Document:

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                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

                                     among:

                             THE TITAN CORPORATION,
                             a Delaware corporation;

                          MERGER SUB ACQUISITION CORP.,
                            a California corporation;

                           VISICOM LABORATORIES, INC.
                            a California corporation;

                                       and

                CERTAIN SHAREHOLDERS OF VISICOM LABORATORIES, INC

                           ---------------------------

                           Dated as of August 7, 1998

                           ---------------------------
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                                TABLE OF CONTENTS

                                                                            PAGE

1.    DESCRIPTION OF TRANSACTION..............................................1

      1.1   Merger of Merger Sub into the Company.............................1

      1.3   Effect of the Merger..............................................2

      1.4   Closing; Effective Time...........................................2

      1.5   Articles of Incorporation and Bylaws; Directors and Officers......2

      1.6   Conversion of Shares..............................................2

      1.7   Employee Stock Options............................................3

      1.8   Closing of the Company's Transfer Books...........................4

      1.9   Exchange of Certificates..........................................4

      1.10  Dissenting Shares.................................................5

      1.11  Tax Consequences..................................................6

      1.12  Accounting Treatment..............................................6

      1.13  Further Action....................................................6

2.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................6

      2.1   Due Organization; No Subsidiaries; Etc............................7

      2.2   Articles of Incorporation and Bylaws; Records.....................7

      2.3   Capitalization, Etc...............................................8

      2.4   Financial Statements..............................................9

      2.5   Absence of Changes................................................9

      2.6   Title to Assets..................................................11

      2.7   Bank Accounts; Receivables.......................................11

      2.8   Equipment; Leasehold.............................................12

      2.9   Proprietary Assets...............................................12

      2.10  Contracts........................................................14

      2.11  Liabilities......................................................18

      2.12  Compliance with Legal Requirements...............................18

      2.13  Governmental Authorizations......................................19

      2.14  Tax Matters......................................................19

      2.15  Employee and Labor Matters; Benefit Plans........................20

      2.16  Environmental Matters............................................23

                                       i.
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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      2.17  Insurance........................................................23

      2.18  Related Party Transactions.......................................23

      2.19  Legal Proceedings; Orders........................................24

      2.20  Authority; Binding Nature of Agreement...........................24

      2.21  Non-Contravention; Consents......................................25

      2.22  Full Disclosure..................................................25

      2.23  Accounting Matters...............................................26

      2.24  Brokers..........................................................26

      2.25  Forecast.........................................................26

      2.26  Discontinued Business............................................26

      2.27  SAIC Covenant....................................................27

      2.28  Definitions......................................................27

3.    REPRESENTATIONS AND WARRANTIES OF THE INSIDER SHAREHOLDERS.............27

      3.1   Company Representations..........................................27

      3.2   No Contrary Knowledge............................................27

4.    REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB................27

      4.1   Due Organization; Etc............................................27

      4.2   Certificate of Incorporation and Bylaws..........................28

      4.3   Capitalization, Etc..............................................28

      4.4   SEC Filings; Financial Statements................................29

      4.5   Absence of Certain Changes or Events.............................29

      4.6   Liabilities......................................................29

      4.7   Compliance with Legal Requirements...............................30

      4.8   Governmental Authorizations......................................30

      4.9   Legal Proceedings; Orders........................................30

      4.10  Authority; Binding Nature of Agreement...........................31

      4.11  Valid Issuance...................................................31

      4.12  Non-Contravention; Consents......................................31

      4.13  Full Disclosure..................................................32

      4.14  Government Contracts; Government Bids............................32

                                       ii.
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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      4.15  Accounting Matters...............................................32

      4.16  Brokers..........................................................32

5.    CERTAIN COVENANTS OF THE COMPANY AND THE INSIDER SHAREHOLDERS..........33

      5.1   Access and Investigation.........................................33

      5.2   Operation of the Company's Business..............................33

      5.3   Notification; Updates to Disclosure Schedule.....................35

      5.4   No Negotiation...................................................35

6.    ADDITIONAL COVENANTS OF THE PARTIES....................................36

      6.1   Filings and Consents.............................................36

      6.2   Company Shareholders' Meeting....................................36

      6.3   Public Announcements.............................................36

      6.4   Confidentiality..................................................37

      6.5   Pooling of Interests.............................................37

      6.6   Best Efforts.....................................................37

      6.7   Registration Statement on Form S-3...............................37

      6.8   Listing on NYSE..................................................38

      6.9   Reporting of Combined Results....................................38

      6.10  Regulatory Approvals.............................................38

      6.11  Tax Matters......................................................39

      6.12  Noncompetition Agreements........................................39

      6.14  FIRPTA Matters...................................................39

      6.15  Release..........................................................39

      6.16  Exempt Transaction...............................................39

      6.17  S-8 Registration Statement.......................................39

      6.18  Tax-Free Reorganization..........................................39

7.    CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB...........40

      7.1   Accuracy of Representations......................................40

      7.2   Performance of Covenants.........................................40

      7.3   Shareholder Approval.............................................40

      7.4   Consents.........................................................40

                                      iii.
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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      7.5   Agreements and Documents.........................................40

      7.6   FIRPTA Compliance................................................42

      7.7   No Restraints....................................................42

      7.8   No Legal Proceedings.............................................42

      7.9   HSR Act..........................................................42

      7.10  Employees........................................................42

      7.11  Legends..........................................................42

      7.12  Number of Shareholders...........................................42

      7.13  Phase One Environmental Site Assessment..........................42

8.    CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.....................43

      8.1   Accuracy of Representations......................................43

      8.2   Performance of Covenants.........................................43

      8.3   Documents........................................................43

      8.4   No Restraints....................................................43

      8.5   No Legal Proceedings.............................................43

9.    TERMINATION............................................................43

      9.1   Termination Events...............................................43

      9.2   Termination Procedures...........................................44

      9.3   Effect of Termination............................................44

10.   INDEMNIFICATION, ETC...................................................44

      10.1  Survival of Representations, Etc.................................44

      10.2  Indemnification by Shareholders..................................45

      10.3  Indirect Damages.................................................46

      10.4  No Contribution..................................................46

      10.5  Interest.........................................................46

      10.6  Defense of Third Party Claims....................................46

      10.7  Exercise of Remedies by Indemnitees Other Than Parent............47

11.   MISCELLANEOUS PROVISIONS...............................................47

      11.1  Shareholders' Agent..............................................47

      11.2  Further Assurances...............................................47

                                       iv.
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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      11.3  Fees and Expenses................................................47

      11.4  Attorneys' Fees..................................................48

      11.5  Notices..........................................................48

      11.6  Confidentiality..................................................49

      11.7  Time of the Essence..............................................49

      11.8  Headings.........................................................49

      11.9  Counterparts.....................................................49

      11.10 Governing Law....................................................49

      11.11 Successors and Assigns...........................................49

      11.12 Remedies Cumulative; Specific Performance........................49

      11.13 Waiver...........................................................50

      11.14 Amendments.......................................................50

      11.15 Severability.....................................................50

      11.16 Entire Agreement.................................................50

      11.17 Construction.....................................................50

                                       v.
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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EXHIBITS
Exhibit A   -     Certain definitions

Exhibit B   -     Form of Amended and  Restated  Articles of Incorporation
                  of Surviving Corporation

Exhibit C   -     Directors and officers of Surviving Corporation

Exhibit D   -     [Reserved for Permitted Bonuses]

Exhibit E   -     Forms of tax representation letters

Exhibit F   -     Form of Noncompetition Agreement

Exhibit G   -     Form of Release

Exhibit H   -     Form of Escrow Agreement

Exhibit I   -     Form of legal opinion of Sheppard, Mullin, Richter &
                  Hampton LLP

Exhibit J   -     Form of legal opinion of Cooley Godward LLP

                                       vi.
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Table of Contents/Authorities.
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                               AGREEMENT AND PLAN
                          OF MERGER AND REORGANIZATION

      THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") is made
and entered into as of August 7, 1998, by and among THE TITAN CORPORATION, a
Delaware corporation ("Parent"); MERGER SUB ACQUISITION CORP., a California
corporation and a wholly owned subsidiary of Parent ("Merger Sub"); VISICOM
LABORATORIES, INC. CORPORATION, a California corporation (the "Company"); and
the Insider Shareholders (as defined in Section 2.28). Certain capitalized terms
used in this Agreement are defined in Exhibit A.

                                    RECITALS

      A. Parent, Merger Sub and the Company intend to effect a merger of Merger
Sub into the Company in accordance with this Agreement and the California
Corporations Code (the "Merger"). Upon consummation of the Merger, Merger Sub
will cease to exist, and the Company will become a wholly owned subsidiary of
Parent.

      B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). For accounting purposes, it is intended that the Merger be
treated as a "pooling of interests."

      C. This Agreement has been approved by the respective boards of directors
of Parent, Merger Sub and the Company.

      D. The directors and officers of the Company, including those Shareholders
with representatives on the Board of Directors of the Company and The VisiCom
Savings Plan and Trust created December 31, 1988 (the "Designated Shareholders")
own a total of 7,551,626 shares of the Common Stock (no par value) of the
Company ("Company Common Stock"). The Designated Shareholders are identified by
name in Exhibit A. Contemporaneously with the execution and delivery of this
Agreement, each Designated Shareholder is executing and delivering to Parent a
Voting Agreement of even date herewith.

                                    AGREEMENT

      The parties to this Agreement agree as follows:

1. DESCRIPTION OF TRANSACTION

      1.1 Merger of Merger Sub into the Company. Upon the terms and subject to
the conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.4), Merger Sub shall be merged with and into the Company, and the
separate existence of Merger Sub shall cease. The Company will continue as the
surviving corporation in the Merger (the "Surviving Corporation").

      1.2 [Intentionally Left Blank]

                                       1.
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      1.3 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the California Corporations
Code.

      1.4 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Parent at 10:00 a.m. on August 24, 1998, or at such other time and date as
Parent may designate upon not less than five days' prior notice to the Company
(the "Scheduled Closing Time"). (The date on which the Closing actually takes
place is referred to in this Agreement as the "Closing Date.") Contemporaneously
with or as promptly as practicable after the Closing, a properly executed
agreement of merger (or Certificate of Merger) conforming to the requirements of
the California Corporations Code shall be filed with the Secretary of State of
the State of California. The Merger shall become effective at the time such
agreement of merger, with officers' certificates, is filed with and accepted by
the Secretary of State of the State of California (the "Effective Time").

      1.5 Articles of Incorporation and Bylaws; Directors and Officers. Unless
otherwise determined by Parent and the Company prior to the Effective Time:

            (a) the Articles of Incorporation of the Surviving Corporation shall
be amended and restated as of the Effective Time to conform to Exhibit B;

            (b) the Bylaws of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the Bylaws of Merger Sub as in
effect immediately prior to the Effective Time; and

            (c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the individuals identified on
Exhibit C.

      1.6 Conversion of Shares.

            (a) Subject to Sections 1.9(c) and 1.10, at the Effective Time, by
virtue of the Merger and without any further action on the part of Parent,
Merger Sub, the Company or any shareholder of the Company:

                  (i) each share of Company Common Stock outstanding immediately
prior to the Effective Time shall be converted into the right to receive the
"Applicable Fraction" (as defined in Section 1.6(b)(i)) of a share of the common
stock (par value $.01 per share) of Parent ("Parent Common Stock"); and

                  (ii) each share of the common stock (no par value) of Merger
Sub outstanding immediately prior to the Effective Time shall be converted into
one share of common stock of the Surviving Corporation.

            (b) For purposes of this Agreement:

                  (i) The "Applicable Fraction" will equal Total Parent Shares
divided by Total Outstanding Company Shares. For this purpose, Total Parent
Shares means the Total Purchase Price as defined above divided by the Designated
Parent Share Price.

