessary to make the statements or facts contained herein or
     therein not misleading in light of the circumstances  under which they were
     furnished.

Restrictions on Business Activities.  There is no material agreement,  judgment,
     injunction,  order  or  decree  binding  upon  PacSoft  that  has or  could
     reasonably  be expected  to have the effect of  prohibiting  or  materially
     impairing any business practice of PacSoft,  any acquisition of property by
     PacSoft or the conduct of business by PacSoft as currently conducted.

Accounts Receivalbe.  The accounts receivable shown on the PacSoft Balance Sheet
     as of the PacSoft  Balance Sheet Date, or thereafter  acquired prior to the
     date hereof,  have been and are (as the case may be) collectible  within 90
     days from the Closing Date in amounts not less than the  aggregate  amounts
     thereof  carried  on the  books of  PacSoft  reduced  by the  reserves  for
     discounts and bad debts, if any, taken on the PacSoft Balance Sheet.

Personal Property.  PacSoft has good title, free and clear of all title defects,
     objections  and  liens,  including  without  limitation,   leases,  chattel
     mortgages,  conditional sales contracts,  collateral security  arrangements
     and  other  title  or  interest-retaining   arrangements,  to  all  of  its
     machinery, equipment, furniture, inventory and other personal property. All
     personal  property  used in the  business  of PacSoft is in good  operating
     condition.  All of the leases to personal property utilized in the business
     of PacSoft are valid and enforceable against PacSoft and are not in default
     by PacSoft or any of the other parties thereto.


<PAGE>


Real Property.  PacSoft does not own any real property.  The Disclosure Schedule
     contains  a list of all  leases  for real  property  to which  PacSoft is a
     party,  the  square  footage  leased  with  respect  to each  lease and the
     expiration  date of each lease.  These leases are valid and enforceable and
     are not in default. To the best knowledge of PacSoft and Sellers,  the real
     property leased or occupied by PacSoft,  the improvements  located thereon,
     and the  furniture,  fixtures and  equipment  relating  thereto  (including
     plumbing, heating, air conditioning and electrical systems), conform to any
     and all applicable  health,  fire,  safety,  zoning,  land use and building
     laws,  ordinances and regulations.  There are no outstanding contracts made
     by  PacSoft  for any  improvements  made to the  real  property  leased  or
     occupied by PacSoft that have not been paid for.

Warranties.  PacSoft  has  made no  warranties  or  guarantees  relating  to its
     products other than as implied or required by law. The Disclosure  Schedule
     contains a list of all warranty and indemnification  obligations of PacSoft
     relating to patents and other proprietary rights.

Contracts.  TheDisclosure Schedule lists all oral or written agreements,  notes,
     instruments,  or  contracts  to which  PacSoft  is a party or by which  its
     assets or  properties  may be bound which involve the payment or receipt of
     more than $25,000 (on an annual  basis),  or which have a term of more than
     one year, or which involve intellectual  property,  or which are employment
     or consulting agreements ("PacSoft  Contracts").  PacSoft is not in default
     in  performance  of its  obligations  under any material  provisions of the
     PacSoft  Contracts.  Neither  PacSoft nor Sellers have any knowledge of any
     violation  of any PacSoft  Contract by any other party  thereto and have no
     knowledge  of any intent by any other  party to a PacSoft  Contract  not to
     perform its obligations under any PacSoft Contract.

Products and Distribution.  The Disclosure  Schedule contains a complete list of
     the top five software products (by title, determined by aggregate net sales
     by PacSoft  during the last  fiscal year from the title)  developed,  sold,
     published and/or distributed by PacSoft ("PacSoft Developed  Products") and
     the expected top five  products (by title,  determined by the projected net
     sales for the title in its first year after introduction) under development
     or  consideration  by  PacSoft  with a  scheduled  ship date on or prior to
     December 31, 1999 ("PacSoft  Products Under  Development," and collectively
     with the PacSoft Developed Products, the "PacSoft Products").

                29.  The  Disclosure  Schedule  sets  forth,  for  each  PacSoft
   Product,  the following:  (i) a list of all material contracts and agreements
   (including  without limitation all material  development,  trademark license,
   technology license, distribution or other agreements) relating to the PacSoft
   Product;  (ii)  whether the PacSoft  Product  has been  developed  internally
   (i.e.,  substantially  entirely by employees of PacSoft) or externally (i.e.,
   including substantive contributions by one or more independent contractors to
   PacSoft) and, if externally,  the Disclosure Schedule sets forth the identity
   of  the  significant  independent  contractors  and a list  of  the  material
   agreements with those  independent  contractors;  (iii) the material advances
   paid or payable,  and the material  royalties  payable,  to any third parties
   with respect to that PacSoft  Product;  and (iv) a list of the third  parties
   with significant  distribution or publication  rights to that PacSoft Product
   together  with a  description  of: (A) the territory in which the third party
   has  distribution  rights;  and  (B)  whether  the  distribution  rights  are
   exclusive or nonexclusive.



<PAGE>


                30. The Disclosure Schedule sets forth, for each PacSoft Product
   Under Development,  the following (as of the date of this Agreement): (i) the
   currently scheduled public availability date (which dates PacSoft believes to
   be  reasonable);  (ii) a schedule  of  development  milestone  events and any
   material related payments,  including both milestones already achieved in the
   past six months and those  scheduled  for the future;  and (iii)  whether any
   significant  development milestone for the PacSoft Product has been missed in
   the past six months by more than 30 days.

Development  Tools.  The  Disclosure  Schedule  contains a complete  list of all
     material software  development tools used or currently  intended to be used
     by PacSoft in the  development  of any of the PacSoft  Developed  Products,
     except for any tools  that are  generally  available  and are used in their
     generally available form (such as standard compilers) ("PacSoft Development
     Tools").  The  Disclosure  Schedule  also  sets  forth,  for  each  PacSoft
     Development  Tool:  (a) for  any  PacSoft  Development  Tool  not  entirely
     developed  internally  by the  employees  of PacSoft,  the  identity of the
     independent  contractors and consultants involved in a material way in such
     development  and a list of the material  agreements  with such  independent
     contractors and consultants with respect to the PacSoft  Development Tools;
     (b) a list of any  third  parties  with  any  rights  to  receive  material
     royalties or other payments with respect to such PacSoft Development Tools,
     and a schedule of all such  royalties  payable;  (c) a list of any material
     restrictions  on PacSoft's  unrestricted  right to use and  distribute  the
     PacSoft  Development  Tools;  and (d) a list of all  agreements  with third
     parties for the use by the third party of the PacSoft Development Tools.

