AGREEMENT AND PLAN OF MERGER

     THIS  AGREEMENT  AND PLAN OF MERGER,  dated as of August 18,  1999 is among
FUSION NETWORKS,  INC., a Delaware corporation (the "Fusion"), IDM ENVIRONMENTAL
CORP., a New Jersey corporation ("IDM"),  IDM/FUSION HOLDINGS,  INC. ("Parent"),
and IDM/FNI ACQUISITION CORPORATION,  a Delaware corporation and a direct wholly
owned subsidiary of Parent (the "Merger Subsidiary").

     WHEREAS,  Fusion is a newly  formed  corporation,  formed  and  capitalized
pursuant to a business plan, a copy of which has been provided to IDM and Parent
(the "Business Plan");

     WHEREAS, IDM is a diversified services and project development company;

     WHEREAS,  management of IDM and Fusion have entered into  negotiations  and
agreed in  principle  as to the terms on which IDM would form  Parent and Merger
Subsidiary for the purpose of forming a holding  company  structure  under which
IDM would become a wholly-owned subsidiary of Parent and Merger Subsidiary would
merge with and into Fusion causing Fusion to become a wholly-owned subsidiary of
Parent;

     WHEREAS,  it is contemplated  that on or prior to the Effective Time of the
Merger  pursuant to this Merger  Agreement,  the following  will have  occurred:
Pursuant to a Plan of Reorganization and Merger (the "IDM Reorganization") dated
August 18, 1999,  among IDM,  Parent and IDM Merger  Subsidiary,  Inc., IDM will
have been restructured into a holding company structure pursuant to which Parent
will be the sole owner of all  outstanding  IDM capital stock and the holders of
IDM  stock  will  be  stockholders  of  Parent  (for  purposes  hereof,  the IDM
Reorganization  shall be assumed to have been consummated prior to the Effective
Time and all  representations  and  undertakings  of Parent  hereunder  shall be
deemed  to be  representations  and  undertakings  of IDM for  periods  prior to
consummation of the IDM Reorganization);

     WHEREAS,  the respective Boards of Directors of the Fusion,  Parent and the
Merger Subsidiary,  and Parent as the sole stockholder of the Merger Subsidiary,
each have, in light of and subject to the terms and conditions set forth herein,
resolved  to deem  this  Agreement  and the  transactions  contemplated  hereby,
including the Merger (as defined in Section 1.1), taken together,  advisable and
fair to, and in the best interests of, their respective stockholders; and

     WHEREAS,  for federal income Tax (as defined in Section 3.16) purposes,  it
is intended that the Merger shall qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").

     NOW, THEREFORE,  in consideration of the premises and the  representations,
warranties,  covenants  and  agreements  herein  contained,  and intending to be
legally bound hereby, the Fusion,  Parent and the Merger Subsidiary hereby agree
as follows:

                                    ARTICLE I

                                   THE MERGER

     SECTION 1.1 The Merger.  At the Effective Time (as defined in Section 1.2),
upon the terms and subject to the conditions of this Agreement and in accordance
with the Delaware General  Corporation Law (the "DGCL"),  the Merger  Subsidiary
shall be merged with and into the Fusion  ("Merger").  Following the Merger, the
Fusion shall continue as the surviving corporation (the "Surviving Corporation")
and shall  continue its  corporate  existence  under the DGCL,  and the separate
corporate existence of the Merger Subsidiary shall cease.

     SECTION 1.2 Effective  Time.  Subject to the provisions of this  Agreement,
Parent,  the  Merger  Subsidiary  and the  Fusion  shall  cause the Merger to be
consummated by (i) filing a certificate  of merger  complying with the DGCL with
the Secretary of State of the State of Delaware (the "Certificate of Merger") as
soon as  practicable  on or after the Closing Date (as defined in Section  1.3).
The Merger shall become  effective upon the later of such filing or at such time
thereafter as is provided in the Certificate of Merger (the  "Effective  Time").
SECTION  1.3 Closing of the  Merger.  The closing of the Merger (the  "Closing")
will take place at a time and on a date (the "Closing  Date") to be specified by
the  parties,  which  shall be no later than the  fifteenth  business  day after
satisfaction  or waiver of the  conditions  set forth in Article VII (other than
those  conditions  that by their nature are to be satisfied at the Closing,  but
subject to the  fulfillment  or waiver of those  conditions),  at the offices of
Oscar D.  Folger,  Esq.,  521 Fifth  Avenue,  New York,  New York 10175,  unless
another time, date or place is agreed to in writing by the parties hereto.


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     SECTION 1.4 Effects of the  Merger.  The Merger  shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto,  at  the  Effective  Time,  all  the  properties,  rights,  privileges,
immunities,  powers and franchises of the Fusion and the Merger Subsidiary shall
vest in the Surviving Corporation,  and all debts, liabilities,  obligations and
duties  of the  Fusion  and  the  Merger  Subsidiary  shall  become  the  debts,
liabilities, obligations and duties of the Surviving Corporation.

     SECTION 1.5  Certificate of  Incorporation  and Bylaws.  The Certificate of
Incorporation  of the Fusion in effect  immediately  prior to the Effective Time
shall be the Certificate of  Incorporation of the Surviving  Corporation,  until
amended in accordance with such Certificate of  Incorporation  and the DGCL. The
Bylaws of the Fusion in effect  immediately prior to the Effective Time shall be
the Bylaws of the Surviving  Corporation,  until amended in accordance with such
Bylaws, the Certificate of Incorporation and the DGCL.

     SECTION 1.6 Directors.  The directors of the Merger Subsidiary  immediately
prior to the  Effective  Time shall be the initial  directors  of the  Surviving
Corporation,  each  to  hold  office  in  accordance  with  the  Certificate  of
Incorporation  and Bylaws of the  Surviving  Corporation  until such  director's
successor is duly elected or appointed and qualified.

     SECTION 1.7 Officers. The officers of Fusion at the Effective Time shall be
the  initial  officers  of the  Surviving  Corporation,  each to hold  office in
accordance  with the  Certificate of  Incorporation  and Bylaws of the Surviving
Corporation  until such  officer's  successor is duly  elected or appointed  and
qualified.

                                   ARTICLE II

                            CONVERSION OF SECURITIES

     SECTION 2.1 Conversion of Securities.  At the Effective  Time, by virtue of
the Merger and without  any action on the part of any of the  parties  hereto or
any holder of shares of Fusion Common Stock (as defined in Section 2.1(c)):

     (a)  Securities  of the  Merger  Subsidiary  and  Parent.  The  issued  and
outstanding securities of Fusion shall remain outstanding and shall be unchanged
as a result of the Merger (except that ownership of the Fusion shares shall pass
to Parent pursuant to Section 2.1(c)). The issued and outstanding  securities of
Parent  shall  remain  outstanding  and  shall be  unchanged  as a result of the
Merger.

     (b) Cancellation of Treasury Shares and Parent-Owned  Shares. Each share of
Merger Subsidiary  Common Stock issued and outstanding  immediately prior to the
Effective Time that is owned by Fusion,  or by Parent,  the Merger Subsidiary or
any other  subsidiary  of Parent (other than shares in trust  accounts,  managed
accounts,  custodial  accounts and the like that are beneficially owned by third
parties)  shall  automatically  be  cancelled  and shall cease to exist,  and no
consideration shall be delivered or deliverable in exchange therefor.

     (c) Conversion of Fusion Common Stock. Each share of common stock of Fusion
("Fusion  Common  Stock")  issued  and  outstanding  immediately  prior  to  the
Effective Time (individually, a "Share" and collectively, the "Shares") shall be
converted into and be  exchangeable  for the right to receive  17,733.333  fully
paid and  non-assessable  shares of common stock,  par value $.01 per share,  of
Parent, or an aggregate of 26,600,000  shares of Parent Common Stock;  provided,
however,  that the aggregate  number of shares of Parent  Common Stock  issuable
pursuant to the Merger  shall be  increased  proportionately  to the extent that
Fusion issues  additional  shares of common stock as permitted by Section 5.1(b)
hereof.

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<PAGE>

     (d)  Certain  Adjustments.  If between the date of this  Agreement  and the
Effective  Time the  outstanding  shares of Parent  Common Stock shall have been
changed into a different  number of shares or a different class by reason of any
stock  dividend,   subdivision,   reclassification,   recapitalization,   split,
combination or exchange of shares or any similar event,  the amount of shares of
Parent  Common  Stock to be issued  pursuant  to Section  2.1(c)  above shall be
correspondingly   adjusted  to  reflect   such  stock   dividend,   subdivision,
reclassification,  recapitalization, split, combination or exchange of shares or
such similar event.

     SECTION 2.2 No Fractional Shares of Parent Common Stock. No certificates or
scrip of shares of Parent Common Stock representing  fractional shares of Parent
Common Stock or book-entry credit of the same shall be issued upon the surrender
for exchange of certificates representing outstanding Shares and such fractional
share interests will not entitle the owner thereof to vote or to have any rights
of a shareholder of Parent or a holder of shares of Parent Common Stock.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF FUSION

     Except  as set  forth in the  disclosure  schedule  delivered  by Fusion to
Parent  prior  to the  execution  of  this  Agreement  (the  "Fusion  Disclosure
Schedule")  (each  Section  of  which  qualifies  the  correspondingly  numbered
representation and warranty or covenant to the extent specified therein), Fusion
hereby represents and warrants to each of Parent,  IDM and the Merger Subsidiary
as follows:

     SECTION 3.1 Organization and Qualification; Subsidiaries.

     (a) Fusion and each of its  subsidiaries  is a corporation  or legal entity
duly organized, validly existing and in good standing under the Laws (as defined
in Section 3.9) of the jurisdiction of its  incorporation  and has all requisite
corporate,  partnership or similar power and authority to own, lease and operate
its  properties  and to carry on its businesses as now conducted and proposed by
Fusion to be conducted.

     (b) Section 3.1 of the Fusion Disclosure  Schedule sets forth a list of all
subsidiaries of Fusion. Except as listed in Section 3.1 of the Fusion Disclosure
Schedule,  Fusion  does not own,  directly  or  indirectly,  beneficially  or of
record, any shares of capital stock or other security of any other entity or any
other investment in any other entity.

     (c) Each of Fusion and its  subsidiaries  is duly qualified or licensed and
in good  standing  to do  business in each  jurisdiction  in which the  property
owned,  leased or operated by it or the nature of the  business  conducted by it
makes such qualification or licensing necessary,  except where the failure to be
so duly  qualified  or  licensed  and in good  standing  does not and  would not
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on Fusion.

     (d) Fusion has heretofore  delivered to Parent accurate and complete copies
of the articles or certificate of incorporation and codes of regulations, bylaws
or other similar  organizational  documents,  as currently in effect, of each of
Fusion and each of its subsidiaries.

     SECTION 3.2 Capitalization of Fusion and Its Subsidiaries.

     (a) The  authorized  capital  stock of Fusion  consists of 3,000  shares of
Fusion Common Stock. As of August 18, 1999,  1,500 shares of Fusion Common Stock
were  issued and  outstanding;  and (ii) no shares of Fusion  Common  Stock were
issued and held in the treasury of Fusion.  All the outstanding shares of Fusion
Common Stock are duly authorized, validly issued, fully paid and non-assessable.
Except as set forth above or in Section 3.2(a) of the Fusion Disclosure Schedule
(1) there are no shares of capital  stock or other voting  securities  of Fusion
authorized,  issued  or  outstanding,  (2)  there  are no  outstanding  options,
warrants, calls, preemptive rights,  subscriptions or other rights,  agreements,
arrangements or commitments of any character  relating to the issued or unissued
capital stock or other voting  securities of Fusion or any of its  subsidiaries,
obligating Fusion or any of its subsidiaries to issue, transfer or sell or cause
to be issued, transferred or sold any shares of capital stock, voting securities
or other  equity  interest in Fusion or any of its  subsidiaries  or  securities
convertible  into or  exchangeable  for such  shares  or  equity  interests,  or
obligating Fusion or any of its subsidiaries to grant,  extend or enter into any
such option, warrant, call, subscription or other right, agreement,  arrangement
or commitment, or (3) there are no outstanding contractual obligations of Fusion
or any of its subsidiaries to repurchase, redeem or otherwise acquire any Shares
or other capital  stock of Fusion or any  subsidiary or to provide funds to make
any investment (in the form of a loan, capital contribution or otherwise) in any
subsidiary or any other entity other than loans to  Subsidiaries in the ordinary
course of business. There are no stockholder agreements,  voting trusts or other
agreements or  understandings  to which Fusion or any of its  subsidiaries  is a
party or by which it is bound  relating  to the  voting of any shares of capital
stock of Fusion.

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<PAGE>

     (b) All of the outstanding capital stock of Fusion's  subsidiaries is owned
by Fusion,  directly or indirectly,  free and clear of any Lien (as  hereinafter
defined) or any other  limitation or restriction  (including any  restriction on
the right to vote,  transfer  or sell the same,  except as may be  provided as a
matter  of  Law).  There  are  no  securities  of  Fusion  or  its  subsidiaries
convertible into or exchangeable for, no options or other rights to acquire from
Fusion or its subsidiaries, and no other contract, understanding, arrangement or
obligation  (whether  or not  contingent)  providing  for the  issuance or sale,
directly or indirectly of, any capital stock or other ownership interests in, or
any other  securities  of, any  subsidiary of Fusion.  There are no  outstanding
contractual  obligations of Fusion or its subsidiaries to repurchase,  redeem or
otherwise  acquire any  outstanding  shares of capital stock or other  ownership
interests in any subsidiary of Fusion.  For purposes of this  Agreement,  "Lien"
means, with respect to any asset (including,  without limitation,  any security)
any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.

     SECTION 3.3 Authority Relative to This Agreement; Consents and Approvals.

     (a) Fusion has all necessary  corporate  power and authority to execute and
deliver this Agreement and to consummate the  transactions  contemplated  hereby
and no other  corporate  proceedings  on the part of  Fusion  are  necessary  to
authorize this Agreement or to consummate the transactions  contemplated  hereby
(other than, with respect to the Merger and this Agreement, the Fusion Requisite
Vote  (as  hereinafter  defined)).  This  Agreement  has been  duly and  validly
executed and delivered by Fusion and, assuming the due authorization,  execution
and delivery hereof by each of Parent and the Merger  Subsidiary,  constitutes a
valid,  legal and binding  agreement of Fusion,  enforceable  against  Fusion in
accordance with its terms.

