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                           EXHIBIT 10

                                                                 Execution Copy

                       CREDIT AGREEMENT

                 DATED AS OF SEPTEMBER 29, 1997

                             

                             

                        BY AND BETWEEN

                        DOCUCORP, INC.

                             AND

                             

                       NATIONSBANK, N.A.


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                     TABLE OF CONTENTS

1.   Definitions and Accounting Matters.................................1
     1.1.    Certain Defined Terms......................................1
     1.2.    Accounting Terms and Determinations........................17

2.   Loans..............................................................18

     2.1.    Amount of Loans............................................18
     2.2.    Borrowings.................................................18
     2.3.    Repayment of Loans.........................................19
     2.4.    Interest...................................................19
     2.5.    Voluntary Reductions of Commitment.........................21
     2.6.    Continuation and Conversion of Loans.......................21
     2.7.    Minimum Amounts............................................22
     2.8.    Fees.......................................................22
     2.9.    Notes......................................................22
     2.10.   Optional Prepayments.......................................23
     2.11.   Mandatory Prepayments of Loans.............................23
     2.12.   Conversion to Term Loan....................................24
     2.13.   Use of Proceeds............................................25
     2.14.   Release of Investor Guaranty...............................25

3.   Payments; Computations; Taxes; Etc.................................25

     3.1.    Payments...................................................25
     3.2.    Computations...............................................26
     3.3.    Certain Notices............................................26
     3.4.    Taxes......................................................27
     3.5.    Additional Costs...........................................27
     3.6.    Limitation on Types of Loans...............................29
     3.7.    Illegality.................................................29
     3.8.    Treatment of Affected Loans................................29
     3.9.    Compensation...............................................30

4.   Conditions Precedent...............................................31

     4.1.    Initial Loans..............................................31
     4.2.    Initial and Subsequent Extensions of Credit................33
     4.3.    Conditions to Acquisitions.................................34
     4.4.    Closing Documents for Non-Significant Acquisitions.........36

5.   Representations and Warranties.....................................38

     5.1.    Corporate Existence........................................38
     5.2.    Authorization; No Conflict.................................38
     5.3.    Enforceability.............................................38
     5.4.    Approvals..................................................39
     5.5.    Financial Condition........................................39
     5.6.    Litigation.................................................39


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     5.7.    Federal Reserve Regulations................................39
     5.8.    ERISA......................................................40
     5.9.    Taxes......................................................40
     5.10.   Investment Company Act.....................................41
     5.11.   Public Utility Holding Company Act.........................41
     5.12.   Material Agreements........................................41
     5.13.   Environmental and Safety Matters...........................41
     5.14.   Subsidiaries...............................................42
     5.15.   Compliance with Law........................................42
     5.16.   Capitalization.............................................42
     5.17.   Title to Properties........................................42
     5.18.   Solvency...................................................42
     5.19.   Conduct of Business........................................43
     5.20.   Representations and Warranties in Acquisition Documents....43
     5.21.   Performance of Contracts, Etc..............................43
     5.22.   Disclosure.................................................43
     5.23.   Representations Regarding Acquisitions.....................43

6.   Affirmative Covenants..............................................43

     6.1.    Financial Statements and Other Information.................44
     6.2.    Litigation.................................................47
     6.3.    Corporate Existence, Etc...................................47
     6.4.    Insurance..................................................47
     6.5.    Obligations and Taxes......................................48
     6.6.    Maintaining Records; Access to Properties and Inspections..48
     6.7.    Environmental and Safety Matters...........................48
     6.8.    Additional Security........................................49
     6.9.    Deposit Accounts/Cash Management Services..................49
     6.10.   Change in Management Group.................................49
     6.11.   Enforcement of Remedies under Acquisition Documents........49
     6.12.   Lien on Intellectual Property..............................49

7.   Negative Covenants.................................................50

     7.1.    Prohibition of Fundamental Changes.........................50
     7.2.    Limitation on Liens........................................51
     7.3.    Indebtedness and Guarantees................................51
     7.4.    Investments................................................51
     7.5.    Restricted Payments........................................51
     7.6.    Accounting.................................................51
     7.7.    Amendment of Certain Documents.............................52

8.   Financial Covenants................................................52

     8.1.    Quick Ratio................................................52
     8.2.    Ratio of Funded Debt to Adjusted EBITDA....................52
     8.3.    Ratio of Adjusted EBITDA to Debt Service...................52
     8.4.    Minimum Net Worth..........................................52


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9.   Events of Default..................................................52

     9.1.    Payments under Credit Documents............................53
     9.2.    Other Indebtedness.........................................53
     9.3.    Representations and Warranties.............................53
     9.4.    Other Obligations..........................................53
     9.5.    Ability to Pay Debts.......................................53
     9.6.    Voluntary Proceedings......................................54
     9.7.    Involuntary Proceedings....................................54
     9.8.    Judgments..................................................54
     9.9.    ERISA Event................................................54
     9.10.   Change in Control..........................................55

10.  Miscellaneous......................................................56

     10.1.   Waiver.....................................................56
     10.2.   Notices....................................................56
     10.3.   Expenses, Etc..............................................57
     10.4.   Amendments, Etc............................................58
     10.5.   Successors and Assigns.....................................58
     10.6.   Assignments and Participations.............................58
     10.7.   Survival...................................................58
     10.8.   Table of Contents: Descriptive Headings....................58
     10.9.   Counterparts...............................................58
     10.10.  Governing Law..............................................58
     10.11.  COMPLETE AGREEMENT.........................................59
     10.12.  Arbitration................................................59
     10.13.  Acknowledgments............................................60
     10.14.  Confidentiality............................................60
     10.15.  Obligations with Respect to Loan Parties...................60

EXHIBITS:


     Exhibit A      Form of First Amendment to Guaranty
     Exhibit B      Form of Subsidiary Guaranty
     Exhibit C      Form of Pledge Agreement
     Exhibit D      Form of Security Agreement
     Exhibit E      Form of Notice of Borrowing
     Exhibit F      Form of Notice of Continuation
     Exhibit G      Form of Notice of Conversion
     Exhibit H      Form of Facility A Note
     Exhibit I      Form of Facility B Note
     Exhibit J      Form of Opinion of Counsel to Company


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SCHEDULES:

     Schedule 5.1.  Corporate Existence
     Schedule 5.6.  Litigation
     Schedule 5.8.  ERISA
     Schedule 5.9.  Taxes
     Schedule 5.12. Material Agreements
     Schedule 5.16. Capitalization
     Schedule 5.17. Title to Properties
     Schedule 7.3.  Indebtedness


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     CREDIT AGREEMENT (this "Agreement") dated as of September 29, 1997 by and 
between DOCUCORP., INC., a Delaware corporation (the "Company") and 
NATIONSBANK, N.A., formerly known as NationsBank, N.A. (South) and prior to 
that NationsBank of Georgia, National Association (the "Lender").

     The Company has requested that the Lender make certain loans to the 
Company in an aggregate principal amount up to but not exceeding $10,000,000 at 
any one time outstanding, and the Lender is willing to make such loans upon the 
terms hereof and subject to the conditions contained herein.

     Accordingly, for good and valuable consideration, the receipt and 
sufficiency of which are hereby acknowledged by the parties hereto, the parties 
hereto agree as follows:

1.   DEFINITIONS AND ACCOUNTING MATTERS

     1.1.   CERTAIN DEFINED TERMS

     As used herein, the following terms shall have the following meanings (all 
terms defined in this Section or in other provisions of this Agreement in the 
singular to have the same meanings when used in the plural and vice versa):

     "ACCOUNT DEBTOR" shall mean a Person who is obligated on a Receivable.

     "ACQUISITION" shall mean, with respect to a Seller, the acquisition by the 
Company directly, or indirectly through any of its Subsidiaries, of 
substantially all of the assets of, assets constituting a distinct operating 
division of, or the outstanding capital stock of, such Seller as contemplated 
by the applicable Acquisition Documents.

     "ACQUISITION DOCUMENTS" shall mean, with respect to an Acquisition, 
collectively, the Purchase Agreement for such Seller and all related agreements 
and conveyance instruments executed in connection therewith or pursuant thereto.

     "ADJUSTED EBITDA" shall mean, for any fiscal period, Net Income of a 
Person for such period PLUS the sum of the following amounts (but only to the 
extent included in determining such Net Income for such period): (a) income tax 
expense of such Person in respect of such period MINUS (b) cash payments 
actually made during such period in respect of taxes on income of such Person 
PLUS (c) interest expense of such Person for such period PLUS (d) depreciation 
and amortization expense and other non-cash charges of such Person for such 
period PLUS (e) extraordinary non-cash losses of such Person for such period 
PLUS (f) in the case of the Company, the extraordinary and unusual charges 
incurred by the Company in an amount not to exceed $21,500,000 in connection 
with the transactions contemplated by that certain Agreement and Plan of merger 
dated as of January 15, 1997, by and among the Company, Image Sciences, Inc., 
ISI Merger Corp., FormMaker Software, Inc. and FormMaker Acquisition Corp. (the 
"Merger Transactions") and MINUS (g) capitalized software expenses incurred 
during such period, as determined in accordance with GAAP; PROVIDED, HOWEVER, 
as of the effective date of any Acquisition, Adjusted EBITDA shall be computed 
giving pro forma effect to such Acquisition for 


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each four fiscal quarter period then and thereafter occurring until such 
Acquisition has been effective for four complete fiscal quarters; FURTHER 
PROVIDED, HOWEVER, Adjusted EBITDA shall be computed giving pro forma effect to 
the Merger Transactions for each four fiscal quarter period ending after the 
effective date of the Merger Transactions until the Merger Transactions have 
been effective for four complete fiscal quarters.

     "ADJUSTED LIBO RATE" shall mean, with respect to each Interest Period for 
any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest 
Period by (b) a percentage equal to 1 MINUS the stated maximum rate (stated as 
a decimal) of all reserves, if any, required to be maintained against 
"Eurocurrency liabilities" as specified in Regulation D of the Board of 
Governors of the Federal Reserve System (or against any other category of 
liabilities which includes deposits by reference to which the interest rate on 
LIBOR Loans is determined or any category of extensions of credit or other 
assets which includes loans by an office of the Lender outside of the United 
States of America to residents of the United States of America).

     "AFFILIATE" shall mean, as to any Person, any other Person which directly 
or indirectly controls, or is under common control with, or is controlled by, 
such Person and, if such Person is an individual, any member of the immediate 
family (including parents, spouse and children) of such individual, any trust 
whose principal beneficiary is such individual or one or more members of such 
individual's immediate family and any Person who is controlled by any such 
member or trust.  As used in this definition, "control" (including, with its 
correlative meanings, "controlled by" and "under common control with") shall 
mean the possession, directly or indirectly, of the power to direct or cause 
the direction of management or policies of the subject Person (whether through 
ownership of securities or partnership or other ownership interests, by 
contract or otherwise); PROVIDED that, in any event, any Person which owns 
directly or indirectly 5% or more of the securities having ordinary voting 
power for the election of directors or other governing body of a corporation or 
5% or more of the partnership or other ownership interests of any other Person 
(other than as a limited partner of such other Person) will be deemed an 
Affiliate of such corporation or other Person.  The term "Affiliate" shall 
include Policy Management Systems Corp. only if it is such by virtue of the 
immediately preceding proviso.

     "APPLICABLE LAW" shall mean all applicable provisions of constitutions, 
statutes, rules, regulations and orders of all governmental bodies and all 
orders, rulings and decrees of all courts and arbitrators.

     "APPLICABLE LENDING OFFICE" shall mean, for the Lender, 600 Peachtree 
Street, 19th Floor, Atlanta, Georgia 30308 or such other office of the Lender 
(or of an affiliate of the Lender) in the United States of America as the 
Lender may from time to time specify in writing to the Company as the office by 
which the Loans are to be made and maintained.

     "ASSIGNMENT OF ACQUISITION DOCUMENTS" shall mean each assignment of rights
under Acquisition Documents executed by any Loan Party in favor of the Lender
after the Closing Date pursuant to Section 4.3., each such assignment to be in
form and substance satisfactory to the Lender.


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     "BANKRUPTCY CODE" means the United States Bankruptcy Code of 1978, as 
amended from time to time, or any successor federal statute.

     "BASE RATE" shall mean, for any day, the higher of (a) the Federal Funds 
Rate for such day plus 1/2 of 1% per annum and (b) the Prime Rate for such day. 
Each change in any interest rate provided for herein resulting from a change in 
the Base Rate shall take effect at the time of such change in the Base Rate. If 
for any reason the Lender shall have determined that it is unable to ascertain 
the Federal Funds Rate for such day, including, without limitation, the 
inability or failure of the Lender to obtain sufficient bids or publications as 
contemplated by the definition of the Federal Funds Rate, the Base Rate for 
such day shall be the Prime Rate.

     "BASE RATE LOAN" shall mean a Loan which bears interest at a rate based on 
the Base Rate.

     "BORROWING BASE" shall mean at any time an amount equal to 75% of the face 
value of Eligible Receivables of the Company and its Subsidiaries due and owing 
at such time; PROVIDED, HOWEVER, that all Receivables subject to clause (g) of 
the definition of Eligible Receivables and which are Eligible Receivables as a 
result of the application of such clause (g) shall not, in the aggregate, 
constitute more than 15% of the Borrowing Base at any time; PROVIDED FURTHER, 
HOWEVER, that all Eligible Receivables due from an Account Debtor incorporated 
under the laws of Canada or any province thereof or whose principal place of 
business or a substantial portion of whose assets is located in Canada shall 
not, in the aggregate, constitute more than 10% of the Borrowing Base at any 
time.

     "BORROWING BASE CERTIFICATE" shall mean a certificate of the chief 
financial officer of the Company setting forth the calculation of the Borrowing 
Base, such certificate to be in form reasonably acceptable to the Lender.

     "BUSINESS DAY" shall mean (a) any day other than a Saturday, Sunday or 
other day on which commercial banks are authorized or required to close in 
Atlanta, Georgia and (b) with reference to a LIBOR Loan, any such day that is 
also a day on which dealings in Dollar deposits are carried out in the London 
interbank market.

     "CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by 
obligations under a lease that is required to be capitalized for financial 
reporting purposes in accordance with GAAP, and the amount of such Indebtedness 
shall be the capitalized amount of such obligations determined in accordance 
with such principles.

     "CLOSING DATE" shall mean the date upon which the conditions precedent to 
the initial extension of credit hereunder set forth in Article 4. have been 
satisfied and the initial extension of credit hereunder is made.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended from time 
to time, or any successor statute.

     "COLLATERAL" means any collateral security hereafter pledged by any Loan 
Party to secure the Obligations or any portion thereof.


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     "COMMITMENT" means the Lender's obligation, subject to the terms hereof, 
to make Revolving Loans pursuant to Section 2.1. in an aggregate principal 
amount at any one time outstanding equal to the sum of the Facility A 
Commitment and the Facility B Commitment, as the same may be reduced from time 
to time pursuant to the terms hereof.

     "CONSOLIDATED SUBSIDIARY" shall mean, as to any Person, each Subsidiary of 
such Person (whether now existing or hereafter created or acquired) the 
financial statements of which are required to be consolidated with the 
financial statements of such Person in accordance with GAAP.

     "CONTINUE", "CONTINUATION" and "CONTINUED" each refers to the continuation 
of a LIBOR Loan from one Interest Period to the next Interest Period pursuant 
to Section 2.6.(a).

     "CONTROL GROUP" shall mean Safeguard Scientifics, Inc., Technology Leaders 
II L.P., Technology Leaders II Offshore C.V., Xerox Corporation and Michael D. 
Andereck.

     "CONVERT", "CONVERSION" and "CONVERTED" each refers to the conversion of a 
Loan of one Type into a Loan of another Type pursuant to Section 2.6.(b).

     "CREDIT DOCUMENTS" shall mean, collectively, this Agreement, the Notes, 
the Guaranties, the Security Documents, and any other documents and instruments 
executed and delivered by any Loan Party or the Investor Guarantor in 
connection with this Agreement or any of the foregoing documents.

     "CREDIT FACILITY" shall mean the credit facility for Loans extended by the 
Lender to the Company under this Agreement.

     "CURRENT MATURITIES" shall mean, with respect to any Person and for any 
period, the sum of (a) regularly scheduled principal payments on Indebtedness 
of such Person during such period, other than any balloon, bullet or similar 
principal payment payable on any Indebtedness of such Person which repays such 
Indebtedness in full PLUS (b) to the extent not already included in the 
preceding clause (a), payments on Capitalized Lease Obligations of such Person 
during such period.

     "DEFAULT" shall mean an Event of Default or an event which with notice or 
lapse of time or both would become an Event of Default.

     "DOLLARS" and "$" shall mean lawful money of the United States of America.

     "ELIGIBLE RECEIVABLE" shall mean, as of any date of determination thereof, 
the aggregate of all Receivables of the Company and its Subsidiaries at such 
date other than the following (determined without duplication):

     (a)  any Receivable which does not represent a complete bona fide 
transaction requiring no further action on the part of the Company or any 
Subsidiary, as applicable, to make such Receivable payable by the Account 
Debtor other than Receivables representing maintenance fees relating to 
maintenance services to be provided by the Company to certain customers under 


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annual or monthly maintenance contracts for which the Company has delivered an 
invoice to any such customer within a 90 day period prior to the renewal of 
such customer's maintenance contract;

     (b)  any Receivable not payable in Dollars;

     (c)  any Receivable which, at the date of issuance of the invoice 
therefor, was by its terms payable more than 90 days after provision of the 
related goods or services;

     (d)  any Receivable due from (i) any Subsidiary or Affiliate of any Loan 
Party or (ii) any employee, agent or representative of any Loan Party or any 
Subsidiary or Affiliate of any Loan Party;

     (e)  any Receivable with respect to all or part of which a check, 
promissory note, draft, trade acceptance or other instrument for the payment of 
money has been presented for payment and returned uncollected for any reason;

     (f)  any Receivable as to which any one or more of the following events 
has occurred with respect to the applicable Account Debtor: death or judicial 
declaration of incompetency; the filing by or against such Account Debtor of a 
request or petition for liquidation, reorganization, arrangement, adjustment of 
debts, adjudication as a bankrupt, or other relief under the bankruptcy, 
insolvency, or similar laws of the United States, any state or territory 
thereof, or any foreign jurisdiction, now or hereafter in effect; the making of 
any general assignment by such Account Debtor for the benefit of creditors; the 
appointment of a receiver or trustee for such Account Debtor or for any of the 
assets of such Account Debtor, including, without limitation, the appointment 
of or taking possession by a "custodian," as defined in the Bankruptcy Code; 
the institution by or against such Account Debtor of any other type of 
insolvency proceeding (under the bankruptcy laws of the United States or 
elsewhere) or of any formal or informal proceeding for the dissolution or 
liquidation of, settlement of claims against, or winding up of affairs of, such 
Account Debtor; the sale, assignment, or transfer of all or substantially all 
of the assets of such Account Debtor; the inability to pay or the nonpayment by 
such Account Debtor of its debts generally as they become due; the cessation of 
the business of such Account Debtor as a going concern;

     (g)  any Receivable due from an Account Debtor incorporated under the laws 
of any jurisdiction other than the United States of America or any state 
thereof or Canada or any province thereof or whose principal place of business 
or a substantial portion of whose assets is located outside of the United 
States of America and Canada unless the payment of such Receivable is supported 
by a letter of credit issued or confirmed by a financial institution located in 
the United States of America and naming the Company or any Subsidiary as 
beneficiary;

     (h)  any Receivable which remains unpaid for more than 90 days after the 
original invoice date;

     (i)  all Receivables from any Account Debtor if more than 25% of the 
aggregate amount of the Receivables of such Account Debtor are ineligible 
pursuant to clause (h) above;


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     (j)  any Receivable with respect to which there is any unresolved dispute, 
defense, offset or counterclaim with or by the respective Account Debtor, but 
only to the extent of the amount shown to be due on the invoice(s) with respect 
to which there is any dispute;

     (k)  any Receivable as to which either (i) the perfection, enforceability 
or validity of the Lender's security interest in such Receivable, or (ii) the 
Lender's right or ability to obtain direct payment of the proceeds of such 
Receivable, is governed by any federal or state statutory requirements other 
than those of the UCC (including, without limitation, the Federal Assignment of 
Claims Act unless the Company or such Subsidiary, as applicable, complies with 
the provisions of the Federal Assignment of Claims Act to the satisfaction of 
the Lender);

     (l)  any Receivable (i) as to which the Lender does not have a valid and 
enforceable first priority security interest, subject to no other Liens other 
than Permitted Liens or (ii) as to which the Lender does not have a right of 
direct payment upon an Event of Default;

     (m)  any Receivable that has not been created in the ordinary course of 
business;

     (n)  the portion of the Receivables of the Company owing by any Account 
Debtor or group of affiliated Account Debtors representing in excess of 25% of 
the aggregate amount of all Eligible Receivables of the Company; provided, 
however, that this subparagraph (m) shall not apply to Receivables owing by 
Policy Management Systems Corp.; and

     (o)  any Receivable arising from a sale on a bill-and-hold, guaranteed 
sale, sale-and-return, sale on approval or consignment basis or made pursuant 
to any other written agreement providing for repurchase or return.