Investment  Representation.  Each Seller  acknowledges that, upon issuance,  the
     Stock will not have been  "registered"  and will  therefore be  "restricted
     securities"  as these terms are used under the Securities Act and the rules
     and regulations  thereunder.  By their  execution of this  Agreement,  each
     Seller agrees,  represents and warrants that (i) his or her  acquisition of
     the Stock is for investment only, for his or her own account and not with a
     view to  "distribution" as that term is used under the Securities Act, (ii)
     he or she is an "accredited  investor" as that term is used in Regulation D
     under the Securities  Act, and (iii) he or she has received copies of REI's
     Form 10-KSB for the fiscal year ended March 31,  1998,  and Form 10-QSB for
     the quarters  ended June 30 and  September  30, 1998 and December 31, 1999.
     Each  Seller  agrees  that he or she  shall  not at any time make any sale,
     pledge,  hypothecation,  gift or other transfer of Stock except pursuant to
     an effective registration statement under the Securities Act or pursuant to
     the provisions of Rule 144 under the  Securities  Act or another  exemption
     from the registration requirements of the Securities Act, and in accordance
     with any  applicable  state "blue sky" or other  securities  laws, and that
     prior to making any sale or other disposition of Stock pursuant to any such
     exemption,  he or she  shall,  if  requested  by REI,  obtain an opinion of
     counsel,  satisfactory  to REI's  counsel,  that  such sale  complies  with
     applicable federal and state securities laws. Each Seller agrees that he or
     she has been informed that the Stock must be held  indefinitely  unless the
     Stock is subsequently  registered  under the Securities Act or an exemption
     from such registration is available and he or she understands that any sale
     of the Stock made in reliance upon Rule 144, or any other like rule, can be
     made only in limited amounts in accordance with the terms and conditions of
     those rules and, if those rules are not applicable,  any resale may require
     compliance with another available exemption under the Securities Act or, in
     the alternative, may require registration of the Stock. Sellers acknowledge
     that,  except  as  expressly  set  forth  in  Section  6.4,  REI  makes  no
     representation  or  covenant  that it shall  conduct  its  affairs so as to
     permit sales under Rule 144 and REI is under no  obligation  to register or
     repurchase the Stock.  Sellers acknowledge that REI shall cause a legend to
     be  placed  on the  certificates  representing  the  Stock to  reflect  the
     foregoing.



<PAGE>


Year 2000 Compliance.  Allcomputer hardware or software owned, used, or provided
     by PacSoft, including, but not limited to, microcode,  firmware, system and
     application programs,  files, databases, and computer services, the failure
     or  disfunctionality of which would either individually or in the aggregate
     constitute a Material Adverse Event, is Year 2000 Compliant. The term "Year
     2000 Compliant" means that the hardware or software will:

                31.     process  date  data  from at  least
   the  years   1900   through   2101   without   error  or
   interruption;

                32.     maintain     functionality     with
   respect  to the  introduction,  processing  or output of
   records  containing dates falling on or after January 1,
   2000; and

                33. be  interoperable  with other  software or hardware that may
   deliver  records to, receive  records from, or interact with, the hardware or
   software in the course of processing data.

REPRESENTATIONS AND WARRANTIES OF REI.

         REI hereby represents and warrants to PacSoft and Sellers that:

Organization;  Good Standing;  Qualification adn Power. REIis a corporation duly
     incorporated,  validly  existing and in good standing under the laws of the
     jurisdiction of its incorporation.

Capital Structure.

Stock, Options adn  Warrants.  Theauthorized  capital  stock of REI  consists of
     20,000,000 shares of Common Stock, $.01 par value ("REI Common Stock"), and
     5,000,000  shares  of  Preferred  Stock,  $.01 par  value  ("REI  Preferred
     Stock").  At the close of business on March 31, 1999,  5,688,209  shares of
     REI Common  Stock were issued and  outstanding,  and 971,550  shares of REI
     Common Stock were  reserved for issuance  upon the exercise of  outstanding
     options  ("REI  Options")  and warrants  ("REI  Warrants")  to purchase REI
     Common Stock.  No shares of REI Preferred  Stock are issued or outstanding.
     All outstanding  shares of REI Common Stock are validly issued,  fully paid
     and nonassessable and not subject to preemptive rights.

No   Other Commitments. Except for the REI Options and REI Warrants disclosed in
     or  pursuant  to Section  3.2.1,  there are no  options,  warrants,  calls,
     rights,  commitments,  conversion  rights or agreements of any character to
     which  REI is a party or by which  REI is bound  obligating  REI to  issue,
     deliver or sell,  or cause to be issued,  delivered or sold,  any shares of
     capital stock of REI or securities  convertible  into or  exchangeable  for
     shares of capital stock of REI, or obligating REI to grant, extend or enter
     into any such option, warrant, call, right, commitment, conversion right or
     agreement.

Authority.



<PAGE>


Corporate Action.  REI has all requisite  corporate power and authority to enter
     into  this  Agreement  and to  perform  its  obligations  hereunder  and to
     consummate the transactions  contemplated by this Agreement.  The execution
     and delivery of this  Agreement by REI and the  consummation  by REI of the
     transactions contemplated hereby have been duly authorized by all necessary
     corporate  action on the part of REI. This Agreement has been duly executed
     and delivered by REI and this Agreement is the valid and binding obligation
     of  REI,   enforceable   in   accordance   with  its  terms,   except  that
     enforceability may be subject to (i) bankruptcy, insolvency, reorganization
     or other similar laws  affecting or relating to  enforcement  of creditors'
     rights generally and (ii) general equitable principles.