                                       2.
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                  (ii) "Debt" means any debt to third parties, including without
limitation, bank indebtedness, accrued and unpaid tax liabilities, and
obligations to reimburse any Governmental Body under a Government Contract for
disallowed payments, but excluding trade payables and accruals incurred or made
in the ordinary course of business and consistent with past practices (e.g.
payroll and commissions). Debt shall not include any actual or contingent
current or future liabilities for income Taxes accrued by the Company as of the
Closing to the extent that the Company's book net operating loss carryforwards
at Closing as determined under generally accepted accounting principles equal or
exceed such accrued Tax liability.

                  (iii) The "Designated Parent Share Price" shall be $7.00;
provided that if the average of the closing prices of Parent Common Stock on the
NYSE for the ten (10) trading days ending on trading day immediately prior to
the Closing is less than $6 per share, then the Parent Stock Price will be $6.00
per share and if the average of the closing prices for such ten (10) day period
is greater than $8 per share, then the Parent Stock Price will be $8.00.

                  (iv) "Net Debt" means Debt as of the Closing Date minus
$4,550,000.

                  (v) The "Total Outstanding Company Shares" shall be the
aggregate number of shares of Company Common Stock outstanding immediately prior
to the Effective Time (including any such shares that are subject to a
repurchase option or risk of forfeiture under any restricted stock purchase
agreement).

                  (vi) The "Total Purchase Price" shall be $25,200,000 subject
to reduction for each dollar of Net Debt in excess of $4,600,000 on the Closing
Date and subject to adjustment for all Excess Expenses.

            (c) If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company, then the shares of
Parent Common Stock issued in exchange for such shares of Company Common Stock
will also be unvested and subject to the same repurchase option, risk of
forfeiture or other condition, and the certificates representing such shares of
Parent Common Stock may accordingly be marked with appropriate legends.

      1.7 Employee Stock Options. At the Effective Time, each stock option that
is then outstanding under the Company's 1990 Stock Option Plan and 1997 Stock
Incentive Stock Plan (collectively, the "Stock Plans"), whether vested or
unvested (a "Company Option"), shall be assumed by Parent in accordance with the
terms (as in effect as of the date of this Agreement) of the Company's Stock
Plans and the stock option agreement by which such Company Option is evidenced.
All rights with respect to Company Common Stock under outstanding Company
Options shall thereupon be converted into rights with respect to Parent Common
Stock. Accordingly, from and after the Effective Time, (a) each Company Option
assumed by Parent may be exercised solely for shares of Parent Common Stock, (b)
the number of shares of Parent Common Stock subject to each such assumed Company
Option shall be equal to the number of shares of Company Common Stock that were
subject to such Company Option immediately prior to the Effective Time
multiplied by the Applicable Fraction, rounded down to the nearest whole

                                       3.
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number of shares of Parent Common Stock, (c) the per share exercise price for
the Parent Common Stock issuable upon exercise of each such assumed Company
Option shall be determined by dividing the exercise price per share of Company
Common Stock subject to such Company Option, as in effect immediately prior to
the Effective Time, by the Applicable Fraction, and rounding the resulting
exercise price up to the nearest whole cent, and (d) all restrictions on the
exercise of each such assumed Company Option shall continue in full force and
effect, and the term, exercisability and vesting schedule (subject to the
acceleration of any vesting that automatically occurs at the Effective Time by
the terms of the assumed Company Option as set forth in those certain Executive
Compensation Agreements that provide for such acceleration) and other provisions
of such Company Option shall otherwise remain unchanged; provided, however, that
each such assumed Company Option shall, in accordance with its terms, be subject
to further adjustment as appropriate to reflect any stock split, reverse stock
split, stock dividend, recapitalization or other similar transaction effected by
Parent after the Effective Time. The Company and Parent shall take all action
that may be necessary (under the Company's 1990 Stock Option Plan and 1997 Stock
Incentive Plan and otherwise) to effectuate the provisions of this Section 1.7.
Following the Closing, Parent will send to each holder of an assumed Company
Option a written notice setting forth (i) the number of shares of Parent Common
Stock subject to such assumed Company Option, and (ii) the exercise price per
share of Parent Common Stock issuable upon exercise of such assumed Company
Option.

      1.8 Closing of the Company's Transfer Books. At the Effective Time,
holders of certificates representing shares of the Company's capital stock that
were outstanding immediately prior to the Effective Time shall cease to have any
rights as Shareholders of the Company, and the stock transfer books of the
Company shall be closed with respect to all shares of such capital stock
outstanding immediately prior to the Effective Time. No further transfer of any
such shares of the Company's capital stock shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of such shares of the Company's capital
stock (a "Company Stock Certificate") is presented to the Surviving Corporation
or Parent, such Company Stock Certificate shall be canceled and shall be
exchanged as provided in Section 1.6.

      1.9 Exchange of Certificates.

            (a) At or as soon as practicable after the Effective Time, Parent,
or a transfer agent designated by Parent (the "Transfer Agent") will send to the
holders of Company Stock Certificates (i) a letter of transmittal in customary
form and containing such provisions as Parent may reasonably specify, and (ii)
instructions for use in effecting the surrender of Company Stock Certificates in
exchange for certificates representing Parent Common Stock. Upon surrender of a
Company Stock Certificate to Parent for exchange, together with a duly executed
letter of transmittal and such other documents as may be reasonably required by
Parent or the Transfer Agent, the holder of such Company Stock Certificate shall
be entitled to receive in exchange therefor a certificate representing the
number of whole shares of Parent Common Stock that such holder has the right to
receive pursuant to the provisions of this Section 1 (less any shares of Parent
Common Stock to be deposited on behalf of the Shareholders of the Company in the
Escrow Account), and the Company Stock Certificate so surrendered shall be
canceled. Until surrendered as contemplated by this Section 1.9, each Company
Stock Certificate shall be deemed, from and after the Effective Time, to
represent only the right to receive upon such

                                       4.
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surrender a certificate representing shares of Parent Common Stock (and cash in
lieu of any fractional share of Parent Common Stock) as contemplated by this
Section 1.9. If any Company Stock Certificate shall have been lost, stolen or
destroyed, Parent may, in its discretion and as a condition precedent to the
issuance of any certificate representing Parent Common Stock, require the owner
of such lost, stolen or destroyed Company Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such sum as Parent may
reasonably direct) as indemnity against any claim that may be made against
Parent or the Surviving Corporation with respect to such Company Stock
Certificate.

            (b) No dividends or other distributions declared or made with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Company Stock Certificate with
respect to the shares of Parent Common Stock represented thereby, and no cash
payment in lieu of any fractional share shall be paid to any such holder, until
such holder surrenders such Company Stock Certificate in accordance with this
Section 1.9 (at which time such holder shall be entitled to receive all such
dividends and distributions and such cash payment).

            (c) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates for any such fractional shares
shall be issued. In lieu of such fractional shares, any holder of capital stock
of the Company who would otherwise be entitled to receive a fraction of a share
of Parent Common Stock (after aggregating all fractional shares of Parent Common
Stock issuable to such holder) shall, upon surrender of such holder's Company
Stock Certificate(s), be paid in cash the dollar amount (rounded to the nearest
whole cent), without interest, determined by multiplying such fraction by the
Designated Parent Stock Price.

            (d) Parent and the Surviving Corporation (or the Transfer Agent on
their behalf) shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable to any holder or former holder of capital stock
of the Company pursuant to this Agreement such amounts as Parent or the
Surviving Corporation may be required to deduct or withhold therefrom under the
Code or under any provision of state, local or foreign tax law (or, in the
alternative, Parent or the Transfer Agent, at Parent's option may request tax
information and other documentation so no withholding is necessary). To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes under this Agreement as having been paid to the Person to whom
such amounts would otherwise have been paid.

            (e) Neither Parent nor the Surviving Corporation shall be liable to
any holder or former holder of capital stock of the Company for any shares of
Parent Common Stock (or dividends or distributions with respect thereto), or for
any cash amounts, delivered to any public official pursuant to any applicable
abandoned property, escheat or similar law.

      1.10 Dissenting Shares.

            (a) Notwithstanding anything to the contrary contained in this
Agreement, any shares of capital stock of the Company that, as of the Effective
Time, are or may become "dissenting shares" within the meaning of the Delaware
General Corporation Law or Section 1300(b) of the California Corporations Code
shall not be converted into or represent the right to

                                       5.
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receive Parent Common Stock in accordance with Section 1.6 (or cash in lieu of
fractional shares in accordance with Section 1.9(c)), and the holder or holders
of such shares shall be entitled only to such rights as may be granted to such
holder or holders in the Delaware General Corporation Law or Chapter 13 of the
California General Corporation Law; provided, however, that if the status of any
such shares as "dissenting shares" shall not be perfected, or if any such shares
shall lose their status as "dissenting shares," then, as of the later of the
Effective Time or the time of the failure to perfect such status or the loss of
such status, such shares shall automatically be converted into and shall
represent only the right to receive (upon the surrender of the certificate or
certificates representing such shares) Parent Common Stock in accordance with
Section 1.6 (and cash in lieu of fractional shares in accordance with Section
1.9(c)).

            (b) The Company shall give Parent (i) prompt notice of any written
demand received by the Company prior to the Effective Time to require the
Company to purchase shares of capital stock of the Company pursuant to the
Delaware General Corporation Law or Chapter 13 of the California General
Corporation Law and of any other demand, notice or instrument delivered to the
Company prior to the Effective Time pursuant to the Delaware or California
General Corporation Law, and (ii) the opportunity to participate in all
negotiations and proceedings with respect to any such demand, notice or
instrument. The Company shall not make any payment or settlement offer prior to
the Effective Time with respect to any such demand unless Parent shall have
consented in writing to such payment or settlement offer.

      1.11 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.

      1.12 Accounting Treatment. For accounting purposes, the Merger is intended
to be treated as a "pooling of interests."

      1.13 Further Action. If, at any time after the Effective Time, any further
action is determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation or Parent with
full right, title and possession of and to all rights and property of Merger Sub
and the Company, the officers and directors of the Surviving Corporation and
Parent shall be fully authorized (in the name of Merger Sub, in the name of the
Company and otherwise) to take such action.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      The Company represents and warrants, to and for the benefit of the
Indemnitees, except as set forth in the Disclosure Schedule prepared by the
Company and delivered by the Company to Parent as of the date of this Agreement
as follows. All references to the Company in this Section 2 refer to the Company
and each of its subsidiaries both individually and taken as a whole unless from
context, the representation and warranty relates specifically to the Company or
to one of its subsidiaries.

                                       6.
<PAGE>

      2.1 Due Organization; No Subsidiaries; Etc.

            (a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and has all
necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Company Contracts.

            (b) Except as set forth in Part 2.1 of the Disclosure Schedule, the
Company has not conducted any business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name, assumed name, trade name or other
name, other than the name "VisiCom Laboratories, Inc."

            (c) The Company is not and has not been required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction other than the jurisdictions identified in Part 2.1 of the
Disclosure Schedule, except where the failure to be so qualified, authorized,
registered or licensed has not had and will not have a Material Adverse Effect
on the Company. The Company is in good standing as a foreign corporation in each
of the jurisdictions identified in Part 2.1 of the Disclosure Schedule.

            (d) Part 2.1 of the Disclosure Schedule accurately sets forth (i)
the names of the members of the Company's board of directors, (ii) the names of
the members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.

            (e) The Company has no direct or indirect subsidiaries and does not
own any controlling interest in any Entity and, except for the equity interests
identified in Part 2.1 of the Disclosure Schedule, the Company has not, since
January 1, 1996, owned, beneficially or otherwise, any shares or other
securities of, or any direct or indirect equity interest in, any Entity. The
Company has not agreed and is not obligated to make any future investment in or
capital contribution to any Entity. The Company has not guaranteed and is not
responsible or liable for any obligation of any of the Entities in which it owns
or has owned any equity interest.