     "EMPLOYEE BENEFIT PLAN" shall mean any employee benefit plan within the 
meaning of Section 3(3) of ERISA maintained or contributed to by any Loan Party 
or any of its ERISA Affiliates, other than a Multiemployer Plan.

     "ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any notice, 
claim, demand or other communication (whether written or oral) alleging or 
asserting such Person's liability for investigatory costs, cleanup costs, 
governmental response costs, damages to natural resources or other property, 
personal injuries, fines or penalties arising out of, based on or resulting 
from (a) the presence, handling, generation, treatment, storage, disposal, 
Release or threatened Release into the environment of any Hazardous Material at 
any location, whether or not owned by such Person, or (b) circumstances forming 
the basis of any violation, or alleged violation, of any Environmental Law.

     "ENVIRONMENTAL LAWS" shall mean any and all federal, state, local and 
foreign statutes, laws, regulations, ordinances and similar provisions having 
the force or effect of law, all judicial and administrative orders and 
determinations, all contractual obligations and common law concerning public 
health or safety, worker health or safety or pollution or protection of the 
environment, including without limitation those relating to any emissions, 
discharges or Releases of Hazardous Materials to ambient air, surface water, 
ground water or land, or otherwise relating 


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to the manufacture, processing, distribution, use, treatment, storage, 
disposal, transport, control, clean-up or handling of Hazardous Materials.

     "EQUITY ISSUANCE" means any issuance or sale by the Company of its capital 
stock or any warrants, options or similar rights to acquire, or securities 
convertible into or exchangeable for, such capital stock.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as 
amended from time to time, or any successor statute.

     "ERISA AFFILIATE" of any Person shall mean any corporation or trade or 
business which is a member of the same controlled group of corporations (within 
the meaning of Section 414(b) of the Code) as such Person or which is under 
common control (within the meaning of Section 414(c) of the Code) with such 
Person.

     "ERISA EVENT" with respect to any Person shall mean (a) the occurrence of 
a reportable event, within the meaning of Section 4043 of ERISA, with respect 
to any Plan of such Person or any of its ERISA Affiliates, unless the 30-day 
notice requirement with respect to such event has been waived by the PBGC; (b) 
the provision by the administrator of any Plan of such Person or any of its 
ERISA Affiliates of a notice of intent to terminate such Plan pursuant to 
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan 
amendment referred to in Section 4041(a)(2) of ERISA); (c) the cessation of 
operations at a facility of such Person or any of its ERISA Affiliates in the 
circumstances described in Section 4062(e) of ERISA with respect to a Plan; (d) 
the withdrawal by such Person or any of its ERISA Affiliates from a Plan during 
a plan year for which it was a substantial employer, as defined in Section 
4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA 
Affiliates to make a payment to a Plan required under Section 302(f)(1) of 
ERISA; (f) the adoption of an amendment to a Plan of such Person or any of its 
ERISA Affiliates requiring the provision of security to such Plan pursuant to 
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to 
terminate a Plan of such Person or any of its ERISA Affiliates pursuant to 
Section 4042 of ERISA, or the occurrence of any event or condition described in 
Section 4042 of ERISA that could constitute grounds for the termination of, or 
the appointment of a trustee to administer, such Plan.

     "FACILITY A COMMITMENT" shall mean the obligation of the Lender to make 
Facility A Loans to the Company in an aggregate principal amount at any one 
time outstanding up to but not exceeding $6,500,000.

     "FACILITY B COMMITMENT" shall mean the obligation of the Lender to make 
Facility B Loans to the Company in an aggregate principal amount at any one 
time outstanding up to but not exceeding $3,500,000.

     "FACILITY A TERMINATION DATE" shall mean September 29, 1998.

     "FACILITY B TERMINATION DATE" shall mean March 29, 1999.

     "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded 
upwards, if necessary, to the nearest 1/16 of 1%) equal to the weighted average 
of the rates on overnight 


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federal funds transactions with members of the Federal Reserve System arranged 
by federal funds brokers on such day, as published by the Federal Reserve Bank 
of New York on the Business Day next succeeding such day, provided that (i) if 
the day for which such rate is to be determined is not a Business Day, the 
Federal Funds Rate for such day shall be the Federal Funds Rate for the 
immediately preceding Business Day, and (ii) if such rate is not so published 
for any Business Day, the Federal Funds Rate for such day shall be the average 
rate charged by three federal funds brokers of recognized standing selected by 
the Lender on such day for such transactions as determined by the Lender.

     "FUNDED DEBT" shall mean, with respect to any Person, the outstanding 
Indebtedness of such Person having an initial maturity or term in excess of one 
year including Capitalized Lease Obligations and including Indebtedness 
outstanding under a revolving credit or similar agreement which obligates the 
lender or lenders to extend credit over a period of one year or more.  Funded 
Debt shall not include, as at any date of determination, Subordinated Debt.

     "GAAP" shall mean generally accepted accounting principles applied in the 
United States of America and practices which are recognized as such by the 
American Institute of Certified Public Accountants, applied on a basis 
consistent with those which, in accordance with Section 1.2.(a), are to be used 
in making the calculations for purposes of determining compliance with the 
terms of this Agreement.

     "GOVERNMENTAL APPROVALS" shall mean all authorizations, consents, 
approvals, licenses and exemptions of, registrations and filings with, and 
reports to, all Governmental Authorities.

     "GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or foreign 
court or governmental agency, authority, instrumentality or regulatory body.

     "GUARANTEE" shall mean a guarantee, an endorsement, a contingent agreement 
to purchase or to furnish funds for the payment or maintenance of, or otherwise 
to be or become contingently liable under or with respect to, any Indebtedness 
or other obligations, net worth, working capital or earnings of any Person, or 
a guarantee of the payment of dividends or other distributions upon the stock 
or equity interests of any Person, or an agreement to purchase, sell or lease 
(as lessee or lessor) property, products, materials, supplies or services 
primarily for the purpose of enabling a debtor to make payment of its 
obligations or an agreement to assure a creditor against loss, and including, 
without limitation, causing a bank to issue a letter of credit for the benefit 
of another Person, but excluding endorsements for collection or deposit in the 
ordinary course of business.  Usage of the term "Guarantee" as a verb shall 
have a corresponding meaning.

     "GUARANTOR CREDIT AGREEMENT" shall mean that certain Credit Agreement 
dated as of September 13, 1996, as amended by that certain First Amendment to 
Credit Agreement dated as of June 19, 1997, by and among the Safeguard 
Scientifics, Inc., Safeguard Scientifics (Delaware), Inc. and PNC Bank, N.A.

     "GUARANTY" shall mean the Investor Guaranty, each Subsidiary Guaranty and  
any guaranty executed by a Loan Party in favor of the Lender after the Closing 
Date pursuant to Section 4.3. 


                                     -8-
<PAGE>

by which such Loan Party Guarantees payment and performance of all of the 
Obligations, such guaranty to be in form and substance satisfactory to the 
Lender.

     "HAZARDOUS MATERIALS" shall mean all or any of the following: (a) 
substances that are defined or listed in, or otherwise classified pursuant to, 
any applicable Environmental Laws as "hazardous substances" "hazardous 
materials", "hazardous wastes", "toxic substances" or any other formulation 
intended to define, list or classify substances by reason of deleterious 
properties such as ignitability, corrosivity, reactivity, carcinogenicity, 
reproductive toxicity or "TLCP" toxicity, "EP toxicity"; (b) oil, petroleum or 
petroleum derived substances, natural gas, natural gas liquids or synthetic gas 
and drilling fluids, produced waters and other wastes associated with the 
exploration, development or production of crude oil, natural gas or geothermal 
resources; (c) any flammable substances or explosives or any radioactive 
materials; and (d) asbestos in any form or (e) electrical equipment which 
contains any oil or dielectric fluid containing levels of polychlorinated 
biphenyls in excess of fifty parts per million.

     "INDEBTEDNESS" shall mean, without duplication, as to any Person (a) 
indebtedness created, issued or incurred by such Person for borrowed money 
(whether by loan or the issuance or sale of debt securities) whether or not 
recourse is limited to specific assets of such Person; (b) obligations of such 
Person to pay the deferred purchase or acquisition price of property or 
services, other than trade accounts payable arising in the ordinary course of 
business so long as such trade accounts payable are not for borrowed money; (c) 
Indebtedness of others secured by a Lien on the property of such Person, 
whether or not the Indebtedness so secured has been assumed by such Person; (d) 
reimbursement obligations of such Person in respect of letters of credit or 
similar instruments issued or accepted by banks and other financial 
institutions for the account of such Person; (e) Capitalized Lease Obligations 
of such Person; and (f) Indebtedness of others Guaranteed by such Person.

     "INSUFFICIENCY" shall mean, with respect to any Plan, the amount, if any, 
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

     "INTELLECTUAL PROPERTY" shall mean patents, patent rights and licenses, 
patent applications, trademarks, trademark rights, trade names, trade name 
rights, copyrights and rights with respect to the foregoing.

     "INTEREST EXPENSE" shall mean for any period of computation thereof, cash 
interest expense attributable to Indebtedness for money borrowed (including 
without limitation, Capitalized Lease Obligations) of the Company and its 
Consolidated Subsidiaries actually paid during such period.

     "INTEREST PERIOD" shall mean with respect to any LIBOR Loan, the period 
commencing on the date of the borrowing, Conversion or Continuation of such 
Loan and ending on the last day of the period selected by the Company pursuant 
to the provisions below.  The duration of each Interest Period shall be one, 
two, three or six months, in each case as the Company may, in an appropriate 
Notice of Borrowing, Notice of Continuation or Notice of Conversion, select. In 
no event shall an Interest Period of a Loan extend beyond the Termination Date. 
 Whenever the last day of any Interest Period would otherwise occur on a day 
other than a Business Day, the last day of such Interest Period shall be 
extended to occur on the next succeeding Business Day; PROVIDED, 


                                     -9-
<PAGE>

HOWEVER, that if such extension would cause the last day of such Interest 
Period to occur in the next following calendar month, the last day of such 
Interest Period shall occur on the next preceding Business Day.

     "INVENTORY" shall mean (a) all inventory of the Company and all goods 
intended for sale or lease by the Company, (b) all work-in-process, (c) all raw 
materials and other materials and supplies of every nature and description used 
or which might be used in connection with the manufacture, packing, shipping, 
selling or furnishing of such goods or otherwise used or consumed in the 
business of the Company, and (d) all documents relating to any of the foregoing.

     "INVESTMENT" in any Person shall mean (a) the acquisition (whether for 
cash, property, services or securities or otherwise) of capital stock, bonds, 
notes, debentures, partnership or other ownership interests or other securities 
of, or any contribution to the capital of, such Person; (b) any deposit with, 
or advance, loan or other extension of credit to, such Person and (without 
duplication) any amount committed to be advanced, lent or extended to such 
Person (other than any such deposit, advance, loan, extension of credit or 
commitment representing (i) the purchase price of inventory or supplies sold in 
the ordinary course of business or (ii) a deposit for, or prepayment of, rents 
or utilities made in the ordinary course of business or (iii) a deposit to 
secure the performance of the obligations described in subparagraphs (d) and 
(e) of the definition of "Permitted Liens" set forth herein made in the 
ordinary course of business); or (c) any Guarantee of, or other contingent 
obligation with respect to, Indebtedness or other liability of such Person.

     "INVESTOR GUARANTOR" shall mean Safeguard Scientifics (Delaware), Inc., a 
Delaware corporation.

     "INVESTOR GUARANTY" shall mean that certain Guaranty dated as of December 
20, 1995, executed by the Investor Guarantor in favor of the Lender, as such 
guaranty is amended by that certain First Amendment to Guaranty substantially 
in the form of Exhibit A executed by the Investor Guarantor in favor of the 
Lender.

     "LIBOR" shall mean, with respect to any Interest Period and a LIBOR Loan, 
the offered rate per annum in the London interbank market for deposits in 
Dollars of amounts equal or comparable to the principal amount of such LIBOR 
Loan offered for a term comparable to such Interest Period, as currently shown 
on the Reuters Screen LIBOR page as of 11:00 a.m., Greenwich Mean Time, two 
Business Days prior to the first day of such Interest Period; PROVIDED, 
HOWEVER, that (a) if more than one offered rate as described above appears on 
the Reuters Screen LIBOR page, the rate used to determine LIBOR will be the 
arithmetic average (rounded upward, if necessary, to the next higher 1/16 of 
1%) of such offered rates, or (b) if no such offered rates appear, the rate 
used for such Interest Period will be the arithmetic average (rounded upward, 
if necessary, to the next higher 1/16 of 1%) of rates quoted by the Lender at 
approximately 10:00 a.m., New York time, two Business Days prior to the first 
day of such Interest Period for deposits in Dollars offered to leading European 
banks for a period comparable to such Interest Period in an amount comparable 
to the principal amount of such LIBOR Loan.  If the Lender ceases to use the 
Reuters Screen LIBOR page for determining interest rates based on eurodollar 
deposit rates, a comparable internationally recognized interest rate reporting 
service shall be used to determine such offered rates.


                                     -10-
<PAGE>

     "LIBOR LOAN" shall mean a Loan bearing interest at a rate based on LIBOR.

     "LIEN" shall mean, as applied to the property of any Person: (a) any 
security interest, encumbrance, mortgage, deed to secure debt, deed of trust, 
pledge, lien, charge or lease constituting a Capitalized Lease Obligation, 
conditional sale or other title retention agreement, or other security title or 
encumbrance of any kind in respect of any property of such Person, or upon the 
income or profits therefrom; (b) any arrangement, express or implied, under 
which any property of such Person is transferred, sequestered or otherwise 
identified for the purpose of subjecting the same to the payment of 
Indebtedness or performance of any other obligation in priority to the payment 
of the general, unsecured creditors of such Person; and (c) the filing of, or 
any agreement to give, any financing statement under the Uniform Commercial 
Code or its equivalent in any jurisdiction other than the filing of a financing 
statement for notice purposes which financing statement does not evidence or 
relate to a Lien described in clauses (a) or (b) above.

     "LOAN PARTY" means each of the Company, its Subsidiaries and each Person, 
who Guarantees all or a portion of the Obligations and/or who grants a Lien in 
any of the Collateral to secure all or a portion of the Obligations.  The term 
"Loan Party" shall not include the Investor Guarantor.

     "LOANS" shall mean, collectively, the Facility A Loans, the Facility A 
Term Loan and the Facility B Loans.

     "MANAGEMENT GROUP" shall mean Hsi-Ming Lin and Michael D. Andereck.

     "MATERIAL ADVERSE EFFECT" shall mean any event, circumstance or condition 
that, individually or when aggregated with all other similar events, 
circumstances or conditions, could reasonably be expected to have a material 
adverse effect on (a) the business, property, assets, liabilities, condition 
(financial or otherwise), operations, results of operations or prospects of (i) 
the Company and its Subsidiaries taken as a whole or (ii) the Investor 
Guarantor; (b) the ability of the Company, any other Loan Party or the Investor 
Guarantor to perform its obligations under any of the Credit Documents to which 
it is a party; (c) the validity or enforceability of any of the Credit 
Documents; or (d) the rights and remedies of the Lender under any of the Credit 
Documents.

     "MATERIAL CONTRACT" shall mean, with respect to the Company and the other 
Loan Parties, any contract, agreement or binding understanding or arrangement 
(whether or not in written form) the termination or loss of which could 
reasonably be expected to have a Material Adverse Effect.

     "MULTIEMPLOYER PLAN" of any Person shall mean a multiemployer plan defined 
as such in Section 3(37) of ERISA to which contributions have been made by such 
Person or any ERISA Affiliate of such Person and which is covered by Title IV 
of ERISA.

     "NET INCOME" shall mean, for any period of computation thereof, the net 
income of a Person; PROVIDED, HOWEVER, that the following shall be excluded 
when determining Net Income: 


                                     -11-
<PAGE>

(i) net gains on the acquisition, retirement, sale or other disposition of 
capital stock and other securities of such Person; (ii) net gains on the 
collection of proceeds of life insurance policies; (iii) any write-up of any 
asset; and (iv) any other net gain or credit of an extraordinary nature.

     "NET PROCEEDS" shall mean, with respect to an Equity Issuance, the 
aggregate amount of all cash received by a Person in respect of such Equity 
Issuance net of investment banking fees, legal fees, accountants fees, 
underwriting discounts and commissions and other customary fees and expenses 
actually incurred by such Person in connection with such Equity Issuance.

     "NET WORTH" shall mean, with respect to any Person and at any given time, 
the sum of such Person's total shareholder's equity (including capital stock, 
additional paid-in capital and retained earnings, after deducting treasury 
stock) which would appear as such on a balance sheet of such Person prepared in 
accordance with GAAP.  In addition, to the extent not already included in Net 
Worth, the carrying value of the Company's Class B Common Stock shall be 
included when determining Net Worth.

     "NEW SUBSIDIARY" means, with respect to an Acquisition, any Subsidiary of 
the Company formed in connection with, and for the purpose of effecting, such 
Acquisition.  If all of the outstanding capital stock of a Seller is being 
acquired by the Company or any of its Subsidiaries in connection with an 
Acquisition, then such Seller shall also constitute a New Subsidiary.

     "NOTES" shall mean, collectively, the Facility A Note and the Facility B 
Note.

     "OPERATING ACCOUNT" shall mean the account established by the Company with 
the Lender or which the Company and the Lender may designate from time to time 
as the "Operating Account."

     "OBLIGATIONS" shall mean, individually and collectively:

     (a)  the Loans;

     (b)  all other obligations and indebtedness of the Company owing to the 
Lender of every kind, nature and description, under or with respect to this 
Agreement, the Notes or any of the other Credit Documents, whether direct or 
indirect, absolute or contingent, due or not due, contractual or tortious, 
liquidated or unliquidated, and whether or not evidenced by any note;

     (c)  all other obligations and indebtedness owing by the Company to the 
Lender and all future advances made to the Company by the Lender, however and 
whenever created, arising or evidenced, whether direct or indirect, through 
assignment from third parties, whether absolute or contingent, or otherwise, 
now or hereafter existing, or due or to become due, including, without 
limitation, obligations under all guaranties, letters of credit and overdrafts; 
and

     (d)  any and all renewals, modifications, extensions and supplements to 
any of the foregoing.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity 
succeeding to any or all of its functions under ERISA.


                                     -12-
<PAGE>

     "PERMITTED INVESTMENTS" of any Person shall mean: (a) direct obligations 
of the United States of America or of any agency thereof, or obligations 
guaranteed as to principal and interest by the United States of America or of 
any agency thereof, in either case maturing not more than 90 days from the date 
of acquisition thereof by such Person; (b) time deposits or certificates of 
deposit issued by any bank or trust company organized under the laws of the 
United States of America or any state thereof and having capital, surplus and 
undivided profits of at least $200,000,000, maturing not more than 90 days from 
the date of acquisition thereof by such Person; and (c) commercial paper having 
the highest rating from Standard & Poor's Rating Group, a division of 
McGraw-Hill, Inc. or Moody's Investors Services, Inc. maturing not more than 90 
days from the date of acquisition thereof by such Person.