No   Conflict.   Neither  the  execution,   delivery  and  performance  of  this
     Agreement, nor the consummation of the transactions contemplated hereby nor
     compliance with the provisions  hereof will conflict with, or result in any
     violations of, or cause a default (with or without notice or lapse of time,
     or  both)  under,  or  give  rise  to a right  of  termination,  amendment,
     cancellation or acceleration of any obligation contained in, or the loss of
     any material benefit under, or result in the creation of any lien, security
     interest,  charge or  encumbrance  upon any of the material  properties  or
     assets of REI or any of the REI Subsidiaries under, any term,  condition or
     provision of (x) the certificate or articles of  incorporation or bylaws of
     REI or any of the REI  Subsidiaries  or (y) any loan or  credit  agreement,
     note,  bond,  mortgage,  indenture,  lease  or  other  material  agreement,
     judgment,  order,  decree,  statute,  law,  ordinance,  rule or  regulation
     applicable  to  REI or any of the  REI  Subsidiaries  or  their  respective
     properties or assets, other than any such conflicts,  violations, defaults,
     losses,   liens,   security  interests,   charges  or  encumbrances  which,
     individually or in the aggregate, would not have a Material Adverse Effect.

Governmental  Consents.  No consent,  approval,  order or  authorization  of, or
     registration,  declaration  or  filing  with,  any  Governmental  Entity is
     required to be obtained by REI or any of the REI Subsidiaries in connection
     with the execution and delivery of this  Agreement or the  consummation  of
     the transactions  contemplated hereby, except for securities law filings to
     be made in connection with the issuance of the Stock.

Litigation. There is no suit, action,  arbitration,  demand, claim or proceeding
     pending or, to the best knowledge of REI,  threatened against REI or any of
     the REI  Subsidiaries  in connection  with or relating to the  transactions
     contemplated  by this  Agreement  or of any action  taken or to be taken in
     connection  herewith or the consummation of the  transactions  contemplated
     hereby.

Fees and  Expenses.  REI has  not  paid or  become  obligated  to pay any fee or
     commission to any broker,  finder or  intermediary  in connection  with the
     transactions contemplated by this Agreement.

PACSOFT AND SELLERS COVENANTS.

Regulatory  Approvals.  PacSoft will  promptly  execute and file, or join in the
     execution  and filing of, any  application  or other  document  that may be
     necessary in order to obtain the authorization,  approval or consent of any
     governmental body, federal, state, local or foreign, which may be required,
     or which REI may reasonably request, in connection with the consummation of
     the transactions contemplated by this Agreement.  PacSoft will use its best
     efforts to promptly obtain all such authorizations, approvals and consents.



<PAGE>


Necessary  Consents.  PacSoft  will use its best  efforts to obtain such written
     consents and take such other actions as may be necessary or  appropriate in
     addition to those set forth in Section 4.1 to allow the consummation of the
     transactions contemplated hereby.

Cooperation in Audit. PacSoft and Sellers shall cooperate fully with REI and its
     auditors  in having the  financial  statements  of  PacSoft  audited to the
     extent required by SEC and Nasdaq rules and regulations  applicable to REI,
     including  providing  access to the information  referred to in Section 4.3
     and any other  information  necessary in order to complete  the audit.  The
     audit will be performed by REI's auditors at REI's expense.

REI COVENANTS

Regulatory  Approvals.  REI  will  promptly  execute  and  file,  or join in the
     execution  and filing of, any  application  or other  document  that may be
     necessary in order to obtain the authorization,  approval or consent of any
     governmental body, federal,  state, local or foreign which may be required,
     or  which  PacSoft  may  reasonably   request,   in  connection   with  the
     consummation of the transactions  contemplated by this Agreement.  REI will
     use its best efforts to promptly obtain all such authorizations,  approvals
     and consents.

Necessary  Consents.  REI will use its  best  efforts  to  obtain  such  written
     consents and take such other actions as may be necessary or  appropriate in
     addition to those set forth in Section 5.1 to allow the consummation of the
     transactions contemplated hereby.

ADDITIONAL AGREEMENTS.

Employee Matters.  PacSoft and Sellers represent and warrant that on or prior to
     the  date of this  Agreement,  PacSoft  has  paid to each of its  employees
     one-half  of the  value  (at  the  employee's  current  rate of pay) of any
     vacation hours accrued prior to the Closing in excess of 160 hours, and any
     additional  accrued  vacation  hours have been  forfeited by the  employee.
     Following the Closing,  all employees of PacSoft will be offered employment
     by REI.  Those  employees  will be provided  employment  benefits  that are
     similar to those they currently receive from PacSoft.  Notwithstanding  the
     foregoing,  REI makes no  representation,  warranty  or  promise  as to the
     length  of time that any such  employee  will  remain in the  employ of REI
     following  the Closing  (except with respect to those  employees who become
     parties to employment agreements pursuant to Section 6.2).

Employee  Agreement.  At the  Closing,  REI and Karen Hunter shall enter into an
     employment  agreement  satisfactory  in form and  substance  to REI and Ms.
     Hunter.   The   employment   agreement   with  Ms.   Hunter  shall  contain
     non-competition  provisions  satisfactory  in form and substance to REI and
     Ms. Hunter.

PacSoft Office Location.  Following the Closing, the principal office of PacSoft
     will be  maintained  in the  general  area where it is  presently  located;
     provided, however, that REI makes no representation, warranty or promise as
     to the specific  length of time that such office will be maintained in such
     general area.


<PAGE>


Registration Rights.