      2.2 Articles of Incorporation and Bylaws; Records. The Company has
delivered to Parent accurate and complete copies of: (1) the Company's Articles
of Incorporation and bylaws, including all amendments thereto; (2) the stock
records of the Company; and (3) except as set forth in Part 2.2 of the
Disclosure Schedule, the minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of the Shareholders of the Company, the board of directors of the
Company and all committees of the board of directors of the Company. There have
been no formal meetings or other proceedings of the Shareholders of the Company,
the board of directors of the Company or any committee of the board of directors
of the Company that are not fully reflected in such minutes or other records.
There has not been any violation of any of the provisions of the Company's
Articles of Incorporation or bylaws, and the Company has not taken any action
that is inconsistent in any material respect with any resolution adopted by the
Company's Shareholders, the Company's board of directors or any committee of the
Company's board of directors. The books of account, stock records, minute books
and other records of the Company

                                       7.
<PAGE>

are accurate, up-to-date and complete in all material respects, and have been
maintained in accordance with prudent business practices.

      2.3 Capitalization, Etc.

            (a) The authorized capital stock of the Company consists of:
20,000,000 shares of Common Stock (no par value), of which 9,214,113 shares have
been issued and are outstanding as of the date of this Agreement. All of the
outstanding shares of Company Common Stock have been duly authorized and validly
issued, and are fully paid and non-assessable. Part 2.3 of the Disclosure
Schedule provides an accurate and complete description of the terms of each
repurchase option which is held by the Company and to which any of such shares
is subject.

            (b) The Company has reserved 1,500,000 shares of Company Common
Stock for issuance under its 1990 Stock Option Plan and 1997 Stock Incentive
Plan, of which options to purchase 1,327,006 shares are outstanding as of the
date of this Agreement. Part 2.3 of the Disclosure Schedule accurately sets
forth, with respect to each Company Option that is outstanding as of the date of
this Agreement: (i) the name of the holder of such Company Option; (ii) the
total number of shares of Company Common Stock that are subject to such Company
Option and the number of shares of Company Common Stock with respect to which
such Company Option is immediately exercisable; (iii) the date on which such
Company Option was granted and the term of such Company Option; (iv) the vesting
schedule for such Company Option; (v) the exercise price per share of Company
Common Stock purchasable under such Company Option; and (vi) whether such
Company Option has been designated an "incentive stock option" as defined in
Section 422 of the Code. Except as set forth in Part 2.3 of the Disclosure
Schedule, there is no: (i) outstanding subscription, option, call, warrant or
right (whether or not currently exercisable) to acquire any shares of the
capital stock or other securities of the Company; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of the Company; (iii)
Contract under which the Company is or may become obligated to sell or otherwise
issue any shares of its capital stock or any other securities; or (iv) to the
best of the knowledge of the Company, condition or circumstance that may give
rise to or provide a basis for the assertion of a claim by any Person to the
effect that such Person is entitled to acquire or receive any shares of capital
stock or other securities of the Company.

            (c) All outstanding shares of Company Common Stock and all
outstanding Company Options, have been issued and granted in compliance with (i)
all applicable securities laws and other applicable Legal Requirements, and (ii)
all requirements set forth in applicable Contracts.

            (d) Except as set forth in Part 2.3 of the Disclosure Schedule,
since January 31, 1993, the Company has never repurchased, redeemed or otherwise
reacquired any shares of capital stock or other securities of the Company. All
securities so reacquired by the Company were reacquired in compliance with (i)
the applicable provisions of the California Corporations Code and all other
applicable Legal Requirements, and (ii) all requirements set forth in applicable
restricted stock purchase agreements and other applicable Contracts.

                                       8.
<PAGE>

            (e) All of the outstanding shares of capital stock of each of the
subsidiaries of the Company are validly issued (in compliance with all
applicable securities laws and other Legal Requirements and applicable Company
Contracts), fully paid and nonassessable and are owned beneficially and of
record by the Company, free and clear of any Encumbrance.

      2.4 Financial Statements.

            (a) The Company has delivered to Parent the following financial
statements and notes (collectively, the "Company Financial Statements"):

                  (i) The audited balance sheets of the Company as of March 28,
1997 and March 29, 1996, and the related audited income statements, statements
of Shareholders' equity and statements of cash flows of the Company for the
years then ended, together with the notes thereto and the unqualified report and
opinion of McGladrey & Pullen, LLP relating thereto; and

                  (ii) the unaudited balance sheet of the Company as of March
27, 1998, and the unaudited balance sheet of the Company as of May 22, 1998
(collectively, the "Interim Balance Sheet"), and the related unaudited income
statement of the Company for the twelve months ended March 27 1998, and the
unaudited income statement of the Company for the two-months ended May 22, 1998.

            (b) The Company Financial Statements are accurate and complete in
all material respects except as adjusted per written agreement with Parent and
present fairly the financial position of the Company as of the respective dates
thereof and the results of operations and (in the case of the financial
statements referred to in Section 2.4(a)(i)) cash flows of the Company for the
periods covered thereby. The Company Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered ("GAAP") (except that the financial
statements referred to in Section 2.4(a)(ii) do not contain footnotes and are
subject to normal and recurring year-end audit adjustments, which will not,
individually or in the aggregate, be material in magnitude). Notwithstanding the
foregoing, the reserves established for the discontinuance of certain operations
may be subject to adjustment after the Effective Time, also in accordance with
GAAP.

      2.5 Absence of Changes. Except as set forth in Part 2.5 of the Disclosure
Schedule, since March 28, 1997:

            (a) there has not been any material adverse change in the Company's
business, condition, assets, liabilities, operations, financial performance or
prospects, and, to the best of the knowledge of the Company, no event has
occurred that will, or could reasonably be expected to, have a Material Adverse
Effect on the Company;

            (b) there has not been any material loss, damage or destruction to,
or any material interruption in the use of, any of the Company's assets (whether
or not covered by insurance);

                                       9.
<PAGE>

            (c) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;

            (d) the Company has not sold, issued or authorized the issuance of
(i) any capital stock or other security (except for Company Common Stock issued
upon the exercise of outstanding Company Options), (ii) any option or right to
acquire any capital stock or any other security (except for Company Options
described in Part 2.3 of the Disclosure Schedule), or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;

            (e) the Company has not amended or waived any of its rights under,
or permitted the acceleration of vesting under, (i) any provision of its 1990
Stock Option Plan and 1997 Stock Incentive Plan, (ii) any provision of any
agreement evidencing any outstanding Company Option, or (iii) any restricted
stock purchase agreement;

            (f) there has been no amendment to the Company's Certificate of
Incorporation or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;

            (g) the Company has not formed any subsidiary or acquired any equity
interest or other interest in any other Entity;

            (h) the Company has not made any capital expenditure which, when
added to all other capital expenditures made on behalf of the Company since
March 31, 1997, exceeds $25,000;

            (i) the Company has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Contract that is or would
constitute a Material Contract (as defined in Section 2.10(a)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
such Contract;

            (j) the Company has not (i) acquired, leased or licensed any right
or other asset from any other Person, (ii) sold or otherwise disposed of, or
leased or licensed, any right or other asset to any other Person, or (iii)
waived or relinquished any right, except for immaterial rights or other
immaterial assets acquired, leased, licensed or disposed of in the ordinary
course of business and consistent with the Company's past practices;

            (k) the Company has not written off as uncollectible any account
receivable other than in the ordinary course of business and has not written off
as uncollectible any individual account receivable of $100,000 or more or
written off aggregate accounts receivable of $250,000 or more, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;

            (l) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with the Company's past practices;

                                      10.
<PAGE>

            (m) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money
except payroll advances aggregating less than $25,000, all of which were made to
non-officer employees;

            (n) the Company has not (i) established or adopted any Employee
Benefit Plan, (ii) paid any bonus or made any profit-sharing or similar payment
to, or increased the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors, officers
or employees in excess of $20,000 individually in fiscal year 1997 or in fiscal
year 1998 and $200,000 in the aggregate in either such fiscal year, or (iii)
hired any new employees since April 1, 1997;

            (o) the Company has not changed any of its methods of accounting or
accounting practices in any respect;

            (p) the Company has not made any Tax election;

            (q) the Company has not commenced or settled any Legal Proceeding;

            (r) the Company has not entered into any material transaction or
taken any other material action outside the ordinary course of business or
inconsistent with its past practices; and

            (s) the Company has not agreed or committed to take any of the
actions referred to in clauses "(c)" through "(r)" above.

      2.6 Title to Assets

            (a) The Company owns, and has good, valid and marketable title to,
all assets purported to be owned by it, including: (i) all assets reflected on
the Unaudited Interim Balance Sheet; (ii) all assets referred to as the
Company's in Parts 2.1, 2.7(b) and 2.9 of the Disclosure Schedule and all of the
Company's rights under the Contracts identified in Part 2.10 of the Disclosure
Schedule; and (iii) all other assets reflected in the Company's books and
records as being owned by the Company. Except as set forth in Part 2.6 of the
Disclosure Schedule, all of said assets are owned by the Company free and clear
of any liens or other Encumbrances, except for (x) any lien for current taxes
not yet due and payable, and (y) minor liens that have arisen in the ordinary
course of business and that do not (in any case or in the aggregate) materially
detract from the value of the assets subject thereto or materially impair the
operations of the Company.

            (b) Part 2.6 of the Disclosure Schedule identifies all assets that
are material to the business of the Company and that are being leased or
licensed to the Company.

      2.7 Bank Accounts; Receivables.

            (a) Part 2.7(a) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.

                                      11.
<PAGE>

            (b) Part 2.7(b) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of May 22, 1998. Except as set forth in Part
2.7(b) of the Disclosure Schedule, all existing accounts receivable of the
Company (including those accounts receivable reflected on the Unaudited Interim
Balance Sheet that have not yet been collected and those accounts receivable
that have arisen since May 22, 1998 and have not yet been collected) (i)
represent valid obligations of customers of the Company arising from bona fide
transactions entered into in the ordinary course of business, (ii) are current
and will be collected in full when due, without any counterclaim or set off (net
of a reasonable allowance for doubtful accounts that is adequate in accordance
with GAAP).

      2.8 Equipment; Leasehold.

            (a) All material items of equipment and other tangible assets owned
by or leased to the Company are adequate for the uses to which they are being
put, are in good condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the Company's business in the manner in which such
business is currently being conducted.

            (b) The Company does not own any real property or any interest in
real property, except for the leasehold created under the real property lease
identified in Part 2.10 of the Disclosure Schedule.

      2.9 Proprietary Assets.

            (a) Part 2.9(a)(i) of the Disclosure Schedule sets forth, with
respect to each Company Proprietary Asset registered with any Governmental Body
or for which an application has been filed with any Governmental Body, (i) a
brief description of such Proprietary Asset, and (ii) the names of the
jurisdictions covered by the applicable registration or application. Part
2.9(a)(ii) of the Disclosure Schedule identifies and provides a brief
description of all other material Company Proprietary Assets owned by the
Company. Part 2.9(a)(iii) of the Disclosure Schedule identifies and provides a
brief description of each Proprietary Asset licensed to the Company by any
Person (except for any Proprietary Asset that is licensed to the Company under
any third party software license generally available to the public at a cost of
less than $10,000), and identifies the license agreement under which such
Proprietary Asset is being licensed to the Company. Except as set forth in Part
2.9(a)(iv) of the Disclosure Schedule, the Company has good, valid and
marketable title to all of the Company Proprietary Assets identified in Parts
2.9(a)(i) and 2.9(a)(ii) of the Disclosure Schedule, free and clear of all liens
and other Encumbrances, and has a valid right (contractual or otherwise) to use
all Proprietary Assets identified in Part 2.9(a)(iii) of the Disclosure
Schedule. Except as set forth in Part 2.9(a)(v) of the Disclosure Schedule, the
Company is not obligated to make any payment to any Person for the use of any
Company Proprietary Asset. Except as set forth in Part 2.9(a)(vi) of the
Disclosure Schedule, the Company has not developed jointly with any other Person
any Company Proprietary Asset with respect to which such other Person has any
rights.