     "PERMITTED LIENS" shall mean:

     (a)  Liens created pursuant to the Security Documents;

     (b)  Liens imposed by any Governmental Authority for taxes, assessments or 
charges not yet due or which are being contested in accordance with Section 
6.5.;

     (c)  carriers', warehousemen's, mechanics', materialmen's, repairmen's or 
other like Liens arising in the ordinary course of business not yet delinquent 
or which are being contested in accordance with Section 6.5.;

     (d)  pledges or deposits under worker's compensation, unemployment 
insurance and other social security legislation;

     (e)  deposits to secure the performance of bids, trade contracts (other 
than a trade contract which constitutes Indebtedness), leases (other than 
Capitalized Lease Obligations), statutory obligations, surety and appeal bonds, 
performance bonds and other obligations of a like nature incurred in the 
ordinary course of business;

     (f)  easements, rights-of-way, zoning restrictions and other similar 
encumbrances of record on real property incurred in the ordinary course of 
business which, in the aggregate, are not material in dollar amount, and which 
do not in any case materially detract from the value of the property subject 
thereto or interfere with the ordinary conduct of the business of the Company 
or any of the other Loan Parties;

     (g)  Liens existing on the date hereof and disclosed on Schedule 5.17. 
hereto; and

     (h)  Purchase Money Liens securing Indebtedness of the Company permitted 
under Section 7.3.(c).

     "PERSON" shall mean an individual, corporation, partnership, limited 
liability company, association, trust or unincorporated organization, or a 
government or any agency or political subdivision thereof.


                                     -13-
<PAGE>

     "PLAN" of the Company or any of the other Loan Parties shall mean an 
employee benefit or other plan established or maintained by such Person or any 
ERISA Affiliate of such Person and which is covered by Title IV of ERISA, other 
than a Multiemployer Plan of such Person.

     "PLEDGE AGREEMENT" shall mean (a) the Pledge Agreement dated as of the 
date hereof executed by the Borrower in favor of the Lender and (b) each 
additional pledge agreement entered into between a Loan Party and the Lender 
after the Closing Date pursuant to Section 4.3. by which such Loan Party grants 
to the Lender a Lien in all capital stock of each Subsidiary directly owned by 
such Loan Party, in each case, substantially in the form of Exhibit C.

     "PRIME RATE" shall mean the rate of interest from time to time announced 
by the Lender in Atlanta, Georgia as its prime commercial lending rate.  The 
Prime Rate is not necessarily intended to be the lowest rate of interest 
determined by the Lender in connection with extensions of credit.

     "PURCHASE AGREEMENT" shall mean, with respect to an Acquisition, the asset 
purchase agreement, stock purchase agreement or other primary agreement to 
which the Company and/or one or more of its Subsidiaries is a party and 
pursuant to which the Company or such Subsidiary or Subsidiaries is acquiring 
substantially all of the assets, assets constituting a distinct operating 
division, or the outstanding capital stock, of the Seller that is the target of 
such Acquisition.

     "PURCHASE MONEY LIEN" shall mean a Lien on any fixed asset or equipment 
(and any intangible assets associated therewith) acquired after the date 
hereof; PROVIDED, HOWEVER, that: (a) such Lien attaches only to the property 
being acquired; (b) the Indebtedness incurred in connection with such 
acquisition shall not exceed the purchase price of such property and (c) such 
Lien shall secure only such Indebtedness.

     "RECEIVABLE" shall mean all accounts and any and all rights to the payment 
of money or other forms of consideration of any kind (whether classified under 
the UCC as accounts, chattel paper, general intangibles, or otherwise) for 
goods sold or leased of for services rendered including, but not limited to, 
accounts receivable, proceeds of any letter of credit naming the Company or any 
Subsidiary as beneficiary, chattel paper, tax refunds, insurance proceeds, 
contract rights, notes drafts, instruments, documents acceptances, and all 
other debts, obligations and liabilities in whatever form from any person.

     "REGULATIONS D, G, T, U AND X" shall mean, respectively, Regulations D, G, 
T, U and X of the Board of Governors of the Federal Reserve System (or any 
successor), as the same may be amended or supplemented from time to time.

     "REGULATORY CHANGE" shall mean, with respect to the Lender, any change 
enacted or adopted after the date of this Agreement in United States Federal, 
state or foreign law or regulations (including, without limitation, Regulation 
D) or the adoption or publication after the date of this Agreement of any 
interpretations, directives or requests (whether or not having the force of 
law) applying to a class of banks including the Lender of or under any United 
States Federal, state or foreign law or regulations by any court or 
governmental or monetary authority charged with the interpretation or 
administration thereof.


                                     -14-
<PAGE>

     "RELEASE" shall mean any "release" as such term is defined in 42 U.S.C. 
Section 9601(22), or any successor federal statute or analogous state law.

     "RESTRICTED PAYMENT" shall mean (a) dividends by or on behalf of a Loan 
Party on, or other payments or distributions on account of or with respect to, 
or the setting apart of money for a sinking or other analogous fund for, or the 
purchase, redemption, retirement or other acquisition of, any shares of any 
class of capital stock of such Loan Party, or (b) any prepayment by a Loan 
Party of principal, optional redemption, purchase, retirement prior to stated 
maturity, defeasance, or similar optional prepayment with respect to any 
Indebtedness for borrowed money other than the Loans.

     "REVOLVING LOANS" shall mean the Facility A Loans and the Facility B Loans.

     "SECURITY AGREEMENTS" shall mean (a) the Security Agreements dated as of 
the date hereof and executed by the Company and each Subsidiary Guarantor and 
the Lender and (b) each security agreement entered into between a Loan Party 
and the Lender after the Closing Date pursuant to Section 4.3., in each case, 
substantially in the form of Exhibit D.

     "SECURITY DOCUMENTS" shall mean, collectively, the Security Agreements, 
the Pledge Agreements, the Assignments of Acquisition Documents, each of the 
UCC financing statements naming a Loan Party as debtor and the Lender as 
secured party and covering the Collateral, and any other security documents 
executed and delivered to the Lender by a Loan Party.

     "SELLER" shall mean the Person being acquired in an Acquisition.

     "SIGNIFICANT ACQUISITION" shall mean any Acquisition in which the 
aggregate amount of consideration payable by the Company and its Subsidiaries 
in connection therewith equals or exceeds $3,000,000.  For purposes of this 
definition, such consideration shall include (without duplication), but shall 
not be limited to, the following:  (a) the amount of cash paid, together with 
the fair market value of all other assets (excluding assets of the type 
described in the following clause (b)) conveyed, by the Company and its 
Subsidiaries in consideration for such Acquisition; (b) the fair market value 
of all capital stock, warrants and options to acquire capital stock, of the 
Company conveyed by the Company in consideration for such Acquisition; (c) the 
aggregate amount of Indebtedness acquired, incurred or assumed by the Company 
and its Subsidiaries in connection with such Acquisition; (d) all amounts paid 
or to be paid by the Company and its Subsidiaries in respect of any covenant 
not to compete granted in connection with such Acquisition and accruing to the 
benefit of any New Subsidiary or other Loan Party; (e) the aggregate 
capitalized amount of consulting or other similar fees or payments to be paid 
by such New Subsidiary or other Loan Party to a Seller or any Affiliate of such 
Seller in connection with, or as a result of, such Acquisition; (f) the 
aggregate amount of earn-out payments, similar payments or other contingent 
obligations required to be made by the Company and its Subsidiaries in 
connection with such Acquisition and which payments or other obligations are to 
be capitalized by the Company and its Subsidiaries and (g) the amount of all 
transaction fees and expenses (including, without limitation, legal, accounting 
and brokers' fees and expenses) incurred by the Company and its Subsidiaries in 
connection with such Acquisition.


                                     -15-
<PAGE>

     "SMALL ACQUISITION" shall mean any Acquisition that is not a Significant 
Acquisition.

     "SOLVENT" shall mean, when used with respect to any Person, that (a) the 
fair value and the fair salable value of its assets (excluding any Indebtedness 
due from any Affiliate of such Person) are each in excess of the fair valuation 
of its total liabilities (including all contingent liabilities); and (b) such 
Person is able to pay its debts or other obligations in the ordinary course as 
they mature and (c) the Person has capital not unreasonably small to carry on 
its business and all business in which it proposes to be engaged.

     "SUBORDINATED DEBT" means, at any time, the Indebtedness of the Company or 
any of its Subsidiaries that is subordinated in right of payment to the Loans 
and the other Obligations in a manner satisfactory to the Lender and otherwise 
permitted by the Lender.

     "SUBSIDIARY" shall mean, with respect to any Person, any corporation, 
partnership, association or other business entity of which more than 50% of the 
total voting power of shares of stock (or equivalent ownership or controlling 
interest) entitled (without regard to the occurrence of any contingency) to 
vote in the election of directors, managers or trustees thereof is at the time 
owned or controlled, directly or indirectly, by that Person or one or more of 
the other Subsidiaries of that Person or any combination thereof.

     "SUBSIDIARY GUARANTOR" shall mean each of (i) FormMaker Software, Inc., a 
Georgia corporation, (ii) Image Sciences, Inc., a Texas corporation and (iii) 
Micro Dynamics, Ltd., a Delaware corporation.

     "SUBSIDIARY GUARANTY" shall mean the Subsidiary Guaranty substantially in 
the form of Exhibit B executed by each Subsidiary Guarantor in favor of the 
Lender.

     "TERMINATION DATE" shall mean September 29, 2000.

     "TRANSACTIONS" shall mean (a) the making of the Loans hereunder, (b) any 
Acquisition, (c) the execution and delivery of each of the Credit Documents and 
the Acquisition Documents and (d) the consummation of all of the other 
transactions contemplated by the Credit Documents and the Acquisition Documents.

     "TYPE"  with respect to a Loan, refers to whether such Loan is a LIBOR 
Loan or a Base Rate Loan.

     "UCC" shall mean the Uniform Commercial Code as in effect from time to 
time in the State of Texas.

     "WHOLLY-OWNED SUBSIDIARY" of a Person shall mean any corporation, 
association or other business entity of which 100% of the outstanding shares of 
all classes of capital stock or other ownership interests is at the time owned 
directly or indirectly by, such Person or one or more of the other Wholly-Owned 
Subsidiaries of such Person or a combination thereof.

     In addition to the above definitions, the following terms are defined in 
this Agreement on the indicated pages:


                                     -16-
<PAGE>

      Acquisition Date...................................34
      Acquisition Historical Financial Statements........34
      Acquisition Projected Financial Statements.........34
      Additional Costs...................................28
      Change in Control..................................55
      Default Rate.......................................20
      Event of Default...................................52
      Facility A Loans...................................18
      Facility A Note....................................22
      Facility A Term Loan...............................24
      Facility B Loans...................................18
      Facility B Note....................................22
      Historical Financial Statements....................32
      Liquidity Agreement................................33
      Margin Stock.......................................40
      Notice of Borrowing................................18
      Notice of Continuation.............................21
      Notice of Conversion...............................21
      Other Taxes........................................27
      Pro Forma Opening Balance Sheet....................45
      Projected Financial Statements.....................32
      Taxes..............................................27


     1.2.   ACCOUNTING TERMS AND DETERMINATIONS

     (a)  Except as otherwise expressly provided herein, all accounting terms 
used herein shall be interpreted, all calculations for purposes of determining 
compliance with the terms of this Agreement shall be made, and all financial 
statements and certificates and reports as to financial matters required to be 
delivered to the Lender hereunder shall be prepared in accordance with GAAP 
applied for all periods to the extent practicable on a basis consistent with 
that used in the preparation of the Historical Financial Statements, so as to 
present fairly the financial condition and the results of operations of the 
applicable Person.  In the event of a change in GAAP that is applicable to the 
Company, compliance with the financial covenants contained herein shall 
continue to be determined in accordance with GAAP as in effect prior to such 
change; provided, however, that the Company and the Lender will thereafter 
negotiate in good faith to revise such covenants to the extent necessary to 
conform such covenants to GAAP as then in effect.

     (b)  To enable the ready and consistent determination of compliance with 
the covenants set forth in Article 7. and Article 8., the Company will not, 
without the prior written consent of the Lender, change the last day of its 
fiscal year from July 31 of each year or the last days of the first three 
fiscal quarters in each of its fiscal years from the last day in October, 
January and April of each year, respectively.


                                     -17-
<PAGE>

     (c)  All terms defined in the UCC and not otherwise defined herein are 
used herein as defined in the UCC.  References in this Agreement to "Sections", 
"Articles", "Exhibits" and "Schedules" are to sections, articles, exhibits and 
schedules herein and hereto unless otherwise indicated.  References in this 
Agreement to any document, instrument or agreement (i) shall include all 
exhibits, schedules and other attachments thereto, (ii) shall include all 
documents, instruments or agreements issued or executed in replacement thereof, 
and (iii) shall mean such document, instrument or agreement, or replacement or 
predecessor thereto, as amended, modified or supplemented from time to time and 
in effect at any given time.

2.   LOANS

     2.1.   AMOUNT OF LOANS

     (a)  FACILITY A LOANS.  The Lender agrees, on the terms and subject to the 
conditions contained herein, to make loans to the Company during the period 
from and including the Closing Date to but excluding the Facility A Termination 
Date in an aggregate principal amount at any one time outstanding of up to but 
not exceeding the Facility A Commitment (such Loans being herein called 
"Facility A Loans").  During the period from and including the Closing Date to 
but excluding the Facility A Termination Date and subject to the terms 
contained herein, the Company may borrow, repay and reborrow the Facility A 
Loans.

     (b)  FACILITY B LOANS.  The Lender agrees, on the terms and subject to the 
conditions contained herein, to make loans to the Company during the period 
from and including the Closing Date to but excluding the Facility B Termination 
Date in an aggregate principal amount at any one time outstanding of up to but 
not exceeding the Facility B Commitment (such Loans being herein called 
"Facility B Loans"); provided however, at all times after the Investor Guaranty 
has been released pursuant to Section 2.14. the aggregate principal amount of 
the Facility B Loans at any one time outstanding shall not exceed the lesser of 
(a) the Borrowing Base and (b) the amount of the Facility B Commitment.  During 
the period from and including the Closing Date to but excluding the Facility B 
Termination Date and subject to the terms contained herein, the Company may 
borrow, repay and reborrow the Facility B Loans.

     2.2.   BORROWINGS

     (a)  The Company shall give the Lender notice of each borrowing of a Loan 
hereunder as provided in Section 3.3., which notice when given shall be 
irrevocable.  Each notice of borrowing (which shall be in the form of Exhibit 
E, each a "Notice of Borrowing") shall specify: (a) whether such Loan is a 
Facility A Loan or a Facility B Loan; (b) the requested amount of such Loan; 
(c) the proposed use of the proceeds of such Loan; (d) the date such Loan is to 
be made; and (e) in the case of a Loan which is initially to be a LIBOR Loan, 
the initial Interest Period therefor.  Not later than 2:00 p.m. (Atlanta, 
Georgia time) on the date specified for each borrowing hereunder, the Lender 
shall make the amount of the Loan available to the Company by depositing the 
same, in immediately available funds, in an account of the Company maintained 
at the Applicable Lending Office.


                                     -18-
<PAGE>

     (b)  At 5:00 p.m. on each Business Day the Company shall be deemed to have 
requested that the Lender make to the Company a Facility B Loan in an amount 
equal to the amount by which drafts against the Operating Account exceed the 
available balance contained therein at such time.  The Lender shall make the 
proceeds of each such Facility B Loan available to the Company by depositing 
such proceeds into the Operating Account.  Facility B Loans advance to the 
Company under this subsection may initially be only Base Rate Loans.  The 
provisions of this subsection shall not become effective until the Company has 
executed and delivered the Lender's customary documentation relating to its 
"Auto Borrow" and "Auto Sweep" programs.

     2.3.   REPAYMENT OF LOANS

     (a)  FACILITY A LOANS.  On the Facility A Termination Date, the aggregate 
principal amount of all Facility A Loans then outstanding and that has not been 
converted into the Facility A Term Loan pursuant to Section 2.12. shall be due 
and payable in full.

     (b)  FACILITY A TERM LOAN.  The principal balance of the Facility A Term 
Loan shall be repaid in 24 consecutive monthly installments due and payable on 
the last day of each calendar month commencing with the first such day 
following the Facility A Termination Date.  The first 23 such installments 
shall each be in an amount equal to 1/24th of the initial principal balance of 
the Facility A Term Loan and the final installment shall be equal to the 
remaining principal balance of the Facility A Term Loan.  Notwithstanding the 
foregoing, on the Termination Date, the principal amount of the Facility A Term 
Loan then outstanding shall be due and payable in full.

     (c)  FACILITY B LOANS.  On the Facility B Termination Date, the aggregate 
principal amount of all Facility B Loans then outstanding shall be due and 
payable in full.

     2.4.   INTEREST

     (a)  FACILITY A LOANS.  The Company agrees to pay to the Lender in 
accordance with Section 3.2. interest on the unpaid principal amount of each 
Facility A Loan for the period from and including the date of such Facility A 
Loan to but excluding the date such Facility A Loan shall be paid in full, at 
the following per annum rates:

          (i)  during the periods that such Facility A Loan is a Base Rate 
     Loan, at the Base Rate (as in effect from time to time); and

          (ii) during the periods that such Facility A Loan is a LIBOR Loan, 
     for each Interest Period relating thereto, at the Adjusted LIBO Rate for 
     such Facility A Loan for such Interest Period plus two                
     and one-half of one percent (2.5%).

     (b)  FACILITY B LOANS.  The Company agrees to pay to the Lender in 
accordance with Section 3.2. interest on the unpaid principal amount of each 
Facility B Loan for the period from and including the date of such Facility B 
Loan to but excluding the date such Facility B Loan shall be paid in full, at 
the following per annum rates:


                                     -19-
<PAGE>

          (i)  during the periods that such Facility B Loan is a Base Rate
     Loan, at the Base Rate (as in effect from time to time) minus one-quarter
     of one percent (0.25%); provided, however, if the Investor Guaranty has
     been released pursuant to Section 2.14., then such Loan shall bear
     interest at the Base Rate (as in effect from time to time); and
     
          (ii) during the periods that such Facility B Loan is a LIBOR Loan,
     for each Interest Period relating thereto, at the Adjusted LIBO Rate for
     such Facility B Loan for such Interest Period plus two percent (2.0%);
     provided, however, if the Investor Guaranty has been released pursuant to
     Section 2.14., then such Loan shall bear interest at Adjusted LIBO Rate
     plus two and one-quarter of one percent (2.25%).
     
     (c)  PAYMENT OF ACCRUED INTEREST.  Accrued interest on each Loan shall be 
payable (i) in the case of a Base Rate Loan, monthly in arrears on the last 
Business Day of each calendar month; (ii) in the case of a LIBOR Loan, on the 
last day of each Interest Period thereof (and, if such Interest Period is 
longer than three months, at three-month intervals following the first day of 
such Interest Period); (iii) in the case of each Loan, upon the payment or 
prepayment thereof or the Conversion of such Loan to a Loan of another Type 
(but only on the principal amount so paid, prepaid or Converted); (iv) in the 
case of each Facility A Loan, on the Facility A Termination Date; (v) in the 
case of each Facility B Loan, on the Facility B Termination Date; and (vi) in 
the case of the Facility A Term Loan on the Termination Date.

     (d)  If an Event of Default shall have occurred and be continuing, the 
Company agrees to pay to the Lender interest, for the period such Event of 
Default is continuing, on the unpaid principal amount of each Loan (and, to the 
extent permitted by law, on the unpaid amount of all interest, fees and other 
amounts payable hereunder or under the Credit Documents that is not paid when 
due) at a rate per annum (the "Default Rate") equal at all times to 3% per 
annum above the rate per annum required to be paid on such Loans pursuant to 
Section 2.4.(a) or (b), as applicable.

     (e)  In no event shall the amount of interest due or payable on the Loans 
exceed the maximum rate of interest allowed by Applicable Law and, in the event 
any such payment is paid by the Company or received by the Lender, then such 
excess sum shall be credited as a payment of principal, unless the Company 
shall notify the Lender in writing that the Company elects to have such excess 
sum returned to it forthwith.  It is the express intent of the parties hereto 
that the Company not pay and the Lender not receive, directly or indirectly, in 
any manner whatsoever, interest in excess of that which may be lawfully paid by 
the Company under Applicable Law.

