SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                  .............................................


                                    FORM 10-Q


                Quarterly Report Under Section 13 or 15(d) of the

                         Securities Exchange Act of 1934


For the Quarter Ended April 30, 1997          Commission file number 000-1033864


                                 DocuCorp, Inc.
             (Exact Name of Registrant as Specified in its Charter)


                      Delaware                           74-2690838
         (State or Other Jurisdiction of    (I.R.S. Employer Identification No.)
          Incorporation or Organization)


              5910 North Central Expressway
                        Suite 800
                        Dallas, TX                                  75206
         (Address of Principal Executive Offices)                 (Zip Code)


               Registrant's telephone number, including area code:
                                 (214) 891-6500


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                 YES     X                                 NO
                      ------                                  ------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

                                                Shares Outstanding Effective
Class                                           May 30, 1997
-----------------------                         ------------
Common Stock Class A, $.01 par value            4,265,401
Common Stock Class B, $.01 per value            4,685,597

                                       1

<PAGE>




PART I            FINANCIAL INFORMATION                              PAGE

Item  1           Consolidated Financial Statements:


Statements of Operations................................................3


Balance Sheets..........................................................4


Statements of Cash Flows................................................5


Notes to Interim Financial Statements...................................6


Item  2    Management's Discussion and Analysis of
           Financial Condition and Results of Operations................8


PART II    OTHER INFORMATION


Item  6    Exhibits and Reports on Form 8-K............................12




                                       2
<PAGE>



 
                                 DOCUCORP, INC.
                            STATEMENTS OF OPERATIONS
                                    UNAUDITED

<TABLE>
<CAPTION>
<S>                                                   <C>          <C>          <C>          <C>
                                                        Three        Three         Nine         Nine
                                                        months       months       months       months
                                                        ended        ended        ended        ended
                                                       April 30     April 30     April 30     April 30
                                                      ----------   ----------   ----------   ----------

                                                         1996         1997         1996         1997
                                                      ----------   ----------   ----------   ----------

Revenues
         Professional services ....................   $  123,800   $  129,771   $  434,670   $  501,427
         License ..................................      918,381    1,034,985    2,828,868    3,077,834
         Maintenance ..............................    1,473,752    1,669,321    4,300,698    4,879,971
                                                                                
                                                      ----------   ----------   ----------   ----------
                Total revenues ....................    2,515,933    2,834,077    7,564,236    8,459,232
                                                      ----------   ----------   ----------   ----------

Expenses
         Professional services ....................       96,793      127,902      335,094      409,677
         Product development and support ..........      966,357      969,799    2,930,142    3,001,115
         Selling and marketing ....................      363,160      376,054    1,096,135    1,168,653
         General and administrative ...............      388,746      529,004    1,263,181    1,608,295
                                                                                
                                                      ----------   ----------   ----------   ----------
                Total expenses ....................    1,815,056    2,002,759    5,624,552    6,187,740
                                                      ----------   ----------   ----------   ----------
                                                                                             
                Operating income ..................      700,877      831,318    1,939,684    2,271,492
         Other income, net ........................       62,930      125,375      164,216      331,114
                                                                                
                                                      ----------   ----------   ----------   ----------
                Income before income taxes ........      763,807      956,693    2,103,900    2,602,606
         Provision for income taxes ...............      279,000      349,000      768,000      950,000
                                                      ----------   ----------   ----------   ----------
                Net income ........................   $  484,807   $  607,693   $1,335,900   $1,652,606
                                                      ==========   ==========   ==========   ==========

         Net income per share of common stock .....   $     0.09   $     0.11   $     0.24   $     0.31
                                                      ==========   ==========   ==========   ==========

         Weighted  average  number of shares of
           common  stock and  common  stock
           equivalents used in calculating earnings
           per share ..............................    5,602,432    5,415,352    5,602,432    5,415,352
                                                      ==========   ==========   ==========   ==========
</TABLE>


             See accompanying notes to interim financial statements
 
                                      3
<PAGE>






                                 DOCUCORP, INC.
                                 BALANCE SHEETS
                                    UNAUDITED
<TABLE>
<CAPTION>
<S>                                                                          <C>           <C>



                                                                              July 31,        April 30,
                                                                                1996            1997
                                                                             -----------   ------------

                               ASSETS
Current assets
          Cash and cash equivalents ......................................   $ 1,909,016   $10,037,204
          Short-term investments .........................................     5,308,806       974,882
          Accounts receivable ............................................     4,105,652     2,567,753
          Current portion of deferred taxes ..............................       399,468       348,690
          Other current assets ...........................................       187,193       198,103
                                                                             -----------   -----------
                     Total current assets ................................    11,910,135    14,126,632

Fixed assets, net of accumulated depreciation ............................       783,328       758,255
Capitalized software, net of amortization ................................     1,941,679     1,820,459
Other assets .............................................................        55,586        13,484
                                                                                           
                                                                             -----------   -----------
                                                                             $14,690,728   $16,718,830
                                                                             ===========   ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
          Accounts payable ...............................................   $   323,044   $   324,457
          Accrued liabilities
                Accrued compensation .....................................       700,050       668,348
                Other ....................................................       278,857       349,233
          Income taxes payable ...........................................       655,264       406,016
          Current portion of obligations under capital lease .............        45,967             0
          Deferred revenue ...............................................     4,267,113     4,694,136
                                                                             -----------   -----------
                     Total current liabilities ...........................     6,270,295     6,442,190

Deferred taxes ...........................................................       383,070       548,792
Stockholders' equity
          Preferred stock - 3,000,000 shares authorized at $.10 par value,
              $1.00 liquidation value, 1,963,433 shares issued
              and outstanding ............................................       196,343       196,343
          Common stock - 20,000,000 shares authorized at $.01 par
              value, 2,335,082 and 2,344,182 shares issued and
              outstanding, respectively ..................................        23,351        23,442
          Additional paid-in capital .....................................     1,321,265     1,359,053
          Retained earnings ..............................................     6,496,404     8,149,010
                                                                             -----------   -----------
                                   
                     Total stockholders' equity ..........................     8,037,363     9,727,848
                                                                             -----------   -----------
                                                                             $14,690,728   $16,718,830
                                                                             ===========   ===========
</TABLE>

             See accompanying notes to interim financial statements

                                       4
<PAGE>





                                 DOCUCORP, INC.
                            STATEMENTS OF CASH FLOWS
                                    UNAUDITED

<TABLE>
<CAPTION>
<S>                                                                            <C>             <C>
                                                                                 Nine            Nine
                                                                                months          months
                                                                                 ended           ended
                                                                                April 30        April 30
                                                                                  1996            1997
                                                                              -------------    ------------

Cash flows from operating activities
    Net income .............................................................   $  1,335,900    $  1,652,606
    Adjustments to reconcile net income to
    net cash provided by operating activities:
           Depreciation and amortization ...................................        270,707         271,545
           Amortization of capitalized software ............................        633,936         560,282
           Stock option compensation expense ...............................         37,590          36,303
           Changes in assets and liabilities:
                  Increase (decrease) in allowance for doubtful accounts ...        (30,000)         36,011
                  (Increase) decrease in accounts receivable ...............      1,318,798       1,501,888
                  (Increase) decrease in income tax refund receivable ......        222,033               0
                  (Increase) decrease in deferred tax assets ...............         36,758          50,778
                  (Increase) decrease in other assets ......................        (73,824)         31,192
                  Increase (decrease) in accounts payable ..................       (108,807)          1,413
                  Increase (decrease) in accrued liabilities ...............       (251,858)         38,674
                  Increase (decrease) in income taxes payable ..............       (428,210)       (249,248)
                  Increase (decrease) in deferred revenue ..................        109,947         427,023
                  Increase (decrease) in deferred tax liabilities ..........        234,452         165,722
                                                                               ------------    ------------
                         Total adjustments .................................      1,971,522       2,871,583
                                                                               ------------    ------------
                         Net cash provided by operating activities .........      3,307,422       4,524,189
                                                                               ------------    ------------

Cash flows from investing activities
    (Purchase) sale of short-term investments ..............................     (2,290,621)      4,333,924
    Purchase of fixed assets ...............................................       (255,919)       (246,472)
    Capitalized software development costs .................................       (404,818)       (439,062)
                                                                               ------------    ------------
                         Net cash (used in) provided by investing activities     (2,951,358)      3,648,390
                                                                               ------------    ------------

Cash flows from financing activities
    Repayment of subordinated debentures ...................................     (1,534,430)              0
    Principal payments under capital lease obligations .....................        (41,886)        (45,967)
    Proceeds from exercise of warrants and options .........................         32,187           1,576
                                                                               ------------    ------------
                         Net cash used in financing activities .............     (1,544,129)        (44,391)
                                                                               ------------    ------------
Net increase (decrease) in cash and cash equivalents .......................     (1,188,065)      8,128,188
Cash and cash equivalents at beginning of year .............................      2,289,980       1,909,016
                                                                               ------------    ------------
Cash and cash equivalents at end of period .................................   $  1,101,915    $ 10,037,204
                                                                               ============    ============
</TABLE>

             See accompanying notes to interim financial statements
                                       5

<PAGE>



                                 DOCUCORP, INC.
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                    UNAUDITED

Note 1 - Basis of Presentation

DocuCorp,  Inc. (the  "Company") was organized on January 13, 1997 in connection
with  the  acquisition  of  FormMaker  Software,  Inc.  ("FormMaker")  by  Image
Sciences,  Inc. ("Image  Sciences").  On May 15, 1997 Common Stock and Preferred
Stock of Image  Sciences  was  exchanged  for  Common  Stock  of  DocuCorp.  For
historical accounting purposes,  Image Sciences is considered to be the acquirer
in the Merger and no purchase  accounting is required  related to the conversion
of Image Sciences Common Stock and Image Sciences  Preferred Stock into DocuCorp
Common Stock. With respect to Image Sciences,  the Merger into DocuCorp has been
treated as a change in entity, and accordingly the financial statements of Image
Sciences are presented as historical statements of DocuCorp for periods prior to
the Merger of Image  Sciences and  FormMaker.  On May 15, 1997,  as described in
Note 3, the  Company  completed  the  merger of  FormMaker  into a  wholly-owned
subsidiary  of the  Company.  The Merger  will be treated as an  acquisition  of
FormMaker by Image Sciences; accordingly this transaction will be recorded under
the purchase  method of  accounting.  The  Company's  business will be conducted
through DocuCorp, Image Sciences, and FormMaker (see also Note 3).