     (b) The Board of  Directors  of Fusion  (the  "Fusion  Board") has duly and
validly authorized the execution and delivery of this Agreement and approved the
consummation of the transactions  contemplated  hereby,  and taken all corporate
actions  required to be taken by the Fusion  Board for the  consummation  of the
transactions,  including the Merger, contemplated hereby and has resolved (i) to
deem this  Agreement and the  transactions  contemplated  hereby,  including the
Merger,  taken  together,  advisable and fair to, and in the best  interests of,
Fusion and its  stockholders;  and (ii) to recommend  that the  stockholders  of
Fusion approve and adopt this Agreement. The Fusion Board has directed that this
Agreement  be  submitted  to the  stockholders  of Fusion for their  approval by
written  consent or at a meeting to be held for that  purpose.  The  affirmative
vote of the  holders  of a  majority  of the  voting  stock of Fusion  (which is
comprised  solely of Fusion  Common  Stock (the  "Voting  Shares"))(the  "Fusion
Requisite  Vote")  are the only  votes of the  holders of any class or series of
capital  stock of Fusion  necessary  to adopt this  Agreement  and  approve  the
transactions  contemplated  hereby,  including the Merger.  No other vote of the
stockholders of Fusion is required by law, the articles of  incorporation or the
code of  regulations  of Fusion or  otherwise in order for Fusion to approve and
adopt this Agreement or to consummate the transactions contemplated hereby.

     SECTION 3.4 Business Plan. Fusion has been formed, capitalized and operated
to date,  and  until  the  Effective  Time  will be  capitalized  and  operated,
consistent with the Business Plan.

     SECTION 3.5  Financial  Statements.  Fusion is newly formed and,  except as
contemplated in the Business Plan, has no material assets and,  through the date
hereof,  has had no material  operations  and has not completed a fiscal quarter
for purposes of preparing financial statements.  If requested, by Parent, Fusion
will prepare and deliver to Parent unaudited financial statements and such other
financial statements, whether audited or unaudited, as may be required by Parent
to comply with applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect  thereto.  Any such financial  statements so
delivered  by Fusion shall be prepared in  conformity  with  generally  accepted
accounting principles applied on a consistent basis ("GAAP").


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<PAGE>

     SECTION  3.6 No  Undisclosed  Liabilities.  Neither  Fusion  nor any of its
subsidiaries has any material liabilities or obligations of any nature,  whether
or not accrued,  contingent  or otherwise,  and there is no existing  condition,
situation  or set of  circumstances  known to Fusion  which could be expected to
result in such a liability or obligation,  except (a) liabilities or obligations
reflected in Fusion  financial  statements  and (b)  liabilities  or obligations
incurred  in the  ordinary  course  of  business  which  do not  and  would  not
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on Fusion.

     SECTION 3.7 Absence of Changes.  Except as and to the extent  disclosed  to
Parent,  as set forth in Section  3.7 of the Fusion  Disclosure  Schedule  or as
permitted by Section  5.1,  since  inception  Fusion and its  subsidiaries  have
conducted  their  business in the  ordinary  and usual  course  consistent  with
Business Plan and there has not been:

     (a) any  event,  change,  occurrence  or  development  which  does or would
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on Fusion;

     (b) any  declaration,  setting  aside or payment of any  dividend  or other
distribution  with  respect  to any  shares  of  capital  stock of Fusion or any
repurchase,  redemption or other  acquisition by Fusion or any subsidiary of any
Fusion securities;

     (c) any amendment of any term of any outstanding  security of Fusion or any
subsidiary;

     (d) (i) any  incurrence or  assumption  by Fusion or any  subsidiary of any
indebtedness  for borrowed money (A) other than in the ordinary and usual course
of business  consistent  with the Business  Plan or (B) in  connection  with any
acquisition  or  capital  expenditure  permitted  by  Section  5.1 or  (ii)  any
guarantee,  endorsement or other incurrence or assumption of liability  (whether
directly,  contingently  or  otherwise)  by  Fusion  or any  subsidiary  for the
obligations  of any other  person  (other than any wholly  owned  subsidiary  of
Fusion), other than in the ordinary and usual course of business consistent with
the Business Plan;

     (e) any creation or assumption  by Fusion or any  subsidiary of any Lien on
any material  asset of Fusion or any  subsidiary  other than in the ordinary and
usual course of business consistent with past practice;

     (f)  any  making  of  any  loan,  advance  or  capital  contribution  to or
investment  in any  person  by  Fusion  or any  subsidiary  other  than  (i) any
acquisition   permitted  by  Section  5.1,  (ii)  loans,   advances  or  capital
contributions to or investments in wholly owned  subsidiaries of Fusion or (iii)
loans or advances to employees of Fusion or any subsidiary  made in the ordinary
and usual course of business consistent with the Business Plan;

     (g) (i) any contract or agreement  entered into by Fusion or any subsidiary
on or  prior  to the  date  hereof  relating  to  any  material  acquisition  or
disposition  of any  assets or  business  or (ii) any  modification,  amendment,
assignment,  termination  or  relinquishment  by Fusion or any subsidiary of any
contract,  license or other right that does or would  reasonably  be expected to
have,  individually  or in the aggregate,  a Material  Adverse Effect on Fusion,
other than, in the case of (i) and (ii), transactions, commitments, contracts or
agreements  in the  ordinary and usual  course of business  consistent  with the
Business Plan and those contemplated by this Agreement;

     (h)  any  material  change  in  any  method  of  accounting  or  accounting
principles or practice by Fusion or any  subsidiary,  except for any such change
required by reason of a change in GAAP; or

     (i) any (i) grant of any  severance  or  termination  pay to any  director,
officer or employee of Fusion or any of its subsidiaries;  (ii) entering into of
any  employment,  deferred  compensation  or  other  similar  agreement  (or any
amendment to any such existing agreement) with any director, officer or employee
of Fusion or any of its subsidiaries (it being  acknowledged and agreed that the
hiring of employees in the ordinary course of business on an at-will basis shall
not be deemed the entering into of an employment  or similar  agreement);  (iii)
increase in benefits  payable under any existing  severance or  termination  pay
policies or employment  agreements;  or (iv) increase in compensation,  bonus or
other benefits  payable to directors,  officers or employees of Fusion or any of
its  subsidiaries  other  than,  in the case of clause (iv) only,  increases  in
compensation,  bonus or other benefits  payable to employees of Fusion or any of
its  subsidiaries  in the ordinary and usual course of business  consistent with
the  Business  Plan or merit  increases  in salaries of  employees  at regularly
scheduled times in customary amounts consistent with past practices. SECTION 3.8
Information  Supplied.  None of the  information  supplied  or to be supplied by
Fusion for  inclusion  or  incorporation  by  reference  in the proxy  statement
relating to the Parent  Stockholder  Meeting  (as  defined in Section  6.1) (the
"Proxy Statement"), including but not limited to the Business Plan, will, at the
date  mailed to  stockholders  and at the time of the  meeting of  stockholders,
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  are  made,  not
misleading.  If at any time prior to the Parent  Stockholder  Meeting  any event
with respect to Fusion,  its officers and  directors or any of its  subsidiaries
should  occur  which is  required  to be  described  in an  amendment  of,  or a
supplement to, the Proxy  Statement,  Fusion shall promptly so advise Parent and
such event shall be so  described,  and such  amendment or  supplement  shall be
promptly  filed  with the SEC  and,  as  required  by Law,  disseminated  to the
stockholders of the Parent.

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     SECTION 3.9  Consents and  Approvals;  No  Violations.  Except for filings,
permits,  authorizations,  consents and approvals as may be required under,  and
other applicable  requirements  of, the Nasdaq SmallCap  Market,  the Securities
Act,  the  Exchange  Act,  state  securities  or blue sky  Laws,  and any  other
applicable  state  regulatory   agency,   the  filing  and  recordation  of  the
Certificate  of Merger as  required  by the DGCL and as  otherwise  set forth in
Section 3.9 to Fusion Disclosure  Schedule  (collectively,  the "Fusion Required
Approvals"), no filing with or notice to, and no permit, authorization,  consent
or  approval  of,  any court or  tribunal  or  administrative,  governmental  or
regulatory body, agency or authority is necessary for the execution and delivery
by Fusion of this Agreement or the  consummation  by Fusion of the  transactions
contemplated   hereby,   except  where  the  failure  to  obtain  such  permits,
authorizations,  consents  or  approvals  or to make such  filings  or give such
notice does not and would not reasonably be expected to have, individually or in
the  aggregate,  a Material  Adverse  Effect on Fusion.  Neither the  execution,
delivery and  performance  of this Agreement by Fusion nor the  consummation  by
Fusion of the transactions  contemplated hereby will (i) conflict with or result
in any breach of any  provision of the  respective  articles or  certificate  of
incorporation or code of regulations or bylaws (or similar governing  documents)
of Fusion or any of its  subsidiaries,  (ii) result in a violation or breach of,
or  constitute  (with or without  due notice or lapse of time or both) a default
(or  give  rise  to  any  right  of  termination,   amendment,  cancellation  or
acceleration or Lien) under,  any of the terms,  conditions or provisions of any
note, bond, mortgage,  indenture,  lease, license, contract,  agreement or other
instrument or obligation to which Fusion or any of its  subsidiaries  is a party
or by which any of them or any of their  respective  properties or assets may be
bound  (collectively,  the  "Fusion  Agreements"),  or  (iii)  violate  any  Law
applicable  to  Fusion  or any of its  subsidiaries  or any of their  respective
properties  or  assets,  except  in the  case of (ii) or (iii)  for  violations,
breaches or defaults  which do not or would not  reasonably be expected to have,
individually or in the aggregate,  a Material Adverse Effect on Fusion.  Section
3.9 of the Fusion  Disclosure  Schedule sets forth a list of all material  third
party consents and approvals required to be obtained under the Fusion Agreements
prior to the consummation of the transactions contemplated by this Agreement.

     SECTION 3.10 No Default.  Neither Fusion nor any of its  subsidiaries is in
violation of any term of (i) its articles or certificate of incorporation,  code
of regulations,  bylaws or other organizational documents, (ii) any agreement or
instrument  related to indebtedness for borrowed money or any other agreement to
which it is a party or by which it is bound,  or (iii) any  foreign or  domestic
law, order, writ, injunction,  decree, ordinance,  award, stipulation,  statute,
judicial  or  administrative   doctrine,   rule  or  regulation   entered  by  a
Governmental  Entity ("Law")  applicable to Fusion,  its  subsidiaries or any of
their respective  properties or assets,  except,  in the case of (ii) and (iii),
for  violations  which do not or  would  not  reasonably  be  expected  to have,
individually  or in the  aggregate,  a Material  Adverse  Effect on Fusion or to
prevent or materially delay the performance of this Agreement by Fusion.

     SECTION 3.11 Real Property.

     (a) Fusion owns no fee interest in any real property.

     (b)  Section  3.11(b)  of the  Fusion  Disclosure  Schedule  sets forth all
leases,  subleases and other agreements (the "Real Property Leases") under which
Fusion or any of its  subsidiaries  uses or  occupies or has the right to use or
occupy,  now or in the future, any real property that is material to the conduct
of the  business of Fusion and its  subsidiaries,  taken as a whole.  Fusion has
heretofore  delivered  to Parent true,  correct and complete  copies of all Real
Property Leases (and all modifications,  amendments and supplements  thereto and
all side letters to which Fusion or any of its subsidiaries is a party affecting
the obligations of any party  thereunder).  Each Real Property Lease constitutes
the  valid  and  legally  binding  obligation  of  Fusion  or its  subsidiaries,
enforceable  in  accordance  with its terms  (except  as  enforceability  may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
fraudulent  transfer  and similar Laws of general  applicability  relating to or
affecting  creditors'  rights or by general equity  principles),  and is in full
force and effect.  All rent and other sums and charges payable by Fusion and its
subsidiaries  as  tenants  under  each  Real  Property  Lease  are  current,  no
termination  event or condition or uncured  default of a material  nature on the
part of Fusion or any such subsidiary or, to Fusion's  knowledge,  the landlord,
exists under any Real Property Lease.  Each of Fusion and its subsidiaries has a
good and valid  leasehold  interest in each parcel of real property leased by it
free  and  clear  of all  Liens,  except  (i)  Taxes  and  general  and  special
assessments not in default and payable  without  penalty and interest,  and (ii)
other liens,  mortgages,  pledges,  encumbrances and security interests which do
not  materially  interfere  with  Fusion's or any of its  subsidiaries'  use and
enjoyment of such real property or materially detract from or diminish the value
thereof.

                                       6
<PAGE>

     (c) No party to any such Real Property Leases has given notice to Fusion or
any  of its  subsidiaries  of or  made  a  claim  against  Fusion  or any of its
subsidiaries with respect to any material breach or default thereunder.

     SECTION 3.12  Litigation.  Except as and to the extent disclosed in Section
3.12 of the  Fusion  Disclosure  Schedule,  there  is no  suit,  claim,  action,
proceeding  or  investigation  pending  or, to  Fusion's  knowledge,  threatened
against Fusion or any of its subsidiaries or any of their respective  properties
or assets which (a) does or would  reasonably be expected to have,  individually
or in the aggregate,  a Material  Adverse Effect on Fusion or (b) as of the date
hereof,  questions  the validity of this  Agreement or any action to be taken by
Fusion in connection  with the  consummation  of the  transactions  contemplated
hereby or could otherwise  prevent or delay the consummation of the transactions
contemplated by this Agreement.  Except as and to the extent publicly  disclosed
by  Fusion  in  Section  3.12 of the  Fusion  Disclosure  Schedule,  there is no
judgment,  order, writ,  injunction or decree outstanding  against Fusion or its
subsidiaries which does or would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Fusion.

     SECTION 3.13 Fusion Permits;  Compliance with Applicable  Laws.  Fusion and
its subsidiaries hold all permits, licenses,  variances,  exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective  businesses (the "Fusion Permits"),  except for failures to hold such
permits, licenses,  variances,  exemptions, orders and approvals which do not or
would not reasonably be expected to have,  individually  or in the aggregate,  a
Material Adverse Effect on Fusion. Fusion and its subsidiaries are in compliance
in all material  aspects with the terms of the Fusion Permits,  except where the
failure  to so comply  does not or would not  reasonably  be  expected  to have,
individually  or in the  aggregate,  a Material  Adverse  Effect on Fusion.  The
businesses of Fusion and its  subsidiaries  are not being conducted in violation
of any Law  applicable to Fusion or its  subsidiaries,  except for violations or
possible  violations  which do not and would not reasonably be expected to have,
individually  or in the  aggregate,  a Material  Adverse  Effect on  Fusion.  To
Fusion's  knowledge,  no investigation or review by any Governmental Entity with
respect to Fusion or its subsidiaries is pending or threatened, nor, to Fusion's
knowledge,  has any  Governmental  Entity  indicated an intention to conduct the
same.