Definitions.  For purposes of Section 6.4:

                         34.     The   terms    "register,"
   "registered,"  and  "registration"  refer  to  a  registration   effected  by
   preparing and filing a registration  statement in compliance with the Act and
   the declaration or ordering of effectiveness of such registration statement;

                         35.     The   term    "Registrable
   Securities"  refers  to the  Stock and any  Common  Stock of REI  issued as a
   dividend  or  other  distribution  with  respect  to,  or in  exchange  or in
   replacement of, the Stock or such Common Stock, except that the Stock (or any
   particular shares of the Stock) shall cease to be Registrable Securities when
   and to the extent (i) a  registration  statement  with respect to the sale of
   such shares of the Stock has become effective under the Act and the Stock has
   been disposed of in accordance  with such  registration  statement;  (ii) the
   shares  of Stock  held by any  Holder  shall  have been or may be sold to the
   public by that Holder in their entirety in any three month period pursuant to
   Rule 144 or any successor  provision  under the  Securities  Act;  (iii) such
   shares of the Stock shall have been otherwise  transferred,  new certificates
   for the Stock not bearing a legend  restricting  further  transfer shall have
   been  delivered by the Company and  subsequent  disposition of the Stock does
   not require  registration or qualification under the Act or any similar state
   law then in force in the opinion of legal  counsel for REI; or (iv) the Stock
   has ceased to be outstanding; and

                         36.     The  term  "Holder"  means
   any Seller holding Registrable Securities.

Piggyback Registration. Subject to Section 6.4.5, if at any time REI proposes to
     register  any of REI Common Stock under the  Securities  Act on a form that
     would also  permit the  registration  of the  Registrable  Securities,  REI
     shall,  each such time,  promptly give each Holder  written  notice of such
     determination.  Upon the  written  request of any Holder  delivered  to REI
     within ten days after  mailing of any such notice by REI, REI shall use its
     best efforts to cause to be registered  under the Securities Act all of the
     Registrable Securities that each such Holder has requested be registered.

Obligations  of REI.  Whenever  required  under  Section  6.4.2  to use its best
     efforts to effect  the  registration  of any  Registrable  Securities,  REI
     shall, as expeditiously as reasonably possible:

                         37.     Prepare  and file with the
   SEC a registration  statement with respect to such Registrable Securities and
   use its best  efforts  to cause  such  registration  statement  to become and
   remain  effective;  provided,  however,  that in connection with any proposed
   registration  intended to permit an offering of any  securities  from time to
   time (i.e., a so-called "shelf registration"),  the Company shall in no event
   be obligated to cause any such registration to remain effective for more than
   90 days.



<PAGE>


                         38.     Prepare  and file with the
   SEC such  amendments and supplements to such  registration  statement and the
   prospectus  used in  connection  with such  registration  statement as may be
   necessary to comply with the provisions of the Securities Act with respect to
   the disposition of all securities covered by such registration statement.

                         39.     Furnish  to  the   Holders
   such numbers of copies of a prospectus,  including a preliminary  prospectus,
   and  such  other  documents  as they  may  reasonably  request  in  order  to
   facilitate the disposition of Registrable Securities owned by them.

                         40.     Use its  best  efforts  to
   register and qualify the securities  covered by such  registration  statement
   under such other  securities or Blue Sky laws of such  jurisdictions as shall
   be reasonably  appropriate for the distribution of the securities  covered by
   the  registration  statement,  provided  that REI  shall not be  required  in
   connection  therewith or as a condition  thereto to qualify to do business or
   to file a  general  consent  to  service  of  process  in any such  states or
   jurisdictions,  and further provided that  (notwithstanding  anything in this
   Agreement  to the  contrary  with  respect to the bearing of expenses) if any
   jurisdiction  in which the securities  shall be qualified  shall require that
   expenses  incurred in connection with the qualification of such securities in
   that jurisdiction be borne by selling shareholders,  then such expenses shall
   be payable by selling  shareholders  pro rata, to the extent required by such
   jurisdiction.

Condition  Precendent.  It shall be a condition  precedent to the obligations of
     REI to take any action  pursuant to this Section 6.4 that the Holders shall
     furnish to REI such information regarding them, the Registrable  Securities
     held by them, and the intended  method of disposition of such securities as
     REI shall  reasonably  request and as shall be required in connection  with
     the action to be taken by REI.

Underwriting  Requirements.   In  connection  with  any  offering  involving  an
     underwriting of shares being issued by REI, REI shall not be required under
     Section 6.4.2 to include any of the Holders' Registrable Securities in such
     underwriting  unless the Holders  accept the terms of the  underwriting  as
     agreed upon between REI and the  underwriters  selected by it or them,  and
     then only in such  quantity  as will not,  in the  written  opinion  of the
     underwriters,  jeopardize  the success of the offering by REI. If the total
     amount of  securities  that all  Holders  request  to be  included  in such
     offering exceeds the amount of securities that the underwriters  reasonably
     believe  compatible  with the  success of the  offering,  REI shall only be
     required  to  include  in the  offering  so many of the  securities  of the
     selling Holders as the underwriters believe will not jeopardize the success
     of the offering  (the  securities  so included to be  apportioned  pro rata
     among the selling Holders according to the total amount of securities owned
     by said selling Holders,  or in such other proportions as shall mutually be
     agreed to by such selling  Holders),  provided that no such reduction shall
     be made with respect to any securities offered by REI for its own account.

Indemnification.  If any  Registrable  Securities are included in a registration
     statement under this Section 6.4:



<PAGE>


                         41.     To  the  extent  permitted
   by  law,  REI  will  indemnify  each  Holder   requesting  or  joining  in  a
   registration,  any underwriter (as defined in the Securities Act) for it, and
   each  person,  if any,  who controls  such Holder or  underwriter  within the
   meaning of the  Securities  Act,  against any  losses,  claims,  damages,  or
   liabilities  joint or  several,  to which they may become  subject  under the
   Securities  Act or otherwise,  insofar as such losses,  claims,  damages,  or
   liabilities (or actions in respect  thereof) arise out of or are based on any
   untrue or alleged  untrue  statement of any material  fact  contained in such
   registration  statement,   including  any  preliminary  prospectus  or  final
   prospectus  contained  therein or any amendments or supplements  thereto,  or
   arise out of or are based  upon the  omission  or alleged  omission  to state
   therein a material fact required to be stated  therein,  or necessary to make
   the  statements  therein  not  misleading,  except to the  extent  the untrue
   statement or omission  resulted from information that the Holder furnished in
   writing  to REI  expressly  for use  therein  or by the  Holder's  failure to
   deliver a copy of the registration  statement or prospectus or any amendments
   or  supplements  thereto to any purchaser  after REI has furnished the Holder
   with copies of the relevant documents.