The unaudited  financial  statements  included  herein have been prepared by the
Company  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission.  Accordingly,  they  do  not  contain  all of  the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements,  and  should  be read in  conjunction  with  the  audited
financial  statements of the Company and Image  Sciences for the year ended July
31, 1996,  included as part of the  Company's  Joint Proxy  Statement/Prospectus
dated April 18, 1997. In the opinion of management,  the accompanying  unaudited
financial  statements  reflect all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary  for a fair  presentation  of the  Company's
financial  condition at April 30, 1997 and for the three and nine month  periods
ended April 30,  1996 and 1997.  The interim  results  presented  herein are not
necessarily  representative  of the results  that may be expected for the fiscal
year ended July 31, 1997 or for any future period.

Note 2 - Contingent Liabilities

The  Company is  subject to legal  proceedings  and  claims  which  arise in the
ordinary  course of its business.  In the opinion of  management,  the amount of
ultimate  liability with respect to these actions will not materially affect the
financial position of the Company.

Note 3 - Subsequent Event

On January 15, 1997, Image Sciences entered into an Agreement and Plan of Merger
("the  Merger")  with  FormMaker,  pursuant to which the  stockholders  of Image
Sciences  and  FormMaker  agreed to exchange  their shares for common stock of a
newly created company,  DocuCorp, Inc. The Merger was completed on May 15, 1997.
In addition,  Image Sciences distributed  $8,000,000 concurrent with the closing
of the Merger  via (i) a tender  offer to its common  stockholders  and  certain
holders  of  options  to  purchase  common  stock,  and (ii) a  dividend  to its
preferred stockholder.

If  reflected  as if the Merger had been  consummated  at the  beginning of each
fiscal period,  the unaudited pro forma combined  results of operations of Image
Sciences and  FormMaker  for the nine months ended April 30, 1996 and 1997 would
have resulted in revenues of $18,376,357 and  $28,232,372,  respectively,  and a
net loss of $843,762  ($0.08 per share) and net income of $1,250,734  ($0.13 per
share), respectively. The unaudited pro forma combined financial results for the
nine months ended April 30, 1996 and 1997 have been  derived from the  unaudited
financial  statements  of each of Image  Sciences  and  FormMaker,  which in the
opinion of management of Image Sciences and FormMaker, respectively, reflect all
adjustments (consisting only of normal recurring adjustments) that are necessary
for a fair  presentation  of  the  results  for  such  periods.  The  pro  forma
information  above  should be read in  conjunction  with the pro forma  combined
Balance  Sheet of the Company as of January  31,  1997,  and pro forma  combined
Statement of Operations of the Company for the year ended July 31, 1996, and the
six months  ended  January  31,  1997,  included  in the  Company's  Joint Proxy
Statement/Prospectus dated April 18, 1997.

                                       6
<PAGE>

The pro forma disclosure above does not give effect to any cost savings that may
result  from the  Merger.  During the  periods  presented,  Image  Sciences  and
FormMaker  were not under common  control or  management  and, as a result,  the
selected  unaudited  pro  forma  combined  financial  data  is  not  necessarily
indicative of or comparable to the financial  position or operating results that
would have  occurred  had the Merger  occurred as of or at the  beginning of the
periods presented or that will occur following the Merger.

The pro forma disclosure above does not give effect to (i) an anticipated charge
for in-process  technology,  which is non-deductible  for tax purposes and which
will be charged to operations as of the date of the Merger, or (ii) compensation
expense  related to the repurchase of options to purchase Image Sciences  Common
Stock and compensation expense related to the creation of a new measurement date
for  outstanding  options to purchase Image  Sciences  Common Stock deemed to be
converted to options to purchase  DocuCorp Class B Common Stock at  consummation
of the Merger. The anticipated charges described above are currently expected to
amount to $13,500,000 and $5,000,000 (net of the resulting  income tax benefit),
respectively.  These  charges  would  reduce pro forma  combined  net income per
common share by $1.36 and $0.50, respectively.

                                       7
<PAGE>



     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                        OF OPERATIONS OF DOCUCORP, INC.

Certain information contained herein may include forward-looking statements that
involve  risks and  uncertainties.  The  Company's  actual  results  may  differ
materially from those  discussed in the  forward-looking  statements.  Potential
risks and uncertainties  include market responses to pricing pressures,  changes
in product and service mix, results from litigation,  the timely development and
acceptance  of new products and services,  and changes in customer  preferences.
Consequently, the actual results realized by the Company could differ materially
from the  statements  made herein.  Readers of this report are  cautioned not to
place undue reliance on the forward-looking statements made herein.

Overview

The Company  develops,  markets,  and  supports  software  products  designed to
automate  the  processing  of  business  forms and  documents.  The  Company was
organized on January 13, 1997 in connection with the acquisition of FormMaker by
Image Sciences (see also "Notes to Interim Financial Statements"). Following the
Merger,  Image  Sciences and  FormMaker  are  wholly-owned  subsidiaries  of the
Company.

Results of Operations

The  following  table sets forth  selected  data of the Company  expressed  as a
percentage of total revenues for the periods indicated:

                                       Three months ended     Nine months ended
                                           April 30,             April 30,
                                          (unaudited)           (unaudited)
                                           -------------      -------------
                                             1996   1997       1996  1997
                                           -------------      -------------
Revenues

         Professional services ...........     5 %   5 %         6 %   6 %
         License .........................    36    36          37    36
         Maintenance .....................    59    59          57    58
                                             ---   ---         ---   ---
                Total revenues ...........   100   100         100   100

Expenses
         Professional services ...........     4     5           4     5
         Product development and support .    38    34          39    35
         Selling and marketing ...........    14    13          14    14
         General and administrative ......    16    19          17    19
                                             ---   ---         ---   ---
 
                Total expenses ...........    72    71          74    73

                                             ---   ---         ---   ---
         Operating income ................    28    29          26    27
         Other income, net ...............     2     5           2     4

                                             ---   ---         ---   ---
                Income before income taxes    30    34          28    31
         Provision for income taxes ......    11    13          10    11
                                             ---   ---         ---   ---
                Net income ...............    19 %  21 %        18 %  20 %
                                             ===   ===         ===   ===


                                       8
<PAGE>


Comparative  analysis  of  quarterly  results for the  three  and  nine months
ended April 30, 1997

Revenues

The Company derives its revenues from license fees, recurring  maintenance fees,
and professional services related to its software products. License revenues are
generally  derived from  perpetual  licenses of software  products.  Maintenance
revenues  consist  primarily  of  annual  maintenance  contracts.   Professional
services revenues include fees for consulting,  contract  programming  projects,
education services, and a biennial user group conference.

Total  revenues  increased  13% and 12%,  respectively,  for the  three and nine
months ended April 30, 1997 compared to the corresponding periods of fiscal 1996
due to increases in all revenue types.  License  revenues  increased 13% and 9%,
respectively,  for the  three  and  nine  month  periods  due to  larger  dollar
contracts being executed. As anticipated, maintenance revenues increased 13% for
the three and nine month periods due to an expanding  customer  base. The 5% and
15%  increase in  professional  services  revenues  for the three and nine month
periods  ended April 30, 1996 and 1997,  respectively,  is  primarily  due to an
increase in educational classes offerings.

The Company's  backlog  consisted  primarily of $4,000,000 of revenue for annual
maintenance  contracts  entitling  the  end-user  to  product  enhancements  and
telephone support as of April 30, 1997.  Maintenance  contracts may generally be
terminated  upon  a  30  day  notice  period;   however,  the  Company  has  not
historically experienced material cancellations of such contracts.

Professional services expense

Professional services expense consists principally of personnel costs and direct
travel and living costs  associated  with the  Company's  consulting,  education
services,  and  contract  programming  projects.  For the three  and nine  month
periods ended April 30, 1997,  professional  services expense  increased 32% and
22%,  respectively,  which is a result of increased  costs to provide  increased
professional  services.  These costs represented 78% and 99%,  respectively,  of
professional  services  revenues  for the three  months ended April 30, 1996 and
1997, and 77% and 82%,  respectively,  of professional services revenues for the
nine months ended April 30, 1996 and 1997. The three month increase in cost as a
percentage  of revenue  is  primarily  due to  utilization  of certain  staff on
non-billable activity.

Product development and support expense

Product  development  and support expense did not change  significantly  for the
three month  period ended April 30,  1997,  and  increased 2% for the nine month
period ended April 30, 1997. Before  capitalization  and  amortization,  product
development and support expense increased 4% and 7%, respectively, for the three
and nine month periods ended April 30, 1997,  primarily resulting from increased
staffing  associated with the Company's  continued focus on research  activities
and enhancing customer satisfaction.

Selling and marketing expense

Selling and marketing expense increased 4% and 7%,  respectively,  for the three
and nine month  periods  ended  April 30,  1997 from the  comparable  prior year
periods.  The increase in selling and  marketing  expense for the three and nine
month  periods is primarily the result of increased  commissions  as a result of
higher  commission  percentages  associated  with larger dollar  contracts being
executed.  This  increase was offset by decreases in personnel  costs and travel
and living expenses in the three and nine month periods.

General and administrative expense

General and administrative expense increased 36% and 27%, respectively,  for the
three and nine month periods ended April 30, 1997. The increased expense for the
fiscal 1997 periods resulted from an increase in profit-based bonuses related to
the Company's current period financial  performance and increased legal expenses
due primarily to activity surrounding an outstanding  lawsuit. In addition,  the
increase  for the nine  month  period  is a result  of an  increase  in bad debt
expense.  Bad debt expense increased due to writing off  uncollectible  accounts
and increasing the allowance account.

                                        9

<PAGE>

Other income, net

For the three and nine month  periods  ended  April 30,  1997,  the 99% and 102%
increase in other income, respectively,  was due to increases in interest income
and a  significant  decrease  in interest  expense.  Interest  income  increased
primarily as a result of  increased  cash and short term  investments.  Interest
expense   decreased   significantly   due  to  retirement  of  all   outstanding
subordinated   debentures  in  March  1996  and  repayment  of  all  outstanding
obligations  under capital  leases.  Interest  income will decrease and interest
expense will increase due to the  distribution of $8,000,000 in conjunction with
the merger of Image Sciences and FormMaker and due to the assumption of debt and
capitalized   leases  of  FormMaker  of   approximately   $8,100,000  with  that
acquisition.