            (b) The Company has taken all commercially reasonable measures and
precautions to protect and maintain the confidentiality and secrecy of all
Company Proprietary Assets (except Company Proprietary Assets whose value would
be unimpaired by public

                                      12.
<PAGE>

disclosure) and otherwise to maintain and protect the value of all Company
Proprietary Assets. Except as set forth in Part 2.9(b) of the Disclosure
Schedule, the Company has not (other than pursuant to license agreements
identified in Part 2.10 of the Disclosure Schedule) disclosed or delivered to
any Person, or permitted the disclosure or delivery to any Person of, (i) the
source code, or any portion or aspect of the source code, of any Company
Proprietary Asset, or (ii) the object code, or any portion or aspect of the
object code, of any Company Proprietary Asset.

            (c) None of the Company Proprietary Assets infringes or conflicts
with any Proprietary Asset owned or used by any other Person except for any
inadvertent infringement of which the Company is unaware that does not impose
any material liability on Company or cause Company to spend any material amount
to replace any Proprietary Assets. The Company is not infringing,
misappropriating or making any unlawful use of, and the Company has not at any
time infringed, misappropriated or made any unlawful use of, or received any
notice or other communication (in writing or otherwise) of any actual, alleged,
possible or potential infringement, misappropriation or unlawful use of, any
Proprietary Asset owned or used by any other Person. To the best of the
knowledge of the Company, no other Person is infringing, misappropriating or
making any unlawful use of, and no Proprietary Asset owned or used by any other
Person infringes or conflicts with, any Company Proprietary Asset.

            (d) Except as set forth in Part 2.9(d) of the Disclosure Schedule:
(i) each Company Proprietary Asset conforms in all material respects with any
specification, documentation, performance standard, representation or statement
made or provided with respect thereto by or on behalf of the Company; and (ii)
there has not been any material claim by any customer or other Person alleging
that any Company Proprietary Asset (including each version thereof that has ever
been licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company, there
is no basis for any such claim. The Company has established adequate reserves on
the Unaudited Interim Balance Sheet to cover all costs associated with any
obligations that the Company may have with respect to the correction or repair
of programming errors or other defects in the Company Proprietary Assets.

            (e) The Company Proprietary Assets constitute all the Proprietary
Assets necessary to enable the Company to conduct its business in the manner in
which such business has been and is being conducted. Except as set forth in Part
2.9(e) of the Disclosure Schedule, (i) the Company has not licensed any of the
Company Proprietary Assets to any Person on an exclusive basis, and (ii) the
Company has not entered into any ` to compete or Contract limiting its ability
to exploit fully any of its Proprietary Assets or to transact business in any
market or geographical area or with any Person.

            (f) Except as set forth in Part 2.9(f) of the Disclosure Schedule:
(i) all current employees of the Company and all former employees who were hired
on or after April 1, 1992, have executed and delivered to the Company an
agreement (containing no exceptions to or exclusions from the scope of its
coverage except for prior inventions that do not conflict with the operations of
the Company's business or the use of Company assets) that is substantially
identical to the standard form of Confidential Information and Invention
Assignment Agreement previously delivered to Parent, and (ii) all current
consultants and independent contractors of the

                                      13.
<PAGE>

Company and all former consultants and independent contractors of the Company
engaged on or after April 1, 1996 (excluding bankers, accountants, lawyers and
other non-technical consultants and independent contractors) have executed and
delivered to the Company an agreement (containing no exceptions to or exclusions
from the scope of its coverage as it relates to the specific project for which
the consultant or independent contractor was hired) that is substantially
identical to the form of Consultant Confidential Information and Invention
Assignment Agreement previously delivered to Parent.

      2.10 Contracts.

            (a) Part 2.10 of the Disclosure Schedule identifies each Contract of
the Company material to the Company, including the following (to the extent
material):

                  (i) each Company Contract relating to the employment of, or
the performance of services by, any employee, consultant or independent
contractor;

                  (ii) each Company Contract relating to the acquisition,
transfer, use, development, sharing or license of any technology or any
Proprietary Asset;

                  (iii) each Company Contract imposing any material restriction
on the Company's right or ability (A) to compete with any other Person, (B) to
acquire any product or other asset or any services from any other Person, to
sell any product or other asset to or perform any services for any other Person
or to transact business or deal in any other manner with any other Person, or
(C) develop or distribute any technology;

                  (iv) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;

                  (v) each Company Contract relating to the acquisition,
issuance or transfer of any securities;

                  (vi) each Company Contract relating to the creation of any
Encumbrance with respect to any asset of the Company;

                  (vii) each Company Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;

                  (viii) each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;

                  (ix) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in Section 2.18);

                  (x) each Company Contract constituting or relating to a
Government Contract or Government Bid;

                                      14.
<PAGE>

                  (xi) any other Company Contract that was entered into outside
the ordinary course of business or was inconsistent with the Company's past
practices;

                  (xii) any other Company Contract that has a term of more than
60 days and that may not be terminated by the Company (without penalty) within
60 days after the delivery of a termination notice by the Company; and

                  (xiii) any other Company Contract that contemplates or
involves (A) the payment or delivery of cash or other consideration in an amount
or having a value in excess of $50,000 individually, or (B) the performance of
services having a value in excess of $50,000 individually.

(Contracts in the respective categories described in clauses "(i)" through
"(xiii)" above are referred to in this Agreement as "Material Company
Contracts.")

            (b) The Company has delivered to Parent accurate and complete copies
of all written Contracts identified in Part 2.10 of the Disclosure Schedule,
including all amendments thereto. Part 2.10 of the Disclosure Schedule provides
an accurate description of the terms of each Company Contract that is not in
written form. Each Contract identified in Part 2.10 of the Disclosure Schedule
is valid and in full force and effect, and, to the best of the knowledge of the
Company, is enforceable by the Company in accordance with its terms, subject to
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.

            (c) Except as set forth in Part 2.10 of the Disclosure Schedule:

                  (i) the Company has not materially violated or breached, or
committed any default under, any Company Contract, and, to the best of the
knowledge of the Company, no other Person has materially violated or breached,
or committed any default under, any Company Contract;

                  (ii) to the best of the knowledge of the Company, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) will, or could reasonably be expected to, (A) result in a
material violation or breach of any of the provisions of any Material Company
Contract, (B) give any Person the right to declare a default or exercise any
remedy under any Material Company Contract, (C) give any Person the right to
accelerate the maturity or performance of any Material Company Contract, or (D)
give any Person the right to cancel, terminate or modify any Material Company
Contract;

                  (iii) since January 1, 1997, the Company has not received any
notice or other communication regarding any actual or possible material
violation or breach of, or default under, any Company Contract; and

                  (iv) the Company has not waived any of its material rights
under any Material Company Contract.

            (d) No Person is renegotiating, or has a right pursuant to the terms
of any Material Company Contract to renegotiate, any amount paid or payable to
the Company under

                                      15.
<PAGE>

any Material Company Contract or any other material term or provision of any
Material Company Contract.

            (e) The Contracts identified in Part 2.10 of the Disclosure Schedule
collectively constitute all of the Contracts reasonably necessary to enable the
Company to conduct its business in the manner in which its business is currently
being conducted.

            (f) Part 2.10 of the Disclosure Schedule identifies and provides a
brief description of each open proposed Government Contract as to which any bid,
offer, award, written proposal, term sheet or similar document has been
submitted or received by the Company since January 1, 1997.

            (g) The Company has made available to Parent all material
documentation regarding the Company's current backlog under Company Contracts.

            (h) Except as set forth in Part 2.10(h) of the Disclosure Schedule:

                  (i) the Company has not had any determination of
noncompliance, entered into any consent order or undertaken any internal
investigation relating directly or indirectly to any Government Contract or
Government Bid;

                  (ii) the Company has complied in all material respects with
all Legal Requirements with respect to all Government Contracts and Government
Bids;

                  (iii) the Company has not, in obtaining or performing any
Government Contract, violated (A) the Truth in Negotiations Act of 1962, as
amended, (B) the Service Contract Act of 1963, as amended, (C) the Contract
Disputes Act of 1978, as amended, (D) the Office of Federal Procurement Policy
Act, as amended, (E) the Federal Acquisition Regulations (the "FAR") or any
applicable agency supplement thereto, (F) the Cost Accounting Standards, (G) the
Defense Industrial Security Manual (DOD 5220.22-M), (H) the Defense Industrial
Security Regulation (DOD 5220.22-R) or any related security regulations, or (I)
any other applicable procurement law or regulation or other Legal Requirement;

                  (iv) all facts set forth in or acknowledged by the Company in
any certification, representation or disclosure statement submitted by the
Company with respect to any Government Contract or Government Bid were current,
accurate and complete as of the date of submission;

                  (v) neither the Company nor any of its current employees has
been debarred or suspended from doing business with any Governmental Body, and,
to the best of the knowledge of the Company, no circumstances exist that would
warrant the institution of debarment or suspension proceedings against the
Company or any employee of the Company;

                  (vi) no negative determinations of responsibility have been
issued against the Company in connection with any Government Contract or
Government Bid;

                                      16.
<PAGE>

                  (vii) no material direct or indirect costs incurred by the
Company are currently being questioned or have been disallowed as a result of a
finding or determination of any kind by any Governmental Body;

                  (viii) since January 1, 1997, no Governmental Body, and no
prime contractor or higher-tier subcontractor of any Governmental Body, has
withheld or set off, or threatened to withhold or set off, any amount due to the
Company under any Government Contract;

                  (ix) to the best of the knowledge of the Company, there are
not and have not been any irregularities, misstatements or omissions relating to
any Government Contract or Government Bid that have led to or could reasonably
be expected to lead to (A) any administrative, civil, criminal or other
investigation, Legal Proceeding or indictment involving the Company or any of
its employees, (B) the questioning or disallowance of any costs submitted for
payment by the Company, except for any question that was finally resolved in the
Company's favor or any disallowance of costs for years prior to 1993, (C) the
recoupment of any payments previously made to the Company, (D) a finding or
claim of fraud, defective pricing, mischarging or improper payments on the part
of the Company, or (E) the assessment of any penalties or damages of any kind
against the Company;

                  (x) there is not and has not been any (A) outstanding claim
against the Company by, or dispute involving the Company with, any prime
contractor, subcontractor, vendor or other Person arising under or relating to
the award or performance of any Government Contract, (B) fact known by the
Company upon which any such claim could reasonably be expected to be based or
which may give rise to any such dispute, (C) receipt of notice by the Company of
any final decision of any Governmental Body against the Company;

                  (xi) the Company is not undergoing and has not undergone any
audit, and the Company has no knowledge of any basis for any impending audit,
arising under or relating to any Government Contract (other than normal routine
audits conducted in the ordinary course of business);

                  (xii) the Company has not entered into any financing
arrangement or assignment of proceeds with respect to the performance of any
Government Contract;

                  (xiii) no payment has been made by the Company or, to the best
knowledge of the Company, by any Person acting on the Company's behalf to any
Person (other than to any bona fide employee or agent (as defined in subpart 3.4
of the FAR) of the Company) which is or was contingent upon the award of any
Government Contract or which would otherwise be in violation of any applicable
procurement law or regulation or any other Legal Requirement;

                  (xiv) the Company's cost accounting system is in compliance
with applicable regulations and other applicable Legal Requirements, and the
Company has not received notice that it has been determined by any Governmental
Body not to be in compliance with any Legal Requirement;

                                      17.
<PAGE>

                  (xv) the Company has complied with all applicable regulations
and other Legal Requirements and with all applicable contractual requirements
relating to the placement of legends or restrictive markings on technical data,
computer software and other Proprietary Assets, except where any failure to do
so has not and could not reasonably be expected to have a Material Adverse
Effect on the Company;

                  (xvi) in each case in which the Company has delivered or
otherwise provided any technical data, computer software or Company Proprietary
Asset to any Governmental Body in connection with any Government Contract, the
Company has taken reasonable measures to mark such technical data, computer
software or Company Proprietary Asset with all markings and legends (including
any "restricted rights" legend and any "government purpose license rights"
legend) necessary (under the FAR or other applicable Legal Requirements) to
ensure that no Governmental Body or other Person is able to acquire any
unlimited rights with respect to such technical data, computer software or
Company Proprietary Asset;

                  (xvii) the Company has not made any disclosure to any
Governmental Body pursuant to any voluntary disclosure agreement;

                  (xviii) the Company has reached agreement with the cognizant
government representatives approving and "closing" all indirect costs charged to
Government Contracts for 1991 and 1992, and those years are closed;

                  (xix) the responsible government representatives have agreed
with the Company on the "forward pricing rates" that the Company is charging on
cost-type Government Contracts and including in Government Bids; and

                  (xx) the Company is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any
Governmental Body under or in connection with any Government Contract or
Government Bid as a result of or by virtue of (A) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, or (B) the consummation of the Merger or any of the other
transactions contemplated by this Agreement.