                         42.     To  the  extent  permitted
   by law, each Holder  requesting or joining in a  registration  will indemnify
   REI,  each of its  directors,  each  of its  officers  who  have  signed  the
   registration  statement,  each  person,  if any,  who controls REI within the
   meaning of the  Securities  Act, and each agent and any  underwriter  for REI
   (within  the meaning of the  Securities  Act)  against  any  losses,  claims,
   damages,  or  liabilities  to  which  REI  or  any  such  director,  officer,
   controlling  person,  agent,  or underwriter  may become  subject,  under the
   Securities  Act or  otherwise,  insofar as such losses,  claims  damages,  or
   liabilities  (or actions in respect  thereto)  arise out of or are based upon
   any untrue  statement  or  alleged  untrue  statement  of any  material  fact
   contained  in  such   registration   statement,   including  any  preliminary
   prospectus  or  final  prospectus  contained  therein  or any  amendments  or
   supplements  thereto,  or arise  out of or are  based  upon the  omission  or
   alleged  omission  to state  therein a material  fact  required  to be stated
   therein or necessary to make the statements  therein not misleading,  in each
   case to the extent,  but only to the extent,  that such untrue  statement  or
   alleged  untrue  statement  or omission or alleged  omission was made in such
   registration  statement,  preliminary or final  prospectus,  or amendments or
   supplements  thereto,  in  reliance  upon  and  in  conformity  with  written
   information  furnished by such Holder  expressly for use in  connection  with
   such  registration;  and each such Holder will  reimburse  any legal or other
   expenses  reasonably   incurred  by  REI  or  any  such  director,   officer,
   controlling person, agent, or underwriter in connection with investigating or
   defending any such loss, claim, damage,  liability, or action. This indemnity
   will be in addition to any liability which each Holder may otherwise have.

                         43.     If   the   indemnification
   provided  for  in  paragraphs  (a)  and  (b)  above  is  unavailable  to  any
   indemnified party in respect of any loss, claim, damage,  liability or action
   referred  to  herein,   then  each  such  indemnifying   party,  in  lieu  of
   indemnifying such indemnified  party,  shall contribute to the amount paid or
   payable by such indemnified  party as a result of such loss,  claim,  damage,
   liability  or action in such  proportion  as is  appropriate  to reflect  the
   relative fault of the  indemnified  parties and the  indemnifying  parties in
   connection with the actions or omissions which resulted in such loss,  claim,
   damage,  liability  or  action,  as  well  as any  other  relevant  equitable
   considerations. No person guilty of fraudulent misrepresentations (within the
   meaning  of  Section  11(f)  of  the  Exchange  Act)  shall  be  entitled  to
   contribution   from  any  person  who  was  not  guilty  of  such  fraudulent
   misrepresentation.



<PAGE>


                         44.     Any  person   entitled  to
   indemnification  hereunder  will: (i) give prompt notice to the  indemnifying
   party of any claim with respect to which it seeks  indemnification;  and (ii)
   unless in such indemnified party's reasonable judgment a conflict of interest
   between such indemnified and  indemnifying  parties may exist with respect to
   such  claim,  permit  such  indemnifying  party to assume the defense of such
   claim with counsel  reasonably  satisfactory  to the indemnified  party.  The
   indemnifying  party will not be subject to any liability  for any  settlement
   made  without  its  consent  (but  such  consent  will  not  be  unreasonably
   withheld).  An indemnifying party who is not entitled or elects not to assume
   the defense of a claim will not be  obligated to pay the fees and expenses of
   more than one counsel for all parties  indemnified by such indemnifying party
   with  respect  to  such  claim,  unless  in the  reasonable  judgment  of any
   indemnified  party a conflict of interest may exist between such  indemnified
   party and any other such indemnified parties with respect to such claim.

                         45.     Notwithstanding   anything
   to the  contrary  contained in this  Agreement,  the  obligations  of REI and
   Holders under this Section 6.4 shall  survive the  completion of any offering
   of Registrable Securities.

Reports Under  1934 Act.  With a view to making  available  to the  Holders  the
     benefits of Rule 144  promulgated  under the  Securities  Act and any other
     rule or  regulation of the SEC that may at any time permit a Holder to sell
     securities of REI to the public without registration, REI agrees to use its
     best efforts to:

                         46.     Make   and   keep   public
   information  available as those terms are understood and
   defined in Rule 144;

                         47.     File  with  the  SEC  in a
   timely manner all reports and other  documents  required
   of REI under the Securities Act and the 1934 Act; and

                         48.     Furnish  to any  Holder so
   long as such Holder owns any of the Stock or Registrable Securities forthwith
   upon request (i) a written  statement  by REI that it has  complied  with the
   reporting  requirements  of Rule 144 and of the  Securities  Act and the 1934
   Act,  (ii) a copy of the most recent  annual or quarterly  report of REI, and
   (iii) such other  reports and  documents so filed by REI as may be reasonably
   requested  in  availing  any  Holder  of any  rule or  regulation  of the SEC
   permitting the selling of any such securities without registration.

Lock-up Agreement.  Inconsideration  for REI agreeing to its  obligations  under
     this Section 6.4, each Holder agrees in connection with any registration of
     REI's securities that, upon the request of REI or the underwriters managing
     any underwritten offering of REI's securities,  not to sell, make any short
     sale of, loan,  grant any option for the purchase of, or otherwise  dispose
     of  any   Registrable   Securities   (other  than  those  included  in  the
     registration)   without   the  prior   written   consent  of  REI  or  such
     underwriters,  as the case may be,  for such  period of time (not to exceed
     180  days)  from  the  effective  date of such  registration  as REI or the
     underwriters may specify.

Delay of  Registration.  No Holder shall  have any  right to take any  action to
     restrain,  enjoin, or otherwise delay any registration as the result of any
     controversy  that  might  arise  with  respect  to  the  interpretation  or
     implementation of this Section 6.4.



<PAGE>


INDEMNIFICATION OF THE PARTIES.