     SECTION 3.14 Employee Plans.

     (a) Except as and to the extent  disclosed in Section 3.14(a) of the Fusion
Disclosure Schedule there are no "employee benefit plans," as defined in Section
3(3)  of  ERISA,  employment,   executive  compensation,   consulting  or  other
compensation agreements,  and stock option, stock award, stock purchase or other
equity-based   compensation,    deferred   compensation,    severance,    salary
continuation,  life insurance, bonus or other incentive compensation programs or
arrangements,  and directors'  benefit,  bonus or other  incentive  compensation
arrangements,  for which Fusion or any of its subsidiaries has any obligation to
or liability,  contingent  or otherwise  (each,  an "Employee  Benefit Plan" and
collectively, the "Employee Benefit Plans")

     (f)  Except  as set  forth in  Section  3.14(b)  of the  Fusion  Disclosure
Schedule,  neither  the  execution  and  delivery  of  this  Agreement  nor  the
consummation  of the  transactions  contemplated  hereby  will by  itself  or in
combination  with any other  event (i) result in any  payment  becoming  due, or
increase the amount of  compensation  due, to any current or former  employee of
Fusion or any of its subsidiaries;  (ii) increase any benefits otherwise payable
under any Employee Benefit Plan; or (iii) result in the acceleration of the time
of payment or vesting of any such benefits.

                                       7
<PAGE>

     SECTION 3.15 Labor Matters.

     (a) Except as set forth in Section 3.15(a) of the Fusion Disclosure,  there
are no employment,  labor or collective  bargaining  agreements which pertain to
employees of Fusion or any of its subsidiaries.  Fusion has heretofore delivered
to Parent true and complete  copies of (i) the employment  agreements  listed on
Section  3.15(a)  of the  Fusion  Disclosure  Schedule  and  (ii)  the  labor or
collective  bargaining  agreements  listed  on  Section  3.15(a)  of the  Fusion
Disclosure Schedule,  together with all material  amendments,  modifications and
supplements thereto and side letters materially affecting the duties, rights and
obligations of any party thereunder.

     (b) Fusion and each of its  subsidiaries  is in  compliance in all material
respects with all Laws relating to the  employment of labor,  including all such
Laws and orders relating to wages, hours, collective bargaining, discrimination,
civil rights,  safety and health  workers'  compensation  and the collection and
payment of withholding and/or Social Security Taxes and similar Taxes.

     SECTION 3.16 Environmental Matters.  Except as set forth in Section 3.16 of
the Fusion  Disclosure  Schedule,  the operations of Fusion and its subsidiaries
have  been  and,  as of the  Closing  Date,  will  be,  in  compliance  with all
applicable  environmental Laws, except for noncompliance that does not and would
not  reasonably be expected to result in Fusion and its  subsidiaries  incurring
material  environmental  costs and  liabilities,  and Fusion is not aware of any
facts,   circumstances  or  conditions,   which  without   significant   capital
expenditures, would prevent material compliance in the future.

     SECTION 3.17 Taxes.

     (a) As of the date  hereof,  Fusion has not been  required  to file any Tax
Returns and has not paid, or been required to pay, any material taxes and is not
subject to, and has not been  subject to, any  audits,  administrative  or court
proceedings or claims with respect to Taxes.

     (b) In the  event the  Operating  files a Tax  Return or pays any  material
taxes on or before the Effective Date,  Fusion shall provide a true and complete
copy of each such Tax Return to Parent and shall provide  prompt  written notice
of any Taxes paid.

     (c) For purposes of this Agreement:

          "Taxes"  includes all forms of taxation,  whenever created or imposed,
     and whether of the United  States or  elsewhere,  and whether  imposed by a
     local,   municipal,   governmental,   state,  foreign,   Federal  or  other
     Governmental  Entity,  or in connection  with any agreement with respect to
     Taxes including all interest,  penalties and additions imposed with respect
     to such amounts.

          "Tax Returns" means all Federal,  state, local, provincial and foreign
     Tax  returns,  declarations,  statements,  reports,  schedules,  forms  and
     information returns and any amended Tax return relating to Taxes.

     SECTION 3.18 Absence of Questionable Payments.

     (a) Neither Fusion nor any of its subsidiaries nor, to Fusion's  knowledge,
any  director,  officer,  agent,  employee or other  person  acting on behalf of
Fusion or any of its  subsidiaries,  has used any  corporate  or other funds for
unlawful contributions,  payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established  or  maintained  any  unlawful or  unrecorded  funds in violation of
Section 30A of the Exchange Act. Neither Fusion nor any of its subsidiaries nor,
to Fusion's knowledge,  any director,  officer,  agent, employee or other person
acting on behalf of Fusion or any of its subsidiaries,  has accepted or received
any unlawful contributions, payments, gifts, or expenditures.


                                       8
<PAGE>

     SECTION 3.19 Material Contracts.

     (a) Section 3.19 of the Fusion Disclosure Schedule sets forth a list of all
Material  Contracts  (as  hereinafter  defined).   Fusion  has  heretofore  made
available  to Parent true,  correct and  complete  copies of all written or oral
contracts  and  agreements  (and  all  material  amendments,  modifications  and
supplements  thereto  and  all  side  letters  to  which  Fusion  or  any of its
subsidiaries  is a party  materially  affecting  the  obligations  of any  party
thereunder)  to which Fusion or any of its  subsidiaries  is a party or by which
any of its  properties  or assets are bound that are  material to the  business,
properties or assets of Fusion and its subsidiaries taken as a whole, including,
without  limitation,  all:  (i)  employment,  severance,  personal  services  or
consulting  contracts (other than any such contracts that are terminable without
penalty  upon  not  more  than  90 days  notice),  and  all  non-competition  or
indemnification  contracts  with  current  or  former  directors,   officers  or
employees of Fusion or any of its subsidiaries  (including,  without limitation,
any contract to which  Fusion or any of its  subsidiaries  is a party  involving
employees of Fusion);  (ii) material license agreements relating to Intellectual
Property (as defined in Section  3.21)  granting to Fusion a license to practice
technology  used in the  conduct of its  current or  planned  operations;  (iii)
contracts  granting a right of first refusal or first  negotiation for essential
properties,  services or supplies, or material sales not in the ordinary course;
(iv)   partnership  or  joint  venture   agreements;   (v)  agreements  for  the
acquisition,  sale or lease  (including  leases  in  connection  with  financing
transactions)  of any  properties  or assets of Fusion with a value in excess of
$5,000 (by  merger,  purchase or sale of assets or stock or  otherwise)  entered
into  since   inception;   (vi)  material   contracts  or  agreements  with  any
Governmental Entity; (vii) loan or credit agreements,  mortgages,  indentures or
other  agreements or instruments  evidencing (A) indebtedness for borrowed money
by Fusion or any of its  subsidiaries  or any such  agreement  pursuant to which
indebtedness  for borrowed money may be incurred  (including  guaranties) or (B)
Liens securing any such  indebtedness;  (viii) agreements that purport to limit,
curtail or restrict the ability of Fusion or any of its  subsidiaries,  or would
restrict  the  ability of Parent or any of its  subsidiaries,  to compete in any
geographic area or line of business; (ix) agreements or arrangements,  including
but not limited to hedges, options, swaps, caps and collars, designed to protect
Fusion  or any of its  subsidiaries  against  fluctuations  in  interest  rates,
currency exchange rates or the prices of certain  commodities and raw materials;
(x) to the extent not otherwise  required to be disclosed  pursuant to any other
clause of this Section  3.19(a),  contracts or agreements that would be required
to be filed as an exhibit to a Form 10-K filed by the Parent  with the SEC;  and
(xi)   commitments   and   agreements   to  enter  into  any  of  the  foregoing
(collectively,  together with any such contracts entered into in accordance with
Section 5.1 hereof,  the "Material  Contracts").  Except as set forth in Section
3.19  of  the  Fusion  Disclosure  Schedule,  neither  Fusion  nor  any  of  its
subsidiaries is a party to or bound by any severance or other agreement with any
employee  or  consultant  pursuant  to which such  person  would be  entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of (x) the consummation of the transactions  contemplated hereby or (y)
the termination of such employment or consulting following such consummation.

     (b) Each of the Material Contracts is in full force and effect. There is no
breach or default under any Material  Contract  either by Fusion or, to Fusion's
knowledge,  by any other party thereto,  and no event has occurred that with the
lapse of time or the  giving  of  notice or both  would  constitute  a breach or
default thereunder by Fusion or, to Fusion's knowledge,  any other party, except
for any such breach or default as does not or would not  reasonably  be expected
to have, individually or in the aggregate, a Material Adverse Effect on Fusion.

     (c) No party to any such Material Contract has given notice to Fusion of or
made a claim  against  Fusion with respect to any breach or default  thereunder,
except for any such  breach or default  as does not or would not  reasonably  be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Fusion.

     SECTION 3.20 Insurance. Section 3.20 of the Fusion Disclosure Schedule sets
forth a list of  insurance  policies  (including  information  on the  scope and
amount of the coverage and deductibles provided thereunder) maintained by Fusion
or any of its subsidiaries  which policies have been issued by insurers,  which,
to Fusion's knowledge,  are reputable and financially sound and provide coverage
for the  operations  conducted  by Fusion  and its  subsidiaries  of a scope and
coverage  consistent with customary industry  practice.  Fusion has delivered to
Parent a true and correct copy of the claims  history  under such  policies from
inception through the date hereof.


                                       9
<PAGE>
     SECTION 3.21 Intellectual Property.

     (a) Section 3.21 of the Fusion Disclosure Schedule sets forth a list of all
patents, patent rights, invention disclosure statements,  trademarks,  trademark
rights, trade names, trade name rights,  service marks, and all applications for
any of the foregoing,  of Fusion and its subsidiaries the absence of which would
reasonably be expected to have a Material Adverse Effect with respect to Fusion.
Except as set forth in Section 3.21 of the Fusion Disclosure  Schedule,  neither
Fusion nor any of its  subsidiaries  is entitled to receive or  obligated to pay
any royalties or similar payments in respect of Intellectual Property.

     (b) Fusion and its subsidiaries  own or possess adequate  licenses or other
valid  rights  to  use  (in  each  case,  free  and  clear  of any  Liens),  all
Intellectual  Property  (as  hereinafter  defined)  used  or  held  for  use  in
connection  with the  business  of  Fusion  and its  subsidiaries  as  currently
conducted or as  contemplated to be conducted and the absence of which ownership
or rights would  reasonably be expected to have a Material  Adverse  Effect with
respect to Fusion.

     (c) The use of any  Intellectual  Property  by Fusion and its  subsidiaries
does not infringe  on, or  otherwise  violate the rights of any person and is in
accordance  with any applicable  license  pursuant to which Fusion or any of its
subsidiaries  acquired  the  right to use any  material  Intellectual  Property,
except where the result of such infringement,  violation or failure does not and
would not,  individually  or in the aggregate,  reasonably be expected to have a
Material Adverse Effect with respect to Fusion.

     (d) No person is challenging or, to the knowledge of Fusion,  infringing on
or  otherwise  violating  any right of Fusion  or any of its  subsidiaries  with
respect to any  Intellectual  Property owned by and/or licensed to Fusion or its
subsidiaries,  except  where  the  result  of such  challenge,  infringement  or
violation does not and would not,  individually or in the aggregate,  reasonably
be expected to have a Material Adverse Effect with respect to Fusion.

     (e) Neither  Fusion nor any of its  subsidiaries  has  received  any notice
(written or otherwise)  of any assertion or claim,  pending or not, with respect
to any Intellectual  Property used by Fusion or its  subsidiaries,  except where
the result of such assertion or claim does not and would not, individually or in
the  aggregate,  reasonably be expected to have a Material  Adverse  Effect with
respect to Fusion.

     (f) No material  Intellectual  Property  owned/or licensed by Fusion or its
subsidiaries  is being used or  enforced  in a manner  that would  result in the
abandonment,  cancellation or  unenforceability  of such Intellectual  Property,
other  than  as  does  not  and  would  not  reasonably  be  expected  to  have,
individually or in the aggregate, a Material Adverse Effect on Fusion.

     For  purposes  of this  Agreement,  "Intellectual  Property"  means (i) all
trademarks,  trademark rights,  trade names, trade name rights,  trade dress and
other indications of origin, corporate names, brand names, logos,  certification
rights,  service  marks,  applications  for  trademarks  and for service  marks,
know-how and other proprietary rights and information,  the goodwill  associated
with the foregoing and  registration in any jurisdiction of, and applications in
any  jurisdictions  to  register,   the  foregoing,   including  any  extension,
modification  or  renewal  of any such  registration  or  application;  (ii) all
inventions,  discoveries  and ideas  (whether  patentable  or  unpatentable  and
whether or not  reduced to  practice),  in any  jurisdiction,  all  improvements
thereto,  and all patents,  patent rights,  applications for patents (including,
without limitation, divisions, continuations,  continuations in part and renewal
applications),  and  any  renewals,  extensions  or  reissues  thereof,  in  any
jurisdiction;  (iii) all licenses  (whether  Fusion is licensor or licensee) and
other agreements relating to any Intellectual Property described in (i) or (ii);
(iv)  nonpublic  information,  trade secrets and  confidential  information  and
rights in any jurisdiction to limit the use or disclosure thereof by any person;
(v) writings and other works, whether copyrightable or not, in any jurisdiction,
and all  registrations  or  applications  for  registration of copyrights in any
jurisdiction,  and any renewals or extensions  thereof;  (vi) all mask works and
all  applications,  registrations and renewals in connection  therewith,  in any
jurisdiction;   (vii)  all  computer   software   (including  data  and  related
documentation);  (viii) any similar intellectual property or proprietary rights;
and (ix) all copies and tangible  documentation thereof and any claims or causes
of action arising out of or relating to any infringement or  misappropriation of
any of the foregoing.


                                       10
<PAGE>
     SECTION 3.22 Year 2000.  Fusion and its subsidiaries are not subject to any
known the Year 2000 issues which,  to the  knowledge of Fusion,  are material to
Fusion and its subsidiaries,  including issues relating to internal  information
systems and process  control  risks,  embedded  circuitry  risks and third party
risks.

     SECTION 3.23 Brokers. No broker, finder or investment banker is entitled to
any brokerage,  finder's or other fee or commission or expense  reimbursement in
connection  with the  transactions  contemplated  by this  Agreement  based upon
arrangements made by and on behalf of Fusion or any of its affiliates.