      2.11 Liabilities. The Company has no material accrued, contingent or other
liabilities of any nature, either matured or unmatured (whether or not required
to be reflected in financial statements in accordance with generally accepted
accounting principles, and whether due or to become due), not otherwise
reflected in the Company Financial Statements or specifically disclosed in the
Company Disclosure Schedule. None of the Legal Proceedings disclosed in any Part
of the Disclosure Schedule, either individually or in the aggregate, will result
in any material liability to the Company or its subsidiaries and the total
costs, damages and expenses incurred on the dispute with Chentel Corporation
disclosed in Part 2.19(a) including costs of defense, shall not exceed $100,000.

      2.12 Compliance with Legal Requirements. The Company is, and has at all
times since December 31, 1993 been, in compliance with all applicable Legal
Requirements, except where the failure to comply with such Legal Requirements
has not had and will not have a

                                      18.
<PAGE>

Material Adverse Effect on the Company. Except as set forth in Part 2.12 of the
Disclosure Schedule, since December 31, 1993, the Company has not received any
notice or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement, except
where the failure to comply with such notice, communication or Legal Requirement
has not had and will not have a Material Adverse Effect on the Company.

      2.13 Governmental Authorizations. The Company has all material Government
Authorizations collectively necessary to the Company to conduct its business in
the manner in which its business is currently being conducted, except where any
failure to have such Governmental Authorizations has not had and will not have a
Material Adverse Effect on the Company. All Government Authorizations of the
Company are valid and in full force and effect, except where the failure to be
valid has not had and will not have a Material Adverse Effect on the Company.
The Company is, and at all times since December 31, 1993 has been, in
substantial compliance with the terms and requirements of its material
Governmental Authorizations. Since December 31, 1993, the Company has not
received any notice or other communication from any Governmental Body regarding
(a) any actual or possible violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any such Governmental Authorization.

      2.14 Tax Matters.

            (a) All Tax Returns required to be filed by or on behalf of the
Company with any Governmental Body with respect to any taxable period ending on
or before the Closing Date (the "Company Returns") (i) have been or will be
filed on or before the applicable due date (including any extensions of such due
date), and (ii) accurately reflect in all material respects all liability of the
Company for taxes for the periods covered thereby in compliance with all
applicable Legal Requirements. All amounts shown on the Company Returns to be
due on or before the Closing Date have been or will be paid on or before the
Closing Date. The Company has delivered to Parent accurate and complete copies
of all Company Returns filed since December 31, 1990, which have been requested
by Parent.

            (b) The Company Financial Statements fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through the dates
thereof in accordance with generally accepted accounting principles. The Company
will establish, in the ordinary course of business and consistent with its past
practices, reserves adequate for the payment of all Taxes for the period from
December 31, 1990 through the Closing Date, and the Company will disclose the
dollar amount of such reserves to Parent on or prior to the Closing Date.

            (c) Except as disclosed on Part 2.14 of the Disclosure Schedule, the
Company has not received any oral or written notice or other information from
any Governmental Body that any Company Return relating to any Taxes has ever
been examined or audited by any Governmental Body. The Company has delivered to
Parent accurate and complete copies of all audit reports and similar documents
(to which the Company has access) relating to the Company Returns. Except as set
forth in Part 2.14 of the Disclosure Schedule, no extension or waiver of the
limitation period applicable to any of the Company Returns has been granted (by
the

                                      19.
<PAGE>

Company or any other Person), and no such extension or waiver has been requested
from the Company.

            (d) Except as set forth in Part 2.14 of the Disclosure Schedule, no
claim or Proceeding is pending or has been threatened against or with respect to
the Company in respect of any Tax. There are no unsatisfied liabilities for
Taxes (including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to any notice of deficiency or
similar document received by the Company with respect to any Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect
to which adequate reserves for payment have been established). There are no
liens for Taxes upon any of the assets of the Company except liens for current
Taxes not yet due and payable. The Company has not entered into or become bound
by any agreement or consent pursuant to Section 341(f) of the Code. The Company
has not been, and the Company will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods employed,
prior to the Closing.

            (e) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any amount
that would not be deductible pursuant to Section 280G or Section 162 of the
Code. The Company is not, and has never been, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.

      2.15 Employee and Labor Matters; Benefit Plans.

            (a) Part 2.15(a) of the Disclosure Schedule identifies each salary,
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance pay, termination pay, hospitalization, medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, employee welfare (as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")(a "Welfare Plan")
or employee pension benefit plan (as defined in Section 3(2) of ERISA)((a
"Pension Plan"), program or agreement (collectively, the "Plans") sponsored,
maintained, contributed to or required to be contributed to by the Company for
the benefit of any employee of the Company ("Employee"), except for Plans which
would not require the Company to make payments or provide benefits having a
value in excess of $25,000 in the aggregate.

            (b) Except as set forth in Part 2.15(a) of the Disclosure Schedule,
the Company does not maintain, sponsor or contribute to, and, to the best of the
knowledge of the Company, has not at any time in the past maintained, sponsored
or contributed to, any Pension Plans (whether or not excluded from coverage
under specific Titles or Merger Subtitles of ERISA) for the benefit of Employees
or former Employees .

            (c) The Company maintains, sponsors or contributes only to those
employee Welfare Plans, whether or not excluded from coverage under specific
Titles or Merger Subtitles

                                      20.
<PAGE>

of ERISA) for the benefit of Employees or former Employees which are described
in Part 2.15(c) of the Disclosure Schedule, none of which is a multiemployer
plan (within the meaning of Section 3(37) of ERISA).

            (d) With respect to each Plan, the Company has delivered to Parent:

                  (i) an accurate and complete copy of such Plan (including all
amendments thereto);

                  (ii) an accurate and complete copy of the annual report, if
required under ERISA, with respect to such Plan for the last two years;

                  (iii) an accurate and complete copy of the most recent summary
plan description, together with each Summary of Material Modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;

                  (iv) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;

                  (v) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-loss agreements, investment management agreements,
subscription and participation agreements and record keeping agreements; and

                  (vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).

            (e) The Company is not required to be, and, to the best of the
knowledge of the Company, has never been required to be, treated as a single
employer with any other Person under Section 4001(b)(1) of ERISA or Section
414(b), (c), (m) or (o) of the Code. The Company has never been a member of an
"affiliated service group" within the meaning of Section 414(m) of the Code. To
the best of the knowledge of the Company, the Company has never made a complete
or partial withdrawal from a multiemployer plan, as such term is defined in
Section 3(37) of ERISA, resulting in "withdrawal liability," as such term is
defined in Section 4201 of ERISA (without regard to subsequent reduction or
waiver of such liability under either Section 4207 or 4208 of ERISA).

            (f) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.

            (g) Except as set forth in Part 2.15(g) of the Disclosure Schedule,
no Welfare Plan provides death, medical or health benefits (whether or not
insured) with respect to any current or former Employee after any such
Employee's termination of service (other than (i)

                                      21.
<PAGE>

benefit coverage mandated by applicable law, including coverage provided
pursuant to Section 4980B of the Code, (ii) deferred compensation benefits
accrued as liabilities on the Unaudited Interim Balance Sheet, and (iii)
benefits the full cost of which are borne by current or former Employees (or the
Employees' beneficiaries)).

            (h) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.

            (i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.

            (j) Each of the Plans intended to be qualified under Section 401(a)
of the Code has received a favorable determination from the Internal Revenue
Service, and the Company is not aware of any reason why any such determination
letter should be revoked.

            (k) Except as set forth in Part 2.15(k) of the Disclosure Schedule,
neither the execution, delivery or performance of this Agreement, nor the
consummation of the Merger or any of the other transactions contemplated by this
Agreement, will result in any payment (including any bonus, golden parachute or
severance payment) to any current or former Employee or director of the Company
(whether or not under any Plan), or materially increase the benefits payable
under any Plan, or result in any acceleration of the time of payment or vesting
of any such benefits.

            (l) The Company has provided to Parent written documentation showing
a list of all salaried employees of the Company as of the date of this
Agreement, and correctly reflecting, in all material respects, their salaries,
any other compensation payable to them (including compensation payable pursuant
to bonus, deferred compensation or commission arrangements), their dates of
employment and their positions. The Company is not a party to any collective
bargaining contract or other Contract with a labor union involving any of its
Employees. All of the Company's employees are "at will" employees.

            (m) Part 2.15(m) of the Disclosure Schedule identifies each Employee
who is not fully available to perform work because of disability or other leave
and sets forth the basis of such leave and the anticipated date of return to
full service.

            (n) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters.

            (o) Except as set forth in Part 2.15(o) of the Disclosure Schedule,
the Company has good labor relations, and the Company does not have any reason
to believe that (i) the consummation of the Merger or any of the other
transactions contemplated by this Agreement will have a material adverse effect
on the Company's labor relations, or (ii) any of the Company's employees intends
to terminate his or her employment with the Company.

                                      22.
<PAGE>

      2.16 Environmental Matters. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law, and, to the best of the knowledge of the
Company, there are no circumstances that may prevent or interfere with the
Company's compliance with any Environmental Law in the future. To the best of
the knowledge of the Company, no current or prior owner of any property leased
or controlled by the Company has received any notice or other communication (in
writing or otherwise), whether from a Government Body, citizens group, employee
or otherwise, that alleges that such current or prior owner or the Company is
not in compliance with any Environmental Law. The Company has All Governmental
Authorizations required to comply with applicable Environmental Laws. (For
purposes of this Section 2.16: (i) "Environmental Law" means any federal, state,
local or foreign Legal Requirement relating to pollution or protection of human
health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern; and (ii) "Materials of Environmental
Concern" include chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products and any other substance that is now or
hereafter regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.)

      2.17 Insurance. Part 2.17 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder since January 1,
1993, and the Company has delivered to Parent or made available to Parent
accurate and complete copies of the insurance policies identified on Part 2.17
of the Disclosure Schedule. Each of the insurance policies identified in Part
2.17 of the Disclosure Schedule is in full force and effect. Since January 31
1993, the Company has not received any notice or other communication regarding
any actual or possible (a) cancellation or invalidation of any insurance policy,
(b) refusal of any coverage or rejection of any claim under any insurance
policy, or (c) material adjustment in the amount of the premiums payable with
respect to any insurance policy.