Indemnification by Sellers.  Sellers shall,  jointly and  severally,  indemnify,
     defend,  protect and hold harmless REI, each of subsidiary of REI, and each
     of their  respective  successors  and assigns and each of their  respective
     directors,  officers,  employees,  agents  and  affiliates  (each  an  "REI
     Indemnified Party"), at all times from and after the date of this Agreement
     against all losses, claims, damages, actions, suits, proceedings,  demands,
     assessments,   adjustments,   costs  and  expenses  ("Losses")   (including
     specifically,  but  without  limitation,  reasonable  attorneys'  fees  and
     expenses of investigation ("Legal Expenses")) based upon, resulting from or
     arising  out of (i) any  inaccuracy  or  breach  of any  representation  or
     warranty of PacSoft or Sellers contained in or made in connection with this
     Agreement,  and (ii) the breach by PacSoft or Sellers of, or the failure by
     PacSoft or Sellers to observe,  any of their respective  covenants or other
     agreements contained in or made in connection with this Agreement.

Indemnification by REI. REI shall indemnify,  defend,  protect and hold harmless
     Sellers (each a "Seller  Indemnified  Party"),  at all times from and after
     the date of this Agreement against all Losses based upon, resulting from or
     arising  out of (i) any  inaccuracy  or  breach  of any  representation  or
     warranty of REI contained in or made in connection with this Agreement, and
     (ii) the  breach by REI of, or the  failure by REI to  observe,  any of its
     covenants or other agreements  contained in or made in connection with this
     Agreement.

Adjustments to Indemnification Payments. Any payment made to any REI Indemnified
     Party or any  Seller  Indemnified  Party  (each,  an  "indemnified  party")
     pursuant  to this  Section 7 in  respect  of any  claim  will be net of any
     insurance proceeds realized by and paid to the indemnified party in respect
     of any such claim. The indemnified party will use its reasonable efforts to
     make  insurance  claims  relating  to any  claim  for  which it is  seeking
     indemnification  pursuant to this Section 7;  provided,  however,  that the
     indemnified  party will not be obligated to make such an insurance claim if
     the  indemnified  party in its  reasonable  judgment  believes  the cost of
     pursuing such an insurance claim, together with any corresponding  increase
     in insurance  premiums or other chargebacks to the indemnified party, would
     exceed  the value of the claim for which the  indemnified  party is seeking
     indemnification.

Indemnification Procedures.

                49. Promptly after receipt by an indemnified  party of notice of
   the commencement of any action, suit or proceeding by a person not a party to
   this  Agreement  in  respect  of  which  the  indemnified   party  will  seek
   indemnification  hereunder (a "Third Party Action"),  the  indemnified  party
   shall notify the party required to provide indemnification (the "indemnifying
   party") in writing, but any failure to so notify the indemnifying party shall
   not relieve it from any liability that it may have to the  indemnified  party
   under Section 7.1 or 7.2, except to the extent that the indemnifying party is
   prejudiced by the failure to give such notice.  The indemnifying  party shall
   be entitled to  participate  in the defense of such Third Party Action and to
   assume  control of such  defense  (including  settlement  of such Third Party
   Action) with  counsel  reasonably  satisfactory  to such  indemnified  party;
   provided, however, that:



<PAGE>


                50. the  indemnified  party shall be entitled to  participate in
   the  defense of such  Third  Party  Action  and to employ  counsel at its own
   expense  (which  shall not  constitute  Legal  Expenses  for purposes of this
   Agreement) to assist in the handling of such Third Party Action;

                51.  the  indemnifying  party  shall  obtain  the prior  written
   approval of the indemnified party before entering into any settlement of such
   Third Party Action or ceasing to defend  against such Third Party Action,  if
   pursuant to or as a result of such  settlement  or  cessation,  injunctive or
   other equitable relief would be imposed against the indemnified  party or the
   indemnified party would be adversely affected thereby;

                52. no  indemnifying  party  shall  consent  to the entry of any
   judgment  or  enter  into  any  settlement   that  does  not  include  as  an
   unconditional  term thereof the giving by each  claimant or plaintiff to each
   indemnified  party of a release  from all  liability in respect of such Third
   Party Action; and

                53. the indemnifying  party shall not be entitled to control the
   defense of any Third Party Action unless the  indemnifying  party confirms in
   writing its  assumption  of such defense and  continues to pursue the defense
   reasonably and in good faith.  After written notice by the indemnifying party
   to the indemnified  party of its election to assume control of the defense of
   any such  Third  Party  Action  in  accordance  with the  foregoing,  (i) the
   indemnifying  party shall not be liable to such  indemnified  party hereunder
   for any  Legal  Expenses  subsequently  incurred  by such  indemnified  party
   attributable to defending  against such Third Party Action,  and (ii) as long
   as the indemnifying party is reasonably contesting such Third Party Action in
   good faith, the indemnified  party shall not admit any liability with respect
   to, or settle, compromise or discharge the claim underlying, such Third Party
   Action  without  the  indemnifying  party's  prior  written  consent.  If the
   indemnifying party does not assume control of the defense of such Third Party
   Action in accordance with this Section 7.4, the indemnified  party shall have
   the right to defend  and/or  settle such Third Party Action in such manner as
   it may deem  appropriate at the cost and expense of the  indemnifying  party,
   and the  indemnifying  party will promptly  reimburse the  indemnified  party
   therefor in  accordance  with this Section 7.4.  The  reimbursement  of fees,
   costs and  expenses  required  by this  Section 7.4 shall be made by periodic
   payments during the course of the investigation or defense, as and when bills
   are received or expenses incurred.

                54. If an indemnified party has actual knowledge of any facts or
   circumstances other than the commencement of a Third Party Action which cause
   in good faith it to believe that it is entitled to indemnification under this
   Section 7, then such  indemnified  party shall promptly give the indemnifying
   party  notice  thereof  in  writing,   but  any  failure  to  so  notify  the
   indemnifying  party shall not relieve it from any liability  that it may have
   to the indemnified  party under Section 7.1 or 7.2, except to the extent that
   the indemnifying party is prejudiced by the failure to give such notice.