     SECTION 3.24 Tax  Treatment.  Neither  Fusion nor any of its  affiliates or
stockholders  has taken or agreed to take any  action or is aware of any fact or
circumstance  that would prevent the Merger from qualifying as a  reorganization
under Section 368 of the Code.

     SECTION 3.25 Takeover Statutes.  Fusion has taken all action required to be
taken by it in order to exempt this Agreement and the transactions  contemplated
hereby from, and this Agreement and the  transactions  contemplated  hereby (the
"Covered  Transactions")  are exempt from, the requirements of any "moratorium,"
"control share," "fair price," "affiliate  transaction,"  "business combination"
or other antitakeover Laws and regulations of any state (collectively, "Takeover
Statutes"),   including,  without  limitation,  any  antitakeover  provision  in
Fusion's  articles of  incorporation or code of regulations (the "Control Shares
Acquisition Law").

     SECTION 3.26 Investment Intent; Investigation.  By execution of this Merger
Agreement  and approval of the same by the  stockholders  of Fusion,  Fusion and
each of its stockholders:

     (a) Will  acquire  the  shares  issuable  by  Parent,  except as  otherwise
permitted  hereunder,  only for  his/hers/its  own account,  for  investment and
without a view to the distribution thereof;

     (b) Has reviewed all filings of the Parent,  and IDM,  with the  Securities
and Exchange  Commission  or with other  public  agencies and has been given the
opportunity  to ask  questions of management of the Parent and IDM to the extent
he/she/it deems necessary to enter into the transactions contemplated hereby and
has the  requisite  knowledge  and  experience in financial and other matters to
make an informed decision regarding the same;

     (c)  Understands  that  he/she/it  may  sell  or  otherwise   transfer  the
Securities only if such  transaction is duly registered under the Securities Act
of 1933,  as  amended  (the  "Securities  Act"),  or  pursuant  to an opinion of
counsel,  satisfactory  to the Parent and its  counsel,  to the effect that such
sale or other  transfer  may be made in the  absence of  registration  under the
Securities Act.

     (d)  Acknowledges  that,  except  as  otherwise  permitted  hereunder,  the
certificates  representing  the  Securities  will be  legended  to  reflect  the
restrictions of Section 3.26(c), and stop transfer instructions will apply; and

     (e) Realizes  that the  Securities  are not a liquid  investment,  and that
he/she/it may lose his/her/its entire investment.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES
                            OF PARENT AND SUBSIDIARY

     Except  as set  forth in the  disclosure  schedule  delivered  by Parent to
Fusion  prior  to the  execution  of  this  Agreement  (the  "Parent  Disclosure
Schedule")  (each  Section  of  which  qualifies  the  correspondingly  numbered
representation  and warranty or covenant to the extent specified  therein),  and
qualified,  where appropriate to give effect to the IDM  Reorganization,  Parent
and the Merger Subsidiary hereby represent and warrant to Fusion as follows:


                                       11
<PAGE>

     SECTION 4.1 Organization.

     (a) Each of Parent and Merger  Subsidiary is a corporation  duly organized,
validly  existing and in good standing under the Laws of the jurisdiction of its
incorporation and has all requisite  corporate power and authority to own, lease
and operate its  properties  and to carry on its  businesses as now conducted or
proposed by Parent or the Merger  Subsidiary to be  conducted,  except where the
failure to be duly  organized,  existing  and in good  standing  or to have such
power and authority would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent or Merger Subsidiary.

     (b) Each of Parent and Merger  Subsidiary is duly qualified or licensed and
in good  standing  to do  business in each  jurisdiction  in which the  property
owned,  leased or operated by it or the nature of the  business  conducted by it
makes such qualification or licensing necessary,  except where the failure to be
so duly  qualified  or  licensed  and in good  standing  does not and  would not
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on Parent or Merger Subsidiary.

     (c) Parent has heretofore  delivered to Fusion accurate and complete copies
of the articles of incorporation  and bylaws of Parent and Merger  Subsidiary as
currently in effect.

     SECTION 4.2 Capitalization of Parent.

     (a) The authorized capital stock of the Parent consists of 7,500,000 shares
of Parent  Common  Stock,  par value $.01 per  share,  and  1,000,000  shares of
preferred stock,  par value $1.00 per share ("Parent  Preferred  Stock").  As of
August 13, 1999,  and giving  effect to the IDM  Reorganization,  (i)  3,331,085
shares of Parent Common Stock were issued and outstanding; (ii) 47,500 shares of
Parent  Common Stock were  reserved for issuance  under the Parent's  1993 Stock
Option  Plan  (the  "1993  Plan"),  of  which  40,110  shares  were  subject  to
outstanding  options;  (iii) 50,000  shares of Parent Common Stock were reserved
for issuance  pursuant to Parent's 1995 Stock Option Plan (the "1995 Plan"),  of
which 46,900 shares were subject to outstanding  options;  (iv) 1,700,000 shares
of Parent  Common Stock were  reserved for  issuance  pursuant to Parent's  1998
Stock Option Plan (the "1998 Plan"),  including  1,600,000  shares  reserved for
issuance  under the 1998 Plan  which  are  subject  to  approval  by the  Parent
stockholders  relating to an amendment to increase the shares reserved under the
1998 Plan in said amount,  of which 1,040,880 shares were subject to outstanding
options; (v) 350,000 shares were reserved for issuance to various consultants in
payment for past and future  services,  and (vi) shares of Parent  Common  Stock
were reserved and subject to issuance under various other options,  warrants and
convertible notes (the "Other  Derivative  Securities") in the amounts listed in
Section  4.2(a) of the Parent  Disclosure  Schedule.  As of the date hereof,  no
shares  of  Parent  Common  Stock  were  held in  treasury,  no shares of Parent
Preferred  Stock  are  issued  and  outstanding  and  200,000  shares  of Parent
Preferred  Stock are reserved for issuance  upon  exercise of the Parent  Rights
pursuant to the Parent Rights  Agreement.  All the outstanding  shares of Parent
Common  Stock  are,  and all  shares to be issued as part of the  Common  Merger
Consideration  will be, when issued in accordance  with the terms  hereof,  duly
authorized,  validly issued, fully paid and non-assessable.  Except as set forth
above,  and except  for the  transactions  contemplated  by this  Agreement  and
Parent's  obligations under the Parent Rights Agreement,  as of the date of this
Agreement (1) there are no shares of capital stock or other voting securities of
Parent  authorized,  issued  or  outstanding,  (2) there  are no  authorized  or
outstanding options, warrants, calls, preemptive rights,  subscriptions or other
rights, agreements, arrangements or commitments of any character relating to the
issued  or  unissued  capital  stock  or  other  voting  securities  of  Parent,
obligating Parent to issue, transfer or sell or cause to be issued,  transferred
or sold any shares of capital stock,  voting securities or other equity interest
in Parent or  securities  convertible  into or  exchangeable  for such shares or
equity interests,  or obligating Parent to grant,  extend or enter into any such
option, warrant, call,  subscription or other right,  agreement,  arrangement or
commitment,  (3) there are no outstanding  contractual  obligations of Parent to
repurchase,  redeem or otherwise acquire any capital stock of Parent.  Except as
set forth in  Section  4.2(a) of the  Parent  Disclosure  Schedule,  here are no
stockholder  agreements,  voting trusts or other agreements or understandings to
which  Parent is a party or by which it is bound  relating  to the voting of any
shares of capital stock of Parent.


                                       12
<PAGE>
     (b) All of the outstanding  capital stock of the Merger Subsidiary is owned
by  Parent  free and clear of any Lien or any other  limitation  or  restriction
(including any restriction on the right to vote or sell the same,  except as may
be  provided  as a matter  of Law).  There  are no  securities  of Parent or its
subsidiaries convertible into or exchangeable for, no options or other rights to
acquire from Parent or its subsidiaries,  and no other contract,  understanding,
arrangement or obligation (whether or not contingent) providing for the issuance
or sale,  directly  or  indirectly,  of any  capital  stock  or other  ownership
interests  in, or any  other  securities  of,  Merger  Subsidiary.  There are no
outstanding   contractual   obligations  of  Parent  or  Merger   Subsidiary  to
repurchase,  redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interests in Merger Subsidiary.

     SECTION 4.3 Authority Relative to This Agreement.

     (a) Each of Parent and the Merger  Subsidiary  has all necessary  corporate
power and authority to execute and deliver this  Agreement and to consummate the
transactions  contemplated hereby. No other corporate proceedings on the part of
Parent or the Merger  Subsidiary are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Parent  Requisite Vote (as hereinafter  defined)).  This Agreement has been duly
and validly  executed and delivered by each of Parent and the Merger  Subsidiary
and,  assuming the due  authorization,  execution and delivery hereof by Fusion,
constitutes  a valid,  legal and  binding  agreement  of each of Parent  and the
Merger Subsidiary,  enforceable against each of Parent and the Merger Subsidiary
in accordance with its terms.

                                       13
<PAGE>

     (b) The Boards of  Directors  of Parent  (the  "Parent  Board")  and Merger
Subsidiary,  and the Parent as the sole  stockholder  of the Merger  Subsidiary,
have duly and validly  authorized  the execution and delivery of this  Agreement
and the  consummation of the  transactions  contemplated  hereby,  and taken all
corporate actions required to be taken by such Boards of Directors and Parent as
the sole  stockholder  of the  Merger  Subsidiary  for the  consummation  of the
transactions.  The  affirmative  approval of the holders of Parent  Common Stock
representing a majority vote of stockholders  present at the Parent Stockholders
Meeting (as hereinafter  defined) (the "Parent Requisite Vote") is the only vote
of the holders of any class or series of capital  stock of Parent  necessary  to
approve  the items  anticipated  to be  submitted  for  approval  at the  Parent
Shareholder Meeting (as hereinafter defined).

     SECTION  4.4 SEC  Reports;  Financial  Statements.  Parent,  including  for
purposes of this  Section 4.4 IDM,  has filed all  required  forms,  reports and
documents with the SEC since January 1, 1998,  each of which has complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act,  each as in effect on the dates such forms,  reports and documents
were filed.  Parent has heretofore  provided to Fusion,  and the stockholders of
Fusion,  access to all reports,  proxy statements and other filings with the SEC
(including  any  amendments  thereto)(the  "Parent SEC  Reports").  None of such
forms,  reports or  documents,  including,  without  limitation,  any  financial
statements  or  schedules   included  or  incorporated  by  reference   therein,
contained,  when filed,  any untrue  statement of a material  fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances  under  which they were made,  not  misleading.  The  consolidated
financial  statements  included in the Parent SEC Reports complied as to form in
all material respects with applicable accounting  requirements and the published
rules and  regulations of the SEC with respect  thereto and fairly  present,  in
conformity  with GAAP on a consistent  basis  (except as may be indicated in the
notes  thereto),   the  consolidated   financial  position  of  Parent  and  its
consolidated subsidiaries as of the dates thereof and their consolidated results
of  operations  and changes in  financial  position  for the periods  then ended
(subject, in the case of the unaudited interim financial  statements,  to normal
year-end adjustments).  Since January 1, 1999, there has not been any change, or
any application or request for any change,  by Parent or any of its subsidiaries
in accounting  principles,  methods or policies for financial  accounting or Tax
purposes.

     SECTION 4.5 No Undisclosed  Liabilities.  Neither the Parent nor the Merger
Subsidiary has any  liabilities  or  obligations  of any nature,  whether or not
accrued, contingent or otherwise, and there is no existing condition,  situation
or set of  circumstances  known to Parent  which  could be expected to result in
such a liability or obligation,  except (a) liabilities or obligations reflected
in the Parent SEC Reports  filed prior to the date hereof,  (b)  liabilities  or
obligations  incurred in the ordinary  course of business which do not and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse  Effect on the Parent and (c)  liabilities  or  obligations  incurred in
connection with the transactions contemplated hereby.


                                       14
<PAGE>

     SECTION 4.6 Absence of Certain  Changes or Events.  Except as  disclosed in
the Parent SEC Reports filed prior to the date hereof or as set forth in Section
4.6 of the Parent Disclosure  Schedule,  since March 31, 1999 (a) the businesses
of the Parent and the Merger  Subsidiary  have been  conducted  in the  ordinary
course  consistent  with past  practice,  and (b) there has not been any  event,
change, occurrence or development that has had, or is reasonably likely to have,
individually  or in the  aggregate,  a Material  Adverse Effect on the Parent or
Merger Subsidiary.

     SECTION 4.7 Information Supplied. None of the information supplied or to be
supplied by Parent or the Merger  Subsidiary for inclusion or  incorporation  by
reference in the Proxy Statement will, at the date mailed to stockholders and at
the time of the Parent  Stockholder  Meeting,  contain any untrue statement of a
material fact or omit to state any material  fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances under which they are made, not misleading. If at any time prior to
the Parent  Stockholder  Meeting any event with respect to Parent,  its officers
and  directors or any of its  subsidiaries  should occur which is required to be
described in an amendment of, or a supplement  to, the Proxy  Statement,  Parent
shall  promptly so advise Fusion and such event shall be so described,  and such
amendment or  supplement  (which Fusion shall have a reasonable  opportunity  to
review)  shall  be  promptly  filed  with  the  SEC  and,  as  required  by Law,
disseminated to the  stockholders of Parent.  The Proxy Statement will comply as
to form in all material respects with the provisions of the Exchange Act and the
respective rules and regulations thereunder.

     SECTION 4.8  Consents and  Approvals;  No  Violations.  Except for filings,
permits,  authorizations,  consents and approvals as may be required under,  and
other  applicable  requirements  of, the Securities Act, the Exchange Act, state
securities  or blue sky Laws,  the filing and  recordation  of  certificates  of
merger as required by the DGCL and as otherwise  set forth in Section 4.8 to the
Parent Disclosure Schedule (the "Parent Required Approvals"),  no filing with or
notice  to,  and  no  permit,   authorization,   consent  or  approval  of,  any
Governmental Entity is necessary for the execution and delivery by Parent or the
Merger  Subsidiary of this Agreement or the consummation by Parent or the Merger
Subsidiary of the transactions  contemplated hereby, except where the failure to
obtain  such  permits,  authorizations,  consents or  approvals  or to make such
filings or give such notice do not or would not  reasonably be expected to have,
individually or in the aggregate,  a Material Adverse Effect on Parent.  Neither
the  execution,  delivery  and  performance  of this  Agreement by Parent or the
Merger Subsidiary nor the consummation by Parent or the Merger Subsidiary of the
transactions  contemplated hereby will (i) conflict with or result in any breach
of any  provision  of the  respective  articles of  incorporation  or bylaws (or
similar  governing  documents)  of Parent  or the  Merger  Subsidiary  or any of
Parent's  subsidiaries,  (ii) result in a violation or breach of, or  constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of  termination,  amendment,  cancellation  or  acceleration  or Lien)
under, any of the terms,  conditions or provisions of any note, bond,  mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which Parent or the Merger  Subsidiary or any of Parent's  subsidiaries  is a
party or by which any of them or any of their  respective  properties  or assets
may be bound  (collectively,  the "Parent and Merger Subsidiary  Agreements") or
(iii) violate any Law  applicable  to Parent or the Merger  Subsidiary or any of
Parent's subsidiaries or any of their respective properties or assets, except in
the case of (ii) or (iii) for  violations,  breaches or defaults which do not or
would not reasonably be expected to have,  individually  or in the aggregate,  a
Material Adverse Effect on Parent. Section 4.8 of the Parent Disclosure Schedule
sets forth a list of all material third party consents and approvals required to
be  obtained  under the  Parent and Merger  Subsidiary  Agreements  prior to the
consummation of the transactions contemplated by this Agreement.

