<PAGE>
 

                             AGREEMENT OF MERGER                  EXHIBIT 2.1


     THIS AGREEMENT OF MERGER, made this 13th day of March, 1997, by and among
HBO & Company, a Delaware corporation ("Parent"); HBO & Company of Georgia, a
Delaware corporation (hereinafter referred to as "Purchaser"); and Enterprise
Systems, Inc., a Delaware corporation (hereinafter referred to as the "Acquired
Company");

                             W I T N E S S E T H:

     WHEREAS, the Boards of Directors of the Acquired Company, Parent and
Purchaser deem it advisable and in the best interests of their respective
stockholders that Purchaser acquire the Acquired Company, and, on or prior to
the date hereof, such Boards of Directors have approved the acquisition of the
Acquired Company upon the terms and subject to the conditions set forth herein;

     NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
receipt, sufficiency and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
<PAGE>
 

I.   DEFINITIONS.
     ------------

     As used herein, the following terms shall have the following meanings
unless the context otherwise requires:

     I.1       "Acquired Company" shall mean Enterprise Systems, Inc., a
                Delaware corporation.
         
     I.2       "Acquired Company Information" shall have the meaning set forth
                in Section 2.3.1.
         
     I.3       "Acquired Company Reports" shall have the meaning set forth in
                Section 3.21.
         
     I.4       "Acquired Company Software" shall have the meaning set forth in
                Section 3.14.2(iii).
         
     I.5       "Acquired Company Stock" shall mean the common stock, $.01 par
                value per share, of the Acquired Company.
         
     I.6       "Agreement" shall mean this Agreement of Merger.
         
     I.7       "Assumed Option" shall have the meaning set forth in Section
                2.1.7.
         
     I.8       "Benefit Plans" shall have the meaning set forth in Section 3.16.
         
     I.9       "Certificate of Merger" shall have the meaning set forth in
                Section 2.1.2.
         
     I.10      "Certificates" shall have the meaning set forth in Section 2.2.2
                hereof.
         
     I.11      "Closing" shall have the meaning set forth in Section 2.1.9
                hereof.
         
     I.12      "Closing Date" shall mean the date on which the Closing occurs
                pursuant to Section 8.1 hereof.
         
     I.13      "Covenants Not to Compete" shall mean the Covenants Not to
                Compete referred to in Section 6.11.
         
     I.14      "Customer Contracts" shall mean all contracts, agreements,
                commitments or other instruments in effect with any customer of
                the Acquired Company or any Subsidiary other than the Specified
                Customer Contracts.
         
     I.15      "Delaware Code" shall mean the Delaware General Corporation Law.
         
     I.16      "DOL" shall mean the United States Department of Labor.
<PAGE>
 

     I.17      "Effective Time" shall mean the time the Merger becomes
               effective, as set forth in Section 2.1.2.
         
     I.18      "ERISA" shall mean the Employee Retirement Income Security Act of
               1974, as amended.
         
     I.19      "ERISA Affiliate" shall mean, with respect to the Acquired
               Company, any Person that is required to be aggregated with the
               Acquired Company under Tax Code (S) 414(b), (c), (m) and/or (o)
               at any time prior to the Closing Date.
         
     I.20      "ERISA Plan" shall have the meaning set forth in Section 3.16.
         
     I.21      "Exchange Act" shall mean the Securities Exchange Act of 1934, as
               amended.
         
     I.22      "Exchange Agent" shall mean the person designated by Purchaser as
               the Exchange Agent pursuant to Section 2.2.1 hereof.
         
     I.23      "Exchange Ratio" shall mean the ratio of exchange pursuant to the
               Merger in respect of each share of Acquired Company Stock
               constituting a fraction of a share of Parent Stock as determined
               pursuant to the provisions of Section 2.1.6.
         
     I.24      "Existing Option" shall have the meaning set forth in Section
               2.1.7.
         
     I.25      "401(k) Plan" shall mean the Enterprise Systems, Inc. 401(k)
               Retirement Plan.
         
     I.26      "HSR Act" shall mean the Hart-Scott-Rodino Antitrust and
               Improvements Act of 1976, as amended.
         
     I.27      "Hazardous Substance" shall have the meaning set forth in Section
               3.18.
         
     I.28      "1996 Financial Statements shall have the meaning set forth in
               Section 3.5.1.
         
     I.29      "IRS" shall mean the United States Internal Revenue Service.
         
     I.30      "Licensed Software" shall have the meaning set forth in Section
               3.14.2(ii).
         
     I.31      "Material Adverse Effect" shall mean a material adverse effect on
               the businesses, properties, rights, financial condition or
               results of operations of the corporation in question and its
               subsidiaries, taken as a whole.
         
     I.32      "Material Contract" shall have the meaning set forth in Section
               3.12.
         
     I.33      "Merger" shall mean the merger of the Acquired Company with and
               into Purchaser, as set forth in Section 2.1.1.
         
     I.34      "Merger Consideration" shall have the meaning set forth in
               Section 2.1.6(a).
<PAGE>
 

     I.35      "Nasdaq" shall mean the Nasdaq National Market of the Nasdaq
               Stock Market, Inc.
         
     I.36      "1994, 1995 and 1996 Financial Statements" shall have the meaning
               set forth in Section 3.5.1.
         
     I.37      "1933 Act" shall mean the Securities Act of 1933, as amended.
         
     I.38      "Owned Software" shall have the meaning set forth in the first
               paragraph of Section 3.13.
         
     I.39      "Parent" shall mean HBO & Company, a Delaware corporation, which
               is the sole stockholder of Purchaser.
         
     I.40      "Parent Reports" shall have the meaning set forth in Section 4.5.
         
     I.41      "Parent Stock" shall mean the common stock, $0.05 par value per
               share, of Parent.
         
     I.42      "Parent Subsidiaries" shall mean the current subsidiaries of
               Parent, as the same are identified in the Parent Reports.
         
     I.43      "PBGC" shall mean the Pension Benefit Guaranty Corporation
               established under Title IV of ERISA.
         
     I.44      "Person" shall include, but is not limited to, an individual, a
               trust, an estate, a partnership, an association, a company, a
               corporation, a sole proprietorship, a professional corporation or
               a professional association.
         
     I.45      "Pooling Letter" shall have the meaning set forth in Section
               2.4(b).
         
     I.46      "Purchaser" shall mean HBO & Company of Georgia, a Delaware
               corporation.
         
     I.47      "Real Property" shall have the meaning set forth in Section 3.18.
         
     I.48      "Registration Statement" shall have the meaning set forth in
               Section 2.3.1.
         
     I.49      "Rule 145 Letters" shall have the meaning set forth in Section
               2.4(a).
         
     I.50      "SEC" shall mean the Securities and Exchange Commission.
         
     I.51      "Specified Customer Contracts" shall mean all contracts,
               agreements, commitments and other instruments (whether oral or
               written) in effect with any customer of the Acquired Company or
               any Subsidiary that involve (i) software or other products not
               fully installed and with remaining payments thereunder in excess
               of $100,000
<PAGE>
 
               as of the date hereof, or (ii) maintenance, support or
               other services, which require payments or provide for receipts in
               excess of $4,000 per month.

       I.52    "Stock Plan" shall mean the Enterprise Systems, Inc. Long-Term
               Incentive Plan which amended and restated the Enterprise Systems,
               Inc. 1993 Stock Option Plan, as supplemented.

       I.53    "Subsidiaries" shall mean the subsidiaries of the Acquired
               Company which are listed on Exhibit 3.1 hereto.

       I.54    "Surviving Corporation" shall have the meaning set forth in
               Section 2.1.1 hereof.

       I.55    "Takeover Proposal" shall have the meaning set forth in Section
               2.11 hereof.

       I.56    "Tax Code" shall mean the Internal Revenue Code of 1986, as
               amended.

II.    COVENANTS AND UNDERTAKINGS.
       ---------------------------

       II.1    Terms and Approval of Merger.
               -----------------------------
 
       II.1.1. Terms of the Merger. Upon the terms and subject to the conditions
               set forth in this Agreement, and in accordance with the Delaware
               Code, the Acquired Company shall be merged with and into
               Purchaser (the "Merger"), as soon as practicable following the
               satisfaction or waiver of the conditions set forth in Articles V,
               VI and VII hereof. Following the Merger, Purchaser shall continue
               as the surviving corporation (the "Surviving Corporation") and
               the separate corporate existence of the Acquired Company shall
               cease.

       II.1.2. Effective Time; Effects of the Merger. The Merger shall become
               effective when both (i) this Agreement shall be adopted and
               approved by the stockholders of the Acquired Company in
               accordance with the applicable provisions of the Delaware Code
               and (ii) a Certificate of Merger (the "Certificate of Merger"),
               executed in accordance with the relevant provisions of the
               Delaware Code is filed with the Secretary of State of Delaware
               (the time the Merger becomes effective being referred to as the
               "Effective Time"). The Merger shall have the effects set forth in
               the Delaware Code.

       II.1.3. Certificate of Incorporation and Bylaws. The Certificate of
               Incorporation of Purchaser as in effect immediately preceding the
               Effective Time shall be the Certificate of Incorporation of the
               Surviving Corporation. The Bylaws of Purchaser as in effect
               immediately preceding the Effective Time shall be the Bylaws of
               the Surviving Corporation.

       II.1.4. Directors. The directors of Purchaser immediately prior to the
               Effective Time shall be the directors of the Surviving
               Corporation and shall hold office from the Effective Time until
               their respective successors are duly elected or appointed and
<PAGE>
 
               qualified in the manner provided in the Certificate of
               Incorporation and Bylaws of the Surviving Corporation, or as
               otherwise provided by law.

       II.1.5. Officers. The officers of Purchaser immediately prior to the
               Effective Time shall be the officers of the Surviving Corporation
               and shall hold office from the Effective Time until their
               respective successors are duly elected or appointed and qualified
               in the manner provided in the Certificate of Incorporation and
               Bylaws of the Surviving Corporation, or as otherwise provided by
               law.

       II.1.6. Conversion of Shares.
               -----------------------

               (a) Subject to Section 2.1.6(g) below, each outstanding share of
               Acquired Company Stock issued and outstanding immediately prior
               to the Effective Time shall, at the Effective Time, by virtue of
               the Merger and without any action on the part of the holder
               thereof, be converted into the right to receive five tenths (.50)
               of a share of Parent Stock, deliverable to the holder thereof
               without interest on the value thereof, upon the surrender of the
               certificate(s) formerly representing such outstanding share,
               provided, however, that:

              (i)   If the average closing price per share as reported by Nasdaq
              (or if there is no sale on such date then the average between the
              closing bid and ask prices on any such day) for shares of Parent
              Stock during the twenty (20) consecutive trading days ending on
              the third trading day prior to the date of the Special Meeting of
              stockholders of the Acquired Company held to approve the Merger
              (the "Market Value"), is equal to or greater than $60 per share
              but not greater than $68 per share, then each share of Acquired
              Company Stock shall be converted into that fraction of a share of
              Parent Stock which, when multiplied by the Market Value, will
              equal to $30;

              (ii)  If the Market Value is less than $60 per share, then each
              share of Acquired Company Stock shall be converted, as stated
              above, into five tenths (.50) of a share of Parent Stock;
              provided, however, that in the event that the Market Value is less
              than $50 per share, then the Acquired Company shall have the right
              to terminate the Merger prior to Closing pursuant to Section
              10.1.6;

              (iii) If the Market Value is greater than $68 per share, but is
              $72 per share or less, then each share of Acquired Company Stock
              shall be converted into four thousand four hundred twelve ten
              thousandths(.4412) of a share of Parent Stock; and

              (iv)  If the Market Value is greater than $72 per share, then each
              share of Acquired Company Stock shall be converted into a fraction
              of a share of Parent Stock which, when multiplied by the Market
              Value, will equal $31.77.

              (b)   Each share of Acquired Company Stock held in the treasury of
              the Acquired Company shall, at the Effective Time, by virtue of
              the Merger and without any action on the part of the holder
              thereof, be canceled and retired and cease to exist.
<PAGE>
 
              (c)  Subject to any applicable escheat laws, until surrendered and
              exchanged pursuant hereto, each certificate that immediately prior
              to the Effective Time represented outstanding shares of Acquired
              Company Stock shall be deemed for all corporate purposes of
              Parent, subject, however, to the other provisions of this Section
              2.1.6, to evidence the ownership of the number of whole shares of
              Parent Stock into which the shares of Acquired Company Stock
              represented thereby shall have been converted, together with the
              right to receive the amount of cash in lieu of fractional shares,
              if any, pursuant to subsections (a) and (d) of this Section 2.1.6.
              (The shares of Parent Stock, and any cash in lieu of fractions
              thereof, receivable by each Acquired Company stockholder as
              described in Section 2.1.6(a) above and 2.1.6(d) below, are
              referred to hereinafter as the "Merger Consideration.") No cash or
              stock dividend payable, no certificate representing split shares
              deliverable, and no other distribution payable or deliverable to
              holders of record of Parent Stock at any time subsequent to the
              Effective Time shall be paid or delivered to the holder of any
              certificate that at the Effective Time represented Acquired
              Company Stock unless and until such certificate is surrendered to
              the Exchange Agent. However, subject to any applicable escheat
              laws, upon such surrender, there shall be paid or delivered to the
              holder of record of the certificate or certificates for Parent
              Stock issued and exchanged therefor, the certificates for shares
              and/or other property resulting from any such dividends, splits,
              or other distributions, as the case may be, that shall have
              therefore become payable or deliverable with respect to Parent
              Stock subsequent to the Effective Time. No interest shall be
              payable with respect to such payment or delivery of any dividends
              or other distributions upon the surrender of certificates that
              represented Acquired Company Stock at the Effective Time.

              (d)  No certificates or scrip representing fractional shares of
              Parent Stock shall be issued upon surrender of certificates
              representing Acquired Company Stock converted pursuant hereto, and
              no dividend, stock split, or other distribution of Parent shall
              relate to any such fractional share interest, and no such
              fractional share interest shall entitle the owner thereof to vote
              or to any other rights of a stockholder of Parent. In lieu of any
              such fractional share, any holder of Acquired Company Stock shall
              be entitled, upon surrender in accordance herewith of such
              holder's certificate or certificates representing Acquired Company
              Stock, to receive a cash payment therefor, without interest, at a
              pro rata amount based on the Market Value. No interest shall
              accrue with respect to any cash held for the benefit of holders of
              unsurrendered certificates therefore representing shares of
              Acquired Company Stock at the Effective Time.

              (e)  All shares of Parent Stock into which shares of the Acquired
              Company Stock have been converted pursuant to this Section 2.1.6
              shall be deemed to have been issued in full satisfaction of all
              rights pertaining to such converted shares and shall, when issued
              pursuant to the provisions hereof, be fully paid and
              nonassessable.
<PAGE>
 
              (f)  The stock transfer books of Acquired Company Stock shall be
              closed at the Effective Time, and thereafter no transfer of any
              such shares of Acquired Company Stock shall be recorded thereon.
              In the event a transfer of ownership of shares of Acquired Company
              Stock is not recorded on the stock transfer books of the Acquired
              Company, a certificate or certificates representing the number of
              whole shares of Parent Stock into which such shares of Acquired
              Company Stock shall have been converted in connection with the
              Merger may be issued to the transferee of such shares of Acquired
              Company Stock if the certificate or certificates representing such
              shares of Acquired Company Stock is or are surrendered to the
              Exchange Agent accompanied by all documents deemed necessary by
              the Exchange Agent to evidence and effect such transfer of
              ownership of shares of Acquired Company Stock and by the payment
              of any applicable stock transfer tax with respect to such
              transfer, subject to compliance with any restrictions or
              conditions contained herein with respect to the transfer of shares
              of Acquired Company Stock.