     (f)  THE PARTIES HERETO HEREBY AGREE AND STIPULATE THAT THE ONLY CHARGE 
IMPOSED UPON THE COMPANY FOR THE USE OF MONEY IN CONNECTION WITH THIS AGREEMENT 
IS AND SHALL BE THE INTEREST DESCRIBED IN SUBSECTIONS (a) AND (b) OF SECTION 
2.4.  THE PARTIES HERETO FURTHER AGREE AND STIPULATE THAT ALL OTHER CHARGES 
IMPOSED BY THE LENDER ON THE COMPANY IN CONNECTION WITH THIS AGREEMENT, 
INCLUDING ALL COMMITMENT FEES, FACILITY FEES, UNDERWRITING FEES, DEFAULT 
CHARGES, LATE CHARGES, ATTORNEYS' FEES AND REIMBURSEMENT FOR COSTS AND EXPENSES 
PAID BY THE LENDER TO THIRD PARTIES OR FOR DAMAGES 


                                     -20-
<PAGE>

INCURRED BY THE LENDER, ARE CHARGES MADE TO COMPENSATE THE LENDER FOR 
UNDERWRITING OR ADMINISTRATIVE SERVICES AND COSTS OR LOSSES PERFORMED OR 
INCURRED, AND TO BE PERFORMED OR INCURRED, BY THE LENDER IN CONNECTION WITH 
THIS AGREEMENT AND SHALL UNDER NO CIRCUMSTANCES BE DEEMED TO BE CHARGES FOR THE 
USE OF MONEY ALL CHARGES OTHER THAN CHARGES FOR THE USE OF MONEY SHALL BE FULLY 
EARNED AND NONREFUNDABLE WHEN DUE.

     2.5.   VOLUNTARY REDUCTIONS OF COMMITMENT

     The Company shall have the right to terminate or reduce the amount of 
either the Facility A Commitment or the Facility B Commitment at any time or 
from time to time; provided that: (i) the Company shall give notice of each 
such termination or reduction as provided in Section 3.3., which notice when 
given shall be irrevocable and (ii) each partial reduction shall be in an 
aggregate amount at least equal to $100,000 or an integral multiple of $100,000 
in excess thereof.   The Facility A Commitment and the Facility B Commitment, 
once terminated or reduced, may not be reinstated or increased.

     2.6.   CONTINUATION AND CONVERSION OF LOANS

     (a)  So long as no Default or Event of Default shall have occurred and be 
continuing, the Company may on any Business Day, with respect to any LIBOR 
Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan 
by selecting a new Interest Period for such LIBOR Loan or portion.  Each new 
Interest Period selected under this Section shall commence on the last day of 
the immediately preceding Interest Period.  Each selection of a new Interest 
Period shall be made by the Company's giving of a notice in the form of Exhibit 
F (a "Notice of Continuation") within the time prescribed by Section 3.3.  Such 
notice by the Company of a Continuation shall specify (a) the effective date of 
such Continuation, (b) the LIBOR Loan and portion thereof subject to such 
Continuation and (c) the duration of the selected Interest Period, all of which 
shall be specified in such manner as is necessary to comply with all 
limitations on Loans outstanding hereunder.  If the Company shall fail to 
select in a timely manner a new Interest Period for any LIBOR Loan in 
accordance with this Section, such Loan will automatically, on the last day of 
the current Interest Period therefor, Convert into a Base Rate Loan 
notwithstanding failure of the Company to comply with the immediately following 
subsection (b).

     (b)  So long as no Default or Event of Default shall have occurred and be 
continuing, the Company may on any Business Day, upon the Company's giving of a 
notice in the form of Exhibit G (a "Notice of Conversion"), Convert all or a 
portion of a Loan of one Type into a Loan of another Type.  In connection with 
any Conversion of a LIBOR Loan into a Base Rate Loan on a day other than the 
last day of an Interest Period for such LIBOR Loan the Company as a condition 
to such Conversion shall pay all amounts contemplated by Section 3.9.  Each 
such Notice of Conversion shall be given within the time prescribed by Section 
3.3.  Subject to the restrictions specified above, each Notice of Conversion 
shall specify (a) the requested date of such Conversion, (b) the Type of Loan 
to be Converted, (c) the portion of such Type of Loan to be 


                                     -21-
<PAGE>

Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if 
such Conversion is into a LIBOR Loan, the requested duration of the initial 
Interest Period of such Loan.

     (c)  No more than six separate Interest Periods in respect of LIBOR Loans 
may be outstanding at any one time.

     2.7.   MINIMUM AMOUNTS

     Except for Conversions or prepayments made pursuant to Section 3.8., (a) 
each borrowing of LIBOR Loans (including a Continuation of, or Conversion into, 
LIBOR Loans) shall be in an amount at least equal to $1,000,000 and integral 
multiples of $500,000 in excess thereof, (b) each borrowing of Base Rate Loans 
(including a Continuation of, or Conversion into, Base Rate Loans) shall be in 
an amount at least equal to $250,000 and integral multiples of $5,000 in excess 
thereof, and (c) each voluntary prepayment of Loans shall be in an amount at 
least equal to $100,000 and integral multiples thereof (borrowings, prepayments 
or Conversions of Loans into Loans of different Types or, in the case of LIBOR 
Loans, having different Interest Periods, shall be deemed to be separate 
borrowings, prepayments or Conversions for purposes of the foregoing, one for 
each Type or Interest Period).  The provisions of this Section shall not apply 
to borrowings under Section 2.2.(b).

     2.8.   FEES

     (a)  The Company shall pay to the Lender on the Closing Date a closing fee 
in the amount of $5,000.

     (b)  If during any calendar month the daily average unused amount of the 
Facility B Commitment for such month shall be greater than an amount equal to 
65% of the Facility B Commitment, then the Company shall pay to the Lender, 
during the period beginning on the first day of the following month through the 
last day of the month in which the daily average unused amount of the Facility 
B Commitment for such month shall first be less than such amount, a fee on the 
daily average unused amount of the Facility B Commitment at a per annum rate, 
computed in accordance with Section 3.2., equal to one-quarter of one percent 
(0.25%).  Accrued unused commitment fees shall be payable monthly in arrears on 
the last Business Day of each month.

     (c)  All fees shall be fully earned and non-refundable upon receipt.

     2.9.   NOTES

     (a)  (i)  The Facility A Loans and the Facility A Term Loan shall be 
evidenced by a single promissory note (the "FACILITY A NOTE") to be executed by 
the Company in substantially the form of Exhibit H, dated the date hereof, 
payable to the Lender in a principal amount equal to the amount of the Facility 
A Commitment as originally in effect and otherwise duly completed.

          (ii)  The Facility B Loans shall be evidenced by a promissory note 
(the "FACILITY B NOTE") to be executed by the Company in substantially the form 
of Exhibit I, dated the date hereof, payable to the Lender in a principal 
amount equal to the amount of the Facility B Commitment as originally in effect 
and otherwise duly completed.


                                     -22-
<PAGE>

     (b)  The date and amount of each Loan made by the Lender to the Company, 
and each payment made on account of the principal thereof, shall be recorded by 
the Lender on its books and, prior to any transfer of the applicable Note 
evidencing such Loans held by it, endorsed by the Lender on the schedule 
attached to such Note or any continuation thereof; provided that the failure of 
the Lender to make any such recordation or endorsement shall not affect the 
obligations of the Company to make a payment when due of any amount owing under 
such Note.  Any such recordations or endorsements made by the Lender on its 
books or such Note shall be conclusive and binding on the Company absent 
manifest error.

     2.10.  OPTIONAL PREPAYMENTS

     The Company shall have the right to prepay Loans in whole or in part at 
any time or from time to time, without premium or penalty, except that in 
connection with any prepayment of LIBOR Loans on a day other than the last day 
of the Interest Period applicable thereto, the Company as a condition to such 
prepayment shall pay all amounts contemplated by Section 3.9. in connection 
with such prepayment.  Optional prepayments of the Facility A Term Loan shall 
be applied to reduce scheduled repayments of such Loan in inverse order of 
maturity.

     2.11.  MANDATORY PREPAYMENTS OF LOANS

     (a)  LOANS IN EXCESS OF COMMITMENT.  If at any time (a) the aggregate 
amount of either the Facility A Loans or the Facility B Loans outstanding shall 
exceed the amount of the  Facility A Commitment or Facility B Commitment, 
respectively, in effect at such time, or (b) after the Investor Guaranty has 
been released pursuant to Section 2.14., the aggregate amount of the Facility B 
Loans shall exceed the Lesser of (i) the Facility B Commitment or (ii) the 
Borrowing Base, then, in each such case the Company shall, within one Business 
Day, prepay such Loans in such amounts as shall be necessary to eliminate such 
excess.

     (b)  SWEEP OF OPERATING ACCOUNT.  At 5:00 p.m. of each Business Day, the 
Company shall repay a principal amount of Facility B Loans by an amount equal 
to the positive balance, if any, of available funds on deposit in the Operating 
Account as determined by the Lender at such time.  The Company hereby 
authorizes the Lender to deduct such amount from the Operating Account without 
notice to the Company, and to apply such amount in repayment of the then 
outstanding principal balance of Facility B Loans.  The provisions of this 
subsection shall not become effective until the Company has executed and 
delivered the Lender's customary documentation relating to its "Auto Borrow" 
and "Auto Sweep" programs.

     (c)  CERTAIN ACTIONS BY INVESTOR GUARANTOR AND AFFILIATES.  If, at any 
time prior to the release of the Investor Guaranty in accordance with Section 
2.14. hereof, any of the following shall occur:

          (i) the Investor Guarantor (x) merges or consolidates with any Person
     (other than a merger or consolidation with a Subsidiary of Safeguard
     Scientifics, Inc. pursuant to which the Investor Guarantor is the
     surviving entity); (y) dissolves, liquidates or ceases to exist, or takes
     any action authorizing any of the foregoing or (z) sells, leases,
     transfers or 


                                     -23-
<PAGE>

     otherwise disposes of, in one transaction or a series of transactions, all 
     or substantially all of its assets; or 

          (ii) at any time both: (x) the amount of Revolving Loans (as defined
     in the Guarantor Credit Agreement) which the Investor Guarantor could then
     borrow under the Guarantor Credit Agreement shall be less than $3,500,000
     and (y) the value of all Qualifying Securities (as defined below) PLUS all
     cash and cash equivalents then held by the Investor Guarantor MINUS twice
     the amount of Indebtedness then owing under the Guarantor Credit Agreement
     shall be less than $7,000,000. For purposes of this subsection (iii), the
     term "Qualifying Security" means any common stock owned by the Investor
     Guarantor in a Subsidiary whose common stock (A) is listed on the New York
     Stock Exchange, the American Stock Exchange or some other principal
     national securities exchange or has price quotations in the
     over-the-counter market reported by the National Association of Securities
     Dealers Automated Quotation System; (B) is not subject to any instrument,
     document or agreement which in any way prohibits the sale of such common
     stock by the Investor Guarantor for any specified period of time or
     otherwise; and (C) the offer and sale of which by the Investor Guarantor
     would not then be subject to any registration requirements or other
     restrictions under the Securities Act of 1933, as amended (the "Securities
     Act"), or other Applicable Law, including without limitation, volume
     limitations imposed under Rule 144 of the Securities Act; or

          (iii) any event or condition of the types described in Sections 9.5.,
     9.6., or 9.7. occurs or exists with respect to the Investor Guarantor; or

          (iv) any representation, warranty or certification made or deemed to
     be made in any Credit Document by the Investor Guarantor or any
     certificate, financial statement or other information furnished in writing
     to the Lender by or on behalf of the Investor Guarantor pursuant to the
     provisions hereof or thereof, shall prove to have been false or misleading
     in any material respect as of the time made or deemed to be made; or

          (v) the Investor Guarantor fails to comply with any of its
     obligations under its Guaranty and such failure continues for five days
     after notice is made by the Lender to the Company of such failure.
     
then, (a) the Company shall, within one Business Day of the Lender's demand, 
repay the entire outstanding principal amount of, and all accrued and unpaid 
interest on, the Facility B Loans and all other Obligations payable by the 
Company hereunder relating to the Facility B Commitment and (b) the Lender may 
upon written notice to the Company terminate the Facility B Commitment.

     2.12.  CONVERSION TO TERM LOAN

     Subject to the terms and conditions of this Agreement, the Company may 
elect to convert the aggregate principal amount of Facility A Loans outstanding 
on the Facility A  Termination Date into a single term loan (the "Facility A 
Term Loan") provided (a) the Company has given the 


                                     -24-
<PAGE>

Lender thirty-days' prior notice of the Company's intention to so convert the 
Facility A Loans and (b) the conditions set forth in Section 4.2. have been 
satisfied as of the date such conversion.

     2.13.  USE OF PROCEEDS

     The Company may use the proceeds of Loans to finance Acquisitions, for 
working capital purposes and for other general corporate purposes.

     2.14.  RELEASE OF INVESTOR GUARANTY

     The Lender agrees, upon at least 30 days but not more than 60 days prior 
written request of the Company, to release the Investor Guarantor from its 
obligations under and pursuant to the Investor Guaranty (other than those 
obligations which survive the termination thereof), subject to the satisfaction 
of the following conditions:

     (a)  the Lender shall receive evidence satisfactory to the Lender of the 
Company's receipt of at least $10,000,000 in Net Proceeds from an Equity 
Issuance completed on or after the date hereof; and

     (b)  no Default or Event of Default have occurred and be continuing as of 
the proposed date of such release of the Investor Guarantor; and

     (c)  no Default or Event of Default shall have ever occurred hereunder; 
PROVIDED, HOWEVER, that the Lender may, in its sole discretion, waive the 
condition set forth in this clause (c).

3.   PAYMENTS; COMPUTATIONS; TAXES; ETC.

     3.1.   PAYMENTS

     (a)  Except to the extent otherwise provided herein, all payments of 
principal, interest and other amounts to be made by the Company under this 
Agreement and the Notes and, except to the extent otherwise provided therein, 
all payments to be made by the Company under any other Credit Document, shall 
be made in Dollars, in immediately available funds, without deduction, set-off 
or counterclaim, to the Lender at its Applicable Lending Office, not later than 
12:00 noon Atlanta time on the date on which such payment shall become due 
(each such payment made after such time on such due date to be deemed to have 
been made on the next succeeding Business Day).

     (b)  The Company shall, at the time of making each payment under this 
Agreement or either Note, specify to the Lender the Loans or other Obligations 
to which such payment is to be applied (and in the event that it fails to so 
specify, or if an Event of Default has occurred and is continuing, the Lender 
may apply such payment to the Loans in such manner as it may determine to be 
appropriate).

     (c)  If the due date of any payment under this Agreement or the Notes 
would otherwise fall on a day which is not a Business Day, such date shall be 
extended to the next succeeding 


                                     -25-
<PAGE>

Business Day and interest shall be payable for any principal so extended for 
the period of such extension.

     3.2.   COMPUTATIONS

     Interest on Loans and commitment fees shall be computed on the basis of a 
year of 360 days comprised of twelve thirty-day months for the actual days 
elapsed (including the first day but excluding the last day) occurring in the 
period for which such amounts are payable.

     3.3.   CERTAIN NOTICES

     Notwithstanding anything contained in Section 10.2. to the contrary, 
Notices of Borrowings, notices of optional terminations or reductions of the 
Facility A Commitment, notices of optional terminations or reductions of the 
Facility B Commitment, notices of optional prepayments of Loans, Notices of 
Conversion and Notices of Continuations shall be irrevocable and shall be 
effective only if received by the Lender in writing not later than 12:00 noon 
Atlanta, Georgia time on the number of Business Days prior to the date of the 
relevant optional termination, reduction, borrowing, Continuation, Conversion 
or prepayment specified below:

                                                        NUMBER OF
                                                         BUSINESS
      NOTICE                                           DAYS PRIOR
      ------                                           ----------
      Initial Borrowing on Closing Date                     1
      Subsequent Borrowing of Base Rate Loans            Same Day
      Subsequent Borrowing of LIBOR Loans                   3
      Notice of Conversion to a LIBOR Loan                  3
      Notice of Conversion to a Base Rate Loan              1
      Notice of Continuation                                3
      Termination or reduction of Facility A Commitment     2
      Termination or reduction of Facility B Commitment     2
      Prepayment of Loans                                   1

     Subject to Section 2.5., each such notice of optional termination or 
reduction of Facility A Commitment or Facility B Commitment shall specify the 
amount of the  Facility A Commitment or the Facility B Commitment, as 
applicable, to be terminated or reduced.  Each notice of borrowing, Conversion 
or optional prepayment shall specify the Type of Loans to be borrowed, 
Converted or prepaid and the amount of each Loan to be borrowed, Converted or 
prepaid and the date thereof (which shall be a Business Day).  The provisions 
of this Section shall not apply to borrowings under Section 2.2.(b) or 
repayments pursuant to Section 2.11.(b).


                                     -26-
<PAGE>

     3.4.   TAXES

     (a)  Any and all payments by the Company hereunder shall be paid (except 
to the extent required by law) free and clear of and without deduction for any 
and all present or future taxes, levies, imposts, deductions, charges or 
withholdings, and all liabilities with respect thereto, excluding franchise 
taxes and taxes based on net income imposed on the Lender by the United States 
(or any political subdivision thereof) in which the Lender has its Applicable 
Lending Office (all such nonexcluded taxes, levies, imposts, deductions, 
charges, withholdings and liabilities being hereinafter referred to as 
"Taxes").  If the Company shall be required by law to deduct any Taxes from or 
in respect of any sum payable hereunder to the Lender (i) the sum payable by 
the Company shall be increased by the amount necessary so that after making all 
required deductions (including deductions applicable to additional sums payable 
under this Section 3.4.) the Lender shall receive an amount equal to the sum it 
would have received had no such deductions been made, (ii) the Company shall 
make such deductions, and (iii) the Company shall pay the full amount deducted 
to the relevant taxing authority or other Governmental Authority in accordance 
with Applicable Law.      

     (b)  In addition, the Company agrees to pay any present or future stamp or 
documentary taxes or any other excise or property taxes, charges or similar 
levies which arise from any payment made hereunder or from the execution, 
delivery or registration of, or otherwise with respect to, this Agreement or 
any other Credit Document (hereinafter referred to as "Other Taxes").      

     (c)  The Company will indemnify the Lender for the full amount of Taxes 
and Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction 
on amounts payable under this Section 3.4.) paid by the Lender and any 
liability (including penalties, interest and expenses) arising therefrom or 
with respect thereto, whether or not such Taxes or Other Taxes were correctly 
or legally asserted.  Such indemnification shall be made within five Business 
Days after the date of receipt of a written demand therefor from  the Lender.   

     (d)  Within 30 days after the date of any payment of Taxes or Other Taxes 
withheld by the Company in respect of any payment to the Lender, the Company 
will furnish to the Lender, at its address referred to in Section 10.2., the 
original or a certified copy of a receipt evidencing payment thereof.      

     (e)  If the Lender claims any additional amounts payable pursuant to this 
Section, the Lender shall use reasonable efforts (consistent with legal and 
regulatory restrictions) to file any certificate or document reasonably 
requested by the Company if the making of such a filing would avoid the need 
for or reduce the amount of any such additional amounts which may thereafter 
accrue and would not, in the sole determination of  the Lender, be otherwise 
disadvantageous to the Lender.

     3.5.   ADDITIONAL COSTS 

     (a)  EVENTS ENTITLING THE LENDER TO RECEIVE COMPENSATION.  The Company 
shall pay directly to the Lender from time to time such amounts as the Lender 
may determine in good faith 

                                     -27-
<PAGE>

to be necessary to compensate it for any costs which it determines are 
attributable to its making or maintaining any Loans or its obligation to make 
any Loans hereunder, or any reduction in any amount receivable by the Lender 
hereunder in respect of any of such Loans or such obligation (such increases in 
costs and reductions in amounts receivable being herein called "Additional 
Costs") resulting from any Regulatory Change which:           

          (i)  changes the basis of taxation of any amounts payable to the 
     Lender under this Agreement or either of the Notes in respect of any of 
     such Loans (other than taxes imposed on or measured by the overall net 
     income of the Lender or of its Applicable Lending Office for any of such 
     Loans by the jurisdiction in which the Lender has its Applicable Lending 
     Office); or 
    
          (ii) imposes or modifies any reserve, special deposit or similar
     requirements relating to any extensions of credit or other assets of, or 
     any deposits with or other liabilities of, the Lender (including any of 
     such Loans or any deposits referred to in the definition of "LIBOR" in 
     Section 1.1.), or any commitment of the Lender (including the 
     Commitment) hereunder.      
    