     SECTION 4.9  Litigation.  Except as and to the extent  disclosed in Section
4.9 of the Parent Company Disclosure Schedule,  there is no suit, claim, action,
proceeding or investigation  pending or, to the Parent's  knowledge,  threatened
against  the  Parent  or  the  Merger  Subsidiary  or any  of  their  respective
properties  or assets  which (a) does or would  reasonably  be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Parent or (b)
as of the date hereof, questions the validity of this Agreement or any action to
be taken by the Parent in connection with the  consummation of the  transactions
contemplated  hereby or could otherwise prevent or delay the consummation of the
transactions  contemplated  by  this  Agreement.  Except  as and  to the  extent
publicly  disclosed  by the  Parent  in  Section  4.9 of the  Parent  Disclosure
Schedule,  there is no judgment,  order, writ,  injunction or decree outstanding
against the Parent or the Merger  Subsidiary  which does or would  reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Parent or the Merger Subsidiary.


                                       15
<PAGE>

     SECTION 4.10 Compliance with Applicable  Laws.  Except as and to the extent
publicly  disclosed by Parent in the Parent SEC Reports  filed prior to the date
hereof,  the  businesses  of  Parent  and the  Merger  subsidiary  are not being
conducted in violation of any Law,  ordinance or regulation of any  Governmental
Entity,  except for violations or possible violations which do not and would not
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on Parent. To Parent's  knowledge,  no investigation or review by
any  Governmental  Entity  with  respect to Parent or the Merger  subsidiary  is
pending or threatened,  nor, to Parent's knowledge,  has any Governmental Entity
indicated  an  intention to conduct the same,  other than,  in each case,  those
which Parent  reasonably  believes do not or would not reasonably be expected to
have,  individually or in the aggregate,  a Material Adverse Effect on Parent or
the Merger Subsidiary.

     SECTION  4.11  Absence of  Questionable  Payments.  Neither  Parent nor the
Merger  Subsidiary nor, to Parent's  knowledge,  any director,  officer,  agent,
employee or other  person  acting on behalf of Parent or the Merger  Subsidiary,
has used any  corporate  or other funds for  unlawful  contributions,  payments,
gifts, or entertainment, or made any unlawful expenditures relating to political
activity to government  officials or others or  established  or  maintained  any
unlawful or  unrecorded  funds in violation of Section 30A of the Exchange  Act.
Neither  Parent  nor the Merger  Subsidiary  nor,  to  Parent's  knowledge,  any
director, officer, agent, employee or other person acting on behalf of Parent or
the Merger  Subsidiary,  has accepted or received  any  unlawful  contributions,
payments, gifts, or expenditures.

     SECTION  4.12  Employee  Plans.  Except as and to the extent  disclosed  in
Section 4.12 of the Parent  Disclosure  Schedule there are no "employee  benefit
plans," as defined in Section 3(3) of ERISA, employment, executive compensation,
consulting or other  compensation  agreements,  and stock  option,  stock award,
stock  purchase  or  other  equity-based  compensation,  deferred  compensation,
severance,  salary  continuation,  life  insurance,  bonus  or  other  incentive
compensation  programs or arrangements,  and directors' benefit,  bonus or other
incentive  compensation  arrangements,  for  which  the  Parent  or  the  Merger
Subsidiary has any obligation to or liability, contingent or otherwise.

     SECTION 4.13 Material Contracts.

     (a) Section 4.13 of the Parent Disclosure Schedule sets forth a list of all
Material  Contracts (as  hereinafter  defined).  The Parent has heretofore  made
available  to Fusion true,  correct and  complete  copies of all written or oral
contracts  and  agreements  (and  all  material  amendments,  modifications  and
supplements  thereto  and  all  side  letters  to  which  Parent  or the  Merger
Subsidiary  is a  party  materially  affecting  the  obligations  of  any  party
thereunder) to which the Parent or the Merger  Subsidiary is a party or by which
any of its  properties  or assets are bound that are  material to the  business,
properties or assets of the Parent and the Merger  Subsidiary  taken as a whole,
including, without limitation, all: (i) employment, severance, personal services
or  consulting  contracts  (other than any such  contracts  that are  terminable
without penalty upon not more than 90 days notice),  and all  non-competition or
indemnification  contracts  with  current  or  former  directors,   officers  or
employees of the Parent or the Merger Subsidiary (including, without limitation,
any  contract  to which  Parent or the Merger  Subsidiary  is a party  involving
employees  of  the  Parent);   (ii)  material  license  agreements  relating  to
Intellectual  Property  granting to the Parent a license to practice  technology
used in the  conduct  of its  current  or planned  operations;  (iii)  contracts
granting a right of first refusal or first negotiation for essential properties,
services  or  supplies,  or  material  sales not in the  ordinary  course;  (iv)
partnership or joint venture  agreements;  (v)  agreements for the  acquisition,
sale or lease  (including  leases in connection with financing  transactions) of
any  properties  or assets of the  Parent  with a value in excess of $5,000  (by
merger,  purchase or sale of assets or stock or  otherwise)  entered  into since
March 31, 1999;  (vi)  material  contracts or agreements  with any  Governmental
Entity;  (vii)  loan  or  credit  agreements,  mortgages,  indentures  or  other
agreements or instruments  evidencing (A) indebtedness for borrowed money by the
Parent  or the  Merger  Subsidiary  or any  such  agreement  pursuant  to  which
indebtedness  for borrowed money may be incurred  (including  guaranties) or (B)
Liens securing any such  indebtedness;  (viii) agreements that purport to limit,
curtail or restrict the ability of the Parent or the Merger Subsidiary, or would
restrict  the  ability  of Parent or the  Merger  Subsidiary,  to compete in any
geographic area or line of business; (ix) agreements or arrangements,  including
but not limited to hedges, options, swaps, caps and collars, designed to protect
the Parent or the Merger  Subsidiary  against  fluctuations  in interest  rates,
currency exchange rates or the prices of certain  commodities and raw materials;
and  (x)  commitments  and  agreements  to  enter  into  any  of  the  foregoing
(collectively,  together with any such contracts entered into in accordance with
Section 5.1 hereof,  the "Material  Contracts").  Except as set forth in Section
4.13 of the  Parent  Disclosure  Schedule,  neither  the  Parent  nor the Merger
Subsidiary is a party to or bound by any severance or other  agreement  with any
employee  or  consultant  pursuant  to which such  person  would be  entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of (x) the consummation of the transactions  contemplated hereby or (y)
the  termination of such employment or consulting  following such  consummation.
(b) Each of the  Material  Contracts  is in full force and  effect.  There is no
breach or default  under any Material  Contract  either by the Parent or, to the
Parent's knowledge,  by any other party thereto,  and no event has occurred that
with the lapse of time or the giving of notice or both would constitute a breach
or default  thereunder  by the Parent or, to the Parent's  knowledge,  any other
party, except for any such breach or default as does not or would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Parent.

                                       16
<PAGE>

     (c) No party to any such  Material  Contract has given notice to the Parent
of or made a claim  against  the  Parent  with  respect to any breach or default
thereunder,  except  for any such  breach  or  default  as does not or would not
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse Effect on the Parent.

     SECTION 4.14 Year 2000.  Parent and its subsidiaries have developed and are
executing a plan with  respect to Year 2000  readiness  (the  "Parent  Year 2000
Plan").The  Parent Year 2000 Plan  addresses the Year 2000 issues which,  to the
knowledge  of Parent,  are  material to Parent and its  subsidiaries,  including
internal information systems and process control risks, embedded circuitry risks
and third party risks.

     SECTION 4.15 Brokers. No broker, finder or investment banker is entitled to
any  brokerage,  finder's  or other fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon arrangements made by and
on behalf of Parent or the Merger Subsidiary or any of their affiliates.

     SECTION 4.16 Tax  Treatment.  Neither  Parent nor any of its affiliates has
taken or agreed to take any action or is aware of any fact or circumstance  that
would prevent the Merger from qualifying as a  reorganization  under Section 368
of the Code.

                                    ARTICLE V

                    COVENANTS RELATED TO CONDUCT OF BUSINESS

     SECTION 5.1 Conduct of Business of Fusion.  Except as  contemplated by this
Agreement,  during the period from the date hereof to the Effective Time, Fusion
will, and will cause each of its  subsidiaries to, conduct its operations in the
ordinary and usual course of business  consistent with the Business Plan and, to
the extent consistent therewith, with no less diligence and effort than would be
applied in the absence of this  Agreement,  seek to preserve  intact its current
business  organizations,  seek to keep  available  the  service  of its  current
officers and employees and seek to preserve its  relationships  with  customers,
suppliers and others having  business  dealings with it to the end that goodwill
and ongoing  businesses  shall be  unimpaired  at the  Effective  Time.  Without
limiting the  generality  of the  foregoing,  and except as otherwise  expressly
provided in this Agreement or in Section 5.1 of the Fusion Disclosure  Schedule,
prior to the Effective Time,  neither Fusion nor any of its  subsidiaries  will,
without the prior written consent of Parent:

     (a) amend its  certificate  of  incorporation  or bylaws (or other  similar
governing instrument);

     (b)  authorize  for issuance,  issue,  sell,  deliver or agree or commit to
issue,  sell or deliver  (whether  through the  issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other  securities  convertible  into or exchangeable for any
stock or any  equity  equivalents  (including,  without  limitation,  any  stock
options  or  stock  appreciation   rights);   provided,   however,  that  it  is
specifically  contemplated  by the  Business  Plan,  and  Fusion  is  authorized
hereunder, to issue, sell, deliver or agree or commit to issue, sell or deliver,
shares of its common stock or securities  convertible  into or exchangeable  for
common stock of Fusion,  as deemed  appropriate by management of Fusion to carry
out Fusion's  Business Plan and provided  that Fusion will notify  management of
Parent prior to any such issuance or commitment to issue securities;

     (c) (i) split,  combine or reclassify any shares of its capital stock; (ii)
declare,  set aside or pay any dividend or other distribution  (whether in cash,
stock or property or any  combination  thereof) in respect of its capital stock;
(iii) make any other actual,  constructive or deemed  distribution in respect of
any shares of its capital stock or otherwise  make any payments to  stockholders
in their capacity as such; or (iv) redeem,  repurchase or otherwise  acquire any
of its securities or any securities of any of its subsidiaries;

     (d) adopt a plan of complete or partial liquidation,  dissolution,  merger,
consolidation, restructuring, recapitalization or other reorganization of Fusion
or any of its subsidiaries (other than the Merger);

                                       17
<PAGE>

     (e) alter through merger, liquidation, reorganization,  restructuring or in
any other fashion the corporate structure or ownership of any subsidiary;

     (f) (i) incur or assume any long-term or short-term  debt or issue any debt
securities, except for borrowings under existing lines of credit in the ordinary
and  usual  course  of  business  consistent  with past  practice  (ii)  assume,
guarantee,  endorse or otherwise become liable or responsible (whether directly,
contingently  or otherwise) for the  obligations of any other person,  except in
the ordinary and usual course of business  consistent with the Business Plan and
in amounts not material to Fusion and its  subsidiaries,  taken as a whole,  and
except for obligations of the wholly owned  subsidiaries  of Fusion;  (iii) make
any loans,  advances or capital  contributions  to, or investments in, any other
person (other than to the wholly owned subsidiaries of Fusion or customary loans
or advances to employees in the ordinary and usual course of business consistent
with the Business  Plan and in amounts not material to the maker of such loan or
advance); (iv) pledge or otherwise encumber shares of capital stock of Fusion or
its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible
or intangible, or create or suffer to be created any material Lien thereupon;

     (g) except as may be required by Law, enter into, adopt,  amend,  extend or
terminate any bonus, profit sharing, compensation, severance, termination, stock
option,  stock  appreciation  right,  restricted stock,  performance unit, stock
equivalent,   stock   purchase   agreement,   pension,   retirement,    deferred
compensation,  labor,  collective  bargaining,  employment,  severance  or other
employee benefit  agreement,  trust,  plan, fund, award or other arrangement for
the benefit or welfare of any  director,  officer or employee in any manner,  or
increase in any manner the  compensation  or fringe  benefits  of any  director,
officer or (except as required under agreements  existing on the date hereof and
except  for  increases  in  compensation,  bonus or other  benefits  payable  to
employees of Fusion or any of its  subsidiaries in the ordinary and usual course
of business  consistent  with the Business Plan) employee or pay any benefit not
required  by any  plan  and  arrangement  as in  effect  as of the  date  hereof
(including,  without  limitation,  the granting of stock appreciation  rights or
performance units);

     (h) acquire,  sell, lease or dispose of any assets outside the ordinary and
usual course of business  consistent  with the Business Plan or any assets which
in the aggregate are material to Fusion and its  subsidiaries  taken as a whole,
enter into any commitment or  transaction  outside the ordinary and usual course
of  business   consistent   with  the  Business  Plan  or  grant  any  exclusive
distribution rights;

     (i)  except as may be  required  as a result of a change in Law or in GAAP,
change any of the accounting principles or practices used by it;

     (j) revalue in any material respect any of its assets,  including,  without
limitation, writing down the value of inventory or writing-off notes or accounts
receivable  other than in the ordinary  and usual course of business  consistent
with Business Plan or as required by GAAP;

     (k) acquire (by merger,  consolidation,  or acquisition of stock or assets)
any corporation,  partnership or other business organization or division thereof
or any  equity  interest  therein;  (ii)  enter into any  material  contract  or
agreement,  other than in the ordinary  and usual course of business  consistent
with the  Business  Plan or amend in any  material  respect any of the  Material
Contracts or the agreements  referred to in Section 3.18; or (iii) enter into or
amend any  contract,  agreement,  commitment  or  arrangement  providing for the
taking of any action that would be prohibited hereunder;

     (l) make or  revoke  any Tax  election,  or settle  or  compromise  any Tax
liability in excess of amounts  reserved  therefor on the  consolidated  balance
sheet of Fusion as at the Audit Date, or change (or make a request to any Taxing
authority to change) any aspect of its method of accounting for Tax purposes;

     (m)  pay,  discharge  or  satisfy  any  material  claims,   liabilities  or
obligations   (absolute,   accrued,   asserted  or  unasserted,   contingent  or
otherwise),  other than the payment,  discharge or  satisfaction in the ordinary
and usual course of business consistent with the Business Plan;

     (n)  waive  the  benefits  of,  or  agree  to  modify  in any  manner,  any
confidentiality,  standstill or similar  agreement to which Fusion or any of its
subsidiaries is a party;


                                       18
<PAGE>

     (o) settle or compromise  any pending or threatened  suit,  action or claim
relating to the transactions contemplated hereby;

     (p) take any action  (including  any  action  otherwise  permitted  by this
Section  5.1) that  would  prevent or impede the  Merger  from  qualifying  as a
reorganization under Section 368(a) of the Code;

     (q) enter  into any  agreement  or  arrangement  that  limits or  otherwise
restricts  Fusion or any of its  subsidiaries  or any successor  thereto or that
could, after the Effective Time, limit or restrict the Surviving Corporation and
its affiliates  (including  Parent) or any successor  thereto,  from engaging or
competing in any line of business or in any geographic area;

     (r) take, propose to take, or agree in writing or otherwise to take, any of
the actions  described  in Sections  5.1(a)  through  5.1(q) or any action which
would (y) make any of the  representations  or warranties of Fusion contained in
this Agreement (i) which are qualified as to materiality  untrue or incorrect or
(ii) which are not so qualified  untrue or incorrect in any material  respect or
(z) result in any of the  conditions  to the  Merger  set forth in  Article  VII
hereof not being satisfied.