              (g)  In the event that Parent at any time or from time to time
              after the date of this Agreement but prior to the Effective Time
              effects a subdivision or combination of the outstanding Parent
              Stock into a greater or lesser number of shares, then and in each
              such event the Exchange Ratio and the Market Value shall be
              increased or decreased proportionately and the other provisions of
              this Section 2.1.6 shall be construed to give effect thereto.  In
              the event that Parent at any time or from time to time shall fix a
              record date, which record date is after the date of this Agreement
              but prior to the Effective Time, for the determination of holders
              of Parent Stock entitled to receive a dividend or other
              distribution payable in additional shares of Parent Stock, cash
              (except Parent's regular quarterly dividend), or any other
              property, then and in each such event, regardless of whether such
              dividend is to be paid prior to or after the Effective Time, the
              Merger Consideration payable hereunder per share of Acquired
              Company Stock shall be increased to reflect such dividend or
              distribution as though each stockholder of the Acquired Company
              were, as of such issuance or record date, a holder of record of
              that number of shares of Parent Stock comprising the Merger
              Consideration otherwise payable to such stockholder pursuant to
              Section 2.1.6(a).
<PAGE>
 
      
     II.1.7.  Stock Plan. At the Effective Time, Parent shall assume the
              Acquired Company's rights and obligations under each of the
              outstanding options previously granted under the Stock Plan (each
              such option existing immediately prior to the Effective Time being
              called an "Existing Option," and each such option so assumed by
              Parent being called an "Assumed Option"), by which assumption the
              optionee shall have the right to purchase that number of shares of
              Parent Stock (rounded down to the nearest whole) into which the
              number of shares of Acquired Company Stock the optionee was
              entitled to purchase under the Existing Option would have been
              converted pursuant to the terms of the Merger as described in
              Section 2.1.6 hereof. Each Assumed Option shall constitute a
              continuation of the Existing Option, substituting Parent for
              Acquired Company as issuer and employment by Parent, Purchaser or
              one of their respective subsidiaries for employment by the
              Acquired Company. The aggregate price for the total number of
              shares of Parent Stock at which the Assumed Option may be
              exercised shall be the aggregate price at which the Existing
              Option was exercisable for the total number of shares of Acquired
              Company Stock, reduced (as necessary for purposes of rounding
              down) to the price that will buy the number of whole shares for
              which the Assumed Option will be exercisable in accordance with
              this Section 2.1.7, and the purchase price per share of Parent
              Stock thereunder shall be such aggregate price divided by the
              total number of shares of Parent Stock covered thereby. The
              assumption of the Assumed Options by Parent as provided in this
              Section 2.1.7 shall not, except as provided herein, provide the
              holders thereof additional benefits which they did not have
              immediately prior to the Effective Time or relieve the holders
              thereof of any obligations or restrictions applicable to the
              Assumed Options or the shares of Parent Stock obtainable upon
              exercise of the Assumed Options. Parent shall take all corporate
              action necessary to reserve and make available for issuance a
              sufficient number of shares of Parent Stock for delivery under the
              Assumed Options.

     II.1.8.  Stockholders' Meeting. The Acquired Company, acting through its
              Board of Directors, shall:

              (a)  promptly furnish a copy of the proxy statement/prospectus
              included in the Registration Statement to each of its stockholders
              after the Registration Statement has become effective with the
              SEC;

              (b)  duly call, give notice of, convene and hold a special meeting
              of its stockholders and submit this Agreement and the Merger and
              any related matters, as appropriate, to a vote of the Acquired
              Company's stockholders as soon as practicable for the purpose of
              considering and taking action upon this Agreement and any such
              related matters; and

              (c)  use its reasonable best efforts, subject to the provisions of
              Section 2.11, to obtain the necessary approval of the Merger by
              its stockholders.
<PAGE>
 
II.1.9.   Closing; Filing of Certificate of Merger. Upon the terms and subject
          to the conditions hereof, as soon as practicable following the
          satisfaction or waiver of the conditions set forth in Articles V, VI
          and VII hereof, the Acquired Company and Purchaser shall execute and
          file the Certificate of Merger referred to in Section 2.1.2 in the
          manner required by the Delaware Code, and the parties hereto shall
          take all such other and further actions as may be required by law to
          make the Merger effective. Prior to the filing referred to in this
          Section 2.1.9, a closing (the "Closing") will be held as set forth in
          Section 8.1 hereof, for the purpose of confirming all of the
          foregoing.

II.1.10.  Termination of 401(k) Plan. Prior to the Closing Date, the Acquired
          Company shall adopt appropriate resolutions and take any and all
          further actions necessary to terminate the 401(k) Plan effective
          immediately preceding the Closing Date. In addition, participants in
          the 401(k) Plan shall make no further deferrals with respect to
          compensation for services performed after such termination date and
          the Acquired Company shall make no further employer contributions to
          the 401(k) Plan after such date, other than (i) employee compensation
          deferrals and (ii) matching contributions with respect to employee
          deferrals of compensation for services through the termination date.
          Parent and Purchaser shall take such action that will permit current
          participants in the 401(k) Plan who are employed by Purchaser to (x)
          participate in the HBO & Company Profit Sharing and Savings Plan
          within ten (10) business days after the Closing Date and (y) credit
          each such participant's years of service under the 401(k) Plan toward
          vesting in contributions under the HBO & Company Profit Sharing and
          Savings Plan, up to a maximum of five (5) years.
                 
II.2      Delivery of Merger Consideration.
          
II.2.1.   Exchange Agent. Prior to the Effective Time, Purchaser shall designate
          a bank or trust company to act as exchange agent in connection with
          the Merger (the "Exchange Agent"). At the Effective Time, Purchaser or
          Parent shall take all steps necessary to enable and cause Parent or
          the Surviving Corporation to provide the Exchange Agent with the
          shares of Parent Stock and cash in respect of fractional shares
          necessary to deliver the Merger Consideration to each holder of
          Acquired Company Stock as contemplated by Section 2.1.6 hereof prior
          to the time that such deliveries are required to be made by the
          Exchange Agent as provided in this Section 2.2

II.2.2.   Surrender of Certificates and Delivery of Merger Consideration.
          Promptly after the Effective Time, the Exchange Agent shall mail to
          each record holder (as of the Effective Time) of an outstanding
          certificate or certificates that immediately prior to the Effective
          Time represented outstanding shares of Acquired Company Stock (the
          "Certificates"), a letter of transmittal in customary form (which
          specifies that delivery shall be effected, and risk of loss and title
          to the Certificates shall pass, only upon proper delivery of the
          Certificates to the Exchange Agent) and
<PAGE>
 
               instructions for use in effecting the surrender of the
               Certificates in exchange for the Merger Consideration payable in
               respect of the shares of Acquired Company Stock formerly
               represented by such Certificate. Upon surrender to the Exchange
               Agent of a Certificate, together with such letter of transmittal
               properly completed and duly executed, together with any other
               required documents, the holder of such Certificate shall be
               entitled to receive in exchange therefor the Merger Consideration
               payable in respect of the shares of Acquired Company Stock
               formerly represented by such Certificate, and such Certificate
               shall forthwith be canceled. If payment is to be made to a Person
               other than the Person in whose name the Certificate surrendered
               is registered, it shall be a condition of payment that the
               Certificate so surrendered shall be properly endorsed or
               otherwise in proper form for transfer and that the Person
               requesting such payment shall pay any transfer or other taxes
               required by reason of the payment to a Person other than the
               registered holder of the Certificate surrendered or establish to
               the satisfaction of Parent or the Surviving Corporation that such
               tax has been paid or is not applicable. Until surrendered in
               accordance with the provisions of this Section 2.2.2, each
               Certificate shall represent for all purposes only the right to
               receive the Merger Consideration, without any interest on the
               value thereof.

     II.2.3.   Escheat Laws. Notwithstanding any provision of this Article II to
               the contrary, neither Parent nor the Surviving Corporation shall
               be liable to any holder of Certificates formerly representing
               shares of Acquired Company Stock for any property properly
               delivered or amount paid to a public official pursuant to any
               applicable abandoned property, escheat or similar law.
<PAGE>
 
     II.3      SEC Registration.
               ---------------- 

     II.3.1.   The Acquired Company shall furnish to Parent such information,
               including information about the Acquired Company and the
               Subsidiaries (including the respective affiliates of any of
               them), as may be necessary to enable Parent to prepare and file
               with the SEC a Registration Statement on Form S-4 under the 1933
               Act, and the rules and regulations promulgated thereunder, in
               respect of the Parent Stock to be issued by reason of the Merger
               (such registration statement, including the prospectus and
               included therein the proxy statement to be furnished to the
               holders of the Acquired Company Stock, in each case together with
               any amendments or supplements thereto, being referred to in this
               Agreement as the "Registration Statement"). The Acquired Company
               covenants that the Acquired Company Information (as defined
               below) included in the Registration Statement shall not, at the
               time the Registration Statement is declared effective, at the
               time the proxy statement/prospectus contained therein is first
               mailed to the Acquired Company's stockholders, or at the time of
               the meeting of the Acquired Company's stockholders held to
               approve the Merger Agreement, contain any untrue statement of a
               material fact or omit to state any material fact required to be
               stated therein or necessary in order to make the statements
               therein not misleading. If at any time prior to the Effective
               Time any event or circumstance should come to the attention of
               the Acquired Company with respect to the Acquired Company
               Information that is required to be set forth in an amendment or
               supplement to the Registration Statement, the Acquired Company
               shall immediately notify Parent and shall assist Parent in
               appropriately amending or supplementing the Registration
               Statement in the manner contemplated in Section 2.3.4 below. An
               amendment or supplement may be accomplished, to the extent
               permitted by law, rule or regulation, by including such
               information in a filing under the Exchange Act that is
               incorporated by reference into the Registration Statement. The
               Registration Statement insofar as it relates to information
               concerning the Acquired Company, the Subsidiaries or any of their
               respective businesses, assets, directors, officers, or
               stockholders or any other affiliates or other matters pertaining
               to the Acquired Company or any of the Subsidiaries that is
               supplied by the Acquired Company for inclusion in the
               Registration Statement, including by incorporation by reference
               to SEC filings (the "Acquired Company Information") shall comply
               as to form and substance in all material respects with the
               applicable requirements of the 1933 Act and the rules and
               regulations thereunder and the Exchange Act and the rules and
               regulations thereunder; except that the Acquired Company shall
               have no liability or obligation for any information other than
               the Acquired Company Information.

     II.3.2.   The Acquired Company shall instruct its accountants, KPMG Peat
               Marwick LLP, to deliver and shall use its reasonable best efforts
               to cause such accountants to deliver to Parent letters dated at
               the time the Registration Statement becomes effective and as of
               the Closing Date, addressed to Parent, each containing both (i)
               its opinion to the effect that the Acquired Company satisfies the
               tests applicable to it such that the Merger can be accounted for
               as a "pooling of interests", which opinion letters shall be
               substantially in the form of the opinion letter attached as
<PAGE>
 
               Exhibit 2.3.2(A) hereto; and (ii) such matters as are customarily
               contained in auditors' letters regarding information about the
               Acquired Company included in the Registration Statement, which
               auditors' letters shall be in form and substance reasonably
               satisfactory to Parent. Parent shall use its reasonable best
               efforts to cause its accountants, Arthur Andersen LLP, to deliver
               to the Acquired Company letters at such times to the effect that
               the Parent satisfies the tests applicable to it such that the
               Merger can be accounted for as a "pooling of interests", which
               letters shall be substantially in the form of the letter attached
               as Exhibit 2.3.2(B) hereto.

     II.3.3.   Parent shall file the Registration Statement and use its
               reasonable best efforts to have it declared effective by the SEC
               as promptly as practicable, and shall use its reasonable best
               efforts to take any action required to be taken to comply in all
               material respects with any applicable federal or state securities
               laws in connection with the issuance of Parent Stock in the
               Merger; except that such covenant of Parent is made, as to those
               portions of the Registration Statement containing or required to
               contain Acquired Company Information, assuming and relying solely
               on timely and full compliance with Sections 2.3.1 and 2.3.2.

     II.3.4.   Parent covenants that the Registration Statement, including
               Parent Reports and other Parent SEC filings incorporated by
               reference therein, shall not, at the time the Registration
               Statement is declared effective, at the time the proxy
               statement/prospectus contained therein is first mailed to the
               Acquired Company's stockholders, or at the time of the meeting of
               the Acquired Company's stockholders held to approve the Merger,
               contain any untrue statement of a material fact or omit to state
               any material fact required to be stated therein or necessary in
               order to make the statements therein not misleading; except such
               covenant of Parent is made as to those portions of the
               Registration Statement containing or required to contain Acquired
               Company Information, assuming and relying solely on timely and
               full compliance with Sections 2.3.1 and 2.3.2. If at any time
               prior to the Effective Time any event or circumstance should come
               to the attention of Parent that is required to be set forth in an
               amendment or supplement to the Registration Statement, Parent
               shall immediately notify the Acquired Company and use its
               reasonable efforts to amend or supplement appropriately the
               Registration Statement. An amendment or supplement may be
               accomplished, to the extent permitted by law, rule or regulation,
               by including such information in a filing under the Exchange Act
               that is incorporated by reference into the Registration
               Statement.

     II.3.5.   Parent covenants that the Registration Statement and all other
               documents required to be filed by Parent with the SEC in
               connection with the transactions contemplated herein shall comply
               as to form and substance in all material respects with the
               applicable requirements of the 1933 Act and the rules and
               regulations thereunder and the Exchange Act and the rules and
               regulations thereunder; except that Parent shall have no
               liability or obligation for any failure to comply with such
               requirements arising out of the Acquired Company Information.
<PAGE>
 
     II.3.6.   Parent and the Acquired Company shall use all their reasonable
               best efforts to file all reports to be filed by each of them on a
               timely basis under the 1933 Act or the Exchange Act and the rules
               and regulations adopted by the SEC thereunder. Parent and the
               Acquired Company shall use their reasonable best efforts to take
               such further action as may be necessary to ensure that the
               requirements of Rule 144(c) under the 1933 Act are satisfied so
               as to enable any "affiliates" of the Acquired Company (as that
               term is used in Rule 145 under the 1933 Act) to offer or sell the
               Parent Stock received by them in the Merger pursuant to paragraph
               (d) of Rule 145 (subject to compliance with the provisions of
               paragraphs (e), (f) and (g) of Rule 144).

     II.3.7.   Parent shall use its reasonable best efforts to obtain prior to
               the effective date of the Registration Statement all necessary
               "Blue Sky" permits and approvals, if any, required to consummate
               the Merger.

     II.3.8.   Within five (5) days following the Closing Date, Parent shall
               file a registration statement covering shares of Parent Stock
               issuable pursuant to the Stock Plan; although such obligation is
               subject to and conditional on the Acquired Company timely
               providing Parent with all information requested by Parent in
               connection therewith.

     II.4      Affiliates.
               ----------

               (a) The Acquired Company shall use its reasonable best efforts to
               cause each person that is an "affiliate" of the Acquired Company
               under the 1933 Act on the date of the Acquired Company's
               stockholder meeting held to approve the Merger to deliver to
               Parent at the Closing a written agreement substantially in the
               form attached hereto as Exhibit 2.4(a) ("Rule 145 Letters").

               (b) The Acquired Company shall use its reasonable best efforts to
               cause each person that is an "affiliate" of the Acquired Company
               under the 1933 Act 31 days prior to the date of the Acquired
               Company's stockholder meeting to deliver to the Parent on such
               date a written agreement substantially in the form attached
               hereto as Exhibit 2.4(b) ("Pooling Letters").

     II.5      Trading Prohibitions. Each of Parent, Purchaser and the Acquired
               Company hereby acknowledges that as a result of disclosures by
               Parent, Purchaser and the Acquired Company contemplated under
               this Agreement, Parent, Purchaser, the Acquired Company, the
               Subsidiaries and their respective affiliates may, from time to
               time, have material, non-public information concerning each
               other. Each of Parent, Purchaser, and the Acquired Company
               confirms that it and its respective directors, officers,
               employees and affiliates are aware, and that it has advised such
               persons that, (i) the United States securities laws may prohibit
               a person who has material, non-public information from purchasing
               or selling securities of any company to which such information
               relates, and (ii) material non-public
<PAGE>
 
               information shall not be communicated to any other person except
               as permitted herein.