     (b)  DETERMINATION OF AMOUNT OF COMPENSATION.  Without limiting the effect 
of the foregoing provisions of this Section 3.5. (but without duplication), the 
Company shall pay directly to the Lender from time to time on request such 
amounts as the Lender may determine to be necessary to compensate the Lender 
(or, without duplication, the bank holding company of which the Lender is a 
subsidiary) for any increased costs which it determines in good faith are 
attributable to the maintenance by the Lender (or any Applicable Lending Office 
or such bank holding company) of capital in respect of the Commitment or Loans 
pursuant to any law or regulation or any interpretation, directive or request 
(whether or not having the force of law) of any court or governmental or 
monetary authority (i) following any Regulatory Change or (ii) implementing any 
risk-based capital guideline or requirement (whether or not having the force of 
law and whether or not the failure to comply therewith would be unlawful) 
hereafter issued by any government or governmental or supervisory authority 
implementing at the national level the Basle Accord (including, without 
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors 
of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225, 
Appendix A) and the Final Risk-Based Capital Guidelines of the Office of the 
Comptroller of the Currency (12 CFR Part 3, Appendix A)), such compensation to 
include, without limitation, an amount equal to any reduction of the rate of 
return on assets or equity of the Lender (or any Applicable Lending Office or 
such bank holding company) to a level below that which the Lender (or any 
Applicable Lending Office or such bank holding company) could have achieved but 
for such law, regulation, interpretation, directive or request.  For purposes 
of this Section 3.5.(b), "Basle Accord" shall mean the proposals for risk-based 
capital framework described by the Basle Committee on Banking Regulations and 
Supervisory Practices in its paper entitled "International Convergence of 
Capital Measurement and Capital Standards" dated July 1988, as amended, 
modified and supplemented and in effect from time to time or any replacement 
thereof.

     (c)  NOTICE OF THE OCCURRENCE OF AN EVENT ENTITLING LENDER TO 
COMPENSATION.  The Lender shall notify the Company of any event occurring after 
the date of this Agreement that will entitle the Lender to compensation under 
Section 3.5.(a) or (b) as promptly as practicable and 


                                     -28-
<PAGE>

shall furnish to the Company a certificate setting forth the basis and amount 
of each request by the Lender for compensation, together with calculations in 
reasonable detail of such amount.  Determinations and allocations by the Lender 
for purposes of this Section 3.5. of the effect of any Regulatory Change 
pursuant to Section 3.5.(a), of the effect of capital maintained pursuant to 
Section 3.5.(b) on its costs or rate of return of maintaining Loans or its 
obligation to make Loans or on amounts receivable by it in respect of Loans, 
and of the amounts required to compensate the Lender under this Section, shall 
be made in a manner consistent with that applied by the Lender in similar 
contexts and shall be conclusive in the absence of manifest error.    

     3.6.   LIMITATION ON TYPES OF LOANS      

     Anything herein to the contrary notwithstanding, if on or prior to the 
determination of LIBOR for any Interest Period the Lender determines (which 
determination shall be conclusive) that: 

          (a)  quotations of interest rates for the relevant deposits referred 
     to in the definition of "LIBOR" are not being provided in the relevant 
     amounts or for the relevant maturities for purposes of determining rates 
     of interest for LIBOR Loans as provided herein; or

          (b)  the relevant rates of interest referred to in the definition of 
     LIBOR in this Agreement upon the basis of which the rate of interest for 
     LIBOR Loans for such Interest Period is to be determined are not likely 
     to adequately cover the cost to the Lender of making or maintaining 
     LIBOR Loans for such Interest Period; 

then the Lender shall give the Company notice thereof, and so long as such 
condition remains in effect, the Lender shall be under no obligation to make 
additional LIBOR Loans, to Continue LIBOR Loans or to Convert Base Rate Loans 
into LIBOR Loans, and the Company shall, on the last day(s) of the then-current 
Interest Period(s) for the outstanding LIBOR Loans, either prepay such Loans or 
Convert such Loans into Base Rate Loans in accordance with Section 2.6.        

     3.7.   ILLEGALITY       

     Notwithstanding any other provision of this Agreement, if it becomes 
unlawful for the Lender to honor its obligation to make or maintain LIBOR 
Loans hereunder, then the Lender shall promptly notify the Company thereof 
and the Lender's obligation to make or Continue, or to Convert Base Rate 
Loans into, LIBOR Loans shall be suspended until such time as the Lender may 
again make and maintain LIBOR Loans.        

     3.8.   TREATMENT OF AFFECTED LOANS 

     If the obligation of the Lender to make, Continue or Convert Base Rate 
Loans into LIBOR Loans shall be suspended pursuant to either of the immediately 
preceding Sections, all outstanding LIBOR Loans shall be automatically 
Converted into Base Rate Loans on the last day(s) of the current Interest 
Period(s) for such LIBOR Loans (or, in the case of a Conversion required by 
Sections 3.6. or 3.7., on such earlier date as the Lender may specify to the 
Company)

                                     -29-
<PAGE>

and, unless and until the Lender gives notice as provided below that the 
circumstances specified in Sections 3.6. or 3.7. which gave rise to such 
Conversion no longer exist:           

         (a)  to the extent that any LIBOR Loans have been so Converted, all 
     payments and prepayments of principal which would otherwise be 
     applied to such LIBOR Loans shall be applied instead to the Base 
     Rate Loans; and           
    
         (b)  all Loans which would otherwise be made or Continued as LIBOR 
     Loans shall be made or Continued instead as Base Rate Loans and all Base 
     Rate Loans which would otherwise be Converted into LIBOR Loans shall 
     remain as Base Rate Loans.   
    
     If the Lender gives notice to the Company that the circumstances specified 
in Sections 3.6. or 3.7. which gave rise to the Conversion of LIBOR Loans 
pursuant to this Section no longer exist at a time when LIBOR Loans are 
outstanding, the Lender's Base Rate Loans shall be automatically Converted, at 
the option of the Company. 

     3.9.   COMPENSATION   

     The Company shall pay the Lender such amount or amounts as shall be 
sufficient to compensate the Lender for any loss, cost, or expense which the 
Lender determines in good faith is attributable to: (a) any payment, prepayment 
or Conversion of a LIBOR Loan for any reason (including, without limitation, 
the acceleration of the Loans pursuant to Article 9.) on a date other than the 
last day of the Interest Period for such Loan; (b) any prepayment of the 
Facility A Term Loan while it bears interest at a fixed rate as provided in 
Section 2.4.(a)(iii) for any reason (including, without limitation, the 
acceleration of the Loans pursuant to Article 9.) on a date other than the 
Termination Date; or (c) any failure by the Company for any reason, including 
without limitation, the failure of any of the conditions precedent specified in 
Article 4. to be satisfied, to (i) borrow a LIBOR Loan from the Lender on the 
date for such borrowing specified in the relevant Notice of Borrowing given 
pursuant to Section 2.2.(a) or (ii) to convert the Facility A Loans into the 
Facility A Term Loan pursuant to Section 2.12. after giving the Lender notice 
of such conversion.  Without limiting the effect of the preceding sentence, 
such compensation shall include with respect to a LIBOR Loan an amount equal to 
the excess, if any, of (i) the amount of interest which otherwise would have 
accrued on the principal amount so paid, prepaid or Converted or not borrowed 
for the period from the date of such payment, prepayment, Conversion or failure 
to borrow to the last day of the then-current Interest Period for such Loan 
(or, in the case of a failure to borrow, the Interest Period for such Loan 
which would have commenced on the date specified for such borrowing) at the 
applicable rate of interest for such Loan provided for herein over (ii) the 
amount of interest which would otherwise have accrued on such principal amount 
at a rate per annum equal to the sum of (x) the Adjusted LIBO Rate which would 
apply to a LIBOR Loan having a principal amount equal to or comparable to such 
principal amount and with maturities comparable to such period (as determined 
in good faith by the Lender) plus (y) the percentage above the applicable 
Adjusted LIBO Rate at which such Loan bears interest under Section 2.4(a) or 
(b), as applicable. 


                                     -30-
<PAGE>

4.   CONDITIONS PRECEDENT  

     4.1.   INITIAL LOANS 

     The obligation of the Lender to make the initial Loans hereunder on the 
Closing Date is subject to the following conditions:  

     (a)  CORPORATE DOCUMENTS.  The Lender shall have received the following 
documents, each certified as indicated below: 

         (i)   a copy of the charter, as amended, of each Loan Party, 
     certified as of a recent date by the Secretary of State of the 
     jurisdiction of its formation, and a certificate as of a recent date 
     from such Secretary of State as to the good standing of such Loan Party; 

         (ii)  a certificate as of a recent date from the Secretary of State 
     of each state in which each Loan Party is required to qualify to do 
     business as a foreign corporation to the effect that such Loan Party is 
     so qualified;

         (iii) a certificate of the secretary of each Loan Party, dated the 
     Closing Date and certifying (A) that attached thereto is a true and 
     complete copy of such Loan Party's by-laws as in effect on the date of 
     such certificate, (B) that attached thereto is a true and complete copy 
     of resolutions duly adopted by such Loan Party's board of directors 
     authorizing the execution, delivery and performance of each of the 
     Credit Documents to which such Loan Party is a party, and that such 
     resolutions have not been modified, rescinded or amended and are in full 
     force and effect, (C) that such Loan Party's charter has not been 
     amended since the date of the certification thereto furnished pursuant 
     to subsection (i) above, and (D) as to the incumbency and specimen 
     signature of each of such Loan Party's officers executing each of the 
     Credit Documents to which such Loan Party is a party (and the Lender may 
     conclusively rely on such certificate until the Lender receives notice 
     in writing from such Loan Party, to the contrary);  

         (iv)  a certificate of another officer of such Loan Party as to the  
     incumbency and specimen signature of the secretary of such Loan 
     Party;           

         (v)   a certificate of the secretary of the Investor Guarantor dated 
     the Closing Date and certifying (A) that Investor Guarantor's 
     certificate of incorporation has not been amended since December 20, 
     1995, or if it has been amended, that attached thereto is a true and 
     complete copy of such amendment, (B) that the Investor Guarantor's 
     by-laws have not been amended since December 20, 1995, or if they have 
     been amended, that attached thereto is a true and complete copy of such 
     amendment, and (C) that attached thereto is a true and complete copy of 
     resolutions duly adopted by the Investor Guarantor's board of directors 
     authorizing the execution, delivery and performance of each of the 
     Credit Documents to which the Investor Guarantor is a party, and that 
     such resolutions have not been modified, rescinded or amended and are in 
     full force and effect; 

         (vi)  a certificate of another officer of the Investor Guarantor as 
     to the incumbency and specimen signature of the secretary of the 
     Investor Guarantor; 

                                     -31-
<PAGE>

     (b)  NOTES.  The Lender shall have received each of the Notes, duly 
completed and executed by the Company.

     (c)  OPINIONS OF COUNSEL.  The Lender shall have received the opinion of 
(i) Gardere & Wynne, L.L.P., counsel to the Company and the Subsidiary 
Guarantors, substantially in the form of Exhibit J and (ii) Gardere & Wynne, 
L.L.P., counsel to the Investor Guarantor, in form and substance satisfactory 
to the Lender and its counsel.      

     (d)  INSURANCE.  The Lender shall have received certificates of insurance 
evidencing the existence of all insurance required to be maintained by each 
Loan Party pursuant to the Credit Documents to which it is a party and Section 
6.4. hereof, together with loss payable clauses as required by such Credit 
Documents.  In addition, the Company shall have delivered a certificate of the 
chief financial officer of the Company stating that such insurance is in full 
force and effect and that all premiums then due and payable thereon have been 
paid.  

     (e)  HISTORICAL FINANCIAL STATEMENTS.  The Lender shall have received the 
following in form and substance satisfactory to the Lender: (i) the unaudited 
combined pro forma balance sheets and statements of operations of  the Company 
for the fiscal year ended July 31, 1996, and (ii) the respective unaudited 
combined pro forma balance sheets and statements of operations of the Company 
for the six (6) month period ending January 31, 1997 (collectively, the 
"Historical Financial Statements").      

     (f)  PROJECTED FINANCIAL STATEMENTS.  The Lender shall have received pro 
forma projected financial statements reflecting the forecasted financial 
condition and results of operations of the Company on a quarterly basis for the 
period from August 1, 1997 through July 31, 1998 in form and substance 
satisfactory to Lender (the "Projected Financial Statements");      

     (g)  FEES, EXPENSES AND OTHER CONSIDERATION.  The Lender shall have 
received all amounts payable by the Company in respect of fees and expenses, 
including the fees required by Section 2.8.(a) and attorney's fees, to the 
extent due and payable on or prior to the making of the initial Loans 
hereunder.      

     (h)  LIEN SEARCHES.  The Lender shall have received favorable UCC, tax, 
judgment and lien search reports (including without limitation, searches of the 
records of the United States Patent and Trademark Office) with respect to each 
Loan Party in all necessary or appropriate jurisdictions and under all legal 
and appropriate trade names indicating that there are no prior liens on any of 
the Collateral other than Permitted Liens.      

     (i)  REPAYMENT OF EXISTING INDEBTEDNESS.  The Lender shall have received 
evidence that all Indebtedness of the Company and its Subsidiaries (other than 
Indebtedness to be incurred hereunder and the Indebtedness permitted under 
Section 7.3.) in existence on the Closing Date shall have been repaid in full 
as of the Closing Date and that any Liens on the assets of the Company and its 
Subsidiaries (other than Permitted Liens) shall have been released; and the 
Lender shall have received such UCC termination statements and other 
instruments, in each case in proper form for recording, as the Lender shall 
have requested to release and terminate of 


                                     -32-
<PAGE>

record all Liens on any such assets (or arrangements for such release and 
termination satisfactory to the Lender shall have been made).      

     (j)  GUARANTIES.  The Lender shall have received a First Amendment to the 
Investor Guaranty substantially in the form of Exhibit A duly executed and 
delivered by the Investor Guarantor and each Subsidiary Guaranty, duly executed 
and delivered by each Subsidiary Guarantor.      

     (k)  SECURITY AGREEMENT AND FINANCING STATEMENTS.  The Lender shall have 
received each Security Agreement to be executed by each Loan Party, duly 
executed and delivered by such Loan Party.  In addition, each Loan Party shall 
have delivered to the Lender appropriately completed and duly executed copies 
of UCC financing statements as the Lender may request in order to perfect the 
security interests created pursuant to each such Security Agreement.      

     (l)  PLEDGE AGREEMENT. The Lender shall have received the Pledge 
Agreements to be executed by the Company and FormMaker Software, Inc. 
("FormMaker"), duly executed and delivered by the Company and FormMaker.  In 
addition, the Lender shall have received each of the following: (i) all 
certificates, if any, representing all of the issued and outstanding capital 
stock, membership interest and other equity interest of each Subsidiary of the 
Company and FormMaker, as applicable and (ii) stock powers duly endorsed in 
blank relating to all such certificates. 

     (m)  LIQUIDITY AGREEMENT.  The Lender shall have received a copy of that 
certain Liquidity Agreement dated as of January 15, 1997 (the "Liquidity 
Agreement"), by and among the Company, the Investor Guarantor, Technology 
Leaders II L.P. and Technology Leaders II Offshore C.V. certified as true and 
correct by an officer of the Company.      

     (n)  OTHER DOCUMENTS.  The Lender shall have received such other 
documents, instruments, agreements and certifications as the Lender or counsel 
to the Lender may reasonably request in connection with this Agreement.        

     4.2.   INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT      

     The obligation of the Lender to make any Loan hereunder (including the 
initial Loans), and the Company's right to convert Facility A Loans into the 
Facility A Term Loan pursuant to Section 2.12., are each subject to the further 
condition precedent that, both immediately prior to the making of such Loan, or 
the conversion of such Loans, and also after giving effect thereto:      

     (a)  no Default or Event of Default shall have occurred and be continuing; 

     (b)  the representations and warranties made or deemed made by the Company 
in Article 5. and by the Company and the other Loan Parties in each of the 
other Credit Documents shall be true, complete and correct in all material 
respects on and as of the date of the making of such extension of credit with 
the same force and effect as if made on and as of such date (or, in the case of 
any such representation and warranty made only as of a particular date, as of 
such particular date); and      


                                     -33-
<PAGE>

     (c)  the Lender shall have timely received (i) in the case of a borrowing 
of a Loan, a duly executed Notice of Borrowing and (ii) in the case of the 
conversion of Facility A Loans under Section 2.12., the applicable notice 
required under such Section.      

     Each Notice of Borrowing hereunder, and any notice given under Section 
2.12., shall constitute a certification by the Company to the effect set forth 
in subsections (a) through (c) above (both as of the date of such notice and as 
of the date of such extension of credit).        

     4.3.   CONDITIONS TO ACQUISITIONS 

     The ability of the Company to consummate an Acquisition of a Seller 
without violating Section 7.1., and the obligation of the Lender to make any 
Loan hereunder, the proceeds of which will be used to finance such Acquisition, 
are subject to the condition precedent that on or prior to the date (the 
"Acquisition Date") such Loan is to be made or such Acquisition is to be 
consummated (or such earlier date as may be provided below):      

     (a)  DESCRIPTION OF TRANSACTION.  The Lender shall have received not less 
than 30 days prior to the Acquisition Date (or in the case of a Small 
Acquisition, on or prior to the Acquisition Date), (x) a written description of 
the Acquisition in detail reasonably satisfactory to the Lender, such 
description to include a description of (i) the purchase price of such 
Acquisition, (ii) the method and structure of payment thereof and (iii) the 
Seller and (y) in the case of a Significant Acquisition, the current draft of 
the Purchase Agreement.      

     (b)  HISTORICAL FINANCIAL STATEMENTS.  If such Acquisition is a 
Significant Acquisition, the Lender shall have received not less than 15 days 
prior to the Acquisition Date, the following: (i) an audited (or unaudited if 
audited statements are not available) balance sheet, statement of operations 
and statement of cash flows for such Seller for the two fiscal years most 
recently ended and (ii) if then available, an unaudited balance sheet, 
statement of operations and statement of cash flows for such Seller for the 
fiscal quarter most recently ending prior to the Acquisition Date 
(collectively, the "Acquisition Historical Financial Statements").      

     (c)  PRO FORMA FINANCIAL STATEMENTS.  If such Acquisition is a Significant 
Acquisition, the Lender shall have received not less than 15 days prior to the 
Acquisition Date, pro forma projected financial statements in form reasonably 
satisfactory to the Lender reflecting the forecast financial condition and 
results of operations of such Seller, the Company and its Consolidated 
Subsidiaries on a monthly basis for the next fiscal year (the "Acquisition 
Projected Financial Statements").      

     (d)  CORPORATE DOCUMENTS.  If such Acquisition is a Significant 
Acquisition and involves any New Subsidiaries, the Lender shall have received 
the following documents, each certified as indicated below:           

          (i)  a copy of the charter of each such New Subsidiary, certified 
     as of a recent date by the Secretary of State of the jurisdiction of its 
     formation, and a certificate as of a recent date from such Secretary of 
     State as to the good standing of such New Subsidiary;

                                     -34-
<PAGE>

          (ii)  a certificate as of a recent date from the Secretary of State 
     of each state in which each such New Subsidiary is required to qualify 
     to do business as a foreign corporation to the effect that such New 
     Subsidiary is so qualified, or, if unavailable, evidence satisfactory to 
     the Lender that each such New Subsidiary has taken appropriate steps to 
     so qualify;           

          (iii) a certificate of the secretary of each such New Subsidiary, 
     dated the Acquisition Date and certifying (A) that attached thereto is a 
     true and complete copy of such New Subsidiary's by-laws as in effect on 
     the date of such certificate, (B) that attached thereto is a true and 
     complete copy of resolutions duly adopted by such New Subsidiary's board 
     of directors authorizing the execution, delivery and performance of each 
     of the Credit Documents to which such New Subsidiary is or is to be a 
     party, and that such resolutions have not been modified, rescinded or 
     amended and are in full force and effect, (C) that such New Subsidiary's 
     charter has not been amended since the date of the certification thereto 
     furnished pursuant to subsection (i) above, and (D) as to the incumbency 
     and specimen signature of each of such New Subsidiary's officers 
     executing each of such Credit Documents (and the Lender may conclusively 
     rely on such certificate until the Lender receives notice in writing 
     from such New Subsidiary, to the contrary); and 

          (iv)  a certificate of another officer of such New Subsidiary as to 
     the incumbency and specimen signature of the secretary of such New 
     Subsidiary.      