Manner of  Indemnification.  All  indemnification  under this Section 7 shall be
     effected by the payment of cash or delivery of a bank cashier's  check,  or
     by a combination of the foregoing.


<PAGE>


CLOSING.

Closing Date.  The closing of the  transactions  contemplated  by this Agreement
     ("Closing")  will  take  place  concurrently  with  the  execution  of this
     Agreement at the offices of Rutan & Tucker LLP, 611 Anton Boulevard,  Suite
     1400, Costa Mesa,  California 92626, unless another place, time and date is
     selected by PacSoft and REI ("Closing Date").

Deliveries by PacSoft and Sellers at the Closing.  At the  Closing,  PacSoft and
     Sellers shall deliver to REI:

                55.  Certificates  representing all of the Shares, free of liens
   and  encumbrances,  accompanied  by duly  executed  stock powers made by each
   Seller in favor of REI with all necessary  transfer stamps affixed thereto or
   other evidence of payment of applicable stock transfer taxes, if any;

                56.  All  other  documents,   instruments,  consents  and  other
   deliveries  required to be delivered by PacSoft and Sellers  pursuant to this
   Agreement.

Deliveries by REI at the Closing.  At the Closing, REI shall deliver to Sellers:

                57.     Certificates    representing    the
   Stock,  with  facsimile  signatures of  appropriate  REI
   officers and endorsement by REI's transfer agent; and

                58.  All  other  documents,   instruments,  consents  and  other
   deliveries required to be delivered by REI pursuant to this Agreement.

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.

         All  representations,   warranties  and  covenants  contained  in  this
Agreement and any other  documents or instruments  delivered in connection  with
this Agreement will remain operative and in full force and effect, regardless of
any investigation  made by or on behalf of the parties to this Agreement,  until
three years after the Closing  Date,  except for  covenants  that by their terms
survive for a longer period and except (i) with respect to Sellers'  obligations
for damages  arising with respect to taxes for any period or part thereof  prior
to the Closing or any breach of the  representations,  warranties  and covenants
with  respect  to  employee  benefits,   taxes  and  environmental  laws,  which
obligations  shall  continue until the  applicable  statute of  limitations  has
expired and (ii) with respect to Sellers' obligations for damages arising out of
any breach of the  representations  and warranties  contained in Section 2.2 and
elsewhere  herein  relating  to the Shares,  which  obligations  shall  continue
forever.

MISCELLANEOUS.



<PAGE>


Governing Law. The internal laws of the State of California (irrespective of its
     choice of law principles)  will govern the validity of this Agreement,  the
     construction  of its terms and the  interpretation  and  enforcement of the
     rights and duties of the parties hereto.  The parties hereby consent in any
     dispute,  action,  litigation or other proceeding concerning this Agreement
     to the jurisdiction of the courts of California,  with the County of Orange
     being the sole venue for bringing of the action or proceeding.

Assignment;  Binding Upon Successors adn Assigns. No party hereto may assign any
     of its rights or obligations hereunder without the prior written consent of
     the other parties hereto.  This Agreement will be binding upon and inure to
     the  benefit of the  parties  hereto and their  respective  successors  and
     permitted assigns.

Severability.  If any provision of this Agreement,  or the application  thereof,
     will for any reason and to any  extent be  invalid  or  unenforceable,  the
     remainder of this  Agreement  and  application  of such  provision to other
     persons or circumstances will be interpreted so as reasonably to effect the
     interest of the parties  hereto.  The parties further agree to replace such
     void  or  unenforceable  provision  of  this  Agreement  with a  valid  and
     enforceable  provision that will achieve,  to the greatest extent possible,
     the  economic,  business  and  other  purpose  of  the  void  unenforceable
     provision.

Counterparts. This Agreement may be executed in any number of counterparts, each
     of which will be deemed an original  as regards  any party whose  signature
     appears  thereon and all of which together will constitute one and the same
     instrument.   This   Agreement   will  become  binding  when  one  or  more
     counterparts  hereof,   individually  or  taken  together,  will  bear  the
     signatures of all the parties reflected hereon as signatories.

OtherRemedies.  Except as otherwise provided herein, any and all remedies herein
     expressly  conferred  upon a party will be deemed  cumulative  with and not
     exclusive of any other remedy conferred hereby or by law on such party, and
     the exercise of any one remedy will not preclude the exercise of any other.

Amendments and Waivers.  Anyterm or provision of this  Agreement may be amended,
     and the  observance  of any term of this  Agreement  may be waived  (either
     generally  or  in  a  particular  instance  and  either   retroactively  or
     prospectively)  only by a writing  signed by the party to be bound thereby.
     The  waiver by a party of any breach  hereof or default in the  performance
     hereof will not be deemed to  constitute  a waiver of any other  default or
     any succeeding breach or default.

Expenses. REI, on the one hand, and Sellers,  on the other, will each bear their
     own expenses and legal fees incurred with respect to this Agreement and the
     transactions  contemplated  hereby.  Sellers shall be  responsible  for all
     expenses and legal fees incurred by PacSoft with respect to the negotiation
     and entry into this Agreement and the transactions contemplated hereby.

Attorneys' Fees. Should suit be brought to enforce or interpret any part of this
     Agreement,  the prevailing party will be entitled to recover, as an element
     of the costs of suit and not as damages,  reasonable  attorneys' fees to be
     fixed by the court (including, without limitation, costs, expenses and fees
     on any appeal).