     II.6      Conduct of the Business of the Acquired Company and its
               -------------------------------------------------------
               Subsidiaries Prior to Closing.
               -----------------------------

     II.6.1.   Except (i) with the prior consent in writing of Purchaser, (ii)
               as may be required to effect the transactions contemplated by
               this Agreement, or (iii) as provided otherwise in this Agreement,
               the Acquired Company covenants that, between the date of this
               Agreement and the Effective Time, the Acquired Company and the
               Subsidiaries will conduct their respective business in the
               ordinary course, and that they will:

               (a) preserve the organization of the Acquired Company and the
               Subsidiaries intact and use its reasonable best efforts to
               preserve the goodwill of customers and others having business
               relations with the Acquired Company or the Subsidiaries;

               (b) use its reasonable best efforts to maintain the properties of
               the Acquired Company and the Subsidiaries in substantially the
               same working order and condition as such properties are in as of
               the date of this Agreement, reasonable wear and tear excepted;

               (c) not effect any sale, assignment or transfer of any of their
               respective assets except in the ordinary course of business;

               (d) use its reasonable best efforts to keep in force at no less
               than their present limits all existing policies of insurance or
               comparable replacements thereof insuring the Acquired Company,
               the Subsidiaries and their respective properties;

               (e) not enter into any Material Contract or Specified Customer
               Contract, or suffer, permit or incur any of the transactions or
               events described in Section 3.9 hereof to the extent such events
               or transactions are within the control of the Acquired Company or
               any of the Subsidiaries (except that the Acquired Company and the
               Subsidiaries may enter into new license agreements and support
               and maintenance agreements and other agreements with customers in
               the ordinary course of business on terms and prices generally
               consistent with historical practices giving due consideration to
               the scope of any such agreement);

               (f) not make or permit any change in the Acquired Company's or
               any of the Subsidiaries' Articles or Certificates of
               Incorporation or Bylaws, or in their authorized, issued or
               outstanding securities (except for the issuance of Acquired
               Company Stock pursuant to exercise of stock options pursuant to
               the Stock Plan);

               (g) except as otherwise set forth in Exhibit 2.6.1(g), not grant
               any stock option or right to purchase any security of the
               Acquired Company or any of the Subsidiaries, issue any security
               convertible into such securities, purchase, redeem, retire or
<PAGE>
 
               otherwise acquire any of such securities, or agree to do any of
               the foregoing or declare, set aside or pay any dividend, make any
               other distribution or declare any split in respect of such
               securities;

               (h) except as otherwise set forth in Exhibit 2.6.1(h), not adopt
               any new Benefit Plan or amend, supplement, or accelerate the
               timing of payments or vesting under any existing Benefit Plan,
               and not make any contribution to or distribution from any
               employee benefit plan, pension plan, stock bonus plan, 401(k)
               plan or profit sharing plan (except for the payment of any
               health, disability and life insurance premiums that may become
               due and except for contributions, vesting or distributions
               required (and not discretionary) pursuant to the terms of any
               Benefit Plans);

               (i) not change the amortization or capitalization policies for
               Owned Software or otherwise make any changes in the accounting
               policies of the Acquired Company and the Subsidiaries;

               (j) not issue any notes, bonds or other debt security, or create,
               incur, assume or guarantee any indebtedness for borrowed money
               other than in the ordinary course of business under the Acquired
               Company's revolving credit facility;

               (k) not issue any shares of Acquired Company Stock or of any
               Subsidiary other than shares of Acquired Company Stock issuable
               upon exercise of presently exercisable options;

               (l) not alter in any manner the terms, conditions or dates of
               vesting or exercise of any of the options to purchase Acquired
               Company Stock except as may occur automatically as a result of
               the operation of the Stock Plan without amendment in connection
               with the Merger;

               (m) except as otherwise set forth in Exhibit 2.6.1(m), not effect
               any acquisition, by purchase of stock, assets or otherwise, of
               any business or portion thereof or of any Person; and

               (n) promptly advise Purchaser in writing of any matters arising
               or of which the Acquired Company becomes aware after the date of
               this Agreement that, if existing or known at the date hereof,
               would be required to be set forth or described in this Agreement
               or the Exhibits hereto.

     II.6.2.   Except after prior notification to, and with the prior written
               consent of, Purchaser, which consent shall not be unreasonably
               withheld, the Acquired Company shall not make or permit any
               Subsidiary to make, between the date of this Agreement and the
               Effective Time, any change in its banking or safe deposit
               arrangements or grant any powers of attorney.
<PAGE>
 
     II.7      Filing of Tax Returns. The Acquired Company shall cause all of
               the Acquired Company's and the Subsidiaries' federal, state and
               local tax returns required to be timely filed before the
               Effective Time to be timely and accurately filed with the
               appropriate taxing authorities. For purposes of this Section 2.7,
               such returns shall be deemed timely filed if the Acquired Company
               or the applicable Subsidiary has obtained an extension from the
               appropriate taxing authority as to the time in which it may file
               such tax returns. The Acquired Company shall submit all such tax
               returns to Purchaser at least fifteen (15) days prior to the date
               they must be filed, and Purchaser shall have the opportunity to
               comment on and approve such returns, which approval shall not
               unreasonably be withheld.

     II.8      Examination of Property and Records; Confidentiality of
               -------------------------------------------------------
               Information.
               -----------

     II.8.1.   Between the date of this Agreement and the Effective Time, the
               Acquired Company shall allow Purchaser, its counsel and other
               representatives full access to all the books, records, files,
               documents, assets, properties, contracts and agreements of the
               Acquired Company and the Subsidiaries that may be reasonably
               requested, and the Acquired Company shall furnish Purchaser, its
               officers and representatives during such period with all
               information concerning the affairs of the Acquired Company and
               the Subsidiaries that may be reasonably requested. Between the
               date of this Agreement and the Effective Time Parent shall allow
               any executive officer of the Acquired Company access to the Chief
               Financial Officer of Parent to make inquiries and request and
               receive information in respect of Parent or Purchaser deemed by
               such Chief Financial Officer in the exercise of his judgment as
               reasonably requested by the Acquired Company in the context of
               the transactions provided for herein. Each party shall conduct
               any investigation in a manner that will not unreasonably
               interfere with the businesses of the other party.

     II.8.2.   All non-public information acquired by any party hereto pursuant
               to this Section 2.8 or otherwise under this Agreement, whether or
               not in writing, concerning the business, operations and affairs
               of any other party to this Agreement, will be kept confidential
               and will not be disclosed to any Person other than the parties
               hereto or their authorized representatives (who shall be subject
               to the same obligations) and will not be used for any purpose
               other than the consummation of the Merger and the related
               transactions described herein, subject to any legal disclosure
               obligation of any party upon advice from counsel and prior notice
               to the other party. Promptly upon termination of this Agreement,
               and at the request of any party hereto, all written materials
               thus obtained by any other party or any of its representatives
               and all copies and extracts of such materials will be delivered
               to the disclosing party. In addition, the Parent and the Acquired
               Company are parties to that certain Confidentiality Agreement
               dated January 2, 1997, which the parties hereto acknowledge and
               affirm shall remain in full force and effect until the Closing
               Date.

     II.9      Consents and Approvals. The Acquired Company shall use its, and
               shall cause the Subsidiaries to use their, reasonable best
               efforts (without requiring the payment of
<PAGE>
 
               money) to obtain the waiver, consent and approval of all persons
               (other than parties to Customer Contracts or Specified Customer
               Contracts except to the extent identified on Exhibit 3.13(D))
               whose waiver, consent or approval (i) is required in order to
               consummate the transactions contemplated by this Agreement,
               including without limitation, the Merger and the merger or
               dissolution of the Subsidiaries pursuant to Section 2.15, or (ii)
               is required by any agreement, lease, instrument, arrangement,
               judgment, decree, order or license to which the Acquired Company
               or any Subsidiary is a party or subject on the Effective Time and
               (a) that would prohibit or require the waiver, consent or
               approval of any person to such transactions or (b) under which,
               without such waiver, consent or approval, such transactions would
               constitute an occurrence of default under, or otherwise conflict
               with or be in contravention of, the provisions thereof, result in
               the acceleration of any obligation thereunder or give rise to a
               right of any party thereto to terminate its obligations
               thereunder. The failure of the Acquired Company to obtain such
               waiver, consent or approval (after using its reasonable best
               efforts to do so) shall not constitute a breach of, or a default
               under this Agreement.

     II.10     Supplying of Financial Statements. The Acquired Company shall
               deliver to Purchaser all regularly prepared audited and unaudited
               consolidated and consolidating financial statements of the
               Acquired Company and the Subsidiaries prepared after the date of
               this Agreement, in format historically published or utilized
               internally (as applicable), and any financial statements prepared
               for filing with the SEC, as soon as each is available.

     II.11     No Solicitation. The Acquired Company shall not, and shall not
               permit any of the Subsidiaries to, and the Acquired Company and
               the Subsidiaries shall not authorize or permit any officer,
               director or employee of, or any financial advisor, attorney,
               accountant or other advisor or representative retained by, the
               Acquired Company or any of the Subsidiaries to, solicit,
               initiate, encourage (including by way of furnishing information),
               endorse or enter into any agreement with respect to, or take any
               other action to facilitate, any inquiries or the making of any
               proposal that constitutes, or may reasonably be expected to lead
               to, any Takeover Proposal (as hereafter defined). The Acquired
               Company shall immediately advise Purchaser orally and in writing
               of any Takeover Proposal or any inquiries or discussions with
               respect thereto. Neither the Board of Directors of the Acquired
               Company nor any committee thereof shall (a) withdraw or modify,
               or propose to withdraw or modify, in a manner adverse to
               Purchaser the approval or recommendation by the Board of
               Directors of the Acquired Company of the Merger or this Agreement
               or (b) approve or recommend, or propose to approve or recommend,
               any Takeover Proposal or any other acquisition of outstanding
               shares of Acquired Company Stock other than pursuant to the
               Merger or this Agreement. Notwithstanding the foregoing, nothing
               contained in this Agreement shall prevent the Board of Directors
               of the Acquired Company from furnishing information to or
               entering into discussions or negotiations with any unsolicited
               person or entity if and only to the extent that the Board of
               Directors of the Acquired Company shall have determined in good
               faith, after receiving written advice of its outside counsel,
               that such action
<PAGE>
 
               would be required under applicable law in the exercise of its
               fiduciary duties. The Acquired Company will immediately notify
               the Purchaser if any such inquiries or proposals are received by,
               any such information is requested from, or any such negotiations
               or discussions are sought to be initiated or continued with the
               Acquired Company. As used in this Agreement, "Takeover Proposal"
               shall mean any tender or exchange offer, or proposal, other than
               a proposal by Purchaser or any of its affiliates, for a merger,
               share exchange or other business combination involving the
               Acquired Company or any of the Subsidiaries or any proposal or
               offer to acquire in any manner a substantial equity interest in
               the Acquired Company or any of the Subsidiaries or a substantial
               portion of the assets of the Acquired Company or any of the
               Subsidiaries.

     II.12     HSR Act Filings. Parent and the Acquired Company shall each, in
               cooperation with the other, make the required filings in
               connection with the transactions contemplated by this Agreement
               under the HSR Act with the Federal Trade Commission and the
               Antitrust Division of the United States Department of Justice,
               and shall request early termination of the waiting period with
               respect to such filings. As promptly as practicable from time to
               time after the date of this Agreement, each party shall make all
               such further filings and submissions, and take such further
               action, as may be required in connection therewith, and shall
               furnish the other all information in its possession necessary
               therefor. Parent and the Acquired Company shall each notify the
               other immediately upon receiving any request for additional
               information with respect to such filings from either the
               Antitrust Division of the Department of Justice or the Federal
               Trade Commission, and the party receiving the request shall use
               its reasonable best efforts to comply with such request as soon
               as possible. Neither such party shall withdraw any such filing or
               submission without the written consent of the other.

     II.13     Tax Reporting. For federal and state tax purposes, Purchaser and
               Parent shall report the transactions contemplated by this
               Agreement as a reorganization within the meaning of Sections
               368(a)(1)(A) and 368(a)(2)(D) of the Tax Code and similar state
               laws. Prior to the Effective Time, the Acquired Company will
               deliver to Purchaser and Parent letters to the reasonable
               satisfaction of Purchaser and Parent from the Acquired Company
               and/or certain of its stockholders that provide assurance that
               there is no plan or intention on the part of the stockholders of
               the Acquired Company (or knowledge of such plan or intent to the
               extent the Acquired Company provides a representation with
               respect to holders of less than five percent (5%) of the Acquired
               Company Stock) to sell, exchange or otherwise dispose of a number
               of shares of Parent Stock received in the Merger that would
               reduce the Acquired Company's stockholders' ownership of Parent
               Stock received in the Merger to a number of shares having a
               value, as of the Effective Time, of less than fifty percent (50%)
               of the value of all of the outstanding stock of Acquired Company
               immediately prior to the Effective Time.

     II.14     Indemnification of Acquired Company Officers and Directors. The
               Purchaser agrees that subsequent to the Closing it will provide
               to the directors and officers of
<PAGE>
 
               the Acquired Company indemnification in accordance with the
               current provisions of the Certificate of Incorporation and By-
               Laws of the Acquired Company with respect to matters occurring
               prior to the Effective Time, for a period of six years from the
               Effective Time (or, in the case of matters occurring prior to the
               Effective Time which have not been resolved prior to the sixth
               anniversary of the Effective Time, until such matters are finally
               resolved). To the fullest extent permitted by applicable law, the
               Purchaser shall advance expenses in connection with the foregoing
               indemnification. The Parent shall cause to be maintained in
               effect for twelve (12) months following the Closing Date the
               current policies of directors' and officers' liability insurance
               currently maintained by the Acquired Company, which policies are
               described on Exhibit 3.19, at no greater than one hundred percent
               (100%) of the annual premiums for such coverage as of the date
               hereof (as reflected on such Exhibit 3.19), provided that the
               Parent may substitute therefor policies of at least the same
               coverage containing terms and conditions that are no less
               advantageous (including, without limitation, coverage under
               Parent's existing policies of directors' and officers' liability
               insurance). In the event that the premiums for the continued
               coverage exceed 100% of the premiums for the coverage as of the
               date hereof (the "100% Amount"), Purchaser shall either
               substitute coverage meeting the requirements of the proviso in
               the preceding sentence or continue the existing insurance but
               reduce the maximum amount of coverage to that available for
               premiums equal to the 100% Amount.

     II.15     Subsidiaries. The parties hereto agree that on the Closing Date,
               Purchaser and Acquired Company will cause the Subsidiaries to be
               liquidated, which may be effected, at the option of Purchaser, by
               corporate merger of the Subsidiaries with and into Purchaser or
               any subsidiary or subsidiaries of Purchaser or by corporate
               dissolution of the Subsidiaries.

     II.16     Certain Reports. In the event the Merger is effective in the
               month of May, 1997, Parent will use its reasonable best efforts
               to include the combined results of operations of Parent,
               Purchaser and Acquired Company for the first full month following
               the effective date of the Merger in Parent's 10-Q Quarterly
               Report for the quarter ending June 30, 1997. In the event the
               Merger is effective after May, 1997, Parent agrees to use its
               reasonable best efforts to make publicly available through a
               filing with the SEC the combined results of operations of Parent,
               Purchaser and Acquired Company for the first full calendar month
               subsequent to the Effective Date of the Merger, within thirty
               (30) days of the close of such first full calendar month.

     II.17     Reasonable Best Efforts. Parent, Purchaser and the Acquired
               Company shall use their respective reasonable best efforts to (a)
               promptly make all filings and seek to obtain all authorizations
               required under all applicable law with respect to the Merger and
               the other transactions contemplated hereby and will cooperate
               with each other with respect thereto; (b) promptly take all other
               actions and do, or cause to be done, all other things necessary,
               proper or appropriate to satisfy the conditions set forth in
               Articles V, VI, and VII and to consummate and make
<PAGE>
 
               effective the transactions contemplated by this Agreement on the
               terms and conditions set forth herein as soon as practicable; and
               (c) subject to the exercise in good faith by the directors or any
               officer of such party of their fiduciary duties to such party or
               its stockholders, not take any action which might reasonably be
               expected to impair the ability of the parties to consummate the
               Merger prior to July 31, 1997 (regardless of whether such action
               would otherwise be permitted or not prohibited hereunder).

III. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED COMPANY.
     -------------------------------------------------------

     The Acquired Company represents and warrants to Purchaser and Parent as
     follows:

     III.1     Organization, Standing and Foreign Qualification.
               ------------------------------------------------

     III.1.1.  Each of the Acquired Company and the Subsidiaries is a
               corporation duly organized, validly existing and in good standing
               under the laws of the respective jurisdiction of its
               incorporation as set forth in Exhibit 3.1 and has the requisite
               corporate power and authority to carry on its business in the
               places and as it is now being conducted and to own and lease the
               properties and assets that it now owns or leases.

     III.1.2.  Each of the Acquired Company and the Subsidiaries is duly
               qualified and/or licensed to transact business and in good
               standing as a foreign corporation in the jurisdictions listed in
               Exhibit 3.1 hereto, and the character of the property owned or
               leased by the Acquired Company and the Subsidiaries and the
               nature of the business conducted by them do not require such
               qualification and/or licensing in any other jurisdiction where
               the failure to so qualify would have a Material Adverse Effect
               upon the Acquired Company.

     III.2     Authority and Status.
               --------------------

     III.2.1.  The Board of Directors of the Acquired Company, by unanimous vote
               of all directors present and voting at a meeting duly called and
               held, has (i) determined that the Merger is fair to and in the
               best interests of the stockholders of the Acquired Company and
               (ii) resolved to submit the Merger to and recommend approval of
               the Merger by the stockholders of the Acquired Company.

     III.2.2.  The Acquired Company has the capacity and authority to execute
               and deliver this Agreement, to perform hereunder and, upon
               approval of the transactions provided for herein by the
               stockholders of the Acquired Company, to consummate the
               transactions contemplated hereby without any other corporate or
               stockholder approval. The execution, delivery and performance by
               the Acquired Company of this Agreement and each and every other
               agreement, document and instrument provided for herein have been
               duly authorized and approved by the Board of Directors of the
               Acquired Company. Assuming this Agreement and each and every
               agreement, document or instrument to be executed, delivered and
               performed
<PAGE>
 
               by the Acquired Company in connection herewith are valid and
               legally binding obligations of Purchaser and Parent, this
               Agreement and each and every agreement, document and instrument
               to be executed, delivered and performed by the Acquired Company
               in connection herewith constitute or will, when executed and
               delivered, constitute the valid and legally binding obligation of
               the Acquired Company enforceable against it in accordance with
               their respective terms, except as enforceability may be limited
               by applicable equitable principles or by bankruptcy, insolvency,
               reorganization, moratorium, or similar laws from time to time in
               effect affecting the enforcement of creditors' rights generally.
               Attached hereto as Exhibit 3.2 are true, correct and complete
               copies of the current Articles or Certificates of Incorporation
               and Bylaws of the Acquired Company and the Subsidiaries.