     SECTION  5.2 Conduct of  Business  of Parent and IDM.  Except as  otherwise
expressly  provided  in this  Agreement  or as set forth in  Section  5.2 of the
Parent Disclosure Schedule, prior to the Effective Time, neither Parent, nor IDM
nor the Merger Subsidiary will, without the prior written consent of Fusion:

     (a) amend its  certificate  of  incorporation  (or other similar  governing
instrument)  in any manner  that would be  materially  adverse to the holders of
Parent Common Stock;

     (b)  authorize  for issuance,  issue,  sell,  deliver or agree or commit to
issue,  sell or deliver  (whether  through the  issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other  securities  convertible  into or exchangeable for any
stock or any  equity  equivalents  (including,  without  limitation,  any  stock
options or stock appreciation rights);

     (c) (i)  declare,  set aside or pay any dividend or other  distribution  in
respect of its capital stock, (ii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders  in their capacity as such or (iii) redeem,  repurchase
or otherwise acquire any shares of Parent Common Stock;

     (d) take any action  (including  any  action  otherwise  permitted  by this
Section  5.2) that  would  prevent or impede the  Merger  from  qualifying  as a
reorganization under Section 368(a) of the Code; or

     (e) take, propose to take, or agree in writing or otherwise to take, any of
the actions described in Section 2.1(e) or Sections 5.2(a) through 5.2(d) or any
action which (y) would make the  representations or warranties of Parent and the
Merger  Subsidiary in this  Agreement (i) which are qualified as to  materiality
untrue or incorrect  or (ii) which are not so  qualified  untrue in any material
respect  or (z)  result  in any of the  conditions  to the  Merger  set forth in
Article VII hereof not being satisfied.

     SECTION 5.3 Access to Information.

     (a) Between the date hereof and the Effective Time, Fusion will give Parent
and the  Merger  Subsidiary  and  their  authorized  representatives  (including
counsel,  financial  advisors and  auditors)  reasonable  access  during  normal
business hours to all employees,  offices and other  facilities and to all books
and records of Fusion and its  subsidiaries,  will permit  Parent and the Merger
Subsidiary  to make such  inspections  as Parent and the Merger  Subsidiary  may
reasonably   require  and  will  cause  Fusion's   officers  and  those  of  its
subsidiaries  to furnish Parent with such financial and operating data and other
information with respect to the business, properties and personnel of Fusion and
its  subsidiaries  as  Parent  or the  Merger  Subsidiary  may from time to time
reasonably  request,  provided  that no  investigation  pursuant to this Section
5.3(a)  shall  affect  or be  deemed to  modify  any of the  representations  or
warranties made by Fusion in this Agreement.


                                       19
<PAGE>

     (b) Between the date hereof and the Effective  Time,  Parent and the Merger
Subsidiary  will  give  Fusion  and its  authorized  representatives  (including
counsel,  financial  advisors and  auditors)  reasonable  access  during  normal
business  hours  to  all  employees,   plants,  offices,  warehouses  and  other
facilities  and to all books and  records of Parent and its  subsidiaries,  will
permit Fusion to make such inspections as Fusion may reasonably require and will
cause  Parent's  officers and those of its  subsidiaries  to furnish Fusion with
such  financial and  operating  data and other  information  with respect to the
business,  properties and personnel of Parent and its subsidiaries as Fusion may
from time to time reasonably request, provided that no investigation pursuant to
this   Section   5.3(b)  shall  affect  or  be  deemed  to  modify  any  of  the
representations  or warranties  made by Parent or the Merger  Subsidiary in this
Agreement.

     (c) Between the date hereof and the Effective Time, Fusion shall furnish to
Parent and the Merger  Subsidiary,  concurrently with the deliveries  thereof to
management or Fusion Board,  such monthly  financial  statements and data as are
regularly prepared for distribution to Fusion management or the Fusion Board.

     (d) Until the Effective Time, each of Parent and the Merger Subsidiary will
hold and will cause its  authorized  representatives  to hold in confidence  all
documents and information  concerning  Fusion and its subsidiaries  furnished to
Parent or the Merger Subsidiary in connection with the transactions contemplated
by this  Agreement  except to the extent  such  documents  and  information  are
required to be disclosed by Law,  including  disclosure  required by federal and
state securities laws.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

     SECTION 6.1 Stockholder Meetings.

     (a) Fusion shall take all lawful  action to (i) cause the  stockholders  of
Fusion to execute a unanimous consent approving the terms of this Agreement,  or
(ii)  cause a special  meeting  of its  stockholders  (the  "Fusion  Stockholder
Meeting")  to be duly called and held as soon as  practicable  after the date of
this  Agreement  for the purpose of voting on the  approval and adoption of this
Agreement and (iii) solicit  proxies from its  stockholders to obtain the Fusion
Requisite Vote for the approval and adoption of this Agreement. The Fusion Board
shall  recommend  approval  and  adoption  of this  Agreement  and the Merger by
Fusion's  stockholders and the Fusion Board shall not withdraw,  amend or modify
in a manner  adverse to Parent such  recommendation  (or  announce  publicly its
intention to do so).

     (b) Parent,  as sole  stockholder  of Merger  Subsidiary,  shall  execute a
written  consent or  otherwise  take such steps as may be  necessary  to satisfy
applicable stockholder approval requirements relating to the Merger.

     (c)  Parent  and IDM shall  take all  lawful  action to (i) cause a special
meeting of the stockholders of IDM (the "Parent Stockholder Meeting") to be duly
called and held as soon as practicable  after the date of this Agreement for the
purpose of voting on the approval of the Action Items (as defined in Section 6.4
below) and (ii)  solicit  proxies from IDM's  stockholders  to obtain the Parent
Requisite  Vote.  IDM's Board shall  recommend  approval of the Action  Items by
IDM's  stockholders  and, except as required to comply with their fiduciary duty
under  applicable Law, IDM's Board shall not be permitted to withdraw,  amend or
modify in a manner adverse to Fusion such  recommendation  (or announce publicly
its intention to do so).

     SECTION 6.2 Registration of Securities to be Issued.

     (a) As soon as  practicable  after the date hereof,  Parent shall file with
the   Securities  and  Exchange   Commission  a   registration   statement  (the
"Registration  Statement") on Form S-4, or such other form as may be appropriate
for the  purpose  of  registering  the Parent  Common  Stock to be issued to the
Fusion  shareholders  pursuant to the Merger and seeking  proxies in  connection
with the vote of the  stockholders  of the  Parent  with  respect  to the Action
Items.  Parent  shall  use all  reasonable  efforts  to cause  the  Registration
Statement to become effective as soon as possible. Prior to filing, Parent shall
consult  with Fusion and provide  Fusion with a full  opportunity  to review and
comment on all  portions  of the  Prospectus/Proxy  Statement  and  Registration
Statement. Fusion shall cooperate with Parent and its counsel in the preparation
of the  Registration  Statement and shall provide all  information and documents
reasonably  requested,  including financial statements as shall be required,  in
connection with preparation of such Registration Statement.

                                       20
<PAGE>

     (b) If,  and to the extent  necessary  to  facilitate  the resale of shares
received in the Merger free of the  limitations of Rule 144 or Rule 145,  Parent
shall  file  with the SEC an  additional  registration  statement  (the  "Resale
Registration  Statement") on Form S-3, or such other form as may be appropriate,
for the purpose of  registering  the resale by  non-management  shareholders  of
Fusion of up to  7,300,000  shares of  Parent  Common  Stock to be issued in the
Merger. Parent shall use all reasonable efforts to cause the Resale Registration
Statement to become effective as soon as possible  following the Effective Time.
Fusion shall  provide a list of selling  shareholders  who desire to have shares
included  in the Resale  Registration  Statement  and Fusion,  and such  selling
shareholders,  shall  cooperate  fully  with  Parent  and  its  counsel  in  the
preparation of the Resale Registration Statement.

     SECTION 6.3 Reasonable Best Efforts. Subject to the terms and conditions of
this  Agreement,  each party will use its  reasonable  best efforts to take,  or
cause to be  taken,  all  actions  and to do,  or cause to be done,  all  things
necessary,  proper or advisable  under  applicable Laws to consummate the Merger
and the other transactions contemplated by this Agreement.

     SECTION 6.4 Action Items. The Parent's Board and IDM's board shall approve,
and submit to IDM's stockholders for approval,  a single proposal to (i) approve
the terms of the Merger; (ii) approve the terms of the IDM Reorganization; (iii)
amend the Parent  Certificate of Incorporation to increase the authorized shares
of Common  Stock of the  Parent to  100,000,000  shares;  (iv)  amend the Parent
Certificate  of  Incorporation  to decrease  the par value of the Parent  Common
Stock to $0.001 per share; (v) amend the Parent  Certificate of Incorporation to
change the name of the  Parent to a name to be  determined  by the Parent  Board
after  consultation  with  management of Fusion;  (vi) approve,  a proposal,  as
previously  approved by the  Parent's  Board,  to increase  the number of shares
reserved  for  issuance  pursuant  to  Parent's  1998 Plan by  1,600,000  shares
(collectively,  the foregoing  items (i) through (vi)  submitted for approval at
the Parent Stockholder  Meeting are referred to as the "Action Items") and (vii)
carry out such other  matters as  management  of Parent  shall  reasonably  deem
necessary.  The Action Items shall be voted on, and approved or rejected, by the
Parent stockholders as a single proposal and not individually. Joel Freedman and
Frank Falco, as the principal officers and shareholders of Parent, agree to vote
for the Action Items at the Parent Stockholder Meeting.

     SECTION 6.5. Grants of Options.  Parent's Board is specifically  authorized
under this Merger Agreement to grant  additional  options in an aggregate amount
up to the total shares reserved for issuance under Parent's 1993 Plan, 1995 Plan
and 1998 Plan, as increased.

     SECTION 6.6. Parent Directors.  On, or as soon as practical following,  the
Effective Time, Parent shall decrease the size of its board of directors to five
persons with three of such  directors to be designated by Fusion and two of such
directors to be designated by IDM.

     SECTION 6.7.  Undertakings of Fusion and Parent Relating to IDM. Parent and
Fusion  agree:  (i) to  guarantee,  for a period of three  years  following  the
Effective  Time, the salary of Joel Freedman and Frank Falco,  pursuant to their
existing employment agreements with IDM, in the amount of $50,000 per year each;
(ii) to cause fifty percent (50%) of all proceeds  received from the  conversion
or exercise of options or warrants of IDM or Parent outstanding on the Effective
Time to be  contributed  to the capital of IDM and fifty  percent  (50%) of such
proceeds to be contributed  to the capital of Fusion;  and (iii) to nominate and
recommend  the election of Joel  Freedman and Frank Falco to the board of Parent
for a minimum of five years following the Parent Stockholder Meeting.

     SECTION 6.8.  Approval of  Issuances of Shares in Payment of Expenses.  The
Parent's Board is hereby  authorized  under this Merger Agreement to issue up to
350,000  shares of Parent Common  Stock,  currently  reserved for  issuance,  in
payment of certain amounts owed by IDM to consultants and service providers.

     SECTION 6.9 No Solicitation;  Acquisition  Proposals.  From the date hereof
until the termination hereof, and except as expressly permitted by the following
provisions  of this Section 6.9,  Fusion will not, nor will it permit any of its
subsidiaries  to, nor will it  authorize  or permit  any  officer,  director  or
employee of or any investment banker,  attorney,  accountant or other advisor or
representative of, Fusion or any of its subsidiaries to, directly or indirectly,
(i) solicit,  initiate or encourage the submission of any  Acquisition  Proposal
(as  defined  in  Section  9.12(a)),  (ii)  participate  in any  discussions  or
negotiations regarding, or furnish to any person any non-public information with
respect  to  Fusion  or any of its  subsidiaries,  or take any  other  action to
facilitate,  any  Acquisition  Proposal  or any  inquiries  or the making of any
proposal  that  constitutes,  or may  reasonably  be  expected  to lead to,  any
Acquisition  Proposal  or (iii)  enter  into any  agreement  with  respect to an
Acquisition Proposal.

                                       21
<PAGE>

     SECTION 6.10 Public  Announcements.  Each of Parent,  the Merger Subsidiary
and Fusion will consult  with one another  before  issuing any press  release or
otherwise  making  any  public  statements  with  respect  to  the  transactions
contemplated by this Agreement,  including,  without limitation, the Merger, and
shall not issue any such press release or make any such public  statement  prior
to  such  consultation,  except  as  may be  required  by  applicable  Law or by
obligations  pursuant to any listing  agreement with the Nasdaq SmallCap Market,
as determined by Parent, the Merger Subsidiary or Fusion, as the case may be.