      2.18 Related Party Transactions. Except by virtue of being a Shareholder
of the Company or as set forth in Part 2.18 of the Disclosure Schedule: (a) no
Related Party has, and no Related Party has at any time since January 31, 1995
had, any direct or indirect interest in any material asset used in or otherwise
relating to the business of the Company; (b) no Related Party is, or has at any
time since January 31, 1995 been, indebted to the Company; (c) since January 31,
1995, no Related Party has entered into, or has had any direct or indirect
financial interest in, any material Contract, transaction or business dealing
involving the Company; (d) no Related Party is competing, or has at any time
since January 31, 1995 competed, directly or indirectly, with the Company; and
(e) no Related Party has any claim or right against the Company (other than
rights under Company Options and rights to receive compensation for services
performed as an employee of the Company). (For purposes of this Section 2.18
each of the following shall be

                                      23.
<PAGE>

deemed to be a "Related Party": (i) each of the Designated Shareholders; (ii)
each individual who is, or who has at any time since January 31, 1995 been, an
officer of the Company; (iii) each member of the immediate family of each of the
individuals referred to in clauses "(i)" and "(ii)" above; and (iv) any trust or
other Entity (other than the Company) in which any one of the individuals
referred to in clauses "(i)", "(ii)" and "(iii)" above holds (or in which more
than one of such individuals collectively hold), beneficially or otherwise, a
material voting, proprietary or equity interest.). No Related Party shall have
any liability or obligation to Parent with respect to this Section 2.18 (except
that nothing shall negate the indemnification obligations of any Shareholder who
is also a Related Person).

      2.19 Legal Proceedings; Orders.

            (a) Except as set forth in Part 2.19 of the Disclosure Schedule,
there is no pending Legal Proceeding, and (to the best of the knowledge of the
Company, no Person has threatened to commence any Legal Proceeding: (i) that
involves the Company or any of the assets owned or used by the Company or, to
the best knowledge of the Company, any Person whose liability the Company has or
may have retained or assumed, either contractually or by operation of law; or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, the Merger or any of the other
transactions contemplated by this Agreement. To the best of the knowledge of the
Company, except as set forth in Part 2.19 of the Disclosure Schedule, no event
has occurred, and no claim, dispute or other condition or circumstance exists,
that will, or that could reasonably be expected to, give rise to or serve as a
basis for the commencement of any such Legal Proceeding.

            (b) Except as set forth in Part 2.19 of the Disclosure Schedule, no
Legal Proceeding has ever been commenced by or has ever been pending against the
Company since January 1, 1997.

            (c) There is no order, writ, injunction, judgment or decree to which
the Company, or any of the assets owned or used by the Company, is subject. To
the best knowledge of the Company, none of the Insider Shareholders is subject
to any order, writ, injunction, judgment or decree that relates to the Company's
business or to any of the assets owned or used by the Company. To the best of
the knowledge of the Company, no officer or other employee of the Company is
subject to any order, writ, injunction, judgment or decree that prohibits such
officer or other employee from engaging in or continuing any conduct, activity
or practice relating to the Company's business.

      2.20 Authority; Binding Nature of Agreement. Subject to the approval of
the shareholders of the Company, the Company has the absolute and unrestricted
right, power and authority to enter into and to perform its obligations under
this Agreement; and the execution, delivery and performance by the Company of
this Agreement have been duly authorized by all necessary action on the part of
the Company and its board of directors. This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.

                                      24.
<PAGE>

      2.21 Non-Contravention; Consents. Except as set forth in Part 2.21 of the
Disclosure Schedule, neither (1) the execution, delivery or performance of this
Agreement or any of the other agreements referred to in this Agreement, nor (2)
the consummation of the Merger or any of the other transactions contemplated by
this Agreement, will directly or indirectly (with or without notice or lapse of
time):

            (a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's Articles of Incorporation or bylaws, or (ii) any
resolution adopted by the Company's Shareholders, the Company's board of
directors or any committee of the Company's board of directors;

            (b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which the Company, or any of the assets owned or used by the
Company, is subject;

            (c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any material Governmental
Authorization that is held by the Company or that otherwise relates to the
Company's business or to any of the assets owned or used by the Company;

            (d) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract; or

            (e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company).

Except as set forth in Part 2.21 of the Disclosure Schedule, the Company is not
and will not be required to make any filing with or give any notice to, or to
obtain any Consent from, any Person in connection with (x) the execution,
delivery or performance of this Agreement or any of the other agreements
referred to in this Agreement, or (y) the consummation of the Merger or any of
the other transactions contemplated by this Agreement.

      2.22 Full Disclosure.

            (a) This Agreement (including the Disclosure Schedule) does not, and
the Insider Shareholders' Closing Certificate will not, (i) contain any
representation, warranty or information that is false or misleading with respect
to any material fact, or (ii) omit to state any material fact or (iii) omit to
state any fact necessary in order to make the representations, warranties and
information contained and to be contained herein and therein (in the light of
the

                                      25.
<PAGE>

circumstances under which such representations, warranties and information were
or will be made or provided) not false or misleading.

            (b) The information in the Information Statement (as defined in
Section 6.17), other than any information supplied by Parent for inclusion in
the Information Statement, will not, as of the date of the Information Statement
or as of the date of the Company Shareholders' Meeting (as defined in Section
6.3), (i) contain any statement that is inaccurate or misleading with respect to
any material fact, (ii) omit to state any material fact; or (iii) omit to state
any fact necessary in order to make such information (in the light of the
circumstances under which it is provided) not false or misleading.

            (c) The offer given by the Company to selected shareholders of the
Company in connection with the repurchase of Company Common Stock did not and
does not (i) contain any statement that is inaccurate or misleading with respect
to any material fact, (ii) omit to state any material fact or (iii) omit to
state any fact necessary in order to make such information (in the light of the
circumstances under which it is provided) not false or misleading.

      2.23 Accounting Matters To the knowledge of the Company, neither the
Company nor any of its affiliates has taken or agreed to, or plans to, take any
action that would prevent Parent from accounting for the business combination to
be effected by the Merger as a "pooling of interests."

      2.24 Brokers. No broker, finder or financial adviser retained by the
Company is entitled to any brokerage, finder's or other fee or commission from
the Company in connection with the transactions contemplated by this Agreement;
except the Company has retained Houlihan Lokey Howard & Zukin to give fairness
opinions and valuations in connection with the Merger for a fee not to exceed
$70,000.

      2.25 Forecast. The Company has forecast that its annual revenues from
operations, as determined under generally accepted accounting principles,
consistently applied, will be $40,600,000 for its fiscal year ending March 31,
1999 and that its earnings before interest and income taxes will be at least
$4,600,000 (excluding $250,000 in general and administrative expenses which
cannot be allocated to MicroLithics under GAAP due to its discontinued status)
during the fiscal year ending March 31, 1999. To the best knowledge of the
Company, the assumptions applied in preparing the forecast appear reasonable as
of the date on which the forecast was prepared and as of date of this Agreement
and the Company had no reason to believe that the forecast cannot be achieved.

      2.26 Discontinued Business. During the fiscal year ending March 31, 1999,
before any Parent corporate allocations, cash flow generated by the operations
of the MicroLithics subsidiary shall be at least equal to the cash used in
operations, financing activities or otherwise by MicroLithics during the period
(excluding any gain on the sale of all of the stock or substantially all of the
assets of MicroLithics during the period); provided that the MicroLithics
business continues to be operated as currently operated (and, that it will be
deemed to be so operated so long as Clifton Cooke continues to serve as the
chief executive of that business unit).

                                      26.
<PAGE>

      2.27 SAIC Covenant. Company has not violated and is not currently
violating the Covenant Not to Compete or the provisions related to additional
Restricted Conduct as set forth in Sections 7.08 and 7.09, respectively, of the
Asset Purchase Agreement by and between Science Applications International
Corporation, a Delaware corporation, and Seller dated October 19, 1996 (the SAIC
Agreement") as such terms are defined in the SAIC Agreement. So long as after
the Effective Time Company remains a wholly-owned subsidiary of Parent and
substantially all of the assets of the Company are not transferred to Parent or
another Subsidiary of Parent, then Parent and each of its Subsidiaries (other
than Company or subsidiaries of the Company following the Merger) will not be
subject to or bound by the Covenant Not to Compete or the provisions related to
additional Restricted Conduct as set forth in Sections 7.08 and 7.09,
respectively, of the SAIC Agreement. This representation and warranty shall not
be deemed breached if after the consummation of the transactions contemplated by
this Agreement, Parent shall cause Company to transfer all or a portion of
Company's Business (as defined in the SAIC Agreement) to Parent or cause Company
to assign the SAIC Agreement to Parent. Notwithstanding anything to the contrary
contained herein, this representation and warranty shall expire on midnight
October 18, 1999.

      2.28 Definitions. For purposes of this Sections 2 and 3, Insider
Shareholders means Clifton L. Cooke,, Jr., Scott R. Laidig, Michael M. Mollin
and Robert A. Babbush.

3. REPRESENTATIONS AND WARRANTIES OF THE INSIDER SHAREHOLDERS

      The Insider Shareholders each represents and warrants, to and for the
benefit of the Indemnitees that to the best of his or her actual knowledge, and
based upon a review of relevant information and the records of the Company as
deemed appropriate by such Insider Shareholder, as follows:

      3.1 Company Representations The representations and warranties of the
Company contained herein (as qualified by the Company Disclosure Schedule) are
true and correct, and do not set forth facts that are false or misleading in any
material respect or omit to set forth facts that absence of which would make
such representations and warranties materially false or misleading.

      3.2 No Contrary Knowledge. Such Insider Shareholder does not know of any
facts that would, if the knowledge were attributed to the Company, make any
representation or warranty qualified as to the best knowledge of Company or
requiring disclosure of information known to Company not true and correct or
make any such representation or warranty materially false or materially
misleading.

4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

      Parent and Merger Sub jointly and severally represent and warrant to the
Company and the Insider Shareholders, except as set forth in the disclosure
schedule prepared by the Parent and delivered by the Parent to the Company on
the date of this Agreement (the "Parent Disclosure Schedule") as follows:

                                      27.
<PAGE>

      4.1 Due Organization; Etc.

            (a) Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all necessary
power and authority: (i) to conduct its business in the manner in which its
business is currently being conducted; (ii) to own and use its assets in the
manner in which its assets are currently owned and used; and (iii) to perform
its obligations under all Material Parent Contracts by which it is bound. Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of California and has all necessary power and authority:
(i) to conduct its business in the manner in which its business is currently
being conducted; (ii) to own and use its assets in the manner in which its
assets are currently owned and used.

            (b) Parent is qualified, authorized, registered or licensed to do
business as a foreign corporation in any jurisdiction where so required under
applicable law, except where the failure to be so qualified, authorized,
registered or licensed has not had and will not have a Material Adverse Effect
on Parent. Parent is in good standing as a foreign corporation in each of such
jurisdictions.

      4.2 Certificate of Incorporation and Bylaws. True, correct and complete
copies of the Certificates of Incorporation/Articles of Incorporation and
Bylaws, each as amended to date, of Parent and Merger Sub have been made
available to the Company. The Certificates of Incorporation and Articles of
Incorporation, as the case may be, and Bylaws of Parent and Merger Sub are in
full force and effect. Neither Parent nor Merger Sub is in violation of any
provision of its Certificate of Incorporation/Articles of Incorporation or
Bylaws.