<PAGE>



                            32

Notices. Allnotices and other communications pursuant to this Agreement shall be
     in writing and deemed to be sufficient if contained in a written instrument
     and shall be deemed  given if  delivered  personally,  telecopied,  sent by
     nationally-recognized   overnight   courier  or  mailed  by  registered  or
     certified mail (return receipt requested),  postage prepaid, to the parties
     at the  following  address  (at such other  address for a party as shall be
     specified by like notice):

         If to PacSoft to:     PacSoft Incorporated
                               14024  NE  181st  Street,  Suite 201
                               Woodinville, Washington 98041
                               Attention:    Chief    Executive Officer
                               Telecopier: (425) 489-1535

         If to REI to:         Research     Engineers, Inc.
                               22700 Savi Ranch Parkway
                               Yorba Linda, California 92887
                               Attention: President
                               Telecopier: (714) 974-4771

         With a copy to:...    Rutan & Tucker, LLP
                               611 Anton, Suite 1400
                               Costa Mesa, California 92626
                               Attention: Gregg Amber, Esq.
                               Telecopier: (714) 546-9035

         If to Sellers to:     Karen Hunter
                               22609 102nd Avenue, SE
                               Woodinville, Washington 98072

                               William Schmidt
                               9614 180th Street, SE
                               Snohomish, Washington 98296

                               Mae Webb
                               106 NW 112th Street
                               Seattle, Washington 98177

         All  notices  and  other  communications  shall be  deemed to have been
received (a) in the case of personal delivery,  on the date of delivery,  (b) in
the case of a telecopy,  when the party  receiving the copy shall have confirmed
receipt   of   the   communication,   (c)   in   the   case   of   delivery   by
nationally-recognized overnight courier, on the business day following dispatch,
and (d) in the  case of  mailing,  on the  third  business  day  following  such
mailing.



<PAGE>


Construction of Agreement.  Thelanguage in all parts of this Agreement  shall be
     in all  cases  construed  simply  according  to its  fair  meaning  and not
     strictly for or against any party. Whenever the context requires, all words
     used in the singular will be construed to have been used in the plural, and
     vice versa, and each gender will include any other gender.  The captions of
     the Sections and Subsections of this Agreement are for convenience only and
     shall  not  affect  the  construction  or  interpretation  of  any  of  the
     provisions of this Agreement.  This Agreement has been  negotiated  between
     unrelated  parties who are  sophisticated  and knowledgeable in the matters
     contained in this  Agreement and who have acted in their own self interest.
     In addition,  each party affirms that it has been afforded the  opportunity
     to receive  independent  advice from its respective legal counsel as to the
     advisability of entering into this Agreement and to consult and discuss the
     provisions of this Agreement  with its  respective  legal counsel and fully
     understands  the legal effect of each provision.  Accordingly,  any rule of
     law,  including  Section 1654 of the California  Civil Code, as well as any
     other statute,  law,  ordinance or common law principles or other authority
     of any jurisdiction of similar effect, or legal decision that would require
     interpretation  of any ambiguities in this Agreement  against the party who
     has drafted it is not applicable  and is hereby  waived.  The provisions of
     this Agreement  shall be  interpreted in a reasonable  manner to effect the
     purpose of the parties,  and this  Agreement  shall not be  interpreted  or
     construed  against any party to this  Agreement  because  that party or any
     attorney  or  representative  for that  party  drafted  this  Agreement  or
     participated in the drafting of this Agreement.

No   Joint  Venture.  Nothing  contained  in this  Agreement  will be  deemed or
     construed  as creating a joint  venture or  partnership  between any of the
     parties  hereto.  No party is by virtue of this Agreement  authorized as an
     agent,  employee or legal  representative of any other party. No party will
     have the power to control the activities  and operations of any other.  The
     status of the parties hereto is, and at all times will continue to be, that
     of independent  contractors  with respect to each other. No party will have
     any power or  authority  to bind or commit  any  other.  No party will hold
     itself out as having any authority or relationship in contravention of this
     Section.

Further Assurances.  Each party agrees to cooperate fully with the other parties
     and to execute such further  instruments,  documents and  agreements and to
     give such further written assurances as may be reasonably  requested by any
     other party to evidence and reflect the  transactions  described herein and
     contemplated  hereby and to carry into effect the  intents and  purposes of
     this Agreement.

Absence of Third Party Rights. No provisions of this Agreement are intended, nor
     will be  interpreted,  to  provide or create  any third  party  beneficiary
     rights or any other rights of any kind in any client, customer,  affiliate,
     shareholder  or partner of any party  hereto or any other  person or entity
     unless specifically  provided otherwise herein, and, except as so provided,
     all provisions  hereof will be personal  solely between the parties to this
     Agreement.

Entire  Agreement.   This  Agreement  and  the  schedules  and  exhibits  hereto
     constitute  the entire  understanding  and agreement of the parties  hereto
     with  respect to the  subject  matter  hereof and  supersede  all prior and
     contemporaneous  agreements or  understandings,  inducements or conditions,
     express or  implied,  written or oral,  between the  parties  with  respect
     thereto.  The express  terms  hereof  control and  supersede  any course of
     performance or usage of trade inconsistent with any of the terms hereof.

Press Releases.  No party will issue or authorize to be issued any press release
   or similar announcement  concerning this Agreement or any of the transactions
   contemplated  hereby without the prior written approval of the other parties,
   which  approval  shall  be  given  in  order  to  allow  compliance  with the
   disclosure requirements of applicable securities laws.



<PAGE>


     IN WITNESS  WHEREOF,  the  parties  hereto  have  executed  or caused  this
Agreement to be executed by their duly authorized  respective officers as of the
date first above written.


                           RESEARCH ENGINEERS, INC.,
                           a Delaware corporation


                           By:    ____________________________
                                  Jyoti Chatterjee, President



                           PACSOFT INCORPORATED,
                           a Washington corporation


                           By:    ____________________________
                                  Karen Hunter, President


                           By:    ____________________________
                                  William Schmidt, Secretary




                           ___________________________________
                           KAREN HUNTER, an individual


                           ___________________________________
                           WILLIAM SCHMIDT, an individual


                           ___________________________________
                           MAE WEBB, an individual





<PAGE>


THE  UNDERSIGNED  SPOUSES  HAVE  EXECUTED  THIS  AGREEMENT  FOR THE  PURPOSE  OF
CONFIRMING THEIR CONSENT TO THE CONVEYANCE OF THEIR COMMUNITY PROPERTY INTEREST,
IF ANY, IN SHARES OF CAPITAL STOCK OF PACSOFT PURSUANT TO THIS AGREEMENT.




                           _____________________________________________________
                           _________________,   spouse   of Karen Hunter



                           _____________________________________________________
                           _________________,   spouse   of William Schmidt



                           _____________________________________________________
                           _________________,   spouse   of Mae Webb