Provision for income taxes

The income tax provision was calculated  utilizing  Federal income tax rates for
corporations.  Effective  tax rates for the three and nine month  periods  ended
April 30,  1996 and 1997 were  approximately  36% for each  period.  These rates
differ from the Federal  statutory rate primarily due to state income taxes. The
Company used a portion of its net operating loss  carryforwards  and outstanding
tax  credits to offset its current  tax  liability  for the three and nine month
periods ended April 30, 1996 and 1997.

Net income

Profitability increased 25% and 24%, respectively,  for the three and nine month
periods  ended  April 30,  1997 from the  comparable  prior  year  periods.  The
increase in profitability for the three and nine month periods was primarily the
result of increasing revenues and containing costs.

Liquidity and capital resources

At April 30, 1997,  the Company's  principal  sources of liquidity  consisted of
cash, cash equivalents, and short-term investments aggregating $11,012,086.

Cash and cash  equivalents  increased  $8,128,188  during the nine month  period
ended April 30, 1997 due primarily to net income of $1,652,606 and maturities of
short-term investments of $4,333,924.  Working capital increased $2,044,602 from
$5,639,840 at July 31, 1996 to  $7,684,442  at April 30, 1997,  primarily as the
result of profitable operations.

As of April 30,  1997,  the  Company  has  repaid  all  existing  debt.  Capital
expenditures have generally not been material.  Concurrent with the consummation
of the Merger (see Note 3 of Notes to Interim Financial Statements), the Company
disbursed $8,000,000 of its cash, cash equivalents,  and short-term  investments
to its  common  and  preferred  stockholders.  Consequently,  subsequent  to the
Merger,  the  Company's  working  capital  and  financial  resources  have  been
significantly reduced. The Company intends to fund its future operations through
its cash from operations, renegotiation or replacement of the existing FormMaker
$10,000,000 line of credit,  and a $3,000,000 loan from one of its shareholders,
Safeguard  Scientifics.  The line of credit and subordinated loan have available
funds of  approximately  $5,400,000 as of April 30, 1997. The $3,000,000 loan is
subordinated to the existing  FormMaker line of credit,  bears interest at prime
plus 1%, and  becomes  due upon the earlier of an  underwritten  initial  public
offering  yielding  proceeds of at least  $13,000,000  to the Company or May 15,
2000.

Recently Issued Accounting Statements

In October 1995, the Financial  Accounting  Standards Board issued  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" ("SFAS 123"), which establishes financial accounting and reporting
standards  for  stock-based  compensation  plans.  SFAS 123 gives  companies the
option to adopt the fair value method for expense  recognition of employee stock
options  and stock  based  awards or to continue to account for such items using
the intrinsic value method as outlined under Accounting Principles Board Opinion
No. 25,  "Accounting  for Stock Issued to Employees"  ("APB 25"), with pro forma
disclosures  of net income and net income per share as if the fair value  method
had been applied.  The Company has adopted SFAS 123 effective  August 1, 1996 by
electing to continue  to apply APB 25 for future  stock  options and stock based
awards and, accordingly,  does not anticipate that SFAS 123 will have a material
impact on its results of operations or financial  position.  In accordance  with
the disclosure  provisions of SFAS 123, the Company will  initially  present the
disclosure  required by SFAS 123 in its  financial  statements as of and for the
periods ending July 31, 1997.

                                       10
<PAGE>


In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings
per Share"  ("SFAS  128"),  was  issued.  SFAS 128  specifies  the  computation,
presentation  and  disclosure  requirements  for earnings per share  ("EPS") for
entities  with publicly  held common stock or potential  common stock.  SFAS 128
simplifies  the  standards  for  computing  EPS  previously  found in Accounting
Principals Board Opinion No. 15, "Earnings per Share" ("APB 15"), and makes them
comparable to  international  EPS  standards.  It replaces the  presentation  of
primary EPS with a presentation of basic EPS. It also requires dual presentation
of basic and  diluted EPS on the face of the  statement  of  operations  for all
entities with complex capital  structures and requires a  reconciliation  of the
numerator  and  denominator  of the basic EPS  computation  to the numerator and
denominator of the diluted EPS computation.  SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997,  including interim
periods; earlier application is not permitted.  SFAS 128 requires restatement of
all  prior-period  EPS data  presented.  The Company  will adopt SFAS 128 in its
consolidated  financial  statements  as of and for the year ending July 31, 1998
and,  based on current  circumstances,  does not  believe the effect of adoption
will be material.

                                       11

<PAGE>



                        EXHIBITS AND REPORTS ON FORM 8-K


(a)  Exhibits:

     10.13 Loan Agreement, dated May 15, 1997, by and among FormMaker  Software,
           Inc., Safeguard Scientifics (Delaware),  Inc., Technology Leaders II,
           L.P. and TL Ventures Third Corp.

     11.1  Calculation of Net Income Per Common Share

     27.1  Financial Data Schedule

(b)  Reports on Form 8-K

     None

                                       12
<PAGE>



                                                       SIGNATURES


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

                               DocuCorp, Inc.
Date:  June 16, 1997                     /S/   TODD ROGNES
-----------------------        -------------------------------------------------

                               Senior Vice President, Finance
                               (Duly Authorized and Principal Financial Officer)

                                       13

<PAGE>



                                                                   Exhibit 10.13

                                 LOAN AGREEMENT

         LOAN  AGREEMENT  (this  "Agreement"),  dated May 15, 1997, by and among
FORMMAKER  SOFTWARE,  INC., a Georgia  corporation  ("Borrower"),  and SAFEGUARD
SCIENTIFICS (DELAWARE),  INC., a Delaware corporation ("Safeguard"),  TECHNOLOGY
LEADERS II L.P., a Delaware limited partnership ("TL II"), and TL VENTURES THIRD
CORP., a Delaware corporation ("TLV III" and, collectively with Safeguard and TL
II, "Lenders"), against the following background:


                                   BACKGROUND

         Borrower  has  requested  that  Lenders  make a loan to Borrower in the
aggregate  principal amount of $3,000,000,  and Lenders are willing to make such
loan upon the terms and conditions set forth herein.

         NOW,  THEREFORE,  intending to be legally  bound,  the parties agree as
follows:

                                    ARTICLE I
                                    THE LOAN

         1.1.  The  Loan.  Subject  to  the  terms  and  conditions  hereinafter
provided,  Lenders  shall lend to Borrower  the  aggregate  principal  amount of
$3,000,000,  allocated  among  the  Lenders  as set  forth on  Schedule  1.1 and
repayable upon the earlier of (a) the closing of an underwritten  initial public
offering  of  common  stock of  Borrower  (or,  after  the  consummation  of the
transactions  described in the Joint Proxy Statement (as  hereinafter  defined),
DocuCorp,   Inc.)  yielding   proceeds  (net  of   underwriting   discounts  and
commissions) of at least $13,000,000 or (b) the third anniversary of the date of
this  Agreement,  with interest  payable monthly in arrears at the prime rate as
announced from time to time by PNC Bank, N.A. plus 1% (the "Loan").

         1.2. The Note;  Repayment.  The Loan shall be evidenced by a promissory
note or  promissory  notes  from  Borrower  to  Lenders  (whether  one or  more,
collectively,  the "Note"),  which shall be  substantially  in the form attached
hereto as Exhibit 1.2. The Loan shall be repaid with interest as provided in the
Note.


                                   ARTICLE II
                                   THE WARRANT

         2.1. The Warrant.  In connection with the Loan, Borrower shall issue to
Lenders Warrants (the "Warrants") to purchase up to 300,000 shares of Borrower's
common stock, par value $.01 per share, at an exercise price of $3.48 per share,
substantially  in the form attached hereto as Exhibit 2.1. The Warrants shall be
allocated among Lenders as set forth on Schedule 1.1.


                                       14
<PAGE>


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         Borrower  hereby makes the following  representations  and  warranties,
which shall be  continuing  in nature and remain in full force and effect  until
the Obligations are satisfied in full:

         3.1.  Existence and Power.  Borrower is a corporation  duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation  or organization  and has all requisite power and authority to own
and  operate  its assets and to conduct  its  business  as now or proposed to be
carried on, and is duly qualified,  licensed and in good standing to do business
in all  jurisdictions  where its  ownership  of  property  or the  nature of its
business requires such  qualification or licensing.  Borrower has the full power
and authority to execute,  deliver and perform this Agreement,  the Note and the
Warrants (collectively, the "Loan Documents").

         3.2.   Authorization  and   Enforceability.   Borrower  has  been  duly
authorized to execute, deliver and perform the Loan Documents by all appropriate
action of its Board of Directors.  Each of the Loan Documents, when executed and
delivered by Borrower,  will constitute the legal,  valid and binding obligation
of Borrower, enforceable in accordance with its respective terms.

         3.3.  No  Defaults  or  Violations.  There  does not exist any Event of
Default  (as that term is defined in Section  6.1) under this  Agreement  or any
default or  violation  by Borrower of or under any of the terms,  conditions  or
obligations  of:  (a) its  certificate  of  incorporation  or  by-laws;  (b) any
indenture,  mortgage, deed of trust, franchise,  permit, contract,  agreement or
other  instrument  to  which  Borrower  is a party  or by which it or any of its
properties  may be bound except to the extent such violation or default will not
have a material and adverse effect on Borrower or its financial position; or (c)
any law,  regulation,  ruling,  order,  injunction,  decree,  condition or other
requirement  applicable to or imposed upon Borrower by any law, or by the action
of any court or other governmental authority or agency except to the extent such
violation or default will not have a material and adverse  effect on Borrower or
its financial position; and the execution,  delivery and performance of the Loan
Documents  will  not  result  in any  such  default  or  violation,  nor are any
approvals, authorizations, licenses, waivers or consents, governmental (foreign,
federal,  state or local) or  non-governmental,  under the terms of contracts or
otherwise,  required to be  obtained  by Borrower by reason of or in  connection
with its execution, delivery and performance of any of the Loan Documents.


                                   ARTICLE IV
                                    COVENANTS

         4.1.  Affirmative  Covenants.  Borrower  agrees  that  from the date of
execution  of this  Agreement  until  the  Obligations  are  satisfied  in full,
Borrower shall (and shall cause each of its majority-owned subsidiaries, if any,
to):

         4.1.1.  Payments of Taxes and Other Charges. Pay and discharge when due
all indebtedness  and all taxes,  assessments,  charges,  levies  and other  
similar liabilities imposed upon Borrower, its income, profits,  properties or 
business, except those which  currently are being  contested in good faith by  
appropriate proceedings  and for which Borrower  shall have set aside  adequate
reserves or made other adequate provisions acceptable to Lenders in their 
discretion.