      4.3 Capitalization, Etc. The authorized capital stock of Parent consists
of: (i) 45,000,000 shares of Common Stock, $.01 par value per share, of which
24,976,427 shares were issued and are outstanding as of June 29, 1998, and (ii)
2,500,000 shares of Preferred Stock, (A) 250,000 shares of which have been
designated as Series A Junior Participating Preferred Stock, none of which has
been issued, (B) 1,068,102 shares of which have been designated as $1.00
Cumulative Convertible Preferred Stock, $1.00 par value per share, of which
694,872 shares were issued and are outstanding as of May 31, 1998, and (C)
500,000 shares of which have been designated as Series B Cumulative Convertible
Redeemable Preferred Stock, all of which were issued as of January 30, 1998.
Each outstanding share of $1.00 Cumulative Convertible Preferred Stock is
convertible at any time into two-thirds (2/3) of a share of Parent's common
stock. The Series B Preferred Stock is convertible at the holder's option into
shares of Parent's common stock at a conversion price of $9.00 per share. In
November 1996, Parent issued $34,500,000 of convertible subordinated debentures.
The debentures are convertible into common stock at a conversion price of $3.50
per share. All of the outstanding shares of Parent capital stock have been duly
authorized and validly issued, and are fully paid and nonassessable, and none of
such shares is subject to any repurchase option or restriction on transfer other
than restrictions imposed by federal or state securities laws. All outstanding
shares of Parent capital stock have been issued in compliance with all
applicable securities laws and other applicable Legal Requirements, and all
requirements set forth in applicable Contracts. All of the outstanding shares of
capital stock of Merger Sub are owned beneficially and of record by Parent, free
and clear of any Encumbrances and were issued in compliance with all applicable
securities laws and other applicable Legal Requirements. Parent has outstanding
options to

                                      28.
<PAGE>

purchase 3,019,522 shares of common stock as of June 30, 1998, with exercise
prices ranging between $2.625 to $9.50. In addition, Parent has issued 100,000
warrants to acquire common stock at an exercise price of $3.50 per share. Parent
has entered into Agreement and Plan of Reorganization dated as of June 30, 1998
with Delsys Merger Corp. and Delfin Systems, Inc pursuant to which Parent
estimates that it will issue approximately 3,129,400 shares of Parent Common
Stock and assume options to acquire approximately 728,500 of Parent Common
Stock. The shares of Parent Common Stock to be issued to the Company's
shareholders in the Merger, when issued by Parent in accordance with the terms
of this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, will be issued in compliance with applicable federal and state
securities laws and, except for the restrictions imposed by applicable federal
and state securities laws, will be free and clear of any Encumbrances created or
imposed, directly or indirectly, by Parent (subject to the terms of Affiliate
Agreements entered into as contemplated by this Agreement).

      4.4 SEC Filings; Financial Statements.

            (a) Parent has delivered or made available to the Company accurate
and complete copies (excluding copies of exhibits) of each report, registration
statement (on a form other than Form S-8) in the pre- or post-effective
amendment declared effective by the SEC (excluding copies of all registration
statements or amendments filed by Parent that were amended or superseded before
being declared effective) and definitive proxy statement filed by Parent with
the SEC between January 1, 1997 and the date of this Agreement (the "Parent SEC
Documents"). As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing): (i) each of the Parent SEC Documents complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

            (b) The consolidated financial statements contained in the Parent
SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered, except as may be indicated in
the notes to such financial statements and (in the case of unaudited statements)
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to year-end audit
adjustments; and (iii) fairly present the consolidated financial position of
Parent and its subsidiaries as of the respective dates thereof and the
consolidated results of operations of Parent and its subsidiaries for the
periods covered thereby.

      4.5 Absence of Certain Changes or Events. Since December 31, 1997, there
has not been (a) any change, or any development or combination of developments,
that has had or would reasonably be expected to have a Material Adverse Effect
on Parent, or (b) any damage, destruction or loss, whether or not covered by
insurance, that has had or would reasonably be expected to have a Material
Adverse Effect on Parent.

                                      29.
<PAGE>

      4.6 Liabilities. Parent is not aware of any material accrued, contingent
or other liabilities of any nature, either matured or unmatured (whether or not
required to be reflected in financial statements in accordance with generally
accepted accounting principles, and whether due or to become due), including,
without limitation, liabilities under environmental laws, liabilities for taxes
or liabilities for infringement of Proprietary Assets of other Persons, not
otherwise reflected in Parent SEC Documents or specifically disclosed in the
Parent Disclosure Schedule other than obligations under contracts entered into
in the ordinary course of business that are not expected to have a Material
Adverse Effect on Parent.

      4.7 Compliance with Legal Requirements. Parent and Merger Sub is, and has
at all times since December 31, 1993 been, in compliance with all applicable
Legal Requirements, except where the failure to comply with such Legal
Requirements has not had and will not have a Material Adverse Effect on Parent.
Except as set forth in Part 4.7 of the Parent Disclosure Schedule, since
December 31, 1993, each of Parent and Merger Sub has not received any notice or
other communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any Legal Requirements, except where
the failure to comply with such Legal Requirements has not had and will not have
a Material Adverse Effect on Parent.

      4.8 Governmental Authorizations. The Governmental Authorizations held by
Parent are valid and in full force and effect, and collectively constitute all
Governmental Authorizations necessary to enable each of the Acquiring
Corporations to conduct its business in the manner in which its business is
currently being conducted except where any failure to have such Governmental
Authorizations has not had and will not have a Material Adverse Effect on
Parent. Parent is in substantial compliance with the terms and requirements of
such Governmental Authorizations.

      4.9 Legal Proceedings; Orders.

            (a) Except as set forth in Part 4.8 of the Parent Disclosure
Schedule, there is no pending Legal Proceeding, and (to the best of the
knowledge of Parent and Merger Sub) no Person has threatened to commence any
Legal Proceeding that has had or would reasonably be expected to have a Material
Adverse Effect on Parent: (i) that involves any of Parent or Merger Sub or any
of the assets owned or used by any of Parent or Merger Sub or (to the best
knowledge of Parent or Merger Sub) any Person whose liability Parent has or may
have retained or assumed, either contractually or by operation of law; or (ii)
that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, the Merger or any of the other
transactions contemplated by this Agreement. To the best of the knowledge of
Parent, except as set forth in Part 4.9 of the Parent Disclosure Schedule, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that will, or that could reasonably be expected to, give rise to or
serve as a basis for the commencement of any such Legal Proceeding.

            (b) Except as set forth in Part 4.9 of the Parent Disclosure
Schedule, no material Legal Proceeding has ever been commenced by or has ever
been pending against any of the Acquiring Corporations since January 1, 1997.

            (c) There is no order, writ, injunction, judgment or decree to which
any of the Parent or Merger Sub, or any of the assets owned or used by any of
Parent or Merger Sub, is

                                      30.
<PAGE>

subject. To the best of the knowledge of Parent, no officer or other employee of
any of Parent or Merger Sub is subject to any order, writ, injunction, judgment
or decree that prohibits such officer or other employee from engaging in or
continuing any conduct, activity or practice relating to Parent's business.

      4.10 Authority; Binding Nature of Agreement. Parent and Merger Sub have
the absolute and unrestricted right, power and authority to perform their
obligations under this Agreement; and the execution, delivery and performance by
Parent and Merger Sub of this Agreement (including the contemplated issuance of
Parent Common Stock in the Merger in accordance with this Agreement) have been
duly authorized by all necessary action on the part of Parent and Merger Sub and
their respective boards of directors. No vote of Parent's Shareholders is needed
to approve the Merger. This Agreement constitutes the legal, valid and binding
obligation of Parent and Merger Sub, enforceable against them in accordance with
its terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.

      4.11 Valid Issuance. The Parent Common Stock to be issued in the Merger
will, when issued in accordance with the provisions of this Agreement, be
validly issued, fully paid and nonassessable.

      4.12 Non-Contravention; Consents. Except as set forth in 4.12 of the
Parent Disclosure Schedule, neither (1) the execution, delivery or performance
of this Agreement or any of the other agreements referred to in this Agreement,
nor (2) the consummation of the Merger or any of the other transactions
contemplated by this Agreement, will directly or indirectly (with or without
notice or lapse of time):

            (a) contravene, conflict with or result in a violation of (i) any of
the provisions of Parent's Certificates of Incorporation, Merger Sub's Articles
of Incorporation or either company's Bylaws, or (ii) any resolution adopted by
either Parent or Merger Sub's stockholders, board of directors or any committee
of either of the Acquiring Corporation's board of directors;

            (b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any material Legal Requirement or any order, writ, injunction,
judgment or decree to which the Company, or any of the assets owned or used by
Parent or Merger Sub, is subject;

            (c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any material Governmental
Authorization that is held by Parent or that otherwise relates to Parent's
business or to any of the assets owned or used by Parent;

            (d) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Contract material to Parent,
or give any Person the right to (i) declare a default or exercise any remedy
under any such Contract, (ii) accelerate the maturity or performance of any such
Contract, or (iii) cancel, terminate or modify any such Contract; or

                                      31.
<PAGE>

            (e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by Parent (except
for minor liens that will not, in any case or in the aggregate, materially
detract from the value of the assets subject thereto or materially impair the
operations of Parent);

Except as set forth in Part 4.12 of the Parent Disclosure Schedule, and except
as may be required by the Securities Act, the Exchange Act, state securities or
"blue sky" laws, the HSR Act and the New York Stock Exchange Rules and
Regulations, Parent is not and will not be required to make any filing with or
give any notice to, or to obtain any Consent from, any Person in connection with
(x) the execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of the Merger
or any of the other transactions contemplated by this Agreement.

      4.13 Full Disclosure. This Agreement (including the Parent Disclosure
Schedule) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, (ii) omit to state any
material fact or (iii) omit to state any fact necessary in order to make the
representations, warranties and information contained and to be contained herein
and therein (in the light of the circumstances under which such representations,
warranties and information were or will be made or provided) not false or
misleading.

      4.14 Government Contracts; Government Bids. Except as set forth in Part
4.14 of the Parent Disclosure Schedule:

            (a) Parent has not had any determination of noncompliance or entered
into any consent order;

            (b) Parent has complied in all material respects with all Legal
Requirements with respect to all Government Contracts and Government Bids;

            (c) Parent has not, in obtaining or performing any Government
Contract, violated (A) the Truth in Negotiations Act of 1962, as amended, (B)
the Service Contract Act of 1963, as amended, (C) the Contract Disputes Act of
1978, as amended, (D) the Office of Federal Procurement Policy Act, as amended,
(E) the FAR or any applicable agency supplement thereto, (F) the Cost Accounting
Standards, (G) the Defense Industrial Security Manual (DOD 5220.22-M), (H) the
Defense Industrial Security Regulation (DOD 5220.22-R) or any related security
regulations, or (I) any other applicable procurement law or regulation or other
Legal Requirement; and

            (d) neither Parent nor any of its current employees has been
debarred or suspended from doing business with any Governmental Body, and, to
the best of the knowledge of Parent, no circumstances exist that would sustain a
debarment or suspension of any Acquiring Corporation or any employee of any
Acquiring Corporation.

      4.15 Accounting Matters. To the knowledge of Parent, Parent has not taken
and has not agreed, and does not plan, and will not take any action that would
prevent Parent from accounting for the business combination to be effected by
the Merger as a "pooling of interest."

                                      32.
<PAGE>

      4.16 Brokers. No broker, finder or financial adviser retained by Parent
and Merger Sub is entitled to any brokerage, finder's or other fee or commission
from Parent and Merger Sub in connection with the transactions contemplated by
this Agreement except that Parent has retained Wheat First Butcher Singer, Inc.
to give a fairness opinion in connection with the Merger.

5. CERTAIN COVENANTS OF THE COMPANY AND THE INSIDER SHAREHOLDERS

      5.1 Access and Investigation. During the period from the date of this
Agreement through the Effective Time (the "Pre-Closing Period"), the Company
shall, and shall cause its Representatives to: (a) provide Parent and Parent's
Representatives with reasonable access to the Company's Representatives,
personnel and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company; and (b)
provide Parent and Parent's Representatives with copies of such existing books,
records, Tax Returns, work papers and other documents and information relating
to the Company, and with such additional financial, operating and other data and
information regarding the Company, as Parent may reasonably request.