     SECTION 6.11 Notification of Certain Matters.  Fusion shall, upon obtaining
knowledge of any of the  following,  give prompt notice to Parent and the Merger
Subsidiary, and Parent and the Merger Subsidiary shall, upon obtaining knowledge
of any of the following,  give prompt notice to Fusion, of (i) the occurrence or
nonoccurrence  of any event the  occurrence or  nonoccurrence  of which would be
likely to cause any  representation  or warranty  contained  in this  Agreement,
which is  qualified  as to  materiality,  to be  untrue  or  inaccurate,  or any
representation  or warranty not so qualified,  to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (ii) any material failure of
Fusion,  Parent or the Merger Subsidiary,  as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder, (iii) the occurrence or non-occurrence of any event the occurrence
or  non-occurrence  of which  would be  likely  to cause  any  condition  to the
obligations of any party to the effect of the transactions  contemplated  hereby
not to be satisfied,  (iv) any notice of, or other communication  relating to, a
default or event  which,  with notice or lapse of time or both,  would  become a
default,  received by it or any of its  subsidiaries  subsequent  to the date of
this Agreement and prior to the Effective Time,  under any contract or agreement
material  to  the  financial  condition,  properties,   businesses,  results  of
operations or prospects of it and its subsidiaries  taken as a whole to which it
or any of its  subsidiaries  is a party or is  subject,  (v) any notice or other
communication from any Governmental  Entity in connection with the Merger,  (vi)
any  actions,   suits,   claims,   investigations   or  other   proceedings  (or
communications  indicating  that  the  same may be  contemplated)  commenced  or
threatened  against Fusion or any of its  subsidiaries  which, if pending on the
date of this Agreement, would have been required to have been disclosed pursuant
to Section 3.12 or which  relate to the  consummation  of the Merger,  (vii) any
notice or other  communication from any third party alleging that the consent of
such third  party is or may be  required  in  connection  with the  transactions
contemplated by this Agreement,  or (viii) any Material  Adverse Effect in their
respective financial condition, properties, businesses, results of operations or
prospects, taken as a whole; provided,  however, that the delivery of any notice
pursuant to this  Section 6.13 shall not cure such breach or  non-compliance  or
limit  or  otherwise  affect  the  remedies  available  hereunder  to the  party
receiving such notice.

     SECTION 6.11  Tax-Free  Reorganization  Treatment.  Fusion,  Parent and the
Merger Subsidiary shall execute and deliver to Friedman  Siegelbaum LLP, special
tax counsel to the Parent,  certificates substantially in the forms agreed to on
or prior to the date  hereof at such time or times as  reasonably  requested  by
such law firm in connection  with the delivery of an opinion with respect to the
transactions  contemplated  hereby. Prior to the Effective Time, none of Fusion,
Parent or the Merger Subsidiary shall take or cause to be taken any action which
would  cause to be untrue  (or fail to take or cause not to be taken any  action
which would cause to be untrue) any of the representations in such certificates.

     SECTION 6.12 Employee Matters.  Parent will cause the Surviving Corporation
to  honor  the  obligations  of  Fusion  or any of its  subsidiaries  under  the
provisions of all  employment,  consulting,  termination,  severance,  change in
control  and  indemnification  agreements  disclosed  in Section  6.12 of Fusion
Disclosure  Schedule between and among Fusion or any of its subsidiaries and any
current or former officer, director,  consultant or employee of Fusion or any of
its subsidiaries.

     SECTION 6.13 SEC  Filings.  Parent  shall  furnish to Fusion  copies of all
reports,  proxy  statements and  prospectuses of the type referred to in Section
4.4  which  it  files  with the SEC on or after  the  date  hereof,  and  Parent
represents  and warrants that as of the respective  dates thereof,  such reports
will not  contain  any untrue  statement  of a material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  The audited  consolidated  financial  statements  and the unaudited
consolidated  interim financial  statements  included in such reports (including
any related notes and schedules)  will fairly present the financial  position of
Parent and its consolidated Subsidiaries as of the dates thereof and the results
of  operations  and cash flows or other  information  included  therein  for the
periods  or as of the date  then  ended  (subject,  in the  case of the  interim
financial statements,  to normal, recurring year-end adjustments),  in each case
in  accordance  with past  practice  and GAAP  consistently  applied  during the
periods involved (except as otherwise disclosed in the notes thereto).

                                       22
<PAGE>

     SECTION 6.14  Listing of Stock.  Parent shall use its best efforts to cause
the shares of Parent Common Stock to be issued in connection  with the Merger to
be approved for listing on the Nasdaq SmallCap Market on or prior to the Closing
Date, subject to official notice of issuance.

     SECTION  6.15  Antitakeover  Statutes.  If any  Takeover  Statute is or may
become  applicable  to the  Merger,  each of Parent and  Fusion  shall take such
actions as are necessary so that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms  contemplated  hereby
and otherwise  act to eliminate or minimize the effects of any Takeover  Statute
on the Merger.

                                   ARTICLE VII

                    CONDITIONS TO CONSUMMATION OF THE MERGER

     SECTION 7.1  Conditions to Each Party's  Obligations  to Effect the Merger.
The  respective  obligations  of  each  party  to  consummate  the  transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following  conditions,  any or all of which may be
waived in whole or in part by the party being benefitted  thereby, to the extent
permitted by applicable Law:

     (a) This  Agreement  shall have been  approved and adopted by the unanimous
vote of the  stockholders  of Fusion  and the Merger  Subsidiary  and the Action
Items shall have been approved by the stockholders of IDM;

     (b)  There  shall not be in effect  any Law of any  Governmental  Entity of
competent   jurisdiction,   restraining,   enjoining  or  otherwise   preventing
consummation  of the  transactions  contemplated by this Agreement or permitting
such consummation only subject to any condition or restriction that has or would
reasonably be expected to have,  individually  or in the  aggregate,  a Material
Adverse  Effect on  Fusion  or Parent  and no  Governmental  Entity  shall  have
instituted any proceeding  which  continues to be pending  seeking any such Law;
and

     (c) All necessary  approvals under state  securities Laws or the Securities
Act or Exchange  Act  relating to the  issuance or trading of the Parent  Common
Stock shall have been received.

     SECTION  7.2  Conditions  to the  Obligations  of the Parent and the Merger
Subsidiary.  The respective  obligations of Parent and the Merger  Subsidiary to
consummate the  transactions  contemplated  by this Agreement are subject to the
fulfillment  at or  prior  to the  Effective  Time  of  each  of  the  following
additional  conditions,  any or all of which  may be  waived in whole or part by
Parent and the Merger Subsidiary, as the case may be, to the extent permitted by
applicable Law:

     (a) The  representations  and  warranties  of  Fusion  contained  herein or
otherwise  required  to be made  after the date  hereof  in a writing  expressly
referred to herein by or on behalf of Fusion pursuant to this Agreement,  to the
extent qualified by materiality or Material Adverse Effect, shall have been true
and, to the extent not  qualified by  materiality  or Material  Adverse  Effect,
shall have been true in all material respects, in each case when made and on and
as of the Closing  Date as though made on and as of the Closing Date (except for
representations  and warranties made as of a specified date, which need be true,
or true in all material  respects,  as the case may be, only as of the specified
date).

     (b) Fusion shall have  performed or complied in all material  respects with
all  agreements  and  conditions  contained  herein  required to be performed or
complied with by it prior to or at the time of the Closing.

     (c) Fusion shall have delivered to Parent a certificate,  dated the date of
the  Closing,  signed by the  President  or any Vice  President  of Fusion  (but
without  personal  liability  thereto),  certifying as to the fulfillment of the
conditions specified in Sections 7.2(a) and 7.2(b).

     (d) Parent shall have received an opinion of Friedman Siegelbaum LLP, dated
the  Effective  Time,  based  on  the  representations  of  Parent,  the  Merger
Subsidiary  and  Fusion,  referred  to in Section  6.11,  to the effect that the
Merger  will be treated  for Federal  income Tax  purposes  as a  reorganization
within the meaning of Section 368(a) of the Code.


                                       23
<PAGE>

     (e) (i) All authorizations,  consents or approvals of a Governmental Entity
(other than those  specified in Section  7.1(b)  hereof)  required in connection
with the execution and delivery of this  Agreement  and the  performance  of the
obligations hereunder shall have been made or obtained,  without any limitation,
restriction  or  condition  that has or would  reasonably  be  expected to have,
individually or in the aggregate, a Material Adverse Effect on Fusion or Parent,
except for such authorizations,  consents or approvals,  the failure of which to
have been made or  obtained  does not and would not  reasonably  be  expected to
have,  individually or in the aggregate,  a Material Adverse Effect on Fusion or
Parent.

          (ii)  There  shall not be pending or  threatened  by any  Governmental
     Entity any suit,  action or proceeding  (A) seeking to restrain or prohibit
     the   consummation  of  the  Merger  or  any  of  the  other   transactions
     contemplated  by this  Agreement or seeking to obtain from Fusion or Parent
     any damages  that are  material in relation to Fusion and its  subsidiaries
     taken as a whole  or  Parent  and its  subsidiaries  taken  as a whole,  as
     applicable, (B) seeking to (1) prohibit or limit the ownership or operation
     by Fusion,  Parent or any of their respective  subsidiaries of any material
     portion of the business or assets of Fusion and its subsidiaries,  taken as
     a whole, or Parent and its  subsidiaries,  taken as a whole, as applicable,
     (2)  compel  Fusion,  Parent  or any of their  respective  subsidiaries  to
     dispose of or "hold  separate"  any  material  portion of the  business  or
     assets of Fusion and its subsidiaries,  taken as a whole, or Parent and its
     subsidiaries, taken as a whole, as applicable, as a result of the Merger or
     any of the other transactions  contemplated by this Agreement or (3) impose
     any other  significant  restrictions  upon,  or the making of any  material
     accommodation  (financial  or  otherwise)  in respect of, the  transactions
     contemplated  hereby  or the  conduct  of  the  business  of the  Surviving
     Corporation  or the Parent  (including  any agreement not to compete in any
     geographic area or line of business),  (C) seeking to impose limitations on
     the  ability of Parent to  acquire  or hold,  or  exercise  full  rights of
     ownership  of,  any  shares of  capital  stock of  Fusion or the  Surviving
     Corporation,  including the right to vote the common stock of the Surviving
     Corporation,  on all matters properly  presented to the stockholders of the
     Surviving Corporation,  (D) seeking to prohibit Parent and its subsidiaries
     from  effectively  controlling  in any  material  respect  the  business or
     operations  of Fusion  and its  subsidiaries,  taken as a whole,  (E) which
     would result in the abrogation or  diminishment of any authority or license
     granted by any Governmental  Entity or (F) which otherwise could reasonably
     be expected to have a Material Adverse Effect on Fusion or Material Adverse
     Effect on Parent.

     (e) Fusion shall have  obtained (i) the consents and approvals set forth in
Sections 3.3 and 3.8 of the Fusion  Disclosure  Schedule and (ii) the consent or
approval of each person whose  consent or approval  shall be required  under any
Material  Contract,  Real Property Lease or other  obligation to which Fusion or
any of its subsidiaries is a party, except those for which the failure to obtain
such consents or approvals does not or would not reasonably be expected to have,
individually or in the aggregate,  a Material Adverse Effect on Fusion and would
not  prevent or  materially  impair  the  ability  of Fusion to  consummate  the
transactions contemplated by this Agreement.

     (f) The Board of Directors of the Parent shall have  received an opinion of
Chartered  Capital  Advisers,  Inc.,  dated the date of this  Agreement,  to the
effect that, as of such date, the terms of the Merger are fair to the Parent and
its  stockholders  from a financial  point of view and, as of the Closing  Date,
such opinion has not been withdrawn or modified in a manner adverse to Parent.

     SECTION 7.3  Conditions to the  Obligations of Fusion.  The  obligations of
Fusion to consummate the transactions contemplated by this Agreement are subject
to the  fulfillment  at or prior to the Effective  Time of each of the following
conditions,  any or all of which  may be waived in whole or in part by Fusion to
the extent permitted by applicable Law:

     (a) The  representations and warranties of Parent and the Merger Subsidiary
contained  herein or  otherwise  required  to be made after the date hereof in a
writing  expressly  referred  to herein by or on behalf of Parent and the Merger
Subsidiary pursuant to this Agreement, to the extent qualified by materiality or
Material  Adverse Effect,  shall have been true and, to the extent not qualified
by materiality or Material Adverse Effect,  shall have been true in all material
respects,  in each case when  made and on and as of the  Closing  Date as though
made on and as of the Closing Date (except for  representations  and  warranties
made as of a  specified  date,  which  need  be  true,  or true in all  material
respects, as the case may be, only as of the specified date).

     (b) Parent shall have  performed or complied in all material  respects with
all  agreements  and  conditions  contained  herein  required to be performed or
complied with by it prior to or at the time of the Closing.

                                       24
<PAGE>

     (c) Parent shall have delivered to Fusion a certificate,  dated the date of
the  Closing,  signed by the  President  or any Vice  President  of Parent  (but
without  personal  liability  thereto),  certifying as to the fulfillment of the
conditions specified in Section 7.3(a) and 7.3(b).

                                  ARTICLE VIII

                         TERMINATION; AMENDMENT; WAIVER

     SECTION  8.1  Termination  by  Mutual  Agreement.  This  Agreement  may  be
terminated  and the Merger may be abandoned  at any time prior to the  Effective
Time, whether before or after the approval of the Merger by the vote referred to
in Section  7.1(a),  by mutual written consent of Fusion and Parent by action of
their respective Boards of Directors.

     SECTION 8.2  Termination by Either Parent or Fusion.  This Agreement may be
terminated  and the Merger may be abandoned  at any time prior to the  Effective
Time by action of the Board of Directors of either Parent or Fusion if:

     (a) the Merger shall not have been  consummated by March 31, 2000,  whether
such  date is before or after  the date of  approval  of the  Merger by the vote
referred to in Section 7.1(a)(the "Termination Date");  provided,  however, that
if either  Parent or Fusion  determines  that  additional  time is  necessary in
connection  with  obtaining  any  consent,  registration,  approval,  permit  or
authorization  required  to  be  obtained  from  any  Governmental  Entity,  the
Termination  Date may be  extended  by  Parent  or  Fusion  from time to time by
written notice to the other party to a date not beyond June 30, 2000;

     (b) the  requisite  vote of the  stockholders  of IDM  shall  not have been
obtained at the Parent Stockholder Meeting or at any adjournment or postponement
thereof;

     (c) any Law  permanently  restraining,  enjoining or otherwise  prohibiting
consummation of the Merger shall become final and non-appealable (whether before
or after the approval of the Merger by the stockholders of Fusion); or

     (e) any Governmental  Entity shall have failed to issue an order, decree or
ruling or to take any other action which is necessary to fulfill the  conditions
set forth in Sections 7.1(b),  and 7.2(e),  as applicable,  and such denial of a
request to issue such order, decree, ruling or take such other action shall have
been  final  and  nonappealable;  provided,  that the  right to  terminate  this
Agreement  pursuant to this Section 8.2 shall not be available to any party that
has breached in any material respect its obligations under this Agreement in any
manner that shall have proximately  contributed to the occurrence of the failure
of the Merger to be consummated.