                                       15

<PAGE>

                  4.1.2.   Maintenance  of  Existence,   Operation  and  Assets;
Inspection.  Do all things  necessary to maintain,  renew and keep in full force
and effect its organizational  existence and all rights,  permits and franchises
necessary to enable it to continue its business; conduct business and enter into
transactions  only in the ordinary course,  consistent with past practice except
to the extent  affected  by the  transactions  contemplated  by the Joint  Proxy
Statement for Image Sciences, Inc. and Borrower dated April 18, 1997 (the "Joint
Proxy Statement");  keep its properties in good operating  condition and repair;
make all necessary and proper  repairs,  renewals,  replacements,  additions and
improvements   thereto;  and  permit   representatives  of  Lenders  to  inspect
Borrower's  properties and its books and records and to make extracts  therefrom
at all reasonable times.

                  4.1.3.  Insurance.  Keep its assets  insured with  responsible
insurance  companies  against  those risks and in such  amounts as are  commonly
insured against by companies in similar businesses and owning similar assets. At
Lenders'  request,  Borrower shall have Lenders named as additional  insureds on
liability  policies.  Borrower  shall  deliver  to  Lenders  such  certificates,
endorsements, and other evidence of such insurance as Lenders may request.

                  4.1.4.  Compliance  with  Laws.  Except  to  the  extent  such
non-compliance  would not have a  material  adverse  effect on  Borrower  or its
financial  position,  comply with all laws  applicable  to  Borrower  and to the
operation of its business (including,  without limitation,  any statute, rule or
regulation  relating  to  employment  practices  and  employee  benefits  and to
environmental, occupational and health standards and controls).

                  4.1.5.  Financial  Reports.  Deliver  promptly such  financial
statements  and reports as Lenders may  reasonably  request  including,  without
limitation,  annual financial statements of Borrower's parent company audited or
reviewed by  independent  certified  public  accountants  and interim  financial
statements prepared by Borrower's  management.  All such financial data shall be
true,  accurate and  complete in all material  respects and shall be prepared in
accordance  with GAAP  consistently  applied  and shall  contain  such detail as
Lenders may reasonably require.

                  4.1.6. Additional Reports. Provide prompt notice to Lenders of
the  occurrence of any of the  following  (together  with a  description  of the
action which Borrower proposes to take with respect  thereto):  (a) any Event of
Default or  potential  Event of Default  hereunder,  and (b) any event  which is
reasonably  expected  to  result in a  material  adverse  change  in  Borrower's
business, assets, operations, financial condition or results of operation.

         4.2. Negative  Covenants.  Borrower  covenants and agrees that from the
date of execution of this Agreement until the Obligations are satisfied in full,
Borrower shall not (and shall cause each of its majority-owned subsidiaries,  if
any, not to), without Lenders' prior written consent:

                  4.2.1. Guarantees.  Guarantee,  endorse or become contingently
liable for the  obligations of any person or entity,  except in connection  with
the  endorsement  and deposit of checks in the  ordinary  course of business for
collection.

                                       16

<PAGE>


                  4.2.2.  Merger;  Disposition  of Assets.  Merge or consolidate
with or into any person or entity or lease, sell,  transfer or otherwise dispose
of any material assets,  whether now owned or hereafter acquired,  other than in
the  normal  course  of  business  and   consistent   with  past   practices  or
substantially as described in the Joint Proxy Statement.

                  4.2.3.  Change in Business,  Management or Ownership.  Make or
permit any material change in the nature of Borrower's business as carried on as
of the date hereof,  of its chief executive  officer or in its equity ownership,
except as described in the Joint Proxy Statement.

                  4.2.4.  Dividends and Other Distributions.  Declare or pay any
dividends on or make any distribution  with  respect to any class of its capital
stock or equity or ownership interest.

                  4.2.5.  Investments.     Purchase  or  hold  beneficially  any
stock, other securities or  evidence  of  indebtedness  or  make  any  loans  or
advances  to,  or  make  any  investment  or acquire any interests in, any other
person or entity.


                                    ARTICLE V
                                  SUBORDINATION

         5.1.  Payments and Remedies  Subordinated.  (a) Anything in the Note or
Loan Documents notwithstanding,  Lenders agree that Borrower's payment of any of
the liabilities  and  obligations now existing or hereafter  arising under or in
connection with the Loan Documents (the "Subordinated Obligations") is and shall
be expressly  subordinate and junior in right of payment to the prior payment in
full of Borrower's liabilities and obligations now existing or hereafter arising
under or in connection with the Credit  Agreement dated as of December 20, 1995,
as amended , between Borrower and NationsBank of Georgia,  National  Association
or any similar  agreement  hereafter  entered  into by  Borrower in  replacement
thereof upon  substantially  similar terms and conditions (such  agreement,  the
"Senior Credit Agreement," such lender, the "Senior Lender" and such liabilities
and  obligations   arising  thereunder,   the  "Senior   Obligations")  and  the
Subordinated  Obligations  are  hereby  subordinated  as a claim and in right of
enforcement  against  Borrower  and any of the  property and assets of Borrower,
whether  such  claim be in the event of any  distribution  of the  property  and
assets of Borrower upon any  voluntary or  involuntary  dissolution,  execution,
sale,  winding-up,   liquidation  or  reorganization,   composition  or  similar
arrangement,  or  bankruptcy,  insolvency,  receivership  or other  statutory or
common law proceedings or arrangements  involving Borrower or any assignment for
the benefit of  creditors  or any  marshaling  of the assets or  liabilities  of
Borrower (a "Reorganization") or otherwise,  to the prior payment in full of the
Senior  Obligations.  In furtherance of the foregoing,  Borrower shall not make,
and no Lender  shall  accept,  receive  or retain  from  Borrower  any direct or
indirect payment (in cash,  property,  or securities or by set-off or otherwise)
upon  or in  respect  of the  Subordinated  Obligations,  or in  respect  of any
acceleration,  demand,  suit  for  collection,  action  or  enforcement  of  any
Subordinated   Obligations  or  in  respect  of  any   prepayment,   redemption,
retirement, purchase or other acquisition of any Subordinated Obligations, until
all the Senior Obligations have been paid in full, except to the extent any such
payment is expressly permitted under Section 5.5.

                                       17
<PAGE>


                  (b) Unless and until the Senior  Obligations  shall be paid in
full,  and except as provided in Section 5.6,  each Lender  covenants and agrees
that it shall not, directly or indirectly:  (i) exercise or enforce any right of
acceleration,  demand or set off  against  Borrower or the assets or property of
Borrower;  (ii) make any claim or commence or initiate any action, lawsuit, case
or  proceeding  against  Borrower or join  together or with any  creditor in any
action,  lawsuit, case or proceeding against Borrower;  (iii) exercise any right
of  foreclosure  pursuant to any lien on the  property and assets of Borrower or
exercise  any other  right or remedy  with  respect to Borrower or the assets or
property of Borrower;  (iv) contact any account debtors of Borrower or otherwise
seek  payment from any obligor on any  Collateral;  or (v) take any other action
that  interferes  with, is prejudicial to or  inconsistent  with Senior Lender's
rights and first  priority  secured  position  with  respect to  Borrower or the
assets or property of Borrower  including,  without  limitation,  that no Lender
shall take any action that will impede,  interfere with,  restrict,  or restrain
the exercise by Senior Lender of its rights and remedies under the Senior Credit
Agreement or any agreement executed in connection  therewith  (hereinafter,  (i)
through (v) are  collectively  referred  to as  "Enforcement  Actions").  If any
Lender  shall  attempt any  Enforcement  Action,  Borrower or Senior  Lender may
interpose as a defense or plea the making of this  Agreement  and Senior  Lender
may intervene and interpose  such defense in its name or in the name of Borrower
and  Borrower  or Senior  Lender may by virtue of this  Agreement  restrain  the
enforcement thereof in the name of Borrower or Senior Lender.

         5.2 Form and Delivery of Subordinated Obligations.  In the event of any
Reorganization relating to Borrower or its assets or property, each Lender shall
deliver to Senior  Lender or its  designee  upon  request the  original  Note if
Senior Lender shall at any time  determine the delivery  thereof to be necessary
to enforce the provisions of this Agreement.

         5.3  Distributions  in   Reorganization.   (a)  In  the  event  of  any
Reorganization  relative to Borrower  or its  properties  and assets then all of
Subordinated   Obligations,   and  in  any  such   proceedings  any  payment  or
distribution of any kind or character, whether in cash or property or securities
or otherwise, which may be payable or deliverable in respect of the Subordinated
Obligations  shall be first  paid or  delivered  directly  to Senior  Lender for
application  in  payment of the  Senior  Obligations,  unless and until all such
Senior Obligations shall have been paid in full.

                  (b) In the event of any Reorganization relative to Borrower or
its properties and assets, each Lender assigns to Senior Lender all of its right
in the Subordinated Obligations and pursuant hereto Senior Lender shall have the
right to act as such Lender's attorney-in-fact for the purposes specified herein
and such  Lender  hereby  irrevocably  appoints  Senior  Lender  and each of its
officers,  its true and lawful attorney,  and grants to Senior Lender a power of
attorney with full power of  substitution,  in the name of such Lender or in the
name of Senior Lender, for the use and benefit of Senior Lender,  without notice
to such Lender or any of its respective representatives,  successors or assigns,
to perform the following acts, at Senior Lender's option,  or in connection with
any Reorganization:

                         (i)  To  enforce  claims  comprising  the  Subordinated
Obligations,  either in Senior  Lender's  own name or in the name of any Lender,
by proof of debt, proof of claim,  suit or otherwise;

                         (ii) To  collect  any assets of  Borrower  distributed,
divided or applied by way of  dividend  or  payment,  or any securities or the
proceeds of any realization upon the same, to  the  Senior   Obligations   until
all  of  the  Senior Obligations (including,   without  limitation,   collection
expenses  and  all  interest  accruing  on  the  Senior  Obligations  after  the
commencement  of any  bankruptcy  case) have been paid in full;

                                       18
<PAGE>


                         (iii)To  vote  and  exercise  any and all  rights  with
respect to claims comprising the Subordinated Obligations in  any Reorganization
including, without limitation, to support  or  oppose  any  cash  collateral  or
borrowing  motion,  to  support or oppose  any  motion  for relief from stay for
Senior Lender,  and  to  accept  or reject  any  plan  of   partial  or complete
liquidation,  reorganization,   arrangement, composition or extension; and

                         (iv) To take  generally any action in  connection  with
any such meeting, case or proceeding that any Lender would be authorized to take
 but for this Agreement.