     (e)  ACQUISITION DOCUMENTS.  In the case of a Significant Acquisition, on 
the Acquisition Date: (i) the Lender shall have received fully executed copies 
of all of the Acquisition Documents and any amendments thereto; (ii) the 
applicable Purchase Agreement shall be in full force and effect and (iii) the 
Lender shall have received a certificate from the Company's chief executive or 
chief financial officer to the effect set forth in the immediately preceding 
clauses (i) and (ii).      

     (f)  ASSIGNMENT OF ACQUISITION DOCUMENTS.  In the case of a Significant 
Acquisition, the Lender shall have received an Assignment of Acquisition 
Documents duly executed by any New Subsidiary or any other existing Loan Party 
having rights under such Purchase Agreement or any of the other Acquisition 
Documents being executed in connection with such Purchase Agreement.  In 
addition, the Lender shall have received the acknowledgment respect to the 
Assignment of Acquisition Documents, in the form attached thereto.      

     (g)  LIEN SEARCHES.  In the case of a Significant Acquisition, the Lender 
shall have received UCC, tax, judgment and lien search reports in form and 
substance satisfactory to the Lender with respect to the Seller and each New 
Subsidiary in all necessary or appropriate jurisdictions and under all legal 
and appropriate trade names indicating that there are no prior liens on any of 
the Collateral other than Permitted Liens or Liens to be released prior to or 
at the time of the consummation of such Significant Acquisition.      

     (h)  SECURITY AGREEMENTS.  In the case of a Significant Acquisition, the 
Lender shall have received a Security Agreement from each such New Subsidiary. 
In addition, each such New Subsidiary shall have filed appropriately completed 
and duly executed copies of UCC financing 


                                     -35-
<PAGE>

statements, and taken such other action, as the Lender shall have reasonably 
requested in order to perfect the security interests created pursuant to such 
Security Agreement.      

     (i)  PLEDGE AGREEMENTS.  In the case of a Significant Acquisition, the 
Lender shall have received from each Loan Party owning any issued and 
outstanding capital stock of each such New Subsidiary, (i) if such Loan Party 
has previously executed and delivered a Pledge Agreement, an amendment (in form 
and substance satisfactory to the Lender) to such Pledge Agreement subjecting 
to the Lien thereof such capital stock or (ii) if such Loan Party not has 
previously executed and delivered a Pledge Agreement, a Pledge Agreement 
granting to the Lender a Lien in such capital stock.  In addition, the Lender 
shall have received each of the following: (x) all stock certificates 
representing all of such capital stock, and (y) stock powers duly endorsed in 
blank by the applicable Loan Parties relating to all such stock certificates.   
   
     (j)  GUARANTIES.  In the case of a Significant Acquisition, the Lender 
shall have received a Guaranty from each such New Subsidiary      

     (k)  OPINIONS OF COUNSEL.  In the case of a Significant Acquisition, the 
Lender shall have received an opinion counsel to the Loan Parties regarding (i) 
the due organization of each such New Subsidiary; (ii) the corporate authority 
of any New Subsidiary or other Loan Party delivering a Credit Document pursuant 
to this Section; (iii) the execution, delivery and enforceability of such 
Credit Documents; (iv) noncontravention of Applicable Law by such Acquisition 
or by the execution, delivery and performance by such New Subsidiary and such 
Loan Parties of such Credit Documents; (v) validity and perfection of any 
security interests granted under any Security Document delivered under this 
Section and (vi) such other matters as the Lender or its counsel may reasonably 
request.    

     (l)  OTHER DOCUMENTS.  The Lender shall have received such other 
documents, instruments, agreements and certifications as the Lender or its 
counsel may reasonably request.        

     4.4. CLOSING DOCUMENTS FOR NON-SIGNIFICANT ACQUISITIONS      

     Within 15 days after the date of consummation of an Acquisition that is 
not a Significant Acquisition, the Company shall deliver to the Lender, each of 
the following in form and substance satisfactory to the Lender:      

     (a)  CORPORATE DOCUMENTS.  If such Acquisition involved any New 
Subsidiaries, the following documents, each certified as indicated below:

          (i)   a copy of the charter of each such New Subsidiary, certified as
     of a recent date by the Secretary of State of the jurisdiction of its 
     formation, and a certificate as of a recent date from such Secretary of 
     State as to the good standing of such New Subsidiary;
     
          (ii)  a certificate as of a recent date from the Secretary of State of
     each state in which each such New Subsidiary is required to qualify to 
     do business as a foreign corporation to the effect that such New 
     Subsidiary is so qualified;           
     
                                     -36-
<PAGE>

          (iii) a certificate of the secretary of each such New Subsidiary, 
     dated the Acquisition Date and certifying (A) that attached thereto is a 
     true and complete copy of such New Subsidiary's by-laws as in effect on 
     the date of such certificate, (B) that attached thereto is a true and 
     complete copy of resolutions duly adopted by such New Subsidiary's board 
     of directors authorizing the execution, delivery and performance of each 
     of the Credit Documents to which such New Subsidiary is or is to be a 
     party, and that such resolutions have not been modified, rescinded or 
     amended and are in full force and effect, (C) that such New Subsidiary's 
     charter has not been amended since the date of the certification thereto 
     furnished pursuant to subsection (i) above, and (D) as to the incumbency 
     and specimen signature of each of such New Subsidiary's officers 
     executing each of such Credit Documents (and the Lender may conclusively 
     rely on such certificate until the Lender receives notice in writing 
     from such New Subsidiary, to the contrary); and

          (iv)  a certificate of another officer of such New Subsidiary as to 
     the incumbency and specimen signature of the secretary of such New 
     Subsidiary. 

     (b)  ACQUISITION DOCUMENTS.  (i) the Lender shall have received fully 
executed copies of all of the Acquisition Documents and any amendments thereto 
and (ii) the Lender shall have received a certificate from the Company's chief 
executive or chief financial officer to the effect set forth in the immediately 
preceding clause (i) and also stating that the applicable Purchase Agreement is 
in full force and effect.

     (c)  LIEN SEARCHES.  The Lender shall have received UCC, tax, judgment and 
lien search reports in form and substance satisfactory to the Lender with 
respect to the Seller and each New Subsidiary in all necessary or appropriate 
jurisdictions and under all legal and appropriate trade names indicating that 
there are no prior liens on any of the Collateral other than Permitted Liens or 
Liens that were released prior to or in connection with such Significant 
Acquisition (together with evidence of such release).

     (d)  SECURITY AGREEMENTS.  The Lender shall have received a Security 
Agreement from each such New Subsidiary.  In addition, each such New Subsidiary 
shall have filed appropriately completed and duly executed copies of UCC 
financing statements, and taken such other action, as the Lender shall have 
reasonably requested in order to perfect the security interests created 
pursuant to such Security Agreement.

     (e)  PLEDGE AGREEMENTS.  The Lender shall have received from each Loan 
Party owning any issued and outstanding capital stock of each such New 
Subsidiary, (i) if such Loan Party has previously executed and delivered a 
Pledge Agreement, an amendment (in form and substance satisfactory to the 
Lender) to such Pledge Agreement subjecting to the Lien thereof such capital 
stock or (ii) if such Loan Party not has previously executed and delivered a 
Pledge Agreement, a Pledge Agreement granting to the Lender a Lien in such 
capital stock.  In addition, the Lender shall have received each of the 
following: (x) all stock certificates representing all of such capital stock, 
and (y) stock powers duly endorsed in blank by the applicable Loan Parties 
relating to all such stock certificates.   

                                     -37-
<PAGE>

     (f)  GUARANTIES.  The Lender shall have received a Guaranty from each such 
New Subsidiary.

     (g)  OTHER DOCUMENTS.  The Lender shall have received such other 
documents, instruments, agreements and certifications as the Lender or its 
counsel may reasonably request.

5.   REPRESENTATIONS AND WARRANTIES      

     The Company represents and warrants to the Lender that the following 
statements are, and after giving effect to the Transactions, will be, true and 
correct:    
     
     5.1.   CORPORATE EXISTENCE

     Each of the Company and the other Loan Parties (a) is a corporation duly 
organized and validly existing and in good standing under the laws of the 
jurisdiction of its organization; (b) has all requisite corporate power, and 
has all Governmental Approvals, necessary to own its assets and carry on its 
business as now being or as proposed to be conducted and to consummate the 
Transactions; and (c) is qualified to do business in all jurisdictions in which 
the nature of the business conducted by it makes such qualification necessary, 
except where failure so to qualify would not have a Material Adverse Effect, 
all of which such jurisdictions are set forth on Schedule 5.1.

     5.2.   AUTHORIZATION; NO CONFLICT

     The execution, delivery and performance by the Company and the other Loan 
Parties of each of the Credit Documents and the Acquisition Documents to which 
any is a party and the consummation of the Transactions (a) have been duly 
authorized by all requisite corporate and, if required, stockholder action on 
the part of the Company and each such Loan Party and (b) will not (i) violate 
any provision of Applicable Law, or any order of any Governmental Authority or 
any provision of the charter or by-laws of the Company or any other Loan Party, 
(ii) violate, conflict with, result in a breach of or constitute (alone or with 
notice or lapse of time or both) a default or an event of default under any 
Material Contract to which the Company or any other Loan Party is a party or by 
which the Company or any other Loan Party or any of its property is or may be 
bound, or (iii) result in the creation or imposition of any Lien upon any 
property or assets of the Company or any other Loan Party (except pursuant to 
the Security Documents).

     5.3.   ENFORCEABILITY

     This Agreement and each other Credit Document have been duly executed and 
delivered by the Company and each of the other Loan Parties (to the extent it 
is a party thereto) and constitute the legal, valid and binding obligations of 
the Company and the other Loan Parties enforceable against the Company and the 
other Loan Parties in accordance with their respective terms, except as the 
same may be limited by bankruptcy, insolvency, reorganization, moratorium, 
fraudulent conveyance or other laws affecting generally the enforcement of 
creditors' rights and by general principles of equity (regardless of whether 
considered in a proceeding in equity or at law).

                                     -38-
<PAGE>

     5.4.   APPROVALS

     No Governmental Approvals are necessary for the execution, delivery or 
performance by the Company and the other Loan Parties of the Credit Documents 
or the Acquisition Documents to which any of them is a party or for the 
validity or enforceability thereof, except for filings and recordings in 
respect of the Liens created pursuant to the Security Documents. 

     5.5.   FINANCIAL CONDITION

     (a)  The Historical Financial Statements of the Company are complete and 
correct in all material respects and fairly present the financial condition and 
results of operations of the Company as of and for the periods covered thereby. 
During the period from July 31, 1996 through and including the Closing Date, 
there has been no material adverse change in the business, property, assets, 
liabilities, condition (financial or otherwise), operations, results of 
operations or prospects of the Company.

     (b)  The Pro Forma Opening Balance Sheet fairly presents the pro forma 
financial condition of the Company as of the Closing Date.  The Projected 
Financial Statements are based on the assumptions set forth therein and, as of 
the date hereof, constitute, in the good faith judgment of the Company, 
reasonable estimations of future performance of the Company.

     (c)  With respect to a given Significant Acquisition, to the Company's 
actual knowledge (i) the Acquisition Historical Financial Statements of the 
Seller fairly present the financial condition and results of operations of the 
Seller as of and for the periods covered thereby; and (ii) the Acquisition 
Projected Financial Statements are based on the assumptions set forth therein 
and constitute, in the good faith judgment of the Company, reasonable 
estimations of future performance of the Company, its Consolidated Subsidiaries 
and the applicable Seller.

     5.6. LITIGATION

     Except as set forth on Schedule 5.6., there are no actions, suits or 
proceedings at law or in equity by or before any Governmental Authority now 
pending or, to the Company's knowledge, threatened against the Company or any 
other Loan Party or their respective business, property or rights (i) which 
involve any Credit Document or any Acquisition Document or any Transaction or 
(ii) which, if adversely determined could reasonably be expected to have, 
individually or in the aggregate, a Material Adverse Effect.  There exists no 
judgment, order, injunction or other restraint issued or filed which is 
material to the Company or any other Loan Party, or any of their respective 
businesses, properties or rights, or which prohibits or adversely affects any 
of the Transactions.        

     5.7. FEDERAL RESERVE REGULATIONS

     Neither the Company nor any of the other Loan Parties is engaged in the 
business of extending credit for the purpose, whether immediate, incidental or 
ultimate, of buying or carrying Margin Stock.  No part of the proceeds of any 
extension of credit hereunder, whether directly or indirectly, and whether 
immediately, incidentally or ultimately, will be used (i) to purchase or carry 
Margin Stock or to extend credit to others for the purpose of purchasing or 
carrying Margin 


                                     -39-
<PAGE>

Stock or to refund indebtedness originally incurred for such purpose, or (ii) 
for any purpose which entails a violation of, or which is inconsistent with, 
the provisions of the Regulations of the Board of Governors of the Federal 
Reserve System, including Regulations G, T, U or X.  As used herein, the term 
"Margin Stock" shall mean margin stock within the meaning of Regulations G, T, 
U and X. 

     5.8. ERISA

     (a)  Neither the Company nor any other Loan Party maintains or contributes 
to any Employee Benefit Plan or Multiemployer Plan other than those identified 
on Schedule 5.8.

     (b)  The Company and each other Loan Party are in compliance in all 
material respects with all applicable provisions of ERISA and the Code with 
respect to all Employee Benefit Plans.  Each Employee Benefit Plan that is 
intended to be qualified under Section 401(a) of the Code has been determined 
by the Internal Revenue Service to be so qualified, and each trust related to 
such Plan has been determined to be exempt from federal income tax under 
Section 501(a) of the Code.  The actuarial present value of all accumulated 
benefit obligations under each Plan, as disclosed in the most recent actuarial 
report with respect to such Plan, does not exceed the fair market value of the 
assets of such Plan.  No material liability has been incurred by the Company or 
any other Loan Party or any of their ERISA Affiliates which remains unsatisfied 
for any taxes, penalties or other amount (other than contributions in the 
ordinary course) with respect to any Employee Benefit Plan or any Multiemployer 
Plan, and to the Company's actual knowledge no such material liability is 
expected to be incurred.      

     (c)  Neither the Company nor any other Loan Party has: (i) engaged in a 
nonexempt prohibited transaction described in Section 406 of ERISA or Section 
4975 of the Code; (ii) incurred any liability to the PBGC which remains 
outstanding other than the payment of premiums and there are no premium 
payments which are due and unpaid; (iii) failed to make a required contribution 
or payment to a Multiemployer Plan; or (iv) failed to make a required 
installment or other required payment under Section 412 of the Code.

     (d)  No ERISA Event has occurred or is reasonably expected to occur with 
respect to any Plan or Multiemployer Plan maintained or contributed to by the 
Company or any other Loan Party which could have a Material Adverse Effect.

     (e)  No proceeding, claim (other than routine claims for benefits), 
lawsuit and/or investigation is existing or, to the Company's actual knowledge, 
threatened concerning or involving any Employee Benefit Plan or Multiemployer 
Plan maintained or contributed to by the Company or any other Loan Party.       

     5.9. TAXES

     Except as set forth on Schedule 5.9., each of the Company and the other 
Loan Parties has filed all federal income tax returns and all other tax returns 
and reports, domestic and foreign, required to be filed by it and has paid all 
taxes, assessments, fees and other governmental charges shown to be due and 
payable by it on such returns or reports.  All such returns are true and 


                                     -40-
<PAGE>

correct in all material respects.  Except as set forth on such Schedule, each 
of the Company and the other Loan Parties has paid or, in the case of taxes 
which are not yet due and payable or are being contested in good faith, has 
provided adequate reserves for the payment of, all federal, state and foreign 
taxes applicable for all prior fiscal years and for the current fiscal year to 
the date hereof.  To the Company's actual knowledge, there is no proposed tax 
assessment against the Company or any other Loan Party.        

     5.10.  INVESTMENT COMPANY ACT

     Neither the Company nor any other Loan Party is an "investment company" 
nor a company "controlled" by an "investment company" within the meaning of the 
Investment Company Act of 1940, as amended.  

     5.11.  PUBLIC UTILITY HOLDING COMPANY ACT

     Neither the Company nor any other Loan Party is a "holding company" nor an 
"affiliate" of a "holding company" or a "subsidiary company" of a "holding 
company" within the meaning of the Public Utility Holding Company Act of 1935, 
as amended.

     5.12.  MATERIAL AGREEMENTS

     Other than this Agreement, the other Credit Documents, the Acquisition 
Documents and except as set forth on Schedule 5.12., neither the Company nor 
any other Loan Party is a party to or otherwise bound or affected by (a) except 
as otherwise permitted by Sections 7.3. and 7.4., any credit agreement, loan 
agreement, indenture, guarantee or other arrangement providing for or otherwise 
relating to any Indebtedness or any extension of credit (or commitment for any 
extension of credit) to, or Guarantee by, the Company or any other Loan Party, 
or (b) any collective bargaining agreement, management agreement, employment 
agreement or consulting agreement.  Neither the Company nor any other Loan 
Party is a party to any agreement or instrument or subject to any corporate 
restriction that has resulted or could reasonably be expected to result in a 
Material Adverse Effect. The representations and warranties in subsection (b) 
of the first sentence of this Section are made as of the Closing Date only.

     5.13.  ENVIRONMENTAL AND SAFETY MATTERS      

     The Company and each of the other Loan Parties has obtained all 
Governmental Approvals which are required under Environmental Laws and is in 
compliance with all terms and conditions of such Governmental Approvals the 
failure with which to be in compliance would have a Materially Adverse Effect. 
Each of the Company and each other Loan Party is also in material compliance 
with all other limitations, restrictions, conditions, standards, prohibitions, 
requirements, obligations, schedules, and timetables contained in the 
Environmental Laws.  The Company is not aware of, and has not received notice 
of, any past, present, or future events, conditions, circumstances, activities, 
practices, incidents, actions, or plans which, with respect to the Company or 
any of the other Loan Parties, may interfere with or prevent compliance or 
continued compliance with Environmental Laws, or may give rise to any 
common-law or legal liability, or otherwise form the basis of any claim, 
action, demand, suit, proceeding, hearing,


                                     -41-
<PAGE>


study, or investigation, based on or related to the manufacture, processing, 
distribution, use, treatment, storage, disposal, transport, or handling or the 
emission, discharge, release or threatened release into the environment, of any 
pollutant, contaminant, chemical, or industrial, toxic, or other Hazardous 
Material; and there is no civil, criminal, or administrative action, suit, 
demand, claim, hearing, notice, or demand letter, notice or violation, 
investigation, or proceeding pending or, to the Company's knowledge, 
threatened, against the Company or any of the other Loan Parties relating in 
any way to Environmental Laws.

     5.14.  SUBSIDIARIES

     Except as set forth on Schedule 5.16., the Company has no Subsidiaries, 
and except as set forth on such Schedule, all such Subsidiaries are 
Wholly-Owned Subsidiaries of the Company.

     5.15.  COMPLIANCE WITH LAW

     The Company and each of the other Loan Parties are in compliance with all 
Applicable Laws of, and all applicable restrictions imposed by, all 
Governmental Authorities in respect of the conduct of their respective business 
and the ownership of their respective property, except such noncompliance as 
could not reasonably be expected to individually or in the aggregate, have a 
Material Adverse Effect.

     5.16.  CAPITALIZATION

     All of the outstanding capital stock of the Company is validly issued, 
fully paid and non-assessable.  Schedule 5.16. correctly sets forth the 
corporate structure and ownership interests of each of the Company's 
Subsidiaries, including the correct legal name of each such Loan Party, and the 
shareholders or other Persons holding equity interests in each such Loan Party 
and their percentage equity or voting interest.  Except as set forth on 
Schedule 5.16., there are no outstanding securities convertible into or 
exchangeable for any capital stock (collectively, "capital stock equivalents") 
of the Company or any other Loan Party or any outstanding subscriptions, 
options, warrants, calls, rights (including without limitation, preemptive 
rights) or other agreements or commitments of any nature relating to or 
exercisable for capital stock or capital stock equivalents of the Company or 
any other Loan Party.

     5.17.  TITLE TO PROPERTIES

     Except as set forth on Schedule 5.17., each of the Company and the other 
Loan Parties have good, indefeasible and insurable title to, or valid leasehold 
interests in, all its real properties and good title to its other assets, free 
and clear of all Liens other than Permitted Liens.