     III.2.3.  The Board of Directors of the Acquired Company received an
               opinion from Broadview Associates LLC, its financial advisor,
               concurrently with the approval described in Section 3.2.1 above
               to the effect that the consideration to be received by the
               Acquired Company's stockholders in the Merger is fair to such
               stockholders from a financial point of view.

     III.3     Capitalization. The entire authorized capital stock of the
               Acquired Company consists of thirty-one million (31,000,000)
               shares of stock, of which thirty million (30,000,000) shares are
               designated Common Stock, par value $.01 per share, and one
               million (1,000,000) shares are designated Preferred Stock, par
               value $.01 per share. Of the total authorized Common Stock, as of
               March 7, 1997, eight million one hundred seventy-two thousand
               eighty-six (8,172,086) shares were issued and outstanding and no
               shares were held in the Acquired Company's treasury. Of the total
               authorized Preferred Stock, no shares have been issued. As of
               March 8, 1997, there were options outstanding under the Stock
               Plan entitling the optionees thereunder upon valid exercise to
               acquire in the aggregate 1,179,685 shares of Common Stock. All
               the issued and outstanding shares of each of the Subsidiaries are
               owned by the Acquired Company and are held free and clear of all
               liens, claims, charges and encumbrances of any nature whatsoever.
               All of the outstanding shares of Acquired Company Stock (and any
               shares issued pursuant to presently outstanding options, if
               exercised and purchased at the applicable exercise price) were
               duly authorized (or will be when issued and the option price
               paid), validly issued, fully paid and nonassessable. None of the
               capital stock of the Acquired Company is entitled to or subject
               to preemptive rights. Other than the requisite stockholder vote
               to consummate the Merger, the authorization or consent of no
               other person or entity is required in order to consummate the
               transactions contemplated herein by virtue of any such person or
               entity having an equitable or beneficial interest in the Acquired
               Company or any Subsidiary or the capital stock of the Acquired
               Company or any Subsidiary. Exhibit 3.3 sets forth all outstanding
               stock options, stock appreciation rights, phantom stock awards,
               performance share unit awards, equity participation rights, or
               similar awards outstanding under the Stock Plan or any other
               Benefit Plan as of the date hereof (and lists in respect of each
               option, award or right the holder, the date of grant and any
               vesting or other
<PAGE>
 
               terms governing exercise or receipt), and any warrants, calls,
               commitments or plans by the Acquired Company or any Subsidiary to
               issue any additional shares of their capital stock, to pay any
               dividends on such shares or to purchase, redeem, or retire any
               outstanding shares of their capital stock. There are no
               outstanding securities or obligations that are convertible into
               or exchangeable for any shares of capital stock of the Acquired
               Company. Other than as disclosed on Exhibit 3.3, there are not
               now, and at the Effective Time there will not be, any voting
               trusts or other agreements or understandings to which the
               Acquired Company or any of the Subsidiaries is a party or is
               bound with respect to the voting of the capital stock of the
               Acquired Company or any of the Subsidiaries.

     III.4     Absence of Equity Investments. Except for the Subsidiaries and as
               described in Exhibit 3.4 hereto, the Acquired Company does not,
               either directly or indirectly, own of record or beneficially any
               shares or other equity interests in any corporation, partnership,
               limited partnership, joint venture, trust or other business
               entity.

     III.5     Liabilities and Obligations of the Acquired Company and the
               -----------------------------------------------------------
               Subsidiaries.
               ------------

     III.5.1.  Attached hereto as Exhibit 3.5.1 are true, correct and complete
               copies of the Acquired Company's audited consolidated balance
               sheets as of December 31, 1994, December 31, 1995 and December
               31, 1996, and the related consolidated statements of income,
               stockholders' equity and cash flows for the years then ended,
               together with the reports of KPMG Peat Marwick LLP thereon
               (respectively, the "1994, 1995 and 1996 Financial Statements").
               The 1994, 1995, and 1996 Financial Statements, have been prepared
               in accordance with generally accepted accounting principles,
               consistently applied, and fairly present in all material respects
               the financial condition of the Acquired Company and the
               Subsidiaries as of the respective dates thereof, and disclose all
               liabilities of the Acquired Company and the Subsidiaries, whether
               absolute, contingent, accrued or otherwise, existing as of the
               date thereof that are of a nature required to be reflected in
               financial statements prepared in accordance with generally
               accepted accounting principles.

     III.5.2.  Neither the Acquired Company nor any Subsidiary has any liability
               or obligation (whether accrued, absolute, contingent or
               otherwise) including, without limitation, any liability that
               might result from an audit of their tax returns by any
               appropriate authority, except for (a) the liabilities and
               obligations of the Acquired Company and the Subsidiaries that are
               disclosed or reserved against in the 1996 Financial Statements or
               Exhibit 3.5.2 hereto, to the extent and in the amounts so
               disclosed or reserved against, (b) liabilities incurred or
               accrued in the ordinary course of business since December 31,
               1996 and liabilities incurred in connection with the transactions
               referred to herein, (c) any liabilities to the extent disclosed
               in the Acquired Company Reports, and (d) any other liabilities
               which would not have a Material Adverse Effect.
<PAGE>
 
     III.5.3.  Except as disclosed in the 1996 Financial Statements or Exhibit
               3.5.2, neither the Acquired Company nor any Subsidiary is in
               default with respect to any liabilities or obligations, and all
               such liabilities or obligations shown or reflected in the 1996
               Financial Statements or Exhibit 3.5.2 and such liabilities
               incurred or accrued subsequent to December 31, 1996 have been, or
               are being, paid and discharged as they become due, and all such
               liabilities and obligations were incurred in the ordinary course
               of business except as indicated in Exhibit 3.5.2.

     III.6     Tax Returns.
               -----------

     III.6.1.  The Acquired Company and the Subsidiaries have, as of the date
               hereof, and will prior to the Effective Time have, timely and
               accurately filed all federal, state, foreign and local income,
               franchise, sales, real and personal property and other tax
               returns and reports required to be filed by them prior to such
               dates and have timely paid, or will prior to the Effective Time
               timely pay, all taxes shown on such returns as owed for the
               periods of such returns, including all withholding or other
               payroll related taxes shown on such returns, except where the
               failure to so file any such return or report would not
               individually or in the aggregate have a Material Adverse Effect
               upon the Acquired Company. The tax basis of all assets of the
               Acquired Company and the Subsidiaries as reflected on their books
               and records is correct and accurate in all material aspects.
               Except as described on Exhibit 3.6, neither the Acquired Company
               nor any Subsidiary is, nor will any of them become, subject to
               any additional taxes, interest, penalties or other similar
               charges with respect to the tax returns and reports referred to
               in the first sentence of this Section 3.6 that would individually
               or in the aggregate have a Material Adverse Effect on the
               Acquired Company. No assessments or notices of deficiency or
               other communications have been received by the Acquired Company,
               nor have any been threatened, with respect to any such tax return
               that has not been paid, discharged or fully reserved in the 1996
               Financial Statements or Exhibit 3.6 hereto, and no amendments or
               applications for refund have been filed or are planned with
               respect to any such return. Except as set forth on Exhibit 3.6,
               there are no agreements between the Acquired Company or any
               Subsidiary and any taxing authority, including, without
               limitation, the IRS, waiving or extending any statute of
               limitations with respect to any tax return, and neither the
               Acquired Company nor any Subsidiary has filed any consent or
               election under the Tax Code, including, without limitation, any
               election under Section 341(f) of the Tax Code.

     III.6.2.  Neither the Acquired Company nor any Subsidiary has made any
               parachute payments as such term is defined in Section 280G of the
               Tax Code, neither is obligated to make any parachute payments,
               and neither is a party to any agreement that under certain
               circumstances could obligate it, or any successor in interest, to
               make any parachute payments that will not be deductible under
               Section 280G of the Tax Code.

     III.6.3.  The Acquired Company and the Subsidiaries (a) have withheld
               proper and accurate amounts in compliance with the tax
               withholding provisions of all applicable laws
<PAGE>
 
               for all compensation paid to the officers and employees of the
               Acquired Company and the Subsidiaries, (b) have correctly and
               properly prepared and duly and timely filed all returns and
               reports relating to those amounts withheld from their officers
               and employees and to their employer liability for employment
               taxes under the Tax Code and applicable state and local laws and
               (c) have duly and timely paid and remitted to the appropriate
               taxing authorities the amounts withheld from their officers and
               employees and any additional amounts that represent their
               employer liability under applicable law for employment taxes.

     III.6.4.  The income tax returns of the Acquired Company have been audited
               by the IRS for all tax years through the year ended December 31,
               1993, and all taxes, deficiencies, penalties and interest
               relating to such tax years have been fully paid and satisfied by
               the Acquired Company.

     III.6.5.  To the knowledge of the Acquired Company, no issue has been
               raised by the IRS, any state or local taxing authority, or any
               other investigation or audit, that will have, or can be expected
               to have, a Material Adverse Effect on the Acquired Company.

     III.6.6.  The 1994, 1995 and 1996 Financial Statements include, and the
               accounts of the Acquired Company and the Subsidiaries will
               include, for all periods up to and including the Closing Date,
               adequate provision for all unpaid applicable taxes, assessments,
               fees and charges relating to the Acquired Company and the
               Subsidiaries.

     III.6.7.  Neither the Acquired Company nor any Subsidiary is a "United
               States real property holding corporation" as defined in Section
               897(c)(2) of the Tax Code.

     III.7     Ownership of Assets. The Acquired Company and the Subsidiaries
               have title to all of their respective properties and assets used
               or useful in their respective businesses, other than leased
               property, licensed property and immaterial items of personal
               property, in each case free and clear of any liens, security
               interests, claims, charges, options, rights of tenants or other
               encumbrances, except as disclosed or reserved against in Exhibit
               3.7 or reserved against in the 1996 Financial Statements (to the
               extent and in the amounts so disclosed or reserved against) and
               except for liens arising from current taxes not yet due and
               payable and other immaterial liens. Except as disclosed on
               Exhibit 3.7, neither the Acquired Company, nor any Subsidiary,
               has received any payment from a lessor or licensor in connection
               with or as inducement for entering into a lease or license in
               which the Acquired Company or a Subsidiary is a lessee or
               licensee, except licenses, fees and similar payment in historical
               amounts and in the ordinary course of business. Except as
               disclosed on Exhibit 3.7, all buildings and material items of
               machinery and equipment owned or leased by the Acquired Company
               or any Subsidiary are in good operating condition and reasonable
               state of repair, subject only to ordinary wear and tear. Except
               as reserved against in the 1996 Financial Statements, the
               inventories of the Acquired Company and the Subsidiaries consist
               only of items of
<PAGE>
 
               supplies and equipment of a quality and quantity usable in the
               normal course of their businesses. Neither the Acquired Company
               nor any Subsidiary has received any notice of violation of any
               applicable zoning regulation, ordinance or other law, regulation
               or requirement relating to their operations and properties,
               whether owned or leased. All of the accounts receivable of the
               Acquired Company and the Subsidiaries as of the Effective Time
               will reflect actual transactions and will have arisen in the
               ordinary course of business.


     III.8     Agreement Does Not Violate Other Instruments. Except as set forth
               on Exhibit 3.8 hereto (or, in respect of the Specified Customer
               Contracts, as set forth on Exhibit 3.13(D) hereto), and except
               for Customer Contracts, the execution and delivery of this
               Agreement by the Acquired Company does not, and the consummation
               of all of the transactions contemplated hereby will not, violate
               any provision of the Articles of Incorporation or Certificate of
               Incorporation, as amended, or Bylaws, as amended, of the Acquired
               Company or any Subsidiary or violate or constitute an occurrence
               of default under any provision of, or conflict with, or result in
               acceleration of any obligation under, or give rise to a right by
               any party to terminate its obligations under, any Material
               Contract, or any order, judgment or decree to which the Acquired
               Company or any Subsidiary is a party or is bound or by which the
               Acquired Company's or any Subsidiaries' assets are affected.
               Except for the applicable requirements of the HSR Act, the 1933
               Act, the Exchange Act and applicable Blue Sky laws, no consent,
               approval, order or authorization of, or registration, declaration
               or filing with, any governmental entity is required to be
               obtained or made by or with respect to the Acquired Company, any
               Subsidiary or any assets, properties or operations of the
               Acquired Company or any Subsidiary in connection with the
               execution and delivery by the Acquired Company of this Agreement
               or the consummation of the transactions contemplated hereby.

     III.9     Absence of Certain Changes or Events. Except as disclosed on
               Exhibit 3.9, since December 31, 1996, the Acquired Company and
               each of the Subsidiaries has operated in the ordinary course of
               business and there has not been (i) any material damage,
               destruction or other casualty loss with respect to property owned
               or leased by the Acquired Company or any of the Subsidiaries,
               whether or not covered by insurance, or any strike, work stoppage
               or slowdown or other labor trouble involving the Acquired Company
               or any of the Subsidiaries; (ii) any increase in dividends or
               employee compensation or benefits payable by the Acquired
               Company, except for normal increases in compensation consistent,
               in amounts and timing, with historical practices; (iii) any
               change in accounting methods; or (iv) any transaction,
               commitment, dispute or other event or condition that has
               individually or in the aggregate resulted in any Material Adverse
               Effect in respect of the Acquired Company.

     III.10    Litigation. Except as otherwise set forth in Exhibit 3.10 hereto,
               there is no suit, action, arbitration, proceeding, claim or
               investigation pending or, to the knowledge of the Acquired
               Company, threatened against or affecting the Acquired Company or
               any Subsidiary that would individually or in the aggregate have a
               Material
<PAGE>
 
               Adverse Effect on the Acquired Company, and, to the knowledge of
               the Acquired Company, there exists no reasonable basis or grounds
               for any such suit, action, arbitration, proceeding, claim or
               investigation.

       III.11  Licenses and Permits; Compliance With Law. The Acquired Company
               and the Subsidiaries hold all licenses, certificates, permits,
               franchises and rights from all appropriate federal, state or
               other public authorities necessary for the conduct of their
               respective businesses and the use of their respective assets,
               except for such licenses, certificates, permits, franchises and
               rights the absence of which would not individually or in the
               aggregate have a Material Adverse Effect on the Acquired Company.
               Except as noted in Exhibit 3.11, and except for any matters which
               will not have a Material Adverse Effect in respect of the
               Acquired Company, the Acquired Company and the Subsidiaries
               presently are conducting their respective businesses so as to
               comply with all applicable statutes, ordinances, rules,
               regulations and orders of any governmental authority. Further,
               the Acquired Company and the Subsidiaries are not presently
               charged with, or under governmental investigation with respect
               to, any actual or alleged violation of any statute, ordinance,
               rule or regulation, or presently the subject of any pending or,
               to the knowledge of the Acquired Company, threatened adverse
               proceeding by any regulatory authority having jurisdiction over
               their respective businesses, properties or operations. Neither
               the execution and delivery of this Agreement nor the consummation
               of the transactions contemplated hereby will result in the
               termination of any license, certificate, permit, franchise or
               right held by the Acquired Company or any Subsidiary that
               individually or in the aggregate would have a Material Adverse
               Effect on the Acquired Company, and all such licenses,
               certificates, permits, franchises and rights will inure to the
               benefit of the Surviving Corporation after the consummation of
               the transactions contemplated by this Agreement except where the
               failure to so inure individually or in the aggregate would not
               have a Material Adverse Effect on the Acquired Company.