         In no event  shall  Senior  Lender be liable to any  Lender for (x) any
failure  to prove the  Subordinated  Obligations,  to  exercise  any right  with
respect  thereto,  or to collect any sums  payable  thereon,  or (y) any actions
taken by the Senior  Lender  which the Senior  Lender may take  pursuant to this
Section  5.3,  except in each case for willful  failure or gross  negligence  as
determined  by a court of  competent  jurisdiction  in a  final,  non-appealable
judgment.  The power of attorney  granted  herein  shall be deemed to be coupled
with an interest.  Any payments.  or  distribution  of assets of Borrower of any
kind or character,  whether in cash,  property or securities or otherwise,  with
respect  to the  Subordinated  Obligations  received  by any  Lender  during any
Reorganization  and prior to the payment in full of the Senior Obligations shall
be held by such  Lender  in trust  for and  turned  over to  Senior  Lender  for
application to the Senior  Obligations  until all such Senior  Obligations shall
have been indefeasibly paid in full.

         5.4 Effect of Provisions. The provisions hereof as to subordination are
solely for the purpose of defining the  relative  rights of the holder of Senior
Obligations,  on the one hand, and Lenders,  on the other hand, and none of such
provisions shall impair, as between Borrower and Senior Lender and Lenders,  the
obligations  of Borrower to pay to Senior Lender the Senior  Obligations  and to
pay to  Lenders  the  Subordinated  Obligations,  in  accordance  with the terms
thereof except as otherwise expressly provided herein.

         5.5 Permitted  Payments.  (a) So long as no event of default shall have
occurred and is continuing under the Senior Credit Agreement, or will occur as a
result of making such  payment,  or would have  occurred  but for the passage of
time or giving of notice or both, or will have  occurred  after giving effect to
any payment or distribution which otherwise would be permitted hereby,  Borrower
may pay, or cause to be paid to  Lenders:  scheduled  payments  of interest  and
principal in accordance  with the terms of the Note in effect on the date hereof
(but not any principal,  interest, fees or charges payable upon the acceleration
thereof  by reason of an Event of  Default  hereunder)  ("Permitted  Payments").
Permitted  Payments  expressly  permitted by the  foregoing  provisions  of this
Section  5.5(a)  may  be  retained  by  Lenders,  free  from  the  subordination
provisions hereof,  unless on or before the business day after the expiration of
a period  of sixty  (60) days  following  receipt  by  Lender of such  Permitted
Payment  Senior  Lender  shall  provide  notice to Lenders that at the time such
Permitted  Payment was made, an event of default had occurred and was continuing
under the Senior Credit  Agreement or would have occurred but for the passage of
time or  giving of notice or both,  or did  occur  after  giving  effect to such
payment.

                                       19
<PAGE>

                  (b)  If an  event  of  default  shall  have  occurred  and  is
continuing under the Senior Credit Agreement, or would have occurred but for the
passage of time or giving of notice or both, or will have occurred  after giving
effect to any payment which otherwise would be permitted hereby,  the obligation
of  Borrower  to make any  Permitted  Payment  shall be  postponed  for a period
commencing  on the day on which the  Permitted  Payment  would have been due and
payable and ending on the first business day following the thirtieth  (30th) day
thereafter  on which no such  event of default  is then  continuing  or would be
continuing after giving effect to such Permitted Payment.

         5.6 Subordinated Note Payment Default.  Notwithstanding  the provisions
of  Section  5.1(b)  hereof,  in the  event of  default  in the  payment  of the
principal or interest due on the Note which default continues without cure for a
period of 180 days after notice by Lender to Borrower and Senior  Lender of such
payment  default,  Lenders  may sue  upon,  obtain  a  judgment  or  take  other
Enforcement  Actions  permitted by law to collect  such overdue  payments on the
Note; provided, however, that all amounts realized by Lender as a result of such
actions  shall be paid over to Senior  Lender as provided in Section 5.3 and 5.7
and provided,  however, that no Enforcement Action of any kind shall be taken by
Lenders and any pending  Enforcement Action shall cease once Senior Lender shall
have  accelerated the Senior  Obligations or the Senior  Obligations  shall have
otherwise become immediately due and payable

         5.7.  Agreement  to Hold in Trust.  If any  Lender  shall  receive  any
payment or distribution of assets of Borrower of any kind or character,  whether
in cash, property or securities,  or by set-off or otherwise,  on account of the
Subordinated  Obligations which payment or distribution is required by the terms
hereof to be made to Senior  Lender or is otherwise in violation of the terms of
this  Agreement,  it shall hold such  payment or  distribution  in trust for the
benefit of Senior Lender and shall  immediately pay or transfer the same over to
Senior Lender for application in payment of the Senior Obligations.

         5.8. Amendment Requiring Senior Lender Consent. Without Senior Lender's
prior  written  consent,  neither  this  Agreement  nor any of the  Notes may be
amended or otherwise  modified in any way so as to (i) shorten the maturity date
of  such  Subordinated  Obligations,  (ii)  provide  for  scheduled  payment  of
principal of such Subordinated Obligations,  or (iii) increase the rate at which
interest is payable on such  Subordinated  Obligations.  Further no provision of
this Article V may be amended or otherwise  modified  without the prior  written
consent of Senior Lender.

         5.9. Paid in Full. As used in this Article V, the terms "paid in full,"
"payment in full" and words of similar  import when used with  respect to Senior
Obligations  shall  mean  the  indefeasible  payment  in  full  in  cash or cash
equivalents of the Senior Obligations.


                                   ARTICLE VI
                                     DEFAULT

         6.1. Events of Default. The occurrence of an event of default as
defined in the Note or any of the  other  Loan  Documents  shall  constitute  an
"Event of Default" hereunder.


                                       20
<PAGE>

                                   ARTICLE VII
                               DISPUTE RESOLUTION

         7.1.     Resolution of Disputes.

                  7.1.1. Good-Faith  Negotiations.(a)Good-FaithNegotiations"  If
any dispute  arises under this Agreement or any of the other Loan Documents that
is not settled  promptly in the ordinary  course of business,  the parties shall
seek to resolve any such dispute between them,  first,  by negotiating  promptly
with each other in good faith in face-to-face  negotiations.  These face-to-face
negotiations  shall be conducted by the respective  designated senior management
representative  of each party.  If the parties are unable to resolve the dispute
between them through these  face-to-face  negotiations,  within 20 business days
(or such period as the parties  shall  otherwise  agree)  following  the date of
notification  (the "Notice  Date") by one party to the other(s) of the existence
of such  dispute,  then any such  disputes  shall be resolved  in the  following
manner.

                  7.1.2.  Mediation.  The parties shall  endeavor to resolve any
dispute  arising out of or relating to this Agreement by mediation under the CPR
Mediation Procedures for Business Disputes. Unless otherwise agreed, the parties
will select a mediator  from the CPR Panels of Neutrals  and shall notify CPR to
initiate the selection process.

                  7.1.3.   Resolution of Disputes.(b)ResolutionofDisputes"

     (a) Any action, suit or proceeding where the amount in controversy as to at
least one party,  exclusive of interest and costs,  exceeds $1,000,000 ("Summary
Proceeding"),  arising out of or relating  to this  Agreement,  any of the other
Loan Documents or the breach, termination or validity thereof which has not been
resolved by  mediation  as provided  herein  within 90 days of the Notice  Date,
shall be litigated  exclusively  in the Superior  Court of the State of Delaware
(the  "Delaware  Superior  Court")  as a summary  proceeding  pursuant  to Rules
124-131 of the Delaware  Superior  Court,  or any successor  rules (the "Summary
Proceeding   Rules").   Each  of  the  parties  hereto  hereby  irrevocably  and
unconditionally  (A) submits to the jurisdiction of the Delaware  Superior Court
for any Summary  Proceeding,  (B) agrees not to commence any Summary  Proceeding
except in the Delaware Superior Court, (C) waives, and agrees not to plead or to
make,  any  objection  to the venue of any Summary  Proceeding  in the  Delaware
Superior  Court,  (D) waives,  and agrees not to plead or to make any claim that
any Summary  Proceeding  brought in the Delaware Superior Court has been brought
in an improper or otherwise  inconvenient  forum, (E) waives,  and agrees not to
plead or to make,  any claim that the  Delaware  Superior  Court lacks  personal
jurisdiction  over it, (F) waives its right to remove any Summary  Proceeding to
the federal  courts  except where such courts are vested with sole and exclusive
jurisdiction by statute, and (G) understands and agrees that it shall not seek a
jury trial or punitive  damages in any Summary  Proceeding based upon or arising
out of or otherwise related to this Agreement or any of the other Loan Documents
or the breach, termination or validity thereof, and waives any and all rights to
any such jury trial or to seek punitive damages.

     (b) In the  event  any  action,  suit or  proceeding  where  the  amount in
controversy as to at least one party,  exclusive of interest and costs, does not
exceed  $1,000,000  (a  "Proceeding"),  arising  out  of  or  relating  to  this
Agreement,  any of the Loan  Documents  or the breach,  termination  or validity
thereof, is brought, the parties to such Proceeding agree to make application to
the Delaware Superior Court to proceed under the Summary Proceeding Rules. Until
such time as such application is rejected, such Proceeding shall be treated as a
Summary Proceeding and all of the foregoing  provisions of this Section relating
to Summary Proceedings shall apply to such Proceeding.

                                       21

<PAGE>

     (c) If a  Summary  Proceeding  is not  available  to  resolve  any  dispute
hereunder, the controversy or claim shall be settled by arbitration conducted on
a confidential  basis,  under the U.S.  Arbitration Act, if applicable,  and the
then  current   Commercial   Arbitration  Rules  of  the  American   Arbitration
Association  (the  "Association")  strictly in accordance with the terms of this
Agreement  and the  substantive  law of the State of Delaware  including  law in
respect of any statute of limitations. The arbitration shall be conducted at the
Association's  regional  office located  closest to Lender's  principal place of
business  by a single  arbitrator.  The  arbitrator  is not  empowered  to award
damages in excess of  compensating  damages  and each party  hereby  irrevocably
waives any right to  recover  such  damages  with  respect to any such  dispute.
Judgment upon the arbitrator's aware may be entered and enforced in any court of
competent jurisdiction.

         7.2. Equitable  Remedies.  Neither party shall be precluded hereby from
securing  equitable  remedies in courts of any jurisdiction  including,  but not
limited to, temporary restraining orders and preliminary injunctions, to protect
its  rights and  interests,  but such shall not be sought as a means to avoid or
stay any of the provisions of this Article VII.