     SECTION 8.3 Termination by Fusion. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time,  whether before
or after  the  approval  of the  Merger by Fusion  stockholders  referred  to in
Section 7.1(a),  by action of the Fusion Board if there is a breach by Parent or
the Merger  Subsidiary of any  representation,  warranty,  covenant or agreement
contained in this Agreement that would give rise to a failure of a condition set
forth in Section  7.3(a) or 7.3(b),  which has not been cured within 15 business
days following receipt by Parent of written notice of such breach;

     SECTION 8.4 Termination by Parent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time,  whether before
or after the approval of the Merger by the Parent  Requisite Vote referred to in
Section 7.1(a) if there is a breach by Fusion of any  representation,  warranty,
covenant or  agreement  contained  in this  Agreement  that would give rise to a
failure of a condition set forth in Section 7.2(a) or 7.2(b), which has not been
cured within 15 business days  following  receipt by Fusion of written notice of
such breach


                                       25
<PAGE>

     SECTION  8.5  Effect  of  Termination  and  Abandonment.  In the  event  of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article VIII, this Agreement  (other than this Section 8.5 and Sections  5.3(d),
6.14 and Article IX) shall become void and of no effect with no liability on the
part of any  party  hereto  (or of any of its  directors,  officers,  employees,
agents,  legal  and  financial  advisors  or other  representatives);  provided,
however,  except as otherwise  provided in this Section 8.5, no such termination
shall  relieve any party hereto of any liability or damages  resulting  from (i)
any  willful  breach of any  representations  or  warranties  contained  in this
Agreement  or (ii) any breach of any  covenant or  agreement  contained  in this
Agreement.

     SECTION 8.6  Amendment.  This  Agreement  may be amended by action taken by
Fusion, Parent and the Merger Subsidiary at any time before or after approval of
the Merger by the Fusion  stockholders  and the Parent Requisite Vote but, after
any such  approval,  no amendment  shall be made which  requires the approval of
such stockholders under applicable Law without such approval. This Agreement may
not be  amended  except  by an  instrument  in  writing  signed on behalf of the
parties hereto.

     SECTION 8.7  Extension;  Waiver.  At any time prior to the Effective  Time,
each party hereto (for these purposes,  Parent and the Merger  Subsidiary  shall
together be deemed one party and Fusion shall be deemed the other party) may (i)
extend the time for the  performance of any of the  obligations or other acts of
the  other  party,  (ii)  waive  any  inaccuracies  in the  representations  and
warranties of the other party contained  herein or in any document,  certificate
or writing  delivered  pursuant  hereto,  or (iii) waive compliance by the other
party with any of the agreements or conditions  contained herein.  Any agreement
on the part of either  party  hereto to any such  extension  or waiver  shall be
valid only if set forth in an  instrument  in  writing  signed on behalf of such
party.  The failure of either party hereto to assert any of its rights hereunder
shall not constitute a waiver of such rights.

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION 9.1  Nonsurvival of  Representations  and  Warranties.  None of the
representations,  warranties,  covenants and  agreements in this Agreement or in
any exhibit,  schedule or instrument  delivered pursuant to this Agreement shall
survive  beyond the Effective  Time,  except for those  covenants and agreements
contained herein and therein that by their terms apply or are to be performed in
whole or in part after the Effective  Time and this Article IX. This Section 9.1
shall not limit any  covenant or  agreement  of the  parties  which by its terms
contemplates performance after the Effective Time.

     SECTION 9.2 Entire Agreement; Assignment.

     (a) This Agreement  constitutes  the entire  agreement  between the parties
hereto with respect to the subject  matter hereof and supersedes all other prior
agreements and  understandings,  both written and oral, between the parties with
respect to the subject matter hereof.

     (b) Neither this Agreement nor any of the rights,  interests or obligations
hereunder shall be assigned by operation of Law (including,  but not limited to,
by merger or consolidation)  or otherwise;  provided,  however,  that Fusion may
assign,  in its  sole  discretion,  any or all  of  its  rights,  interests  and
obligations  under this  Agreement  to any direct  wholly  owned  subsidiary  of
Parent,  but no such assignment shall relieve Parent or the Merger Subsidiary of
its  obligations  hereunder if such assignee does not perform such  obligations.
Any assignment in violation of the preceding  sentence shall be void. Subject to
the  preceding  sentence,  this  Agreement  will be binding  upon,  inure to the
benefit of, and be enforceable by, the parties and their  respective  successors
and assigns.

     SECTION 9.3 Notices. All notices, requests, instructions or other documents
to be given under this Agreement  shall be in writing and shall be deemed given,
(i) five  business  days  following  sending by  registered  or certified  mail,
postage prepaid,  (ii) when sent if sent by facsimile;  provided that the fax is
promptly confirmed by telephone confirmation thereof,  (iii) when delivered,  if
delivered  personally  to the  intended  recipient  and  (iv) one  business  day
following sending by overnight  delivery via a national courier service,  and in
each case, addressed to a party at the following address for such party:


                                       26
<PAGE>


    if to Parent or to Merger Subsidiary, to:   IDM Environmental Corp.
                                                396 Whitehead Avenue
                                                South River, New Jersey 08882
                                                Attn: Joel Freedman, President
                                                Facsimile: (732) 390-9545

    with a copy to:                             Vanderkam & Sanders
                                                440 Louisiana, Suite 475
                                                Houston, Texas 77002
                                                Attn: Michael Sanders, Esq.
                                                Facsimile: (713) 547-8910

    if to Fusion, to:                           Fusion Networks, Inc.
                                                8115 N. W. 29th Avenue
                                                Miami, Florida 33122
                                                Attn: Hernando Bahamon
                                                Facsimile: (305) 477-6703

    with a copy to:                             Oscar D. Folger, Esq.
                                                Fifth Avenue - 24th Floor
                                                New York, New York  10175
                                                Facsimile: (212) 697-9570

or to such  other  address  as the  person  to whom  notice  is  given  may have
previously furnished to the other in writing in the manner set forth above.

     SECTION  9.4  Governing  Law.  Except to the extent  that  Delaware  Law is
mandatorily  applicable to the Merger and for the rights of the  shareholders of
Fusion, this Agreement shall be governed by and construed in accordance with the
Laws of the State of New York,  without regard to the principles of conflicts of
Law thereof.

     SECTION 9.5  Descriptive  Headings.  The  descriptive  headings  herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

     SECTION 9.6 Parties in Interest.  This Agreement  shall be binding upon and
except as provided in Section  6.7(c)  inure solely to the benefit of each party
hereto and its  successors  and permitted  assigns,  and,  except as provided in
Section 6.7(c), nothing in this Agreement, express or implied, is intended to or
shall  confer  upon any other  person any  rights,  benefits  or remedies of any
nature whatsoever under or by reason of this Agreement.

     SECTION 9.7 Indemnification.  Each of Fusion,  Parent and Merger Subsidiary
(each,  an  "Indemnitor")  hereby jointly and severally  agrees to indemnify the
other, and their respective officers, directors, employees, attorneys and agents
(each, an "Indemnitee") and hold them harmless against and in respect of (i) any
and all loss,  liability  or damage  suffered or incurred by the  Indemnitee  by
reason of any untrue  representation,  breach of warranty or  non-fulfillment of
any  covenant  by  the  Indemnitor;   and  (ii)  any  and  all  actions,  suits,
proceedings,  claims,  demands,  assessments,  judgments,  costs  and  expenses,
including,  without limitation,  legal fees and expenses, incident to any of the
foregoing or incurred in  investigating  or  attempting  to avoid the same or to
oppose the imposition thereof, or in enforcing this indemnity.

     SECTION 9.8 Severability.  The provisions of this Agreement shall be deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or  enforceability  of the other provisions  hereof.  If any
provision of this  Agreement,  or the  application  thereof to any person or any
circumstance,  is  invalid  or  unenforceable,  (a)  a  suitable  and  equitable
provision shall be substituted  therefor in order to carry out, so far as may be
valid and  enforceable,  the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this  Agreement and the  application  of such
provision  to other  persons  or  circumstances  shall not be  affected  by such
invalidity or  unenforceability,  nor shall such invalidity or  unenforceability
affect the validity or  enforceability  of such  provision,  or the  application
thereof, in any other jurisdiction.

                                       27
<PAGE>


     SECTION 9.9 Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the  provisions of this  Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and  provisions  of this  Agreement in any court of the United  States
located in the  Southern  District of the State of New York or in New York state
court,  this being in addition to any other remedy to which they are entitled at
Law or in equity. In addition, each of the parties hereto (a) consents to submit
itself to the personal  jurisdiction  of the courts of the United States for the
Southern  District  of New York or any New York  state  court in the  event  any
dispute  arises out of this  Agreement or any of the  transactions  contemplated
hereby,  (b) agrees  that it will not  attempt to deny or defeat  such  personal
jurisdiction  by motion or other  request  for leave from any such court and (c)
agrees that it will not bring any action  relating to this  Agreement  or any of
the transactions contemplated hereby in any other court.

     SECTION 9.10  Counterparts.  This  Agreement may be executed in one or more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.

     SECTION 9.11 Interpretation.

     (a) The words "hereof," "herein" and "herewith" and words of similar import
shall,  unless  otherwise  stated,  be construed to refer to this Agreement as a
whole  and not to any  particular  provision  of this  Agreement,  and  article,
section,  paragraph,  exhibit  and  schedule  references  are to  the  articles,
sections, paragraphs,  exhibits and schedules of this Agreement unless otherwise
specified.  Whenever the words "include,"  "includes" or "including" are used in
this  Agreement,  they  shall be deemed  to be  followed  by the words  "without
limitation." All terms defined in this Agreement shall have the defined meanings
contained  herein  when  used  in any  certificate  or  other  document  made or
delivered  pursuant hereto unless  otherwise  defined  therein.  The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the  masculine  as well as to the feminine and neuter
genders of such terms. Any agreement,  instrument or statute defined or referred
to herein or in any  agreement  or  instrument  that is referred to herein means
such agreement,  instrument or statute as from time to time, amended,  qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession  of comparable  successor
statutes  and all  attachments  thereto and  instruments  incorporated  therein.
References to a person are also to its permitted successors and assigns.

     (b) The phrases "the date of this  Agreement,"  "the date hereof" and terms
of similar import,  unless the context  otherwise  requires,  shall be deemed to
refer to August 18, 1999. The phrase "made  available" in this  agreement  shall
mean that the information  referred to has been actually  delivered to the party
to whom such information is to be made available.

     (c) The parties have  participated  jointly in the negotiation and drafting
of  this  Agreement.  In the  event  an  ambiguity  or  question  of  intent  or
interpretation  arises,  this Agreement shall be construed as if drafted jointly
by the parties  and no  presumption  or burden of proof shall arise  favoring or
disfavoring  any party by virtue of the  authorship  of any  provisions  of this
Agreement.

     SECTION 9.12 Definitions.

     (a) "Acquisition  Proposal" means an inquiry,  offer or proposal  regarding
any  of  the  following  (other  than  the  transactions  contemplated  by  this
Agreement)  involving  Fusion:  (i) any merger,  consolidation,  share exchange,
recapitalization,  business combination or other similar  transaction;  (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of Fusion and its  subsidiaries,  taken as a whole,
in a single  transaction  or series of  related  transactions;  (iii) any tender
offer or exchange offer for 20 percent or more of the outstanding  Shares or the
filing of a  registration  statement  under  the  Securities  Act in  connection
therewith;  or (iv) any public announcement of a proposal,  plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.

     (b)  "beneficial  ownership" or  "beneficially  own" shall have the meaning
provided  in Section  13(d) of the  Exchange  Act and the rules and  regulations
thereunder.

                                       28
<PAGE>

     (c) "know" or "knowledge"  means,  with respect to any party, the knowledge
of such party's executive officers after due inquiry,  including inquiry of such
party's  counsel and other officers or employees of such party  responsible  for
the relevant matter.

     (d) "Material Adverse Effect" means with respect to any entity, any change,
circumstance  or effect that,  individually  or in the aggregate  with all other
changes,  circumstances and effects, is or is reasonably likely to be materially
adverse  to (i)  the  assets,  properties,  business,  condition  (financial  or
otherwise) or results of operations of such entity and its subsidiaries taken as
a whole  or (ii)  the  ability  of such  party to  consummate  the  transactions
contemplated by this Agreement.

     (e) "person" means an individual,  corporation,  limited liability company,
partnership,  association,  trust, unincorporated organization,  other entity or
group (as defined in the Exchange Act).

     (f)  "subsidiary"  means,  when  used with  reference  to any  entity,  any
corporation or other organization,  whether incorporated or unincorporated,  (i)
of which  such  party or any other  subsidiary  of such  party is a  general  or
managing  partner or (ii) the  outstanding  voting  securities  or interests of,
which  having by their terms  ordinary  voting  power to elect a majority of the
Board of Directors or others  performing  similar functions with respect to such
corporation or other organization, is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries.

     IN WITNESS  WHEREOF,  each of the parties has caused this  Agreement  to be
duly executed on its behalf as of the day and year first above written.

IDM ENVIRONMENTAL CORP.                  IDM/FNI ACQUISITION CORPORATION


By:      /S/ JOEL FREEDMAN                     By:      /S/ JOEL FREEDMAN
       -------------------------                    ----------------------------
Name:    Joel Freedman                         Name:    Joel Freedman
Title:   President and                         Title:   President and
         Chief Executive Officer                        Chief Executive Officer

IDM/FUSION HOLDINGS, INC                 FUSION NETWORKS, INC.


By:      /S/ JOEL FREEDMAN                     By:   /S/ HERNANDO BAHAMON
      -------------------------                     ----------------------------
Name:    Joel Freedman                         Name:  Hernando Bahamon
Title:   President and                         Title: President
         Chief Executive Officer