     5.18.  SOLVENCY                                                            

     After fiving effect to the Transactions, the Company and each other Loan 
Party will be Solvent.


                                     -42-
<PAGE>


     5.19.  CONDUCT OF BUSINESS

     The Company and its Subsidiaries are engaged in the business of developing 
and marketing document automation software and providing both related and 
complementary services.

     5.20.  REPRESENTATIONS AND WARRANTIES IN ACQUISITION DOCUMENTS

     Each representation and warranty made or deemed made by the Company or any 
other Loan Party in any of the other Credit Documents and the Acquisition 
Documents is hereby deemed made to and for the benefit of the Lender as if the 
same were set forth herein in full.

     5.21.  PERFORMANCE OF CONTRACTS, ETC.

     Neither the Company nor any of the other Loan Parties is in default in the 
performance, observance or fulfillment of any of the obligations, covenants or 
conditions contained in any contract, agreement, indenture, mortgage, lease or 
other binding understanding or arrangement of any such Person, and no condition 
exists that, with the giving of notice or the lapse of time or both, would 
constitute such a default, in each case, that could have a Material Adverse 
Effect.

     5.22.  DISCLOSURE

     No representation or warranty of the Company or any other Loan Party made 
or deemed made in this Agreement, any other Credit Document, any Acquisition 
Document, the financial statements referred to in Section 4.1.(e) through (g), 
or any other document, certificate or written statement furnished to the Lender 
by or on behalf of any such Person for use in connection with any of the 
Transactions, contained, as of the date made or deemed made or as of the date 
thereof, any untrue statement of a material fact or omitted, omits or will omit 
to state a material fact necessary in order to make the statements contained 
herein or therein not misleading in light of the circumstances in which the 
same were made.  There is no material fact known to the Company that has had or 
will have a Material Adverse Effect and that has not been disclosed herein or 
in such other documents, certificates and statements furnished to the Lender 
for use in connection with the transactions contemplated hereby.

     5.23.  REPRESENTATIONS REGARDING ACQUISITIONS

     To the extent any representation or warranty contained in this Article 5. 
relates to an Acquisition and the Transactions relating thereto, such 
representation or warranty shall be deemed made only on and as of the (a) the 
date such Acquisition has been consummated and (b) the date of the making of 
the Loan any of the proceeds of which are used in whole or in part to finance 
such Acquisition.

6.   AFFIRMATIVE COVENANTS

     The Company covenants and agrees that, so long as the Credit Facility is 
in effect or the principal or interest on any Loan or any Obligation shall 
remain unpaid, the Company will, and (as applicable) will cause each of the 
other Loan Parties to:


                                     -43-
<PAGE>

     6.1.   FINANCIAL STATEMENTS AND OTHER INFORMATION

     Deliver to the Lender:

     (a)  as soon as available and in any event within 120 days after the end 
of each fiscal year of the Company, audited consolidated statements of income, 
retained earnings and cash flow of the Company and its Consolidated 
Subsidiaries for such fiscal year and the related audited consolidated balance 
sheet as of the end of such fiscal year, accompanied by an unqualified report 
of the Company's independent auditors (who shall be of nationally recognized 
standing), stating that such financial statements fairly present the 
consolidated financial condition and results of operations of the Company and 
its Consolidated Subsidiaries in accordance with GAAP;

     (b)  as soon as available and in any event within 45 days after the end of 
each fiscal quarter of each fiscal year of the Company, a consolidated 
statements of income, retained earnings and cash flow of the Company and its 
Consolidated Subsidiaries for such fiscal quarter and for the period from the 
beginning of the current fiscal year to the end of such fiscal quarter, and the 
related consolidated balance sheet as of the end of such period, accompanied by 
a certificate of the chief financial officer of the Company, which certificate 
shall state that such consolidated financial statements fairly present the 
consolidated financial condition and results of operations of the Company and 
its Consolidated Subsidiaries in accordance with GAAP (subject to normal 
year-end adjustments and absence of full footnote disclosures);

     (c)  simultaneously with the delivery of the annual financial statements 
referred to in Section 6.1.(a), a report addressed to the Company by the 
independent auditors who audited such statements (i) stating that, in 
connection with their audit of such statements (and without conducting any 
procedures other than those customarily conducted in a year-end audit), such 
auditors have obtained no knowledge of any condition or event which constitutes 
a Default or Event of Default as at the end of such fiscal year of the Company, 
or if such auditors shall have obtained knowledge of any such condition or 
event, specifying in such report each such condition or event of which they 
have knowledge and the nature and status thereof and (ii) setting forth in 
reasonable detail the computations necessary to determine whether the Company 
is in compliance with the covenants contained in Sections 7.3. and 7.4. and 
Article 8.;

     (d)  simultaneously with the delivery of the quarterly financial 
statements pursuant to Section 6.1.(b), a certificate of the chief financial 
officer of the Company (i) to the effect that no Default or Event of Default 
has occurred and is continuing (or, if any Default or Event of Default has 
occurred and is continuing, describing the same in reasonable detail and 
describing the action that the Company (or such other Person, as appropriate) 
has taken and proposes to take with respect thereto) and (ii) setting forth in 
reasonable detail the computations necessary to determine whether the Company 
is in compliance with the covenants contained in Sections 7.3. and 7.4. and 
Article 8., in each case as of the end of the period for which such financial 
statements are delivered;

     (e)  if the Investor Guaranty has been released pursuant to Section 2.14., 
within 30 days of the end of each calendar month, a Borrowing Base Certificate 
as of the last Business Day of such month, together with a schedule of 
receivables as of the date of such Borrowing Base 


                                     -44-
<PAGE>

Certificate setting forth an aged trial balance in summary form of the 
Company's then existing Receivables, and also specifying the name of and the 
balance due from (and any rebate due to) each Account Debtor obligated on an 
aggregate amount of Receivables which constitutes 5% or more of the Company's 
Eligible Receivables;

     (f)  within 30 days of the Closing Date, a pro forma balance sheet of the 
Company, dated as of the Closing Date and giving effect to the consummation of 
the transaction contemplated hereby, in form and substance satisfactory to the 
Lender (the "Pro Forma Opening Balance Sheet");

     (g)  promptly upon the receipt thereof, copies of all "management letters" 
received by the Company or any other Loan Party from its independent 
accountants;

     (h)  as soon as possible, and in any event within thirty days after the 
Company or any other Loan Party knows or has reason to know that any of the 
events or conditions specified below have occurred or exist, a statement signed 
by the chief financial officer of the Company setting forth details respecting 
such event or condition and the action, if any, which the Company, any other 
Loan Party or its ERISA Affiliates proposes to take with respect thereto (and a 
copy of any report or notice required to be filed with or given to the PBGC by 
the Company or any other Loan Party or any of its ERISA Affiliates as of such 
date with respect to such event or condition):

          (i)  any reportable event, as defined in Section 4043(b) of ERISA and
     the regulations issued thereunder, with respect to a Plan of the Company
     or any other Loan Party or any of its ERISA Affiliates, as to which the
     PBGC has not by regulation waived the requirement of Section 4043 (a) of
     ERISA that it be notified within 30 days of the occurrence of such event
     (provided that a failure to meet the minimum funding standard of
     Section 412 of the Code or Section 302 of ERISA shall be a reportable
     event regardless of the issuance of any waivers in accordance with
     Section 412(d) of the Code);

          (ii) the filing under Section 4041 of ERISA of a notice of intent to
     terminate any Plan of the Company or any other Loan Party or any of its
     ERISA Affiliates or the termination of any such Plan;

          (iii)     the institution by the PBGC of proceedings under
     Section 4042 of ERISA for the termination of, or the appointment of a
     trustee to administer, any Plan of the Company or any other Loan Party or
     any of its ERISA Affiliates, or the receipt by the Company or any other
     Loan Party or any of its ERISA Affiliates of a notice from a Multiemployer
     Plan of the Company or any other Loan Party or any of its ERISA Affiliates
     that such action has been taken by the PBGC with respect to such
     Multiemployer Plan;

          (iv) the complete or partial withdrawal by the Company or any other
     Loan Party or any of its ERISA Affiliates under Section 4201 or 4204 of
     ERISA from a Multiemployer Plan, or the receipt by the Company or any
     other Loan Party or any such ERISA Affiliate of notice from such a
     Multiemployer Plan that it is in reorganization or insolvency pursuant to
     Section 4241 or 4245 of ERISA or that it intends to terminate or


                                     -45-
<PAGE>

     has terminated under Section 4041A of ERISA, which in any such case could
     reasonably be expected to result in the imposition of withdrawal liability
     upon the Company or any other Loan Party or any of its ERISA Affiliates;

          (v)  the institution of a proceeding by a fiduciary of any
     Multiemployer Plan against the Company or any other Loan Party or any of
     its ERISA Affiliates to enforce Section 515 of ERISA, which proceeding is
     not dismissed within 30 days; and

          (vi) the fair market value of the assets of any Plan does not equal
     or exceed the accumulated benefit obligations with respect to such Plan,
     as disclosed on the most recent actuarial report with respect to such
     Plan.

     (i)  promptly after the Company obtains knowledge of the occurrence of any 
Default or Event of Default, a notice of such Default or Event of Default 
describing the same in reasonable detail together with a description of the 
action that the Company (or such other appropriate party, as the case may be) 
has taken and proposes to take with respect thereto;

     (j)  promptly after receipt of written request from the Lender, such other 
information regarding the business, affairs or financial condition of the 
Company or any other Loan Party as the Lender may reasonably request;

     (k)  as soon as possible, and in any event within ten Business Days after 
the Company receives notice or otherwise has knowledge that any of the 
following events have occurred or exist, a statement signed by the chief 
financial officer of the Company setting forth details regarding such event or 
condition and the action, if any, which the Company proposes to take with 
respect thereto (along with all relevant documentation):  (A) any violation by 
the Company or any other Loan Party of any Environmental Laws which could 
reasonably be expected to have a Material Adverse Effect; (B) any request for 
information or notice of potential responsibility under Environmental Laws with 
respect to cleanup of any property or facility of the Company or any other Loan 
Party or any offsite location; (C) the imposition of any Lien on any assets of 
the Company or any other Loan Party under Environmental Laws; (D) the 
commencement of any litigation, enforcement action or investigation with 
respect to the Company or any other Loan Party under Environmental Laws; or (E) 
any Release or threatened Release of any Hazardous Material at or from any 
property or facility of the Company or any other Loan Party;

     (l)  promptly upon their becoming available, copies of any statements, 
reports and other communications, if any, which the Company or any other Loan 
Party shall have provided to its stockholders or filed with the Securities and 
Exchange Commission (or any governmental agency substituted therefor), any 
national securities exchange or the National Association of Securities Dealers, 
Inc.;

     (m)  simultaneously with the delivery of the annual financial statements 
referred to in Section 6.1(a), pro forma projected financial statements 
reflecting the forecasted financial condition and results of operations of the 
Company on a quarterly basis for the next succeeding fiscal year;


                                     -46-
<PAGE>

     (n)  promptly upon receipt thereof, copies of any notification or other 
communication regarding any claim or potential claim for indemnification under 
any Acquisition Documents relating to any Significant Acquisition;

     (o)  prompt notice of the terms of any proposed amendment to, or 
modification or waiver of any of the material terms of any of the Acquisition 
Documents relating to any Significant Acquisition; and

     (p)  simultaneously with the delivery of the annual financial statements 
referred to in Section 6.1.(a), capital and operating expense budgets, 
projections of sources and applications of funds and profit and loss 
projections for the Company (and each of its Consolidated Subsidiaries) on a 
consolidated basis for each month of the next succeeding fiscal year, all 
itemized in reasonable detail and prepared by the Company.  Any material 
revisions made in such budgets or projects shall be furnished promptly to the 
Lender.

     6.2.   LITIGATION

     Promptly (and in any event within three Business Days of receipt) give to 
the Lender notice of the filing or commencement of, or any written notice of 
intention of any Person to file or commence, any action, suit or proceeding 
affecting the Company or any of the other Loan Parties, whether at law or in 
equity by or before any Governmental Authority which if adversely determined 
could reasonably be expected to result in liability to the Company or any of 
the other Loan Parties in an amount equal to or exceeding $250,000 (including 
the amount of any deductible paid or required to be paid by the Company or any 
other Loan Party under the terms of its insurance policies, but NET of any 
amounts acknowledged in writing by the applicable insurer(s) to be fully 
covered by insurance) or would otherwise have a Material Adverse Effect, and of 
any adverse development in respect of such legal or other proceedings.

     6.3.   CORPORATE EXISTENCE, ETC.

     Except as expressly permitted by this Agreement: preserve and maintain its 
corporate existence, and all of its material rights, privileges and franchises; 
comply in all material respects with the requirements of all Applicable Laws, 
rules, regulations and orders of all Governmental Authorities; maintain all of 
its material properties used in its business in sufficient working order and 
condition so as to permit such Loan Party to conduct its business; and preserve 
and enforce its rights (including rights to indemnification) under any Material 
Contracts, except where the failure to do so would not have a Material Adverse 
Effect in the reasonable judgment of the Lender.

     6.4.   INSURANCE

     Keep insured by financially sound and reputable insurers all property of a 
character usually insured by entities engaged in the same or similar business 
similarly situated against loss or damage of the kinds and in the amounts 
customarily insured against by such businesses and carry such other insurance 
as is usually carried by such businesses.  Without limiting the obligations of 
the Company and the other Loan Parties under the foregoing provisions of this 
Section, in the 


                                     -47-
<PAGE>



event the Company or any of the other Loan Parties shall fail to maintain in 
full force and effect insurance as required by the foregoing provisions of this 
Section or any of the other Credit Documents, then the Lender may upon notice 
to the Company or such other Loan Party, but shall have no obligation to, 
procure insurance covering the interests of the Lender in such amounts and 
against such risks as the Lender shall deem appropriate, and the Company shall 
reimburse the Lender in respect of any premiums paid by the Lender as provided 
in Section 10.3.(c).

     6.5.   OBLIGATIONS AND TAXES

     Pay its Indebtedness and other obligations in accordance with their terms
and pay and discharge promptly all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property, and in any event before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; PROVIDED, HOWEVER, that such payment and discharge shall not
be required so long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings which effectively stay the execution of
any such Lien and the Company shall (or shall cause the applicable Loan Party
to) set aside on its books adequate reserves in accordance with GAAP with
respect thereto.

     6.6.   MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS

     Maintain all financial records in accordance with GAAP and permit any
representatives designated by the Lender upon reasonable notice to visit and
inspect the properties of the Company or any of the other Loan Parties and to
inspect their financial and business records and make extracts therefrom and
copies thereof, all at reasonable times during normal business hours and in a
manner so as not to unreasonably disrupt the operations of the Company or the
other Loan Parties and as often as reasonably requested, and permit the Lender
or any representatives designated by the Lender upon reasonable notice to
discuss the affairs, finances and condition of the Company or any of the other
Loan Parties with the officers thereof and, after prior notice to the Company
(so long as no Event of Default has occurred and is continuing), independent
accountants therefor.

     6.7.   ENVIRONMENTAL AND SAFETY MATTERS

     For the purposes of protecting the Lender's security interest in the 
Collateral and preserving the Company's ability to satisfy its Obligations:

     (a)  Comply with all Environmental Laws applicable to it or any of its 
property or facilities in all material respects.

     (b)  Keep its properties and facilities free from any Liens which could 
reasonably be expected to have a Material Adverse Effect arising under any 
Environmental Laws.

     (c)  Respond promptly to any Release or threatened Release of any 
Hazardous Materials in a manner which complies in all material respects with 
all Environmental Laws and mitigates any associated risk to human health or the 
environment to the maximum extent commercially practicable.


                                     -48-
<PAGE>

     (d)  If the Lender at any time has reason to believe that any property or 
facility owned or operated by the Company or any other Loan Party has been or 
may be either (i) operated in violation of any Environmental Laws; (ii) 
contaminated with any Hazardous Materials; or (iii) subject to any 
government-imposed obligation to conduct any environmental investigation or 
clean-up, any of which, in the good faith judgment of the Lender may impair in 
any material respect the value of the Collateral or the ability of the Company 
or any of the other Loan Parties to satisfy any of their respective 
Obligations, the Company shall, upon the written request of the Lender, at the 
Company's sole cost and expense, conduct such investigation or study, through 
retention of a consulting firm reasonably satisfactory to the Lender, as is 
necessary in the good faith judgment of the Lender to demonstrate that no such 
impairment could reasonably be expected to have a Material Adverse Effect.

     6.8.   ADDITIONAL SECURITY

     If and to the extent requested by the Lender from time to time, execute 
and deliver such additional documents and take such other action as may be 
necessary or desirable in the reasonable opinion of the Lender in order to 
assure and confirm that all Obligations are secured in a manner acceptable to 
the Lender by a first priority Lien on substantially all present and future 
assets of the Company and the other Loan Parties (other than Intellectual 
Property, unless a security interest in Intellectual Property in granted to the 
Lender pursuant to Section 6.12. hereof) subject only to Permitted Liens.

     6.9.   DEPOSIT ACCOUNTS/CASH MANAGEMENT SERVICES

     For the purpose of protecting the Lender's security interest in the 
Collateral and enabling the Lender to monitor the proceeds of Collateral and 
the uses of cash by the Company and the other Loan Parties, maintain all of its 
primary operating accounts and cash management service relationships with the 
Lender or its Texas Affiliate.

     6.10.  CHANGE IN MANAGEMENT GROUP

     Immediately notify the Lender if any member of the Management Group shall 
terminate their employment with the Company or otherwise cease to be employed 
by the Company in a senior management position.

     6.11.  ENFORCEMENT OF REMEDIES UNDER ACQUISITION DOCUMENTS

     If the Company becomes aware of or otherwise has knowledge of any facts 
that could give rise to any material claim for indemnification from any party 
under any Acquisition Document, assert or cause the assertion of such claim 
against such party before the date on which such claim may no longer be made 
under such Acquisition Document, and in asserting any such claim shall comply 
with all requirements for asserting such claims under the Acquisition Documents.

     6.12.  LIEN ON INTELLECTUAL PROPERTY.

     If either of the following occurs:


                                     -49-
<PAGE>

     (a)  the ratio of (i) Funded Debt of the Company and its Consolidated 
Subsidiaries TO (ii) Adjusted EBITDA of the Company and its Consolidated 
Subsidiaries for the four fiscal quarter period most recently ending exceeds 
2.25 to 1.0 at any time; or

     (b)  the ratio of (i) Adjusted EBITDA of the Company and its Consolidated 
Subsidiaries for the four fiscal quarter period most recently ended (the "Prior 
Period") TO (ii) the sum of (x) Interest Expense of the Company and its 
Consolidated Subsidiaries for such four fiscal quarter period PLUS (y) Current 
Maturities of the Company and its Consolidated Subsidiaries for the four fiscal 
quarter period immediately following the Prior Period is less than 1.75 to 1.0 
at any time;

then, within 30 days of the Lender's request therefor, the Company shall, at 
its sole cost and expense, take any and all actions requested by the Lender to 
grant to the Lender a security interest in and first priority lien on all 
Intellectual Property owned by the Company and each Subsidiary Guarantor 
including, without limitation, the execution and delivery of security 
agreements, financing statements, and filings with the United States Patent and 
Trademark Office.

7.   NEGATIVE COVENANTS

     The Company covenants and agrees that, so long as the Credit Facility is
in effect or the principal or interest on any Loan or any Obligation shall
remain unpaid, the Company will not, nor will it permit any of the Loan Parties
to:

     7.1.   PROHIBITION OF FUNDAMENTAL CHANGES

     Effect any of the following: (i) any transaction of merger, consolidation,
recapitalization, reorganization, liquidation or dissolution (other than the
merger of a Subsidiary of the Company with and into (x) the Company pursuant to
which the Company is the surviving corporation, (y) any Wholly-Owned Subsidiary
of the Company pursuant to which such Wholly-Owned Subsidiary is the surviving
corporation or (z) another Person which Person becomes a Wholly-Owned
Subsidiary after giving effect to such merger); or (ii) the sale, transfer,
lease, contribution or other conveyance, or the granting of options, warrants
or other rights (excluding options, warrants or other rights with respect to
the Company's stock) with respect to, any of its assets to any Person other
than sales of assets in the ordinary course of business; or (iii) engage in any
line of business other than those engaged in or similar to those engaged in by
the Company or such other Loan Party, as applicable, on the Closing Date; or
(iv) any Acquisition or any other transaction of acquisition of another Person,
or of substantially all of the assets of another Person, or of a distinct
operating division of another Person, unless (A) at the time of such
transaction, such other Person is engaged in, or such assets are to be used in,
the same or similar line(s) of business as those described in Section 5.19.,
(B) no Default or Event of Default has occurred and is continuing or would
occur after giving effect to such transaction, and (C) the applicable
conditions precedent contained in Section 4.3. have been satisfied.