         7.3. Performance Pending Resolution. Each party  shall be  required  to
continue to perform its respective  obligations under the Loan Documents pending
final  resolution  of any  Dispute,  unless  to do so  would  be  impossible  or
impracticable under the circumstances.


                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.1. Expenses.  Borrower shall pay to Lenders, on demand, all costs and
expenses   incurred  by  Lenders  in  defending  or  prosecuting   any  actions,
arbitrations  or  proceedings  arising out of or relating to the Loan  Documents
including, without limitation, reasonable fees and expenses of counsel.

         8.2.  Amendments,  Indulgences,  Etc.  No  amendment  or  waiver of any
provision of this  Agreement nor consent to any  departure by Borrower  herefrom
shall in any event be  effective  unless the same shall be in writing and signed
by Lenders,  and then such amendment,  waiver or consent shall be effective only
in the  specific  instance  and for the  specific  purpose for which  given.  No
failure or delay on the part of any Lender in the exercise of any right,  power,
or remedy under this  Agreement or any of the other Loan  Documents  shall under
any circumstances constitute or be deemed to be a waiver thereof, or prevent the
exercise thereof in that or any other instance.

         8.3.  Notices.  All  notices  given  hereunder  shall be in writing and
deemed validly given (a) three (3) business days after sent, postage prepaid, by
certified mail, return receipt  requested,  (b) one (1) business day after sent,
charges  paid by the  sender,  by Federal  Express  Next Day  Delivery  or other
guaranteed delivery service,  (c) when confirmation of transmission by facsimile
during normal  business hours is received,  or (d) when delivered by hand,  upon
delivery,  in each case to the intended  recipient at its address shown below or
to such other  address,  or in care of such other person,  as either party shall
hereafter specify to the other from time to time by due notice:


                                       22
<PAGE>


                  If to Borrower:

                                    FormMaker Software, Inc.
                                    2300 Windy Ridge Parkway
                                    Suite 400 North
                                    Atlanta, GA  30339
                                    Attention:  President

                                    Fax No.: 770-859-9900

                  If to Lenders:

                                    Safeguard Scientifics (Delaware), Inc.
                                    103 Springer Building
                                    3411 Silverside Road
                                    P.O. Box 7048
                                    Wilmington, DE  19803
                                    Attention:  President

                                    Fax No.:   302-478-3667

                                    Technology Leaders II L.P.
                                    TL Ventures Third Corp.
                                    c/o Technology Leaders Management, Inc.
                                    800 The Safeguard Building
                                    435 Devon Park Drive
                                    Wayne, PA  19087
                                    Attention: President

                                    Fax No.:  610-975-9330

         8.4.  Interpretation.  Except as otherwise  indicated,  all  agreements
defined herein refer to the same as from time to time amended or supplemented or
the terms thereof waived or modified in accordance  herewith and therewith.  Any
provision hereof found to be illegal,  invalid or  unenforceable  for any reason
whatsoever  shall not affect the  legality,  validity or  enforceability  of the
remainder hereof. In this Agreement, in the computation of a period of time from
a specified  date to a later  specified  date,  the word "from"  means "from and
including" and the words "to" and "until" each means "to but excluding."  Unless
otherwise expressly provided,  the word "including" does not limit the preceding
words or terms.

         8.5.  Entire  Agreement.   This  Agreement,   and  all  agreements  and
instruments  to be delivered  by the parties  pursuant  hereto or in  connection
herewith,  represent the entire understanding of the parties with respect to the
subject  matter  hereof,  and  supersede  all other  prior  and  contemporaneous
agreements and  understandings,  both written and oral, between the parties with
respect to the subject matter hereof.

                                       23
<PAGE>



     8.6. Governing Law. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their  respective  successors and assigns,
and construed and interpreted according to the laws of the State of Delaware.

     8.7.  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument.

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

                           FORMMAKER SOFTWARE, INC.

                           By:       /S/   ROBERT L. MORRIS
                           ------------------------------------
                           Title: Senior Vice President

                           SAFEGUARD SCIENTIFICS
                           (DELAWARE), INC.

                           By:       /S/   GERALD M. WILK
                           ------------------------------------
                           Title: Senior Vice President

                           TECHNOLOGY LEADERS II L.P.

                           By: Technology Leaders II Management L.P.,
                                 its general partner

                           By: Technology Leaders Management, Inc.,
                                 its general partner

                           By:      /S/   MARK J. DENINO
                           ------------------------------------
                           Title: Managing Director

                           TL VENTURES THIRD CORP.

                           By:       /S/   ROBERT E. KEITH, JR.
                           ------------------------------------
                           Title: President

                                       24

<PAGE>




                                                SCHEDULES AND EXHIBITS


Exhibit 1.2                Note
Exhibit 2.1                Warrant


Schedule 1.1               Allocations

 
                                       25
<PAGE>



                                    TERM NOTE



$1,970,792                                                          May 15, 1997


         FOR VALUE RECEIVED,  FORMMAKER  SOFTWARE,  INC., a Georgia  corporation
("Borrower"),  having an office at 2300 Windy  Ridge  Parkway,  Suite 400 North,
Atlanta,  Georgia 30339, does hereby unconditionally promise to pay to the order
of SAFEGUARD SCIENTIFICS (DELAWARE), INC., a Delaware corporation ("Lender"), at
Lender's office located at 103 Springer Building, 3411 Silverside Road, P.O. Box
7048, Wilmington, Delaware 19803, or at such other place as Lender may from time
to time  designate  in  writing,  in  lawful  money of the  United  States,  the
principal  sum of ONE  MILLION  NINE  HUNDRED  SEVENTY  THOUSAND  SEVEN  HUNDRED
NINETY-TWO DOLLARS ($1,970,792), with interest, all as provided below.

         1. Rate of Interest. Interest on the principal amount outstanding under
this  promissory  note (this "Note") shall accrue at an annual rate equal to the
announced prime rate of PNC Bank, N.A. (the "Prime Rate") plus 1%. Such interest
rate  shall be  changed  when and as the Prime Rate  changes.  Interest  payable
hereunder  shall be calculated for actual days elapsed on the basis of a 360-day
year.

         Notwithstanding anything in this Note, the interest rate charged hereon
shall not exceed the maximum  rate  allowable by  applicable  law. If any stated
interest rate herein exceeds the maximum  allowable rate, then the interest rate
shall be reduced  to the  maximum  allowable  rate,  and any  excess  payment of
interest made by Borrower at any time shall be applied to the unpaid  balance of
any outstanding principal of this Note.

         2. Payment of Interest and Principal. Interest shall be due and payable
commencing  on June 30, 1997,  and  continuing  on the last day of each calendar
quarter  thereafter  until the  earlier of (a) the  closing  of an  underwritten
initial public  offering of common stock of Borrower (or, after  consummation of
the  transactions  contemplated by the Joint Proxy Statement for Image Sciences,
Inc. and Borrower dated April 18, 1997, DocuCorp.,  Inc.) yielding proceeds (net
of underwriting  discounts and  commissions) of at least  $13,000,000 or (b) the
third  anniversary of the date of this Agreement (the "Maturity Date"), on which
date all outstanding  principal and accrued interest shall be due and payable in
full.  This Note may be  prepaid in whole or in part at any time or from time to
time without prepayment penalty or premium.

         3.  Other  Loan  Documents;  Subordination.  This  Note  is  issued  in
connection  with, and subject to the provisions of, that certain loan agreement,
dated the date hereof,  by and among Borrower,  Lender and certain other lenders
named therein (the "Loan  Agreement")(collectively  with this Note and all other
agreements executed in connection herewith, the "Loan Documents"),  and shall be
subordinate  in right of payment to certain  senior  indebtedness  to the extent
provided in the Loan Agreement.

                                       26

<PAGE>

         4. Method and Application of Payments.  All amounts  payable  hereunder
shall be paid by Borrower in immediately available and freely transferable funds
at the place  designated  by Lender to Borrower for such  payment.  All payments
made on this Note (including, without limitation,  prepayments) shall be applied
to fees and expenses (including attorneys' fees), accrued interest and principal
in any order Lender may choose, in its sole discretion.

         5. Events  of  Default.  Each  of  following events shall constitute an
event of default (an "Event of Default") hereunder:

                  a. If  Borrower  shall  fail to pay when due any  interest  or
principal or any other sum payable to Lender  hereunder  and such failure  shall
continue unremedied for five (5) days after written notice.

                  b. If any  representation  or  warranty  made by  Borrower  to
Lenders in any statement,  certificate or other document in connection  with the
Loan Documents  including,  but not limited to, the Loan Documents now or in the
future securing the obligations of Borrower to Lenders,  is false,  erroneous or
misleading in any material respect.

                  c. If Borrower  shall default in the  performance of any other
agreement or covenant with Lenders  contained in the Loan  Documents  including,
but not  limited  to,  the Loan  Documents  now or in the  future  securing  the
obligations of Borrower to Lenders,  and such default shall continue uncured for
ten (10) days after written  notice thereof to Borrower given by any Lender (or,
if such default  cannot  reasonably be cured within such ten (10) day period and
Borrower is proceeding to cure with reasonable diligence, such period of time as
shall be reasonably  necessary to cure such  default,  but in no event more than
thirty (30) days).

                  d. If  Borrower  shall  become  insolvent,  bankrupt  or shall
generally  fail to pay its debts as such debts become due; or if Borrower  shall
admit in writing its inability to pay its debts;  or if Borrower  shall suffer a
receiver or trustee for it or substantially  all of its property to be appointed
and not  dismissed  within  thirty (30) days  thereof;  or if  Borrower  makes a
general assignment for the benefit of creditors; or if proceedings under any law
related to  bankruptcy or  insolvency  or the  reorganization  or the release of
debtors are instituted  against  Borrower and are not dismissed or stayed within
sixty (60) days; or if a receiver or trustee for Borrower or  substantially  all
of its property shall be appointed without  Borrower's consent and such receiver
or trustee  shall not be discharged  within sixty (60) days;  or if  proceedings
relating to Borrower  under any law related to  bankruptcy  or insolvency or the
reorganization  or the  release  of  debtors  are  instituted  or  commenced  by
Borrower.

                  e.  If any  final  unappealable  judgment,  writ,  warrant  of
attachment  or execution or similar  process which calls for payment or presents
liability in excess of $100,000 individually, or $500,000 in the aggregate, (not
covered by  insurance)  shall be  rendered or issued  against or levied  against
Borrower or  Borrower's  property  and such process  shall not be paid,  waived,
stayed, vacated, discharged,  settled, satisfied or fully bonded within ten (10)
days after its issuance or levy.