     III.12    Contracts, Agreements and Instruments Generally. Exhibit 3.12
               hereto consists of a true and complete list of all contracts,
               agreements, commitments and other instruments (identified by
               title, date and parties)(whether oral or written) to which the
               Acquired Company or any Subsidiary is a party (except for
               Customer Contracts and Specified Customer Contracts that: involve
               a receipt or an expenditure by the Acquired Company or any
               Subsidiary or require the performance of services or delivery of
               goods to, by, through, on behalf of or for the benefit of the
               Acquired Company or any Subsidiary, which in each case relates to
               a contract, agreement, commitment or instrument that requires
               payments or provides for receipts in excess of $60,000 per year.
               Exhibit 3.12 also identifies (identified by title, date and
               parties)(whether oral or written) all:

     III.12.1. leases, rental agreements or other contracts or commitments
               affecting the ownership or leasing of, title to or use of any
               interest in real or personal property with payments equal to or
               greater than $5,000 per month and all maintenance or
<PAGE>
 
               service agreements relating to any real or personal property with
               payments equal to or greater than $5,000 per month;

     III.12.2. contracts or committments providing for payments by the Acquired
               Company or any Subsidiary based in any manner upon the sales,
               purchases, receipts, income or profits of the Acquired Company or
               any Subsidiary;

     III.12.3. franchise agreements, marketing agreements or royalty agreements
               (and with respect to each such agreement, Exhibit 3.12 sets forth
               the aggregate royalties or similar payment paid or payable
               thereunder by the Acquired Company or any Subsidiary as of the
               date hereof);

     III.12.4. employment contracts or commitments regarding employees or
               independent contractors (except to the extent listed in Exhibit
               3.14.2(iii)) (including without limitation any standard form
               contracts such as employee nondisclosure agreements, provided
               that to the extent substantially all employees have executed any
               such standard form, a copy of such form is attached in lieu of
               each individual contract and the Acquired Company represents and
               warrants that substantially all employees have executed such
               form), and any other contracts, plans or commitments providing
               for any continuing payment of any type or nature, including,
               without limitation, any severance, termination, parachute, or
               other payments (whether due to a change in control, termination
               or otherwise) and bonuses and vested commissions. Exhibit 3.12
               also includes a listing of all such agreements, if any, for which
               the standard form was materially or substantially modified or
               materially or substantially altered, and any contracts that are
               not in the standard form. Other than the standard form agreements
               listed on Exhibit 3.12, those listed variations from the standard
               form agreements and those listed agreements that are not in the
               standard form, there are no other agreements of the type referred
               to in this Section 3.12.4;

     III.12.5. contracts, agreements, understandings or arrangements restricting
               the Acquired Company or any Subsidiary from carrying on its
               business anywhere in the world;

     III.12.6. instruments or arrangements evidencing or related to indebtedness
               for money borrowed or to be borrowed, whether directly or
               indirectly, by way of purchase-money obligation, guaranty,
               subordination, conditional sale, lease-purchase or otherwise
               providing for payments in excess of $5,000 per month;

     III.12.7. joint product development agreement with any party other than the
               Purchaser, other than Customer Contracts and Specified Customer
               Contracts; and

     III.12.8. contracts or agreements with vendors of material equipment
               purchased by the Acquired Company or appointing the Acquired
               Company as a reseller of equipment, other than purchase orders in
               the ordinary course of business; or
<PAGE>
 
     III.12.9. contracts, agreements, commitments or understandings for the
               issuance, transfer or sale of any shares of capital stock or
               assets of any of the Subsidiaries.

               The contracts, agreements, commitments and other instruments
               listed or required to be listed on Exhibit 3.12 or listed on an
               Exhibit referred to in Section 3.14 hereof are herein referred to
               as the "Material Contracts."

               All the Material Contracts and Specified Customer Contracts are
               valid and binding upon the Acquired Company or the applicable
               Subsidiary and the other parties thereto and are in full force
               and effect and enforceable in accordance with their terms, except
               as enforceability may be affected by bankruptcy, insolvency,
               moratorium or similar laws affecting creditors rights generally
               and general principles of equity relating to the availability of
               equitable remedies. Except as set forth on Exhibit 3.12, none of
               the Acquired Company, the applicable Subsidiary and, to the
               knowledge of the Acquired Company, any other party to any such
               contract, commitment or arrangement has breached any provision
               of, or is in default under, the terms thereof; and except as set
               forth on Exhibit 3.12, there are no existing facts or
               circumstances that would prevent the work in process of the
               Acquired Company or any Subsidiary or their contracts and
               agreements from maturing upon performance by the Acquired Company
               or the applicable Subsidiary into accounts receivable collectible
               in the aggregate in amounts consistent in all material respects
               with historical experience. Except as set forth on Exhibit 3.12,
               there are no contracts or commitments that require the
               performance of services or provision of goods by the Acquired
               Company at a direct cost or with a value for each such contract
               or commitment in excess of the revenue to be derived pursuant to
               the terms of such contract or commitment. Except for terms
               specifically described in Exhibit 3.12, neither the Acquired
               Company nor any Subsidiary has received any payment from any
               contracting party in connection with or as an inducement for
               entering into any contract, agreement, policy or instrument
               except for payment for actual services rendered or to be rendered
               by such Acquired Company or Subsidiary consistent with amounts
               historically charged for such services.

     III.13    Specified Customer Contracts. Exhibit 3.13(A) hereto consists of
               a true and correct list of all Specified Customer Contracts
               (identified by title, date and parties). Exhibit 3.13(B) hereto
               is the Acquired Company's standard form of Customer Contract (the
               "Customer Contract Form"). Except as set forth on Exhibit 3.13(C)
               or Exhibit 3.13(D), each Specified Customer Contract entered into
               during the eighteen (18) month period ending on the date hereof
               conforms substantially to the Customer Contract Form, except for
               deviations which do not individually or in the aggregate
               materially adversely affect the rights or benefits of the
               Acquired Company thereunder. Except as set forth on Exhibit
               3.13(C), with respect to each Specified Customer Contract, (i)
               each customer to which computer software represented as owned by
               or proprietary to the Acquired Company or a Subsidiary (the
               "Owned Software") has been licensed pursuant to such Specified
               Customer Contract and tendered or certified as operational by the
               Acquired
<PAGE>
 
               Company or any Subsidiary (whichever is the case being referred
               to in this Section 3.13 as the "Vendor") has accepted in all
               material respects such software to the extent and on the terms
               and conditions provided for in such Specified Customer Contract;
               (ii) in each case in which the Specified Customer Contract
               pursuant to which Owned Software is licensed incorporates
               response(s) by Vendor to a Request for Proposal by the customer,
               such software has met all material requirements set forth in such
               response(s); and (iii) all performance warranties with respect to
               Owned Software made by the Vendor in any Specified Customer
               Contract, including warranties with respect to capacity,
               availability, downtime and response time, have been satisfied in
               all material respects upon the terms and conditions and to the
               extent provided for in such Specified Customer Contract. Except
               as set forth on Exhibit 3.13(D), none of the Specified Customer
               Contracts contains any of the following deviations from the
               Customer Contract Form:

     III.13.1. any term for acceptance of any Owned Software that fails to
               specify a period of time or date for acceptance or standards
               applicable thereto;

     III.13.2. any provision granting the customer a right to a whole or partial
               refund of fees previously paid upon the non-acceptance or failure
               of any Owned Software to perform as warranted;

     III.13.3. any provision obligating the Vendor to indemnify a customer
               against consequential damages;

     III.13.4. any commitment by the Vendor to provide a hardware upgrade in
               response to or as a remedy for a breach of any software-related
               response-time warranty unless the customer party to the Customer
               Contract in which the commitment is made is required to pay the
               cost of such upgrade and such costs are specified or described in
               such contract;

     III.13.5. any material deviation from the provisions regarding
               confidentiality of the Owned Software;

     III.13.6. any provision granting an ownership interest (other than a
               license) in any Owned Software to a customer;

     III.13.7. any license for use by more than a single entity of any Owned
               Software unless the customer that is a party to such Customer
               Contract has agreed to pay a fee or fees with respect to each
               entity's use thereof;

     III.13.8. any provision naming a customer as an insured on any policy of
               insurance owned by the Vendor;

     III.13.9. any joint product development agreement with any other party;
<PAGE>
 
III.13.10.  any commitment or warranty made or given by the Vendor to design or
            modify any Owned Software so as to comply with any governmental
            regulations;

III.13.11.  any restrictions in any Customer Contract on the ability of the 
            Vendor to increase the fees by less than the lesser of 5% or the
            annual increase in the Consumer Price Index, for maintenance of any
            Owned Software applicable to any period beyond the period specified
            in such contract during which the customer that is a party to such
            contract is obligated to pay maintenance fees;

III.13.12.  any commitment by the Vendor to sell or maintain computer hardware;

III.13.13.  any commitment by the Vendor to provide emergency back-up for either
            software or hardware; or

III.13.14.  any commitment by the Vendor to provide existing customers products
            developed in the future as a credit to existing payment obligations 
            or for less than normal prices.

III.14      Intellectual Property; Computer Software.

III.14.1.   Exhibit 3.14.1 hereto sets forth (i) a complete and correct list of
            all registered and material unregistered trademarks, trade names,
            service marks, service names, and brand names, and all patent and
            registered copyrights; and all applications for the foregoing, if
            any, (setting forth the registration, issue or serial number of the
            same and a description of the same) applicable to or used in the
            businesses of the Acquired Company or any Subsidiary; (ii) the owner
            of such intellectual property and any registration thereof or
            application therefor; and (iii) a complete list of all licenses
            granted by or to the Acquired Company or any Subsidiary with respect
            to any of the above except pursuant to contracts with customers
            (identified by title, date and parties). Except as set forth on
            Exhibit 3.14.1, all such trademarks, trade names, service marks,
            service names, brand names, copyrights and patents are owned by the
            Acquired Company or a Subsidiary free and clear of all liens,
            claims, security interests and encumbrances. Except as set forth on
            Exhibit 3.14.1, neither the Acquired Company nor any Subsidiary is
            currently in receipt of any notice of any violation of, and neither
            the Acquired Company nor any Subsidiary is violating, the rights of
            others in any trademark, trade name, service mark, copyright,
            patent, trade secret, know-how or other intangible asset, except
            where such violations individually or in the aggregate would not
            have a Material Adverse Effect on the Acquired Company.

III.14.2.(i) Exhibit 3.14.2(i) contains a complete and accurate list of all 
            Owned Software, other than immaterial Owned Software which list
            specifies which of the Acquired Company and the Subsidiaries is the
            owner thereof. Except as set forth on Exhibit 3.14.2(i), the
            Acquired Company or one of the Subsidiaries has title to the Owned
            Software, free and clear of all claims, including claims or rights
            of employees, agents, consultants, inventors, customers, licensees
            or other parties involved in the
<PAGE>
 
              development, creation, marketing, maintenance, enhancement or
              licensing of such computer software, except claims that
              individually or in the aggregate would not have a Material Adverse
              Effect on the Acquired Company. Except as set forth on Exhibit
              3.14.2(i) and except for commercially available, over-the-counter
              "shrink-wrap" software, the Owned Software is not dependent on any
              Licensed Software (as defined in subsection (ii) below) in order
              to operate fully in the manner in which it is intended. No Owned
              Software has been published or disclosed to any other parties,
              except as set forth on Exhibit 3.14.2(i), and except pursuant to
              contracts requiring such other parties to keep the Owned Software
              confidential and except where such disclosures were both
              incidental and immaterial. To the knowledge of the Acquired
              Company, no such other party has breached any such obligation of
              confidentiality.

              3.14.2(ii) All software (other than commercially available over-
              the-counter "shrink-wrap" software) necessary for the Acquired
              Company or any Subsidiary to license and deliver the Owned
              Software to customers is set forth on Exhibit 3.14.2(ii) ("Support
              Software"). The Acquired Company has the right and license to use,
              sublicense, modify and copy all Support Software and all other
              material software used in its business under which the Acquired
              Company or any Subsidiary is a licensee, lessee or otherwise has
              obtained the right to use (the "Licensed Software") as set forth
              in the respective license, lease or similar agreement pursuant to
              which the Licensed Software is licensed to the Acquired Company or
              any Subsidiary, free of any other limitations or encumbrances. All
              Support Software agreements to which the Acquired Company or any
              Subsidiary is a party will be provided to Purchaser within ten
              days of the date of this Agreement. The Acquired Company covenants
              to remedy any default or item of noncompliance with respect to
              Support Software prior to Closing, and shall use its reasonable
              best efforts to remedy any such default or item of noncompliance
              with respect to Licensed Software prior to Closing. Except as
              disclosed on Exhibit 3.14.2(ii), none of the Support Software has
              been incorporated into or made a part of any Owned Software or any
              other Licensed Software by the Company or any Subsidiary. Neither
              the Acquired Company nor any Subsidiary has published or disclosed
              any Support Software that the Acquired Company or a Subsidiary
              leases or markets to others, in accordance with and as permitted
              by any license, lease or similar agreement relating to the Support
              Software and except pursuant to contracts requiring such other
              parties to keep the Support Software confidential. No party to
              whom the Acquired Company or a Subsidiary has disclosed Support
              Software has, to the knowledge of the Acquired Company, breached
              any obligation of confidentiality imposed on them by the Acquired
              Company or any Subsidiary.

              3.14.2(iii) The Owned Software, Support Software and Licensed
              Software and commercially available over-the-counter "shrink-wrap"
              software constitute all software used in the businesses of the
              Acquired Company and the Subsidiaries (collectively, the "Acquired
              Company Software") other than immaterial Owned Software and
              immaterial Licensed Software. Exhibit 3.14.2(iii) sets forth a
              list of all contract programmers, independent contractors,
              nonemployee agents and
<PAGE>
 
              persons or other entities (other than employees of the Acquired
              Company or any Subsidiary) who have performed, within the last
              three (3) years, computer programming services for the Acquired
              Company or any Subsidiary and identifies the project on which such
              services were performed. The Acquired Company shall use its
              reasonable best efforts to obtain from each of the persons and
              entities identified on Exhibit 3.14.2(iii) as having provided such
              services, an assignment of all intellectual property rights
              related to such services in form and substance satisfactory to
              Purchaser prior to Closing. Except as disclosed on Exhibit 3.8,
              the transactions contemplated herein will not cause a breach or
              default under any licenses, leases or similar agreements relating
              to the Acquired Company Software or impair Purchaser's, the
              Acquired Company's or any Subsidiary's ability to use the Acquired
              Company Software in the same manner as such computer software is
              currently used by the Acquired Company or the Subsidiaries.
              Neither the Acquired Company nor any Subsidiary is infringing in
              any material respect any intellectual property rights of any other
              person or entity with respect to the Acquired Company Software,
              and, to the knowledge of the Acquired Company, no other person or
              entity is infringing any intellectual property rights of the
              Acquired Company or any Subsidiary with respect to the Acquired
              Company Software.

              3.14.2(iv) Exhibit 3.14.2(iv)(a) lists and separately identifies
              all agreements pursuant to which the Acquired Company or any
              Subsidiary has been granted rights to market software owned by
              third parties, and Exhibit 3.14.2(iv)(b) lists and separately
              identifies all agreements pursuant to which the Acquired Company
              or any Subsidiary has granted marketing rights in the Acquired
              Company Software to third parties.

              3.14.2(v) None of the Acquired Company and the Subsidiaries has
              taken or failed to take any actions under the law of any
              applicable foreign jurisdictions where the Acquired Company or a
              Subsidiary has marketed or licensed Acquired Company Software that
              would restrict or limit the ability of the Acquired Company or any
              Subsidiary to protect, or prevent it from protecting, in any
              material respect, its ownership interests in, confidentiality
              rights of, and rights to market, license, modify or enhance, the
              Acquired Company Software.

     III.15   Labor Matters. Except as set forth on Exhibit 3.15, within the
              last three (3) years neither the Acquired Company nor any
              Subsidiary has been the subject of any union activity or labor
              dispute, nor has there been any strike of any kind called or, to
              the knowledge of the Acquired Company, threatened to be called
              against any of them. Neither the Acquired Company nor any
              Subsidiary has violated any applicable federal or state law or
              regulation relating to labor or labor practices including, without
              limitation, any requirements of the Immigration and Nationality
              Act of 1952, as amended by the Immigration Reform and Control Act
              of 1986 and the regulations promulgated thereunder (hereinafter
              collectively referred to as the "Immigration Laws"), where such
              violation would have a Material Adverse Effect on the Acquired
              Company. Exhibit 3.15 sets forth a true, correct and complete list
<PAGE>
 
              of employer loans or advances from the Acquired Company and each
              Subsidiary to their respective employees.

   III.16     Benefit Plans.
              -------------

   III.16.1.  Exhibit 3.16 lists every pension, retirement, profit-sharing,
              deferred compensation, stock option, employee stock ownership,
              severance pay, vacation, bonus or other incentive plan; any
              medical, vision, dental or other health plan; any life insurance
              plan or any other employee benefit plan or fringe benefit plan;
              any payroll practice; any other written or unwritten employee
              program, arrangement, agreement or understanding; commitments or
              methods of contribution or compensation (whether arrived at
              through collective bargaining or otherwise), whether formal or
              informal, whether funded or unfunded, and whether legally binding
              or not; including, without limitation, any "employee benefit
              plan," as that term is defined in Section 3(3) of ERISA; that is
              currently or previously adopted, maintained, sponsored in whole or
              in part, or contributed to by the Acquired Company or any ERISA
              Affiliate of the Acquired Company, for the benefit of, providing
              any remuneration or benefits to, or covering any current or former
              employee, retiree, dependent, spouse or other family member or
              beneficiary of such employee or retiree, director, independent
              contractor, stockholder, officer or consultant of the Acquired
              Company or any ERISA Affiliate of the Acquired Company or under
              (or in connection with) which the Acquired Company or an ERISA
              Affiliate of the Acquired Company has any contingent or
              noncontingent liability of any kind, whether or not probable of
              assertion (collectively, the "Benefit Plans"). Any of the Benefit
              Plans that is an "employee pension benefit plan," or an "employee
              welfare benefit plan" as that term is defined in Section 3(1) of
              ERISA, is referred to herein as an "ERISA Plan." No Benefit Plan
              is or has been a multiemployer plan within the meaning of Section
              3(37) of ERISA.