                                     -50-
<PAGE>

     7.2.   LIMITATION ON LIENS

     Without the Lender's prior written consent, (i) create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except Permitted Liens or (ii) enter into or
assume any agreement (other than the Credit Documents) prohibiting the creation
or assumption of any Lien upon any of Intellectual Property, whether now owned
or hereafter acquired.

     7.3.   INDEBTEDNESS AND GUARANTEES

     Without the Lender's prior written consent (which will not be unreasonably
withheld), create, incur or suffer to exist any Indebtedness or Guarantees
except (a) Indebtedness to the Lender created hereunder and under any of the
Credit Documents; (b) Indebtedness existing on the Closing Date and described
on attached Schedule 7.3.; (c) Indebtedness in an aggregate amount not to
exceed $500,000.00 during any fiscal year of the Company; (d) Indebtedness
otherwise permitted by Section 7.4. and (e) loans and advances to employees of
the Company for moving, entertainment, travel and other similar expenses in the
ordinary course of business consistent with past practices.

     7.4.   INVESTMENTS

     Make or permit to remain outstanding any Investments except (i) Permitted
Investments, (ii) the ownership of the capital stock of Subsidiaries by the
Company or its Subsidiaries, the acquisition of which is permitted by
Section 7.1.(iv), (iii) loans or advances to the Company by one or more of its
Subsidiaries, provided that such Subsidiary is a Subsidiary Guarantor and (iv)
loans or advances to any Subsidiary by the Company or another Subsidiary,
provided that each such Subsidiary borrower is a Subsidiary Guarantor.

     7.5.   RESTRICTED PAYMENTS

     Make any Restricted Payment; PROVIDED, HOWEVER, that (i) Subsidiaries of
the Company may make dividends, payments or other distributions to the Company
or to any Wholly-Owned Subsidiary of the Company, (ii) so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, the Company may make payments in an aggregate amount not to exceed
$250,000 per year to redeem shares of its common stock issued to any employee
in accordance with an employee stock ownership plan and (iii) so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Company may redeem shares of its Class B Common Stock as
required by, and pursuant to the terms of, Part THIRD, Section A(5) of its
certificate of incorporation in exchange for or out of proceeds from the
substantially concurrent sale of shares of its Class A Common Stock to the
Investor Guarantor pursuant to the Liquidity Agreement.

     7.6.   ACCOUNTING

     Change its accounting methods or practices (except as required to conform
to changes in GAAP or permitted by GAAP) or, without the prior written consent
of the Lender, which consent shall not be unreasonably withheld, change its
fiscal year end from July 31.


                                     -51-
<PAGE>

     7.7.   AMENDMENT OF CERTAIN DOCUMENTS

     Enter into any amendment, modification or waiver of any of the terms of
any of the Acquisition Documents which amendment, modification or waiver would
have a Material Adverse Effect in the reasonable judgment of the Lender.

8.   FINANCIAL COVENANTS

     So long as the Credit facility remains in effect or the principal or
interest on any Loan or Obligations shall remain unpaid:

     8.1.   QUICK RATIO

     The Company shall not permit the ratio of the sum of cash, cash
equivalents and Receivables TO current liabilities of the Company and its
Consolidated Subsidiaries, each as calculated in accordance with GAAP, to be
less than .55 to 1.0 at any time.

     8.2.   RATIO OF FUNDED DEBT TO ADJUSTED EBITDA

     The Company shall not permit the ratio of (a) Funded Debt of the Company
and its Consolidated Subsidiaries TO (b) Adjusted EBITDA of the Company and its
Consolidated Subsidiaries for the four fiscal quarter period most recently
ending to exceed 2.5 to 1.0 at any time.

     8.3.   RATIO OF ADJUSTED EBITDA TO DEBT SERVICE

     The Company shall not permit the ratio of (a) Adjusted EBITDA of the
Company and its Consolidated Subsidiaries for the four fiscal quarter period
most recently ended (the "Prior Period") TO (b) the sum of (i) Interest Expense
of the Company and its Consolidated Subsidiaries for such four fiscal quarter
period PLUS Current Maturities of the Company and its Consolidated Subsidiaries
for the four fiscal quarter period immediately following the Prior Period to be
less than 1.5 to 1.0 at any time.

     8.4.   MINIMUM NET WORTH

     The Company shall not permit at any time its Net Worth determined on a
consolidated basis with its Consolidated Subsidiaries to be less than
(a) $11,500,000 PLUS (b) an amount equal to 80% of positive Net Income of the
Company and its Consolidated Subsidiaries (or MINUS 100% of any negative Net
Income of the Company and its Consolidated Subsidiaries) for each fiscal
quarter ending after July 31, 1997 PLUS (c) 100% of the Net Proceeds of each
Equity Issuance effected after the date hereof.

9.   EVENTS OF DEFAULT

     If one or more of the following events (herein collectively called "Events
of Default" and singularly called an "Event of Default") shall occur and be
continuing:


                                     -52-
<PAGE>

     9.1.   PAYMENTS UNDER CREDIT DOCUMENTS

     The Company or any other Loan Party shall default in the payment when due
of any principal of any Loan.  The Company shall default in the payment when
due of any interest on any Loan or any fee or any other Obligations payable by
it hereunder or under any other Credit Document, or any other Loan Party shall
default in the payment when due of any other amount payable by it under any
Credit Document to which such Loan Party is a party and such default shall
continue unremedied for a period of five days after the Company or such other
Loan Party receives notice of such default.

     9.2.   OTHER INDEBTEDNESS

     The Company or any other Loan Party shall default in the payment when due
of any principal of or interest on any Indebtedness, having a principal amount
outstanding, individually or in the aggregate, equal to or exceeding
$250,000.00 (other than the Obligations) and such default shall continue
unremedied beyond any applicable grace or cure periods; or any event specified
in any note, agreement, indenture or other document evidencing or relating to
any Indebtedness of the Company or any other Loan Party shall occur if the
effect of such event is to cause, or to permit the holder thereof to cause
(with the giving of notice or lapse of time or both), such Indebtedness to
become due or to be required to be prepaid (whether by redemption, purchase or
otherwise) prior to its stated maturity, and such event shall remain unremedied
beyond any applicable grace or cure periods.

     9.3.   REPRESENTATIONS AND WARRANTIES

     Any representation, warranty or certification made or deemed to be made in
any Credit Document by the Company or any other Loan Party or any certificate,
financial statement or other information furnished in writing to the Lender
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time made or deemed to be made.

     9.4.   OTHER OBLIGATIONS

     (i) The Company shall default in the performance of any of its obligations
under Section 2.13., Section 6.1. (which default shall continue for ten
Business Days), Article 7. or Article 8.; (ii) the Company shall default in the
performance of any of its other obligations in this Agreement and such default
shall continue unremedied for a period of 30 days after the Company receives
notice or otherwise has actual knowledge thereof; (iii) an "Event of Default"
as defined in any other Credit Document shall have occurred and be continuing;
or (iv) an "Event of Default" under and as defined in the Guarantor Credit
Agreement shall have occurred and be continuing.

     9.5.   ABILITY TO PAY DEBTS

     The Company or any other Loan Party shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due.


                                     -53-
<PAGE>

     9.6.   VOLUNTARY PROCEEDINGS

     The Company or any other Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property,
(ii) make a general assignment for the benefit of its creditors, (iii) commence
a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts,
(v) acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, or (vi) take any corporate action for the
purpose of effecting any of the foregoing.

     9.7.   INVOLUNTARY PROCEEDINGS

     A proceeding or case shall be commenced against the Company or any other
Loan Party, without its application or consent, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of all or
any substantial part of its assets, or (iii) similar relief under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against the Company or any other Loan Party
shall be entered in an involuntary case under the Bankruptcy Code.

     9.8.   JUDGMENTS

     A judgment or judgments for the payment of money in excess of $250,000.00
in the aggregate (exclusive of judgment amounts to the extent covered by
insurance where the Company has submitted a claim and the insurer has not
contested liability in respect of such judgment) shall be rendered by a court
or courts against the Company or any other Loan Party and the same shall not be
vacated, bonded or discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 60
days from the date of entry thereof.

     9.9.   ERISA EVENT

     (a) Any ERISA Event shall have occurred with respect to the Company or any
other Loan Party and the sum of the Insufficiency of such Plan (determined as
of the date of occurrence of such ERISA Event) and the Insufficiency of any and
all other Plans (determined as of the date of occurrence of such ERISA Event)
of the Company or any other Loan Party with respect to which an ERISA Event
shall have occurred (or the liability of the Company or any other Loan Party or
its ERISA Affiliates related to such ERISA Event) exceeds $250,000; or (b) the
Company or any other Loan Party or any of its ERISA Affiliates shall have been
notified by a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan and the imposition of such liability is reasonably
likely to be incurred in an amount that, when aggregated with all other amounts
required to be paid to Multiemployer Plans by the Company or any other Loan
Party and its ERISA Affiliates as withdrawal liability (determined as of the
date of such notification 


                                     -54-
<PAGE>

indemnification), requires payments exceeding $250,000 per annum or $250,000 in 
the aggregate; or (c) the Company or any other Loan Party or any of its ERISA 
Affiliates shall have been notified by a Multiemployer Plan that such 
Multiemployer Plan is in reorganization or is being terminated within the 
meaning of Title IV of ERISA, and as a result of such reorganization or 
termination the aggregate annual contributions of such Person and its ERISA 
Affiliates to all Multiemployer Plans that are then in reorganization or being 
terminated have been or will be increased over the amounts contributed to such 
Multiemployer Plans for the plan years of such Multiemployer Plans immediately 
preceding the plan year in which such reorganization or termination occurs by 
an amount exceeding $250,000.

     9.10.  CHANGE IN CONTROL

     A Change in Control shall have occurred without the prior written consent 
of the Lender.  As used in this Section the term "Change in Control" shall mean 
any of the following:  (i) the Control Group at any time fails to own, on a 
fully diluted basis, at least 51% of the capital stock of the Company prior to 
a registered public offering of any capital stock of the Company or (ii) if 
after any such offering any Person or two or more Persons (other than the 
Control Group) acting in concert, shall acquire "beneficial ownership" within 
the meaning of Rule 13d-3 of the Securities and Exchange Act of 1934, as 
amended (the "Exchange Act"), directly or indirectly, of capital stock or 
securities of the Company representing 30% or more of the aggregate voting 
power of all classes of capital stock and securities of the Company; or (iii) 
during any twelve-month period (commencing both before and after the Agreement 
Date), a majority of the Board of Directors of the Borrower shall no longer be 
composed of individuals (x) who were members of such Board of Directors on the 
first date of such period, (y) whose election or nomination to such Board of 
Directors was approved by individuals referred to in clause (x) above 
constituting at the time of such election or nomination at least a majority of 
such Board of Directors or (z) whose election or nomination to such Board of 
Directors was approved by individuals referred to in clauses (x) and (y) above 
constituting at the time of such election or nomination at least a majority of 
such Board of Directors..

     THEREUPON: (1) In the case of an Event of Default, other than an Event of
Default referred to in Section 9.6. or Section 9.7., the Lender may, by notice
to the Company, terminate the Commitment, cancel the Credit Facility and/or
declare the then-outstanding principal amount of, and the accrued interest on,
the Loans and all other Obligations payable by the Company hereunder and under
the Notes (including, without limitation, any amounts payable under
Section 10.3.), whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company; (2) in the case of the
occurrence of an Event of Default referred to in Section 9.6. or Section 9.7.
above, the Commitment and the Credit Facility shall automatically be canceled
and the then-outstanding principal amount of, and the accrued interest on, the
Loans and all other Obligations payable by the Company hereunder and under the
Notes (including, without limitation, any amounts payable under Section 10.3.)
shall automatically become immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (3) in the case of any Event of Default,
may exercise any and all remedies available under the Security Documents or
under Applicable Law.


                                     -55-
<PAGE>

10.  MISCELLANEOUS

     10.1.  WAIVER

     No failure on the part of the Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement or the Note or other Credit Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

     10.2.  NOTICES

     All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and
delivered personally, mailed by certified or registered mail, return receipt
requested and postage prepaid, sent via a nationally recognized overnight
courier, or sent via facsimile.  Such notices, demands and other communications
will be sent to the address indicated below:

     To the Company:

       DocuCorp., Inc.
       5910 North Central Expressway, Suite 800
       Dallas, Texas  75206
       Attention:  Todd Rognes, Vice President- Finance and Administration
       Telephone No.:  (214) 891-6500
       Telecopy No.:  (214) 891-6678

     To the Lender:

       NationsBank, N.A.
       600 Peachtree Street, 18th Floor
       Atlanta, Georgia 30308
       Attention: Michael Paulson
       Telephone No.:   (404) 607-4569
       Telecopy No.:    (404) 607-6338
       
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party;
provided, however, that the failure to deliver copies of notices as indicated
above shall not affect the validity of any notice.  Any such communication
shall be deemed to have been received (i) when delivered, if personally
delivered, or sent by nationally-recognized overnight courier or sent via
facsimile or (ii) on the third Business Day following the date on which the
piece of mail containing such communication is posted if sent by certified or
registered mail.


                                     -56-
<PAGE>

     10.3.  EXPENSES, ETC.

     (a)  AGREEMENT TO PAY AND REIMBURSE.  The Company agrees to pay or
reimburse the Lender for the following as incurred by Lender: (i) all out-of
pocket costs and expenses (including, without limitation, the reasonable fees
and expenses of Alston & Bird LLP, counsel to the Lender) in connection with
(A) the negotiation, preparation, execution and delivery of this Agreement and
the other Credit Documents and the extension of credit hereunder and (B) any
amendment, modification or waiver of any of the terms of this Agreement or any
of the other Credit Documents; (ii) all costs and expenses of the Lender
(including reasonable counsel's fees and expenses) in connection with (A) any
Default and any enforcement or collection proceedings resulting therefrom and
(B) the enforcement of this Section; and (iii) all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any of the other Credit
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any other Credit Document or any other
document referred to herein or therein.

     (b)  INDEMNITY.  The Company agrees to indemnify the Lender and its
directors, officers, employees and agents for, and hold each of them harmless
against, any and all losses, liabilities, claims (including Environmental
Claims), damages or expenses incurred by any of them arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
extensions of credit hereunder or any actual or proposed use by the Company or
any Loan Party of the proceeds of any of the extensions of credit hereunder or
the past, present or future business activities of the Company or any Loan
Party including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses that are determined pursuant to a final, non-appealable order of a
court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of the Person to be indemnified).

     (c)  EXPENSES PAID ON BEHALF OF THE COMPANY.  If the Company fails to pay
when due any costs, expenses or other amounts payable by it under any Credit
Document, including, without limitation, fees and expenses of counsel,
indemnities and insurance premiums, such amount may be paid on behalf of the
Company by the Lender, in its sole discretion.  Any such payment by the Lender
shall constitute for all purposes of this Agreement the making by the Lender of
a Loan, which shall bear interest at the Base Rate, in the amount of such
payment (but without any requirement for compliance with the conditions set
forth in Article 4.).  In the event that such payment is not reimbursed by the
Company by 12:00 noon Atlanta time on the first Business Day after such
payment, the Lender shall be deemed to have made a Loan to the Company in such
amount, which Loan shall be deemed to bear interest at the Default Rate with
respect to Base Rate Loans from the date such Loan is made until the same is
repaid.


                                     -57-
<PAGE>

     10.4.  AMENDMENTS, ETC.

     Any term, covenant, agreement or condition of this Agreement or any of the
other Credit Documents may be amended or waived and any departure therefrom may
be consented to if, but only if, such amendment, waiver or consent is in
writing signed by the Lender and, in the case of an amendment, by the Company.
Unless otherwise specified in such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.

     10.5.  SUCCESSORS AND ASSIGNS
       
     This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

     10.6.  ASSIGNMENTS AND PARTICIPATIONS
       
     The Company may not assign its rights or obligations hereunder or under
the other Credit Documents without the prior consent of the Lender.  The Lender
may assign to one or more Persons, or sell participations to one or more
Persons in, all or a portion of its rights and obligations hereunder, under the
Note and the other Credit Documents.  The Lender may, in connection with any
assignment or proposed assignment or sale or proposed sale of a participation,
disclose to the assignee or proposed assignee or participant or proposed
participant any information relating to the Company furnished to the Lender by
or on behalf of the Company.

     10.7.  SURVIVAL
       
     The obligations of the Company and its Subsidiaries under Sections 3.4.
and 10.3. shall survive the repayment of the Loans and the termination of the
Credit Facility.

     10.8.  TABLE OF CONTENTS: DESCRIPTIVE HEADINGS
       
     The table of contents and captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.

     10.9.  COUNTERPARTS
       
     This Agreement may be executed in any number of counterparts, each of
which need not contain the signature of more than one party and all of which
taken together shall constitute one and the same original instrument.

     10.10. GOVERNING LAW
       
     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW PROVISION OR RULE.


                                     -58-
<PAGE>

     10.11. COMPLETE AGREEMENT.
       
     THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS COLLECTIVELY REPRESENT THE
FINAL AGREEMENT BY AND AMONG THE LENDER AND THE LOAN PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE LENDER OR THE LOAN PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE LENDER AND THE LOAN PARTIES.

     10.12. ARBITRATION
       
     ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT
NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY CREDIT
DOCUMENT, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION
AND MEDIATION SERVICES, INC. (J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH
BELOW.  IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION.  ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER
SUCH ACTION.

     A.   SPECIAL RULES.  THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
COMPANY'S DOMICILE AT THE TIME OF THIS AGREEMENT'S EXECUTION AND ADMINISTERED
BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE.  ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR
UP TO AN ADDITIONAL 60 DAYS.

     B.   RESERVATION OF RIGHTS.  NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) BE A WAIVER BY
THE LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER
HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF,
OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR


                                     -59-
<PAGE>

(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT 
LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A 
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH 
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR 
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS 
AGREEMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR 
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES 
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN 
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM 
OCCASIONING RESORT TO SUCH REMEDIES.

     10.13. ACKNOWLEDGMENTS
       
     The Company hereby acknowledges that: (a)  it has been advised by counsel
in the negotiation, execution and delivery of this Agreement and the other
Credit Documents to which it is a party; (b) the Lender has no fiduciary
relationship with or fiduciary duty to the Company or any of the other Loan
Parties, and the relationship between the Lender on one hand, and the Company
on the other hand, is solely that of debtor and creditor; and (c) no joint
venture exists between the Lender on one hand, and the Company on the other
hand.

     10.14. CONFIDENTIALITY
       
     Except as otherwise provided by Applicable Law, the Lender shall utilize
all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as confidential or proprietary by the
Company in accordance with the Lender's customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices but in any event may make disclosure: (a) to any of its
Affiliates (provided they shall agree to keep such information confidential in
accordance with the terms of this Section); (b) as reasonably required by any
BONA FIDE transferee or participant in connection with the contemplated
transfer of any of the Loans or the Lender's commitments hereunder, or
participations therein, as permitted hereunder; (c) as required by any
Governmental Authority or representative thereof or pursuant to legal process;
(d) to the Lender's independent auditors and other professional advisors
(provided they shall be notified of the confidential nature of the
information); and (e) after the happening and during the continuance of an
Event of Default, to any other Person, in connection with the exercise of the
Lender's rights hereunder or under any of the other Credit Documents.

     10.15. OBLIGATIONS WITH RESPECT TO LOAN PARTIES.
       
     The obligations of the Company to direct or prohibit the taking of certain
actions by the other Loan Parties as specified herein and in the other Credit
Documents shall be absolute and not subject to any defense the Company may have
that the Company does not control such Loan Parties.

                           [Signatures on Next Page]


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<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed as of the day and year first above written.

                               DOCUCORP, INC.


                              By:_________________________
                                 Name:____________________
                                 Title:___________________



                               NATIONSBANK, N.A.


                              By:_________________________
                                 Name:____________________
                                 Title:___________________


                                     -61-