                                       27

<PAGE>


         6. Remedies.  Upon the occurrence of any Event of Default, (a) interest
shall  automatically  and  without  notice  begin to accrue  on the  outstanding
balance of this Note at the Prime Rate plus 3%, (b) the entire unpaid  principal
amount of this Note and all unpaid  interest  accrued thereon shall, at the sole
option of Lender upon notice to Borrower,  become  immediately  due and payable,
(c) Lender shall have the right to offset all amounts owed by Borrower hereunder
against any amounts owed by Lender in any  capacity to Borrower,  whether or not
due, and (d) Lender shall  thereupon  have the immediate  right to exercise from
time to time  all  rights  and  remedies  available  to  Lender  under  the Loan
Documents or now or hereafter available at law or in equity.

         7. Miscellaneous. Except as expressly set forth herein, Borrower hereby
waives presentment, demand, protest and notice of dishonor and protest, and also
waives all other exemptions; and agrees that extension or extensions of the time
of payment of this Note or any  installment  or part thereof may be made before,
at or after maturity by agreement by Lender.  Borrower shall pay to Lender, upon
demand, all costs and expenses that may be incurred by Lender in connection with
the enforcement of this Note including, without limitation, fees and expenses of
Lender's  counsel.  Notices  required  to be given  hereunder  shall be given in
accordance  with the provisions of the Loan  Agreement,  as amended from time to
time.  Any  failure  by Lender to  exercise  any  right  hereunder  shall not be
construed  as a waiver of the right to  exercise  the same or any other right at
any time.  No  amendment to or  modification  of this Note shall be binding upon
Lender  unless in writing  and signed by it. Any  provision  hereof  found to be
illegal, invalid or unenforceable for any reason whatsoever shall not affect the
legality,  validity or enforceability  of the remainder hereof.  This Note shall
apply to and bind the  successors  of Borrower and shall inure to the benefit of
Lender,  its successors and assigns;  provided,  however,  that Borrower may not
assign its rights and  obligations  under this Note  without the  express  prior
written  consent of Lender.  This Note shall be governed by and  interpreted  in
accordance with the laws of the State of Delaware.

         IN WITNESS WHEREOF,  Borrower, by its duly authorized officer intending
to be legally  bound  hereby,  has duly  executed this Note as of the date first
written above.

                                  FORMMAKER SOFTWARE, INC.


                                  By:               /S/   ROBERT L. MORRIS
                                  ----------------------------------------
                                  Name: Robert L. Morris
                                  Title: Senior Vice President
 
                                       28
<PAGE>



                                    TERM NOTE



$573,578                                                            May 15, 1997


         FOR VALUE RECEIVED,  FORMMAKER  SOFTWARE,  INC., a Georgia  corporation
("Borrower"),  having an office at 2300 Windy  Ridge  Parkway,  Suite 400 North,
Atlanta,  Georgia 30339, does hereby unconditionally promise to pay to the order
of TECHNOLOGY  LEADERS II L.P., a Delaware limited  partnership  ("Lender"),  at
Lender's  office  located at 800 The Safeguard  Building,  435 Devon Park Drive,
Wayne,  Pennsylvania  19087,  or at such other  place as Lender may from time to
time designate in writing,  in lawful money of the United States,  the principal
sum of FIVE HUNDRED  SEVENTY THREE THOUSAND FIVE HUNDRED  SEVENTY-EIGHT  DOLLARS
($573,578), with interest, all as provided below.

         1. Rate of Interest. Interest on the principal amount outstanding under
this  promissory  note (this "Note") shall accrue at an annual rate equal to the
announced prime rate of PNC Bank, N.A. (the "Prime Rate") plus 1%. Such interest
rate  shall be  changed  when and as the Prime Rate  changes.  Interest  payable
hereunder  shall be calculated for actual days elapsed on the basis of a 360-day
year.

         Notwithstanding anything in this Note, the interest rate charged hereon
shall not exceed the maximum  rate  allowable by  applicable  law. If any stated
interest rate herein exceeds the maximum  allowable rate, then the interest rate
shall be reduced  to the  maximum  allowable  rate,  and any  excess  payment of
interest made by Borrower at any time shall be applied to the unpaid  balance of
any outstanding principal of this Note.

         2. Payment of Interest and Principal. Interest shall be due and payable
commencing  on June 30, 1997,  and  continuing  on the last day of each calendar
quarter  thereafter  until the  earlier of (a) the  closing  of an  underwritten
initial public  offering of common stock of Borrower (or, after  consummation of
the  transactions  contemplated by the Joint Proxy Statement for Image Sciences,
Inc. and Borrower dated April 18, 1997, DocuCorp.,  Inc.) yielding proceeds (net
of underwriting  discounts and  commissions) of at least  $13,000,000 or (b) the
third  anniversary of the date of this Agreement (the "Maturity Date"), on which
date all outstanding  principal and accrued interest shall be due and payable in
full.  This Note may be  prepaid in whole or in part at any time or from time to
time without prepayment penalty or premium.

         3.  Other  Loan  Documents;  Subordination.  This  Note  is  issued  in
connection  with, and subject to the provisions of, that certain loan agreement,
dated the date hereof,  by and among Borrower,  Lender and certain other lenders
named therein (the "Loan  Agreement")(collectively  with this Note and all other
agreements executed in connection herewith, the "Loan Documents"),  and shall be
subordinate  in right of payment to certain  senior  indebtedness  to the extent
provided in the Loan Agreement.


                                       29
<PAGE>

         4. Method and Application of Payments.  All amounts  payable  hereunder
shall be paid by Borrower in immediately available and freely transferable funds
at the place  designated  by Lender to Borrower for such  payment.  All payments
made on this Note (including, without limitation,  prepayments) shall be applied
to fees and expenses (including attorneys' fees), accrued interest and principal
in any order Lender may choose, in its sole discretion.

         5. Events of Default.  Each  of following  events  shall  constitute an
event of default (an "Event of Default") hereunder:

                  a. If  Borrower  shall  fail to pay when due any  interest  or
principal or any other sum payable to Lender  hereunder  and such failure  shall
continue unremedied for five (5) days after written notice.

                  b. If any  representation  or  warranty  made by  Borrower  to
Lenders in any statement,  certificate or other document in connection  with the
Loan Documents  including,  but not limited to, the Loan Documents now or in the
future securing the obligations of Borrower to Lenders,  is false,  erroneous or
misleading in any material respect.

                  c. If Borrower  shall default in the  performance of any other
agreement or covenant with Lenders  contained in the Loan  Documents  including,
but not  limited  to,  the Loan  Documents  now or in the  future  securing  the
obligations of Borrower to Lenders,  and such default shall continue uncured for
ten (10) days after written  notice thereof to Borrower given by any Lender (or,
if such default  cannot  reasonably be cured within such ten (10) day period and
Borrower is proceeding to cure with reasonable diligence, such period of time as
shall be reasonably  necessary to cure such  default,  but in no event more than
thirty (30) days).

                  d. If  Borrower  shall  become  insolvent,  bankrupt  or shall
generally  fail to pay its debts as such debts become due; or if Borrower  shall
admit in writing its inability to pay its debts;  or if Borrower  shall suffer a
receiver or trustee for it or substantially  all of its property to be appointed
and not  dismissed  within  thirty (30) days  thereof;  or if  Borrower  makes a
general assignment for the benefit of creditors; or if proceedings under any law
related to  bankruptcy or  insolvency  or the  reorganization  or the release of
debtors are instituted  against  Borrower and are not dismissed or stayed within
sixty (60) days; or if a receiver or trustee for Borrower or  substantially  all
of its property shall be appointed without  Borrower's consent and such receiver
or trustee  shall not be discharged  within sixty (60) days;  or if  proceedings
relating to Borrower  under any law related to  bankruptcy  or insolvency or the
reorganization  or the  release  of  debtors  are  instituted  or  commenced  by
Borrower.

                  e.  If any  final  unappealable  judgment,  writ,  warrant  of
attachment  or execution or similar  process which calls for payment or presents
liability in excess of $100,000 individually, or $500,000 in the aggregate, (not
covered by  insurance)  shall be  rendered or issued  against or levied  against
Borrower or  Borrower's  property  and such process  shall not be paid,  waived,
stayed, vacated, discharged,  settled, satisfied or fully bonded within ten (10)
days after its issuance or levy.

                                       30
<PAGE>

         6. Remedies.  Upon the occurrence of any Event of Default, (a) interest
shall  automatically  and  without  notice  begin to accrue  on the  outstanding
balance of this Note at the Prime Rate plus 3%, (b) the entire unpaid  principal
amount of this Note and all unpaid  interest  accrued thereon shall, at the sole
option of Lender upon notice to Borrower,  become  immediately  due and payable,
(c) Lender shall have the right to offset all amounts owed by Borrower hereunder
against any amounts owed by Lender in any  capacity to Borrower,  whether or not
due, and (d) Lender shall  thereupon  have the immediate  right to exercise from
time to time  all  rights  and  remedies  available  to  Lender  under  the Loan
Documents or now or hereafter available at law or in equity.

         7. Miscellaneous. Except as expressly set forth herein, Borrower hereby
waives presentment, demand, protest and notice of dishonor and protest, and also
waives all other exemptions; and agrees that extension or extensions of the time
of payment of this Note or any  installment  or part thereof may be made before,
at or after maturity by agreement by Lender.  Borrower shall pay to Lender, upon
demand, all costs and expenses that may be incurred by Lender in connection with
the enforcement of this Note including, without limitation, fees and expenses of
Lender's  counsel.  Notices  required  to be given  hereunder  shall be given in
accordance  with the provisions of the Loan  Agreement,  as amended from time to
time.  Any  failure  by Lender to  exercise  any  right  hereunder  shall not be
construed  as a waiver of the right to  exercise  the same or any other right at
any time.  No  amendment to or  modification  of this Note shall be binding upon
Lender  unless in writing  and signed by it. Any  provision  hereof  found to be
illegal, invalid or unenforceable for any reason whatsoever shall not affect the
legality,  validity or enforceability  of the remainder hereof.  This Note shall
apply to and bind the  successors  of Borrower and shall inure to the benefit of
Lender,  its successors and assigns;  provided,  however,  that Borrower may not
assign its rights and  obligations  under this Note  without the  express  prior
written  consent of Lender.  This Note shall be governed by and  interpreted  in
accordance with the laws of the State of Delaware.