   III.16.2.  Exhibit 3.16 also lists, with respect to all Benefit Plans listed
              in Exhibit 3.16: (a) all trust agreements or other funding
              arrangements, including insurance contracts, all annuity
              contracts, actuarial statements or valuations, fidelity bonds,
              fiduciary liability policies, investment manager or advisory
              contracts, and all amendments (if any) thereto, (b) where
              applicable, with respect to any such plans or plan amendments, the
              most recent determination letters issued by the IRS, and (c) the
              most recent summary plan descriptions, any material modifications
              thereto, and all material employee communications with respect to
              such Benefit Plans. Contemporaneous with the delivery of the
              Exhibits to this Agreement, the Acquired Company has delivered a
              true and complete copy of each such Benefit Plan, agreement, most
              recent IRS letter or ruling, opinion, return, financial statement
              and summary plan description described in Sections 3.16.1 or
              3.16.2 hereof, certified as such by the Chief Financial Officer of
              the Acquired Company, together with the annual report (Form 5500
              Series) for the two most recent plan years for any Benefit Plan
              subject to such reporting requirements.
<PAGE>
 
   III.16.3.  All the Benefit Plans and any related trusts subject to ERISA
              comply with and have been administered in substantial compliance
              with the provisions of ERISA, all applicable provisions of the Tax
              Code relating to qualification and tax exemption under Tax Code
              Sections 401(a) and 501(a) or otherwise necessary to secure
              intended tax consequences, all applicable state or federal
              securities laws and all other applicable laws, rules and
              regulations, and the Acquired Company has not received any notice
              from any governmental agency or instrumentality questioning or
              challenging such compliance. Any noncompliance or failure properly
              to maintain, operate or administer a Benefit Plan or related trust
              has not rendered nor will render (i) such Benefit Plan or related
              trust or the Parent, Purchaser or Acquired Company subject to or
              liable for any material taxes, penalties, or liabilities to any
              Person; (ii) the Benefit Plan subject to disqualification; or
              (iii) the trust subject to loss of tax-exempt status.

   III.16.4.  None of the Acquired Company, any of the Subsidiaries, and, to the
              knowledge of the Acquired Company, any administrator or fiduciary
              of any such Benefit Plan (or agent or delegate of any of the
              foregoing) has engaged in any transaction or acted or failed to
              act in any manner that could subject the Acquired Company to any
              direct or indirect liability (by indemnity or otherwise) for a
              breach of any fiduciary, co-fiduciary or other duty under ERISA
              which individually or in the aggregate would have a Material
              Adverse Effect on the Acquired Company. No material oral or
              written representation or communication with respect to any aspect
              of the Benefit Plans has been or will be made to employees of the
              Acquired Company prior to the Closing Date that is not in
              accordance with the written or otherwise preexisting terms and
              provisions of such Benefit Plans in effect immediately prior to
              the Closing Date, except for any amendments or terminations
              required by the terms of this Agreement and except where such
              representation or communication would not have a Material Adverse
              Effect on the Acquired Company. There are no pending unresolved
              claims or disputes under the terms of, or in connection with, the
              Benefit Plans (other than routine undisputed claims for benefits),
              and no action, legal or otherwise, has been commenced with respect
              to any claim.

   III.16.5.  All annual reports or returns, audited or unaudited financial
              statements, actuarial valuations, summary annual reports and
              summary plan descriptions issued with respect to the Benefit Plans
              are correct and accurate in all material respects as of the dates
              thereof; and there have been no amendments filed to any of such
              reports, returns, statements, valuations or descriptions or
              required to make the information therein true and accurate. Except
              as disclosed on Exhibit 3.16.5, all annual reports (Form 5500
              series) required to be filed with respect to any Benefit Plan have
              been or will be timely filed prior to Closing.

   III.16.6.  No non-exempt "prohibited transaction" (within the meaning of
              Section 4975(c) of the Tax Code) involving any Benefit Plan has
              occurred. None of the assets of any ERISA Plan is "employer real
              property" (within the meaning of Section 407(d)(2) of ERISA).
<PAGE>
 
   III.16.7.   Each Benefit Plan that is or has been an "employee pension
               benefit plan" as defined in Section 3(2) of ERISA is a defined
               contribution plan qualified under Section 401(a) of the Tax Code
               and its related trust is exempt from tax under Section 501(a) of
               the Tax Code (a "Qualified Plan") and no circumstances exist that
               are likely to result in disqualification of any Qualified Plan or
               loss of tax-exempt status for its related trust (or monetary
               sanctions in lieu of disqualification or loss of tax exempt
               status), except where the payment of such monetary sanctions
               would not have a Material Adverse Effect on the Acquired Company.
               No Qualified Plan (nor any predecessor to a Qualified Plan) has
               ever been subject to the provisions of Title IV of ERISA or to
               the minimum funding standards of Section 412 of the Tax Code.
             
   III.16.8.   As of December 31, 1996, the Acquired Company had no current or
               future liability with respect to any events or matters occurring,
               arising or accruing on or prior to such date under any Benefit
               Plan that was not reflected in the 1996 Financial Statements,
               which liability would have a Material Adverse Effect on the
               Acquired Company.
             
   III.16.9.   The Acquired Company does not maintain any Benefit Plan providing
               deferred or stock based compensation that is not reflected in the
               1996 Financial Statements.
             
   III.16.10.  Neither the Acquired Company nor any ERISA Affiliate of the
               Acquired Company has maintained, and neither now maintains, a
               Benefit Plan providing welfare benefits (as defined in ERISA
               Section 3(1)) to employees after retirement or other separation
               of service except to the extent required under Part 6 of Title I
               of ERISA and Tax Code Section 4980B.
             
   III.16.11.  Except as disclosed in Exhibit 3.16.11, the consummation of the
               transactions contemplated by this Agreement will not (i) entitle
               any current or former employee (or any spouse, dependent or other
               family member of such employee) of the Acquired Company or any of
               the Subsidiaries to severance pay, unemployment compensation or
               any payment contingent upon a change in control or ownership of
               the Acquired Company, or (ii) accelerate the time of payment or
               vesting, or increase the amount, of any compensation due to any
               such employee or former employee (or any spouse, dependent or
               other family member of such employee).
             
   III.16.12.  The Acquired Company has provided to each of those persons listed
               on Exhibit 6.11A the form of Covenant Not to Compete attached as
               Exhibit 6.11B and obtained their agreement to enter into same in
               favor of Purchaser as of the Closing Date.
             
   III.17      Customers. Except as disclosed on Exhibit 3.17, none of the
               Acquired Company and the Subsidiaries has received any notice
               from, or has any knowledge (which, for the purposes of this
               Section 3.17 only shall mean the knowledge of the Acquired
               Company or any Subsidiary after having made reasonable inquiry of
               managerial and customer account employees) that, any current
               customer of the Acquired Company or any Subsidiary as of December
               31, 1996 or any date
<PAGE>
 
              subsequent thereto has taken or will take any
              steps that could disrupt the business relationship of the Acquired
              Company or the Subsidiaries with such customer in any material
              respect, including without limitation any cancellation of
              contract, diminution of business or failure to renew, or any
              intention to do any of the foregoing.

   III.18     Environmental Matters. Except as set forth in Exhibit 3.18, no
              real property now or previously owned, leased or used by the
              Acquired Company or any Subsidiary (the "Real Property") has been
              used by the Acquired Company or any Subsidiary or, to the
              knowledge of the Acquired Company, any other party for the
              handling, treatment, storage or disposal of any Hazardous
              Substance. Except as set forth in Exhibit 3.18, no release,
              discharge, spillage or disposal into the environment of any
              Hazardous Substance and no soil, water or air contamination by any
              Hazardous Substance has occurred or is occurring in, from or on
              the Real Property (a) by virtue of the actions or failure to act
              of any of the Acquired Company or any Subsidiary or (b) to the
              knowledge of the Acquired Company, by virtue of the actions or
              failure to act of any other party. Except as set forth in Exhibit
              3.18, the Acquired Company and all Subsidiaries have complied in
              all material respects with all reporting requirements under any
              applicable federal, state or local environmental laws and any
              permits with respect to the Real Property, and there are no
              existing violations by the Acquired Company or any Subsidiary of
              any such environmental laws or permits with respect to the Real
              Property. Except as set forth in Exhibit 3.18, there are no
              claims, actions, suits, proceedings or investigations related to
              the presence, release, production, handling, discharge, spillage,
              transportation or disposal of any Hazardous Substance or ambient
              air conditions or contamination of soil, water or air by any
              Hazardous Substance pending or threatened (1) with respect to the
              Real Property (a) by virtue of the actions or failure to act of
              the Acquired Company or any Subsidiary or (b) to the knowledge of
              the Acquired Company, by virtue of the actions or failure to act
              of any other party, or (2) otherwise against the Acquired Company
              or any Subsidiary, in any court or before any state, federal or
              other governmental agency or private arbitration tribunal and, to
              the knowledge of the Acquired Company, there is no basis for any
              such claim, action, suit, proceeding or investigation (i) with
              respect to the Real Property (a) by virtue of the actions or
              failure to act of the Acquired Company or any Subsidiary or (b) to
              the knowledge of the Acquired Company, by virtue of the actions or
              failure to act of any other party, or (ii) otherwise against the
              Acquired Company or any Subsidiary. Except as disclosed on Exhibit
              3.18, to the knowledge of the Acquired Company or any Subsidiary,
              there are no underground storage tanks on the Real Property. To
              the knowledge of the Acquired Company, no building or other
              improvement included in the Real Property contains any exposed or
              friable asbestos currently required to be removed or otherwise
              treated under applicable law. For the purposes of this Agreement,
              "Hazardous Substance" shall mean any hazardous or toxic substance
              or waste as those terms are defined by any applicable federal,
              state or local law, ordinance, regulation, policy, judgment,
              decision, order or decree, including, without limitation, the
              Comprehensive Environmental Recovery Compensation and Liability
              Act, 42 U.S.C. 9601 et seq.,
<PAGE>
 
              the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801 et.
              seq. and the Resource Conservation and Recovery Act, 42 U.S.C.
              6901 et seq., and petroleum, petroleum products and oil.

   III.19     Insurance. Set forth in Exhibit 3.19 is a complete list of all
              material insurance policies that the Acquired Company and the
              Subsidiaries maintain with respect to its businesses, properties
              or employees. Except as set forth in Exhibit 3.19, such policies
              are commensurate with all material insurance policies in effect
              during the preceding thirty-six (36) months, are in full force and
              effect and to the knowledge of the Acquired Company, no event has
              occurred that would give any insurance carrier a right to
              terminate any such policy. To the knowledge of the Acquired
              Company, such policies are adequate to insure against risks to
              which the Acquired Company, and any Subsidiaries and their
              respective properties and assets are exposed in the operation of
              their respective businesses in such amounts and types of coverage
              as are commercially reasonable and are consistent with practices
              in the industry in which the Acquired Company and the Subsidiaries
              operate. Except as set forth in Exhibit 3.19, since December 31,
              1996, there has not been any change in the Acquired Company's or
              any Subsidiary's relationship with their respective insurers or in
              the premiums payable pursuant to such policies.

   III.20     Related Parties.
              ---------------

              (a) Except as set forth in Exhibit 3.20, to the knowledge of the
              Acquired Company, no stockholder owning greater than a five-
              percent (5%) interest in the Acquired Company, no affiliate or
              member of the immediate family of any such stockholder, and no
              officer or director or member of the immediate family of such
              officer or director of the Acquired Company or any Subsidiary
              possesses, directly or indirectly, any beneficial interest in, or
              is a director, officer or employee of, or member of the immediate
              family of a director, officer or employee of, any corporation,
              partnership, firm, association or business organization that is a
              client, supplier, customer, lessor, lessee, lender, creditor,
              borrower, debtor or contracting party with or of the Acquired
              Company or any Subsidiary (except as a stockholder holding less
              than a one-percent 1% interest in a corporation whose shares are
              traded on a national or regional securities exchange or in the
              over-the-counter market).

              (b) The Acquired Company has provided to each of its "affiliates"
              as identified in Section 2.4 copies of the Rule 145 Letters and
              Pooling Letters and obtained their agreement to enter into same as
              of the Closing Date. The Acquired Company has provided to the
              stockholders described in Section 2.13 the form of letter
              referenced therein provided by the Purchaser and obtained their
              agreement to enter into same as of the Closing Date.
<PAGE>
 
   III.21     Information. The Acquired Company has made accessible to Purchaser
              or Parent each registration statement, schedule, report, proxy
              statement or information statement it has filed with the SEC since
              January 1, 1995, including, without limitation, (a) the Acquired
              Company's Annual Reports on Form 10-K for the year ended December
              31, 1995, including all documents incorporated therein, (b) the
              Acquired Company's Quarterly Reports on Form 10-Q for the quarters
              ended March 31, June 30 and September 30, 1996, and (c) all
              Reports of Acquired Company on Form 8-K since September 30, 1996
              (collectively, the "Acquired Company Reports"). As of the date of
              this Agreement, the Acquired Company Reports, did not contain any
              untrue statement of a material fact or omit to state a material
              fact required to be stated therein or necessary to make the
              statements made therein, in light of the circumstances in which
              they were made, not misleading. As used in this Section 3.21,
              "material" means material to the financial condition, business,
              properties, rights or operations of the Acquired Company together
              with the Subsidiaries, taken as a whole. Since December 31, 1996,
              the Acquired Company has made all filings with the SEC in a timely
              manner as required by law and no event has occurred that requires
              an additional filing or any amendment to a prior filing.

   III.22     Pooling of Interests. The Acquired Company is not aware of any
              facts or circumstances in respect of it or its accounting
              procedures which would have the effect of precluding accounting
              for the transactions contemplated hereby as a "pooling of
              interests."

   III.23     Disclosure and Absence of Undisclosed Liabilities. No statement
              contained herein or in any certificate, schedule, list, exhibit or
              other instrument furnished or required to be furnished to
              Purchaser pursuant to the provisions hereof contains, or will at
              the time it is furnished contain, any untrue statement of any
              material fact or omits or omit to state any fact necessary to make
              the Statements herein or therein not false or misleading. As used
              in this Section, "material" means material to the financial
              condition, business, properties, rights or operations of the
              Acquired Company and its Subsidiaries, taken as a whole.

   III.24     No Special Stockholder Rights. Except as disclosed on Exhibit
              3.24, the Acquired Company has no agreement with any individual or
              entity that grants such person any rights as a stockholder of
              Acquired Company Stock that are in addition to such holder's
              rights under the Acquired Company's Certificate of Incorporation
              or Bylaws (including, without limitation, registration rights,
              preemptive rights, put rights, rights of co-sale or rights to
              Board representation).

IV.  REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT.
     ------------------------------------------------------

     Purchaser and Parent, jointly and severally, represent and warrant to the
     Acquired Company as follows:

     IV.1 Organization and Standing
          -------------------------
<PAGE>
 
   IV.1.1.    Each of Purchaser and Parent is a corporation duly organized,
              validly existing and is in good standing under the laws of the
              respective jurisdiction of its incorporation and has the requisite
              corporate power and authority to carry on its business in the
              places and as it is now being conducted and to own and lease the
              properties and assets that it now owns or leases.

   IV.1.2.    Each of Purchaser and Parent is duly qualified and/or licensed to
              transact business and is in good standing as a foreign corporation
              in jurisdictions where the character of the property owned or
              leased by Purchaser and Parent and the nature of the business
              conducted by them requires such qualification and/or licensing,
              except where the failure to do so qualify would not individually
              or in the aggregate have a Material Adverse Effect upon Parent.