         IN WITNESS WHEREOF,  Borrower, by its duly authorized officer intending
to be legally  bound  hereby,  has duly  executed this Note as of the date first
written above.

                                     FORMMAKER SOFTWARE, INC.


                                     By:               /S/   ROBERT L. MORRIS
                                     ----------------------------------------
                                     Name: Robert L. Morris
                                     Title: Senior Vice President

                                       31
<PAGE>



                                    TERM NOTE



$455,630                                                            May 15, 1997


         FOR VALUE RECEIVED,  FORMMAKER  SOFTWARE,  INC., a Georgia  corporation
("Borrower"),  having an office at 2300 Windy  Ridge  Parkway,  Suite 400 North,
Atlanta,  Georgia 30339, does hereby unconditionally promise to pay to the order
of TL VENTURES  THIRD  CORP.,  a Delaware  corporation  ("Lender"),  at Lender's
office  located at 800 The  Safeguard  Building,  435 Devon Park  Drive,  Wayne,
Pennsylvania  19087,  or at such  other  place as  Lender  may from time to time
designate in writing, in lawful money of the United States, the principal sum of
FOUR HUNDRED  FIFTY-FIVE  THOUSAND SIX HUNDRED THIRTY DOLLARS  ($455,630),  with
interest, all as provided below.

         1. Rate of Interest. Interest on the principal amount outstanding under
this  promissory  note (this "Note") shall accrue at an annual rate equal to the
announced prime rate of PNC Bank, N.A. (the "Prime Rate") plus 1%. Such interest
rate  shall be  changed  when and as the Prime Rate  changes.  Interest  payable
hereunder  shall be calculated for actual days elapsed on the basis of a 360-day
year.

         Notwithstanding anything in this Note, the interest rate charged hereon
shall not exceed the maximum  rate  allowable by  applicable  law. If any stated
interest rate herein exceeds the maximum  allowable rate, then the interest rate
shall be reduced  to the  maximum  allowable  rate,  and any  excess  payment of
interest made by Borrower at any time shall be applied to the unpaid  balance of
any outstanding principal of this Note.

         2. Payment of Interest and Principal. Interest shall be due and payable
commencing  on June 30, 1997,  and  continuing  on the last day of each calendar
quarter  thereafter  until the  earlier of (a) the  closing  of an  underwritten
initial public  offering of common stock of Borrower (or, after  consummation of
the  transactions  contemplated by the Joint Proxy Statement for Image Sciences,
Inc. and Borrower dated April 18, 1997, DocuCorp.,  Inc.) yielding proceeds (net
of underwriting  discounts and  commissions) of at least  $13,000,000 or (b) the
third  anniversary of the date of this Agreement (the "Maturity Date"), on which
date all outstanding  principal and accrued interest shall be due and payable in
full.  This Note may be  prepaid in whole or in part at any time or from time to
time without prepayment penalty or premium.

         3.  Other  Loan  Documents;  Subordination.  This  Note  is  issued  in
connection  with, and subject to the provisions of, that certain loan agreement,
dated the date hereof,  by and among Borrower,  Lender and certain other lenders
named therein (the "Loan  Agreement")(collectively  with this Note and all other
agreements executed in connection herewith, the "Loan Documents"),  and shall be
subordinate  in right of payment to certain  senior  indebtedness  to the extent
provided in the Loan Agreement.

                                       32

<PAGE>

         4. Method and Application of Payments.  All amounts  payable  hereunder
shall be paid by Borrower in immediately available and freely transferable funds
at the place  designated  by Lender to Borrower for such  payment.  All payments
made on this Note (including, without limitation,  prepayments) shall be applied
to fees and expenses (including attorneys' fees), accrued interest and principal
in any order Lender may choose, in its sole discretion.

         5. Events of Default.  Each  of  following  events shall  constitute an
event of default (an "Event of Default") hereunder:

                  a. If  Borrower  shall  fail to pay when due any  interest  or
principal or any other sum payable to Lender  hereunder  and such failure  shall
continue unremedied for five (5) days after written notice.

                  b. If any  representation  or  warranty  made by  Borrower  to
Lenders in any statement,  certificate or other document in connection  with the
Loan Documents  including,  but not limited to, the Loan Documents now or in the
future securing the obligations of Borrower to Lenders,  is false,  erroneous or
misleading in any material respect.

                  c. If Borrower  shall default in the  performance of any other
agreement or covenant with Lenders  contained in the Loan  Documents  including,
but not  limited  to,  the Loan  Documents  now or in the  future  securing  the
obligations of Borrower to Lenders,  and such default shall continue uncured for
ten (10) days after written  notice thereof to Borrower given by any Lender (or,
if such default  cannot  reasonably be cured within such ten (10) day period and
Borrower is proceeding to cure with reasonable diligence, such period of time as
shall be reasonably  necessary to cure such  default,  but in no event more than
thirty (30) days).

                  d. If  Borrower  shall  become  insolvent,  bankrupt  or shall
generally  fail to pay its debts as such debts become due; or if Borrower  shall
admit in writing its inability to pay its debts;  or if Borrower  shall suffer a
receiver or trustee for it or substantially  all of its property to be appointed
and not  dismissed  within  thirty (30) days  thereof;  or if  Borrower  makes a
general assignment for the benefit of creditors; or if proceedings under any law
related to  bankruptcy or  insolvency  or the  reorganization  or the release of
debtors are instituted  against  Borrower and are not dismissed or stayed within
sixty (60) days; or if a receiver or trustee for Borrower or  substantially  all
of its property shall be appointed without  Borrower's consent and such receiver
or trustee  shall not be discharged  within sixty (60) days;  or if  proceedings
relating to Borrower  under any law related to  bankruptcy  or insolvency or the
reorganization  or the  release  of  debtors  are  instituted  or  commenced  by
Borrower.

                  e.  If any  final  unappealable  judgment,  writ,  warrant  of
attachment  or execution or similar  process which calls for payment or presents
liability in excess of $100,000 individually, or $500,000 in the aggregate, (not
covered by  insurance)  shall be  rendered or issued  against or levied  against
Borrower or  Borrower's  property  and such process  shall not be paid,  waived,
stayed, vacated, discharged,  settled, satisfied or fully bonded within ten (10)
days after its issuance or levy.


                                       33
<PAGE>

         6. Remedies.  Upon the occurrence of any Event of Default, (a) interest
shall  automatically  and  without  notice  begin to accrue  on the  outstanding
balance of this Note at the Prime Rate plus 3%, (b) the entire unpaid  principal
amount of this Note and all unpaid  interest  accrued thereon shall, at the sole
option of Lender upon notice to Borrower,  become  immediately  due and payable,
(c) Lender shall have the right to offset all amounts owed by Borrower hereunder
against any amounts owed by Lender in any  capacity to Borrower,  whether or not
due, and (d) Lender shall  thereupon  have the immediate  right to exercise from
time to time  all  rights  and  remedies  available  to  Lender  under  the Loan
Documents or now or hereafter available at law or in equity.

         7. Miscellaneous. Except as expressly set forth herein, Borrower hereby
waives presentment, demand, protest and notice of dishonor and protest, and also
waives all other exemptions; and agrees that extension or extensions of the time
of payment of this Note or any  installment  or part thereof may be made before,
at or after maturity by agreement by Lender.  Borrower shall pay to Lender, upon
demand, all costs and expenses that may be incurred by Lender in connection with
the enforcement of this Note including, without limitation, fees and expenses of
Lender's  counsel.  Notices  required  to be given  hereunder  shall be given in
accordance  with the provisions of the Loan  Agreement,  as amended from time to
time.  Any  failure  by Lender to  exercise  any  right  hereunder  shall not be
construed  as a waiver of the right to  exercise  the same or any other right at
any time.  No  amendment to or  modification  of this Note shall be binding upon
Lender  unless in writing  and signed by it. Any  provision  hereof  found to be
illegal, invalid or unenforceable for any reason whatsoever shall not affect the
legality,  validity or enforceability  of the remainder hereof.  This Note shall
apply to and bind the  successors  of Borrower and shall inure to the benefit of
Lender,  its successors and assigns;  provided,  however,  that Borrower may not
assign its rights and  obligations  under this Note  without the  express  prior
written  consent of Lender.  This Note shall be governed by and  interpreted  in
accordance with the laws of the State of Delaware.

         IN WITNESS WHEREOF,  Borrower, by its duly authorized officer intending
to be legally  bound  hereby,  has duly  executed this Note as of the date first
written above.

                                 FORMMAKER SOFTWARE, INC.


                                 By:               /S/   ROBERT L. MORRIS
                                 ----------------------------------------
                                 Name: Robert L. Morris
                                 Title: Senior Vice President


                                       34

<PAGE>





                                  Schedule 1.1

<TABLE>
<CAPTION>
<S>                                                           <C>               <C>

                                                               Principal Amount No. of Shares
Lender .....................................................      of Loan       Covered by Warrants

Safeguard Scientifics (Delaware), Inc. .....................   $1,970,792       197,079
Technology Leaders II L.P. .................................      573,578        57,358
TL Ventures Third Corp. ....................................      455,630        45,563
                                                               ----------       ----------
                                                               $3,000,000       300,000


                                       35
</TABLE>

<PAGE>


                                                                    Exhibit 11.1


                                 DOCUCORP, INC.
                        COMPUTATION OF EARNINGS PER SHARE
                                    UNAUDITED

<TABLE>
<CAPTION>
<S>                                             <C>         <C>          <C>          <C>

                                                 Three       Three         Nine         Nine
                                                 months      months       months       months
                                                 ended       ended        ended        ended
                                                April 30    April 30     April 30     April 30       
                                                  1996        1997         1996         1997
                                               ----------   ----------   ----------   ----------

Net earnings ...............................   $  484,807   $  607,693   $1,335,900   $1,652,606
                                               ==========   ==========   ==========   ==========

Weighted average common shares outstanding .    4,245,015    4,307,615    4,245,015    4,307,615

Weighted average common share equivalents:

       Options .............................    1,357,417    1,107,737    1,357,417    1,107,737
                                               ----------   ----------   ----------   ----------

Weighted average number of common shares and
       common share equivalents outstanding     5,602,432    5,415,352    5,602,432    5,415,352
                                               ==========   ==========   ==========   ==========

       Earnings per common share ...........   $     0.09   $     0.11   $     0.24   $     0.31
                                               ==========   ==========   ==========   ==========
</TABLE>

                                       36

<PAGE>