   IV.2       Corporate Power and Authority. Each of Purchaser and Parent has
              the capacity and authority to execute and deliver this Agreement,
              to perform hereunder and to consummate the transactions
              contemplated hereby without the necessity of any act or consent of
              any other Person whomsoever. The execution, delivery and
              performance by Purchaser and Parent of this Agreement and each and
              every agreement, document and instrument provided for herein have
              been duly authorized and approved by their respective Boards of
              Directors (or Executive Committees thereof). Assuming this
              Agreement, and each and every other agreement, document and
              instrument to be executed, delivered and performed by Purchaser
              and Parent in connection herewith are valid and legally binding on
              the Acquired Company, this Agreement, and each and every other
              agreement, document and instrument to be executed, delivered and
              performed by Purchaser and Parent in connection herewith,
              constitute or will, when executed and delivered, constitute the
              valid and legally binding obligations of Purchaser and Parent as
              applicable, enforceable against each of them in accordance with
              their respective terms, except as enforceability may be limited by
              applicable equitable principles, or by bankruptcy, insolvency,
              reorganization, moratorium, or similar laws from time to time in
              effect affecting the enforcement of creditors' rights generally.
              The Parent has provided to counsel for the Acquired Company a true
              and correct copy of the Certificate of Incorporation and Bylaws,
              each as amended, of the Parent and Purchaser.

   IV.3       Agreement Does Not Violate Other Instruments. The execution and
              delivery of this Agreement by Purchaser and Parent do not, and the
              consummation of the transactions contemplated hereby will not,
              violate any provisions of the Certificate of Incorporation, as
              amended, or Bylaws, as amended, of Purchaser or of Parent, and,
              except as set forth on Exhibit 4.3, violate or constitute an
              occurrence of default under any provision of, or conflict with,
              result in acceleration of any obligation under, or give rise to a
              right by any party to terminate its obligations under, any
              mortgage, deed of trust, conveyance to secure debt, note, loan,
              lien, lease, agreement, instrument, or any order, judgment, decree
              or other arrangement to which Purchaser or Parent is a party or is
              bound or by which any of their
<PAGE>
 
              respective assets are affected. Except for the applicable
              requirements of the HSR Act, the 1933 Act, the Exchange Act,
              applicable Blue Sky laws, and as set forth on Exhibit 4.3, no
              consent, approval, order or authorization of, or registration,
              declaration or filing with, any governmental entity is required to
              be obtained or made by or with respect to Purchaser or Parent or
              any assets, properties or operations of Purchaser or Parent in
              connection with the execution and delivery by Purchaser and Parent
              of this Agreement or the consummation of the transactions
              contemplated hereby.

   IV.4       Reservation of Shares. Purchaser will, prior to the Merger, in
              accordance with the terms thereof, have available shares of Parent
              Stock sufficient to complete the Merger. The shares of Parent
              Stock issued pursuant to Article II will, when issued, be duly
              authorized, validly issued, fully paid and nonassessable and no
              stockholder of the Parent will have any preemptive rights of
              subscription or purchase in respect thereof.
<PAGE>
 
   IV.5       Information. Parent has made available to the Acquired Company
              each registration statement, schedule, report, proxy statement or
              information statement it has filed with the Securities and
              Exchange Commission since January 1, 1995, including, without
              limitation, (a) Parent's Annual Report on Form 10-K for the years
              ended December 31, 1995, and December 31, 1996, respectively,
              including all documents incorporated therein, and (b) Reports of
              Parent on Form 8-K since December 31, 1996 (collectively, the
              "Parent Reports"). As of the date of this Agreement, the Parent
              Reports, taken together with information previously furnished by
              Parent to the Acquired Company, did not contain any untrue
              statement of a material fact or omit to state a material fact
              required to be stated therein or necessary to make the statements
              made therein, in light of the circumstances in which they were
              made, not misleading. As used in this Section, "material" means
              material to the financial condition, results of operations,
              business, assets or properties of Parent together with the Parent
              Subsidiaries (including Purchaser), taken as a whole. Since
              December 31, 1996, the Parent has made all filings with the SEC in
              a timely manner as required by law and no event has occurred that
              requires an additional filing or any amendment to a prior filing.

   IV.6       Capitalization. The entire authorized capital stock of the Parent
              consists of 251,000,000 shares of stock, of which 250,000,000
              shares are designated Common Stock, par value $.05 per share, and
              1,000,000 shares are designated Preferred Stock, without par
              value. Of the total authorized Common Stock, as of December 31,
              1996, approximately ninety million six hundred one thousand four
              hundred ninety-three (90,601,493) shares were issued and
              outstanding and approximately thirty-one million five hundred
              thirty-four thousand nine hundred fourteen (31,534,914) shares
              were held in the Parent's treasury. Of the total authorized
              Preferred Stock, no shares have been issued. As of December 31,
              1996, there were options outstanding entitling the optionees
              thereunder, to acquire in the aggregate approximately six million
              seven hundred fourteen thousand one hundred ninety-six (6,714,196)
              shares of the Parent Stock. All the issued and outstanding shares
              of each of the Parent Subsidiaries are owned directly or
              indirectly by the Parent free and clear of all liens, claims,
              charges and encumbrances of any nature whatsoever. All of the
              outstanding shares of Parent Stock (and any shares issued pursuant
              to presently outstanding options, if exercised and purchased at
              the applicable exercise price) were duly authorized (or will be
              when issued and the option price paid), validly issued, fully paid
              and nonassessable. None of the capital stock of the Parent is
              entitled to or subject to preemptive rights. The authorization or
              consent of no other person or entity is required in order to
              consummate the transaction contemplated herein by virtue of any
              such person or entity having an equitable or beneficial interest
              in the Parent or any Subsidiary.

V.   CONDITIONS PRECEDENT TO RESPECTIVE OBLIGATIONS OF THE PARTIES.
     -------------------------------------------------------------

     The obligations of Purchaser and Parent, on the one hand, and of the
     Acquired Company, on the other hand, to consummate, or cause to be
     consummated, the Merger shall be contingent
<PAGE>
 
   upon and subject to the satisfaction, on or before the Closing, of each and
   every one of the following conditions, any one or more of which may be waived
   in writing by such parties.

   V.1   Actions of Governmental Authorities. There shall not have been
         instituted or be pending any action, proceeding, application,
         claim or counterclaim by any government or governmental authority
         or agency, domestic or foreign, and Purchaser, Parent or the
         Acquired Company shall not have been notified by any such
         government, governmental authority or agency (or a representative
         thereof) of its present intention to commence, or recommend the
         commencement of, such an action or proceeding, that (i) challenges
         the acquisition by Purchaser or Parent of the Acquired Company
         Stock, restrains or prohibits or seeks to restrain or prohibit the
         making or consummation of the Merger or restrains or prohibits or
         seeks to restrain or prohibit the performance of this Agreement;
         (ii) prohibits or limits or seeks to prohibit or limit the
         ownership or operation by Purchaser or Parent of all or any
         substantial portion of the business or assets of the Acquired
         Company or any of the Subsidiaries or of Purchaser, Parent or any
         of their respective subsidiaries or compels or seeks to compel
         Purchaser or Parent to dispose of or to hold separate all or any
         substantial portion of the business or assets of the Acquired
         Company or any of the Subsidiaries or of Purchaser, Parent or any
         of their respective subsidiaries, or imposes or seeks to impose
         any material limitation on the ability of Purchaser or Parent to
         conduct such business or to own such assets; or (iii) imposes or
         seeks to impose limitations on the ability of Purchaser or Parent
         (or any other affiliate of Purchaser) to acquire or hold or to
         exercise full rights of ownership of the Surviving Corporation,
         including, but not limited to, the right to vote such shares on
         all matters properly presented to the stockholders of the
         Surviving Corporation.
      
   V.2   Other Legal Actions. There shall not have been any statute, rule,
         regulation, order or injunction enacted, promulgated, entered,
         enforced, deemed applicable to the Merger or this Agreement or
         proposed by any government, governmental authority or agency or
         court, domestic or foreign, and no claim or action shall have been
         instituted by any Person before a court, government or
         governmental authority or agency, that could be reasonably
         expected to result in any of the consequences referred to in
         clauses (i) through (iii) of Section 5.1 above.
      
   V.3   Legal Approvals. The execution and the delivery of this Agreement
         and the consummation of the transactions contemplated hereby shall
         have been approved by all regulatory authorities whose approvals
         are required by law and the waiting period under the HSR Act shall
         have expired or have been terminated.
      
   V.4   Stockholder Approval. This Agreement and the Merger and any
         related matters shall have been adopted and approved by the
         affirmative vote or written consent of the holders of the
         outstanding shares of Acquired Company Stock by the vote or
         written consent required by, and in accordance with, the Delaware
         Code.
<PAGE>
 
   V.5        Effectiveness of Registration Statement. The Registration
              Statement shall have been declared effective by the SEC, and no
              stop order suspending effectiveness shall have been issued, and no
              action, suit, proceeding or investigation by the SEC to suspend
              the effectiveness thereof shall have been initiated and be
              continuing. The shares of Parent Stock to be issued or sold
              pursuant to the Registration Statement shall have been registered
              for issuance under all applicable Blue Sky laws or shall be exempt
              from such registration, and no stop order shall have been issued
              with respect to the issuance or sale of such securities by any
              Blue Sky authority.

   V.6        Nasdaq Approval. The Parent Stock issuable in the Merger shall
              have been listed or approved for listing upon notice of issuance
              by the Nasdaq Stock Market, Inc.

   V.7        Fairness Opinion. The Acquired Company shall have received an
              opinion dated as of a date not more than three (3) business days
              prior to the mailing of the proxy statement/prospectus included
              within the Registration Statement to the stockholders of the
              Acquired Company from Broadview Associates LLC, its financial
              advisor, confirming the opinion referred to in Section 3.2.3
              hereof.

VI.  FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND PARENT.
     -------------------------------------------------------------------

     In addition to the conditions set forth in Article V above, all the
     obligations of Purchaser and Parent to consummate, or cause to be
     consummated, the Merger shall be contingent upon and subject to the
     satisfaction, on or before the Closing, of each and every one of the
     following conditions. The following conditions are for the sole benefit of
     Purchaser and Parent and may be asserted by Purchaser or Parent regardless
     of the circumstances giving rise to any such condition and may be waived by
     Purchaser or Parent (which action shall be deemed a waiver by both
     Purchaser and Parent), in whole or in part, at any time and from time to
     time, in the sole discretion of Purchaser or Parent. The failure by either
     Purchaser or Parent at any time to exercise any of the foregoing rights
     shall not be deemed a waiver of any other right, and each right shall be
     deemed an ongoing right that may be asserted at any time and from time to
     time.

     VI.1 Representations of Acquired Company. All representations and
          warranties of the Acquired Company contained in this Agreement (except
          as affected by the transactions contemplated by this Agreement), in
          the statements contained in the Exhibits hereto or in any certificate
          delivered by the Acquired Company pursuant to this Agreement shall be
          true and correct when made, and shall be true and correct at and as of
          the Closing Date as though such representations and warranties were
          made or given on and as of the Closing Date, in each case as if none
          of such representations and warranties contained any qualifications as
          to materiality or the absence of Material Adverse Effect, provided
          however, that notwithstanding the foregoing, this condition shall be
          deemed to be satisfied if all breaches of such representations and
          warranties, after giving effect to the foregoing, do not individually
          or in the aggregate constitute a Material Adverse Effect on the
          Acquired Company.
<PAGE>
 
   VI.2    Covenants of Acquired Company. The Acquired Company shall have, or
           caused to be, performed and observed all covenants, agreements and
           conditions hereto to be performed or observed at or before the
           Closing Date.
        
   VI.3    No Material Adverse Change. Since the date of this Agreement there
           shall not have been any change or changes in the business,
           properties, rights or operations of the Acquired Company or its
           Subsidiaries, which individually or in the aggregate constitute a
           Material Adverse Effect on the Acquired Company.
        
   VI.4    Certificate. Purchaser shall have received a certificate of the
           Chief Executive Officer of the Acquired Company, dated as of the
           Closing Date, certifying as to the matters set forth in Sections
           6.1 through 6.3 above. In addition, Parent shall have received
           both a certificate dated as of the effective date of the
           Registration Statement and a certificate dated as of the Closing
           Date certifying that the covenants set forth in Section 2.3.1
           hereof have been performed and that the representations set forth
           in Sections 3.21 and 3.24 hereof are true and correct as of such
           dates.
        
   VI.5    Opinion of Acquired Company's Counsel.  Purchaser and Parent shall
           have received an opinion of counsel for the Acquired Company
           substantially in the form of Exhibit 6.5.
        
   VI.6    Tax Opinion. Purchaser and Parent shall have received an opinion
           from their counsel, dated as of the date the Registration
           Statement is declared effective and as of the Closing Date, to the
           effect that the Merger will qualify as a reorganization pursuant
           to Section 368(a) of the Tax Code, which opinion shall be
           substantially in the form of Exhibit 6.6 hereto.
        
   VI.7    Affiliates and Principal Stockholders. Purchaser and Parent shall
           have received the Rule 145 Letters and the Pooling Letters from
           the persons and at the times specified in Section 2.4, and the
           letters referenced in Section 2.13.
        
   VI.8    Additional Instruments. The Acquired Company shall have delivered
           to Purchaser or Parent certified copies of resolutions duly
           adopted by the Acquired Company's Board of Directors and
           stockholders, approving the Merger and authorizing the
           transactions contemplated hereby, and such other or additional
           instruments, consents, waivers, approvals, endorsements and
           documents as Parent and Purchaser reasonably deem to be necessary
           to enable the Merger to be consummated as provided in this
           Agreement. All other proceedings in connection with the Merger and
           the other transactions contemplated hereby, and all instruments,
           consents, waivers, approvals, endorsements and documents referred
           to hereunder or otherwise incident to such transactions, shall
           have been obtained and are reasonably satisfactory in form and
           substance to Parent and Purchaser and their counsel, including,
           without limitation, those consents, waivers and approvals referred
           to in Section 2.9 hereof.
<PAGE>
 
   VI.9       Accountants' Pooling Letters.  Parent shall have received letters
              from KPMG Peat Marwick LLP and Arthur Andersen LLP, dated as of
              the effective date of the Registration Statement and as of the
              Closing Date, in each case addressed to Parent advising it, as set
              forth in Section 2.3.2 hereof, that the Merger may be accounted
              for as a pooling of interests, which letters shall be
              substantially in the form of Exhibits 2.3.2(A) and 2.3.2(B),
              respectively.

   VI.10      Accountant's Comfort Letters. Purchaser and Parent shall have
              received letters from KPMG Peat Marwick LLP dated as of the
              effective date of the Registration Statement and as of the Closing
              Date, in each case addressed to Purchaser and Parent, containing
              such matters as are customarily contained in auditors' letters
              regarding the Acquired Company Information provided expressly for
              inclusion in such Registration Statement, and in form and
              substance reasonably satisfactory to Parent.

   VI.11      Covenants Not to Compete. Purchaser shall have received executed
              non-competition agreements from each of those persons listed on
              Exhibit 6.11(A), with each such agreement in the form of Exhibit
              6.11(B) hereto (a "Covenant Not to Compete").

   VI.12      Fee Limitation. The only fees and expenses to any investment
              banking firm or similar entity that will be incurred by Acquired
              Company in connection with the transaction with Parent and
              Purchaser will be the fees and expenses of Broadview Associates
              LLC and shall not exceed $1,900,000 in the aggregate.

   VI.13      Termination of Certain Agreements. Each of the Agreements
              described on Exhibit 3.24 shall have been terminated.

   VI.14      Certain Other Matters. The Acquired Company shall have remedied
              any default or item of noncompliance with respect to Support
              Software as described in Section 3.14.2(ii), and shall have
              obtained the assignments of intellectual property rights described
              in Section 3.14.2(iii) from all persons and entities identified on
              Exhibit 3.14.2(iii) which the Acquired Company is able to locate
              after utilizing its reasonable best efforts.

VII. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRED COMPANY.
     -----------------------------------------------------------------------

     All the obligations of the Acquired Company to consummate the Merger shall
     be contingent upon and subject to the satisfaction, on or before the
     Closing, of each and every one of the following conditions. The following
     conditions are for the sole benefit of the Acquired Company and may be
     asserted by the Acquired Company regardless of the circumstances giving
     rise to any such condition and may be waived by the Acquired Company, in
     whole or in part, at any time and from time to time, in the sole discretion
     of the Acquired Company for purposes of consummating the transactions
     contemplated herein. The failure by the Acquired
<PAGE>
 
       Company at any time to exercise any of the foregoing rights shall not be
       deemed a waiver of any other right, and each right shall be deemed an
       ongoing right that may be asserted at any time and from time to time.

       VII.1    Representations of Purchaser and Parent. All representations and
                warranties made by Purchaser and Parent in this Agreement
                (except as affected by the transactions contemplated by this
                Agreement) shall be true and correct in all material respects at
                the Closing Date, with the same force and effect as if such
                representations and warranties had been made at and as of the
                Closing Date.

       VII.2    Covenants of Purchaser and Parent. Purchaser and Parent shall
                have, or caused to be, performed and observed in all respects
                all covenants, agreements and conditions hereof to be performed
                or observed by them at or before the Closing Date.

       VII.3    Certificate. The Acquired Company shall have received a
                certificate of the President of each of Parent and Purchaser,
                dated as of the Closing Date, certifying as to the matters set
                forth in Sections 7.1 and 7.2 above.

       VII.4    Opinion of Parent's and Purchaser's Counsel. The Acquired
                Company shall have received an opinion of Jones, Day, Reavis &
                Pogue, counsel to Parent and Purchaser, dated as of the Closing
                Date, substantially in the form of Exhibit 7.4.

       VII.5    Tax Opinion. The Acquired Company shall have received for the
                benefit of its stockholders an opinion from its tax counsel,
                dated as of the date the Registration Statement is declared
                effective and as of the Closing Date, to the effect that the
                Merger will qualify as a reorganization pursuant to Section
                368(a) of the Tax Code, which opinion shall be substantially in
                the form of Exhibit 7.5 hereto.

VIII.  CLOSING.
       --------

       VIII.1   Time and Place of Closing. Unless another place or date is
                agreed to in writing by the Acquired Company and Purchaser, the
                Closing shall be held at the offices of Jones, Day, Reavis &
                Pogue, 3500 One Peachtree Center, 303 Peachtree Street N.E.,
                Atlanta, Georgia 30308-3242, commencing at 10:00 a.m. Eastern
                Time, within two (2) business days of the last to occur of (i)
                the expiration or termination of the waiting period under the
                HSR Act, (ii) the Merger having been approved by the
                stockholders of the Acquired Company pursuant to the Delaware
                Code and (iii) the satisfaction or waiver of the other
                conditions set forth in Articles V, VI and VII. (The actual date
                of the Closing is referred in this Agreement as the "Closing
                Date.")

       VIII.2   Transactions at Closing.  At the Closing, each of the following
                ---------------------------------------------------------------
                transactions shall occur:
                ------------------------
<PAGE>
 
VIII.2.1.  The Acquired Company's Performance.  At the Closing, the Acquired 
           Company shall deliver to Purchaser and Parent, the following:

           (a) copies of the consents and waivers described in Section 2.9;

           (b) satisfactory evidences of the approvals described in Section
           5.4;

           (c) the certificates described in Section 6.4 to be delivered on the
           Closing Date;

           (d) certificates of compliance or certificates of good standing of 
           the Acquired Company and of the Subsidiaries, as of the most recent
           practicable date, from the appropriate governmental authority of the
           jurisdiction of their respective incorporation and any other
           jurisdiction that is set forth in Exhibit 3.1 hereto;

           (e) certified copies of resolutions of the Board of Directors and
           stockholders of the Acquired Company approving the transactions set
           forth in this Agreement;

           (f) certificates of incumbency for the officers of the Acquired
           Company;

           (g) resignations of each trustee of each Benefit Plan;

           (h) Certificate of Merger and a Plan of Merger, each in form and
           content that complies with the Delaware Code, executed by the
           Acquired Company;

           (i) the opinion of counsel for the Acquired Company, referenced in
           Section 6.5;

           (j) the tax opinion described in Section 6.6;

           (k) the Rule 145 Letters and Pooling Letters described in Section
           2.4;

           (l) the letters described in Section 2.13 hereof;

           (m) the letters described in Section 2.3.2 hereof;

           (n) the letters from KPMG Peat Marwick LLP to be delivered by the
           Closing Date as described in Section 6.9;

           (o) each of the Covenants Not to Compete fully executed and
           delivered;

           (p) the executed Employee Agreements described in Section 6.12; and

           (q) such other evidence of the performance of all covenants and
           satisfaction of all conditions required of the Acquired Company by
           this Agreement, at or prior to the Closing, as Purchaser, Parent or
           their counsel may reasonably require.
<PAGE>
 

          VIII.2.2.  Performance by Purchaser and Parent. At the Closing,
                     Purchaser or Parent, as appropriate, shall deliver to the
                     Acquired Company the following:

                     (a)  the certificate described in Section 7.3;

                     (b)  certificates of incumbency of the officers of
                     Purchaser and of Parent who are executing this Agreement
                     and the other documents contemplated hereunder;

                     (c)  certified copies of resolutions of the Boards of
                     Directors of each of Purchaser and Parent (or Executive
                     Committees thereof) approving the transactions set forth in
                     this Agreement;

                     (d)  Certificate of Merger and a Plan of Merger, each in
                     form and content that complies with the Delaware Code,
                     executed by Purchaser;

                     (e)  the opinion of counsel for Purchaser and Parent
                     referenced in Section 7.4; and

                     (f)  such other evidence of the performance of all the
                     covenants and satisfaction of all of the conditions
                     required of Purchaser and of Parent by this Agreement at or
                     before the Closing as the Acquired Company or its counsel
                     may reasonably require.

IX.       NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
          -----------------------------------------------------------

          IX.1       Except for the covenants contained in Sections 2.1.7,
                     2.1.10, 2.2.2, 2.3.6, 2.13, 2.14, 2.16 and 11.5, all
                     representations, warranties and agreements of the parties
                     in this Agreement or in any instrument delivered pursuant
                     to this Agreement (other than the Covenants Not To Compete)
                     shall not survive the Closing, and thereafter no party
                     hereto and no officer, director or employee of any such
                     party shall have any liability whatsoever with respect to
                     any such representation, warranty or agreement except for
                     liabilities arising from fraud, willful misconduct or
                     criminal acts.

X.        TERMINATION.
          ------------

          X.1        Method of Termination. This Agreement constitutes the
                     binding and irrevocable agreement of the parties to
                     consummate the transactions contemplated hereby, the
                     consideration for which is (a) the covenants set forth in
                     Article II hereof, and (b) expenditures and obligations
                     incurred and to be incurred by Purchaser and Parent, on the
                     one hand, and by the Acquired Company, on the other hand,
                     in respect of this Agreement, and this Agreement may be
                     terminated or abandoned only as follows:

          X.1.1.     By the mutual consent of the Boards of Directors of the
                     Acquired Company and Parent, notwithstanding prior approval
                     by the stockholders of any or all of such corporations;
<PAGE>
 

          X.1.2.     By the Board of Directors of the Parent in accordance with
                     its rights under Section 10.3;
       
          X.1.3.     By the Board of Directors of the Acquired Company after
                     July 31, 1997, if any of the conditions set forth in
                     Articles V and VII hereof, to which the Acquired Company's
                     obligations are subject, have not been fulfilled or waived,
                     unless such fulfillment has been frustrated or made
                     impossible by any act or failure to act of it or the
                     Subsidiaries;

          X.1.4.     By Purchaser after July 31, 1997, if any of the conditions
                     set forth in Articles V and VI hereof, to which the
                     obligations of Purchaser and Parent are subject, have not
                     been fulfilled or waived, unless such fulfillment has been
                     frustrated or made impossible by any act or failure to act
                     of Purchaser or Parent.
       
          X.1.5.     By the Board of Directors of the Acquired Company if in the
                     exercise of its good faith determination, as set forth in
                     Section 2.11, as to its fiduciary duties to the Acquired
                     Company's stockholders imposed by law, the Board of
                     Directors of the Acquired Company decides that such
                     termination is required.
       
          X.1.6.     By the Board of Directors of the Acquired Company, if the
                     Market Value of the Parent Stock is less than $50.00 per
                     share.
       
          X.2        Effect of Termination.
                     ----------------------
       
          X.2.1.     Except as provided in Section 10.2.2, and except as
                     provided in the immediately succeeding sentence, in the
                     event of a termination of this Agreement pursuant to
                     Section 10.1 hereof, each party shall pay the costs and
                     expenses incurred by it in connection with this Agreement,
                     and no party (or any of its officers, directors, employees,
                     agents, representatives or stockholders) shall be liable to
                     any other party for any costs, expenses, damage or loss of
                     anticipated profits hereunder. In the event of any
                     termination of this Agreement, the parties shall retain any
                     and all rights attendant to a breach of any covenant,
                     representation or warranty made hereunder.
       
          X.2.2.     In the event this Agreement is terminated by the Acquired
                     Company in accordance with Section 10.1.5, or by the
                     Parent, Purchaser or Acquired Company in accordance with
                     Section 10.1.3 or 10.1.4 by reason of the failure of the
                     condition set forth in Section 5.4 hereof, then the
                     Acquired Company shall promptly pay to Purchaser (i) all
                     reasonable costs and expenses of Purchaser and Parent
                     incurred in connection with the negotiation and performance
                     of this Agreement including without limitation fees and
                     expenses of counsel, fees and expenses of independent
                     public accountants, printing expenses and registration fees
                     in an aggregate amount not to exceed seven hundred fifty
                     thousand dollars ($750,000) and (ii) to Purchaser a fee in
                     the amount of $8,800,000, provided, however, such fee shall
                     not be
<PAGE>
 

                     payable in the event of a termination pursuant to Section
                     10.1.3 or 10.1.4 by reason of a failure of the condition in
                     Section 5.4 hereof if within twenty (20) days of the date
                     hereof the stockholders of the Acquired Company identified
                     on Exhibit 10.2.2 hereto have executed Voting Agreements
                     with Purchaser in forms substantially similar to the form
                     heretofore provided by Purchaser to counsel for the
                     Acquired Company.

          X.3        Risk of Loss. The Acquired Company retains all risk of
                     condemnation, destruction, loss or damage due to fire or
                     other casualty from the date of this Agreement up to the
                     Effective Time. If the condemnation, destruction, loss, or
                     damage is such that the business of the Acquired Company
                     and the Subsidiaries, taken as a whole, is materially
                     interrupted or curtailed or the assets of the Acquired
                     Company and the Subsidiaries, taken as a whole, are
                     materially affected, then Purchaser shall have the right to
                     terminate this Agreement.

XI.       GENERAL PROVISIONS.
          -------------------

          XI.1       Notices. All notices, requests, demands and other
                     communications hereunder shall be in writing and shall be
                     delivered by hand or mailed by certified mail, return
                     receipt requested, first class postage prepaid, or sent by
                     Federal Express or similar overnight delivery service with
                     receipt acknowledged addressed as follows:

          XI.1.1.    If to the Acquired Company:

                          Enterprise Systems, Inc.
                          1400 South Wolf Road
                          Wheeling, Illinois 60090-6524
                          Attn: Glen E. Tullman

                          and to:

                          Sachnoff & Weaver, Ltd.
                          30 South Wacker Drive, 29th Floor
                          Chicago, Illinois 60606-7404
                          Attn: William N. Weaver, Esq.

          XI.1.2.    If to Purchaser or Parent:

                          HBO & Company
                          301 Perimeter Center North
                          Atlanta, Georgia 30346
                          Attn: Mr. Jay P. Gilbertson
<PAGE>
 

                          and to:
                       
                          Jones, Day, Reavis & Pogue
                          3500 One Peachtree Center
                          303 Peachtree Street, N.E.
                          Atlanta, Georgia 30308-3242
                          Attention: John E. Zamer, Esq.

          XI.1.3.    If delivered personally, the date on which a notice,
                     request, instruction or document is delivered shall be the
                     date on which such delivery is made and, if delivered by
                     mail or by overnight delivery service, the date on which
                     such notice, request, instruction or document is received
                     shall be the date of delivery. In the event any such
                     notice, request, instruction or document is mailed or
                     shipped by overnight delivery service to a party in
                     accordance with this Section 11.1 and is returned to the
                     sender as nondeliverable, then such notice, request,
                     instruction or document shall be deemed to have been
                     delivered or received on the fifth day following the
                     deposit of such notice, request, instruction or document in
                     the United States mails or the delivery to the overnight
                     delivery service.

          XI.1.4.    Any party hereto may change its address specified for
                     notices herein by designating a new address by notice in
                     accordance with this Section 11.1.

          XI.2       Brokers. Purchaser and Parent, jointly and severally,
                     represent and warrant to the Acquired Company that no
                     broker or finder has acted for them or any entity
                     controlling, controlled by or under common control with
                     them in connection with this Agreement. The Acquired
                     Company represents and warrants to Purchaser and Parent
                     that, except for Broadview Associates LLC, no broker or
                     finder has acted for it or any entity controlling,
                     controlled by or under common control with it in connection
                     with this Agreement. The Acquired Company agrees to
                     indemnify and hold harmless Purchaser and Parent against
                     any fee, loss, or expense arising out of any claim by
                     Broadview Associates LLC, or any other broker or finder
                     employed or alleged to have been employed by it or any of
                     the Subsidiaries or any of the Acquired Company's
                     stockholders. The fees and expenses of Broadview Associates
                     LLC and any other broker or finder shall be paid by the
                     Acquired Company, subject to the limitations set forth in
                     Section 6.12 in conjunction with such other fees set forth
                     in Section 11.5.

          XI.3       Further Assurances. Each party covenants that at any time,
                     and from time to time, after the Effective Time, it will
                     execute such additional instruments and take such actions
                     as may be reasonably requested by the other parties to
                     confirm or perfect or otherwise to carry out the intent and
                     purposes of this Agreement.

          XI.4       Waiver. Any failure on the part of any party hereto to
                     comply with any of its obligations, agreements or
                     conditions hereunder may be waived by any other party to
                     whom such compliance is owed. No waiver of any provision of
                     this Agreement
<PAGE>
 

                     shall be deemed, or shall constitute, a waiver of any other
                     provision, whether or not similar, nor shall any waiver
                     constitute a continuing waiver.

          XI.5       Expenses. Except as provided in 10.2.2, all expenses
                     incurred by the parties hereto in connection with or
                     related to the authorization, preparation and execution of
                     this Agreement and the closing of the transactions
                     contemplated hereby, including, without limitation of the
                     generality of the foregoing, all fees and expenses of
                     agents, representatives, counsel and accountants employed
                     by any such party, shall be borne solely and entirely by
                     the party that has incurred the same.
          
          XI.6       Press Releases and Disclosure. In the event that either
                     party proposes to issue, make or distribute any press
                     release, public announcement or other written publicity or
                     disclosure prior to the Closing Date that refers to the
                     transactions contemplated herein, the party proposing to
                     make such disclosure shall provide a copy of such
                     disclosure to the other parties and shall afford the other
                     parties reasonable opportunity (subject to any legal
                     obligation of prompt disclosure) to comment on such
                     disclosure or the portion thereof which refers to the
                     transactions contemplated herein prior to making such
                     disclosure.
          
          XI.7       Binding Effect. This Agreement shall be binding upon and
                     inure to the benefit of the parties hereto and their
                     respective heirs, legal representatives, executors,
                     administrators, successors and assigns.
          
          XI.8       Headings. The section and other headings in this Agreement
                     are inserted solely as a matter of convenience and for
                     reference, and are not a part of this Agreement.
          
          XI.9       Entire Agreement. This Agreement and all agreements
                     referenced specifically in this Agreement and executed as
                     required by this Agreement constitute the entire agreement
                     among the parties hereto and supersede and cancel any prior
                     agreements, representations, warranties, or communications,
                     whether oral or written, among the parties hereto relating
                     to the transactions contemplated hereby or the subject
                     matter herein. Neither this Agreement nor any provision
                     hereof may be changed, waived, discharged or terminated
                     orally, but only by an agreement in writing signed by the
                     party against whom or which the enforcement of such change,
                     waiver, discharge or termination is sought.
          
          XI.10      Governing Law. Except to the extent the transactions
                     contemplated hereby are governed by the Delaware Code, this
                     Agreement shall be governed by and construed in accordance
                     with the laws of the State of Georgia.
          
          XI.11      Counterparts. This Agreement may be executed in two or more
                     counterparts, each of which shall be deemed an original,
                     but all of which together shall constitute one and the same
                     instrument.
          
          XI.12      No Agreement Until Executed. This Agreement shall not
                     constitute or be deemed to evidence a contract or agreement
                     among the parties hereto unless and until
<PAGE>
 

                     executed by all parties hereto, irrespective, of
                     negotiations among the parties or the exchanging of drafts
                     of this Agreement.

          XI.13      Pronouns. All pronouns used herein shall be deemed to refer
                     to the masculine, feminine or neuter gender as the context
                     requires.

          XI.14      Exhibits Incorporated. All Exhibits attached hereto are an
                     integral part of this Agreement.

          XI.15      Time of Essence. Time is of the essence in this Agreement.
<PAGE>
 

IN WITNESS WHEREOF, each party hereto has executed or caused this Agreement to
be executed on its behalf, all on the day and year first above written.


                     "PURCHASER":
                     HBO & COMPANY OF GEORGIA
                     
                     
                     By: /s/ Jay P. Gilbertson
                         ---------------------
                     Title: Executive Vice President and Chief Financial Officer
                            ----------------------------------------------------


                     "PARENT":
                     HBO & COMPANY


                     By: /s/ Jay P. Gilbertson
                         ---------------------
                     Title: Executive Vice President and Chief Financial Officer
                            ----------------------------------------------------


                     "ACQUIRED COMPANY":
                     ENTERPRISE SYSTEMS, INC.


                     By: /s/ Glen E. Tullman
                         -------------------
                     Title: Chief Executive Officer
                            -----------------------