      5.2 Operation of the Company's Business. During the Pre-Closing Period:

            (a) the Company shall conduct its business and operations in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement;

            (b) the Company shall use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with all
suppliers, customers, landlords, creditors, employees and other Persons having
business relationships with the Company;

            (c) the Company shall keep in full force all insurance policies
identified in Part -- 2.17 of the Disclosure Schedule;

            (d) the Company shall cause its officers to report regularly (but in
no event less frequently than weekly) to Parent concerning the status of the
Company's business;

            (e) the Company shall not declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of capital
stock, and shall not repurchase, redeem or otherwise reacquire any shares of
capital stock or other securities (except that the Company may repurchase
Company Common Stock from former employees pursuant to the terms of existing
restricted stock purchase agreements and except that the Company may repurchase
up to four percent (4%) of the Company Common Stock;

            (f) the Company shall not sell, issue or authorize the issuance of
(i) any capital stock or other security, (ii) any option or right to acquire any
capital stock or other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security (except that the Company
shall be permitted (x) to grant stock options to employees in accordance with
its past practices, and (y) to issue Company Common Stock to employees upon the
exercise of outstanding Company Options ;

                                      33.
<PAGE>

            (g) the Company shall not amend or waive any of its rights under, or
permit the acceleration of vesting under, (i) any provision of its 1990 Stock
Option Plan and 1997 Stock Incentive Plan except to the extent that automatic
acceleration of vesting is required pursuant to those certain Executive
Compensation Agreements which were entered into before the negotiations with
Parent commenced, (ii) any provision of any agreement evidencing any outstanding
Company Option, or (iii) any provision of any restricted stock purchase
agreement;

            (h) neither the Company nor any of the Insider Shareholders shall
amend or permit the adoption of any amendment to the Company's Certificate of
Incorporation or bylaws, or effect or permit the Company to become a party to
any Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction (except that the Company may
issue shares of Company Common Stock upon the conversion of shares of Series A
Preferred Stock);

            (i) the Company shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;

            (j) the Company shall not make any capital expenditure, except for
capital expenditures that, when added to all other capital expenditures made on
behalf of the Company during the Pre-Closing Period, do not exceed $25,000 per
month;

            (k) the Company shall not (i) enter into, or permit any of the
assets owned or used by it to become bound by, any Contract that is or would
constitute a Material Contract, or (ii) amend or prematurely terminate, or waive
any material right or remedy under, any such Contract;

            (l) the Company shall not (i) acquire, lease or license any right or
other asset from any other Person, (ii) sell or otherwise dispose of, or lease
or license, any right or other asset to any other Person, or (iii) waive or
relinquish any right, except for assets acquired, leased, licensed or disposed
of by the Company pursuant to Contracts that are not Material Contracts;

            (m) the Company shall not (i) lend money to any Person (except that
the Company may make routine travel advances to employees in the ordinary course
of business and may, consistent with its past practices, allow employees to
acquire Company Common Stock in exchange for promissory notes upon exercise of
Company Options), or (ii) incur or guarantee any indebtedness for borrowed money
(except that the Company may make routine borrowings in the ordinary course of
business under its line of credit with Finova);

            (n) except as set forth in Exhibit D, the Company shall not (i)
establish, adopt or amend any Employee Benefit Plan, (ii) pay any bonus or make
any profit-sharing payment, cash incentive payment or similar payment to, or
increase the amount of the wages, salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its directors, officers or
employees, or (iii) hire any new employee whose aggregate annual compensation is
expected to exceed $40,000 other than employees who are chargeable as direct
labor on existing or newly awarded (and funded) Company Government Contracts;

            (o) the Company shall not change any of its methods of accounting or
accounting practices in any material respect;

                                      34.
<PAGE>

            (p) the Company shall not make any Tax election;

            (q) the Company shall not commence or settle any material Legal
Proceeding;

            (r) the Company shall not agree or commit to take any of the actions
described in clauses "(e)" through "(q)" above.

      5.3 Notification; Updates to Disclosure Schedule.

            (a) During the Pre-Closing Period, the Company shall promptly notify
Parent in writing of:

                  (i) the discovery by the Company of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by the Company or any of the Insider
Shareholders in this Agreement;

                  (ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute an inaccuracy in or breach of any representation or warranty made by
the Company or any of the Insider Shareholders in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement;

                  (iii) any breach of any covenant or obligation of the Company
or any of the Insider Shareholders; and

                  (iv) any event, condition, fact or circumstance that would
make the timely satisfaction of any of the conditions set forth in Section 7 or
Section 8 impossible or unlikely.

            (b) If any event, condition, fact or circumstance that is required
to be disclosed pursuant to Section 5.3(a) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then the Company shall promptly deliver to Parent an update to the
Disclosure Schedule specifying such change. No such update shall be deemed to
supplement or amend the Disclosure Schedule for the purpose of (i) determining
the accuracy of any of the representations and warranties made by the Company or
any of the Insider Shareholders in this Agreement, or (ii) determining whether
any of the conditions set forth in Section 6 has been satisfied.

      5.4 No Negotiation. During the Pre-Closing Period, neither the Company nor
any of the Insider Shareholders or Representatives shall directly or indirectly:

            (a) solicit or encourage the initiation of any inquiry, proposal or
offer from any Person (other than Parent) relating to a possible Acquisition
Transaction;

                                      35.
<PAGE>

            (b) participate in any discussions or negotiations or enter into any
agreement with, or provide any non-public information to, any Person (other than
Parent) relating to or in connection with a possible Acquisition Transaction; or

            (c) consider, entertain or accept any proposal or offer from any
Person (other than Parent) relating to a possible Acquisition Transaction.

The Company acknowledges that any breach of this covenant by any representative
of the Company or any Insider Shareholder shall be deemed a breach by the
Company. The Company shall promptly notify Parent in writing of any material
inquiry, proposal or offer relating to a possible Acquisition Transaction that
is received by the Company or any of the Insider Shareholders during the
Pre-Closing Period.

6. ADDITIONAL COVENANTS OF THE PARTIES

      6.1 Filings and Consents. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings (if
any) and give all notices (if any) required to be made and given by such party
in connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use all commercially reasonable efforts to obtain all
Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger and the other transactions contemplated by this Agreement. The Company
shall (upon request) promptly deliver to Parent a copy of each such filing made,
each such notice given and each such Consent obtained by the Company during the
Pre-Closing Period.

      6.2 Company Shareholders' Meeting. The Company shall, in accordance with
its certificate of incorporation and bylaws and the applicable requirements of
the California General Corporation Law, call and hold a special meeting of its
Shareholders as promptly as practicable for the purpose of permitting them to
consider and to vote upon and approve the principal terms and conditions of
Merger and the adoption and approval of this Agreement (the "Company
Shareholders' Meeting"). As soon as permissible under the rules of the
California General Corporation Law, the Company shall solicit the vote of its
Shareholders with respect to the Merger and the transactions contemplated
hereby. Without limiting the generality or the effect of anything contained in
the Voting Agreement being executed and delivered by the Insider Shareholders to
Parent contemporaneously with the execution and delivery of this Agreement, each
Insider Shareholder shall cause all shares of the capital stock of the Company
that are owned, beneficially or of record, by such Insider Shareholder on the
record date for the Company Shareholders' Meeting to be voted in favor of the
principal terms and conditions of the Merger and in favor of the adoption and
approval of this Agreement at such meeting.

      6.3 Public Announcements. During the Pre-Closing Period, (a) neither the
Company nor any of the Insider Shareholders shall (and the Company shall not
permit any of its Representatives to) issue any press release or make any public
statement regarding this Agreement or the Merger, or regarding any of the other
transactions contemplated by this Agreement, without Parent's prior written
consent, and (b) Parent will use reasonable efforts to consult with the Company
prior to issuing any press release or making any public statement regarding the
Merger.

                                      36.
<PAGE>

      6.4 Confidentiality. The confidentiality and standstill agreement
("Confidentiality and Standstill Agreement") included as Exhibit A in the Basis
Of Negotiation Of Agreement and Plan Of Reorganization signed by the parties on
June __, 1998, shall continue in full force and effect during the Pre-Closing
Period.

      6.5 Pooling of Interests. During the Pre-Closing Period, no party to this
Agreement shall take any action that could reasonably be expected to have an
adverse effect on the ability of Parent to account for the Merger as a "pooling
of interests."

      6.6 Best Efforts. During the Pre-Closing Period, (a) the Company and the
Insider Shareholders shall use their best efforts to cause the conditions set
forth in Section 7 to be satisfied on a timely basis, and (b) Parent and Merger
Sub shall use their best efforts to cause the conditions set forth in Section 8
to be satisfied on a timely basis.

      6.7 Registration Statement on Form S-3.

            (a) Within sixty (60) days following the Closing Date, Parent will
prepare and file with the SEC a registration statement on Form S-3 ("S-3
Registration Statement") registering the Parent Common Stock issued in the
Merger for resale by the former Company Shareholders and shall use best efforts
to have the S-3 Registration Statement declared effective as soon as practical
thereafter. Parent will keep the S-3 Registration Statement effective for up to
one year following the Closing Date, or, if earlier, until the former Company
Shareholders have completed the distribution related thereto. Parent shall
prepare and file with the SEC such amendments and supplements to the S-3
Registration Statement and the prospectus used in connection with such S-3
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
S-3 Registration Statement. Parent shall furnish to the former Company
Shareholders such number of copies of a prospectus in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Parent Common
Stock owned by them. Parent shall notify each former Company Shareholder by
written notice to the address to which the letter of transmittal was sent
pursuant to Section 1.9 (unless Parent is notified in writing of a different
address for a shareholder) at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in the S-3 Registration Statement
as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. Parent shall not be required to effect the S-3 Registration Statement
or any required amendment thereto or any request for acceleration of the
Effective Date thereof if Parent shall furnish to the Insider Shareholders a
certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of Parent, it would be seriously detrimental
to Parent for such S-3 Registration Statement to be effected at such time, in
which event Parent shall have the right to defer filing or causing the
registration statement to be declared effective for a period of not more than 90
days in the aggregate from the date of the certification.

            (b) It shall be a condition precedent to the obligations of Parent
to take any action under this Section 6.7 that the selling former Company
Shareholders shall furnish to

                                      37.
<PAGE>

Parent such information regarding themselves, the Parent Common Stock held by
them and the intended method of disposition of such securities as shall be
required to effect the registration of their shares.

            (c) Parent shall pay all expenses incurred by Parent in complying
with this Section 6.7, including, without limitation, all registration and
filing fees, printing expenses, fee and disbursements of counsel for Parent,
accounting fees and any blue sky filing fees. Parent shall not pay for any
underwriting discounts or selling commissions applicable to any resales of
Parent Common Stock made by the former Company Shareholders

      6.8 Listing on NYSE. Parent shall use its good faith reasonable efforts to
obtain, prior to the effective date of the S-3 Registration Statement, approval
for the listing on the NYSE of the shares of Parent Common Stock issued pursuant
to this Agreement.

      6.9 Reporting of Combined Results. Parent agrees that it will report
within 75 days following the Closing Date the combined results of Parent and the
Company for a minimum of a 30 day period following the Closing.

      6.10 Regulatory Approvals. The Company and Parent shall use all reasonable
efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed with any Governmental
Body with respect to the Merger and the other transactions contemplated by this
Agreement, and to submit promptly any additional information requested by any
such Governmental Body. Without limiting the generality of the foregoing, the
Company and Parent shall, promptly after the date of this Agreement, prepare and
file the notifications, if any, required under the HSR Act in connection with
the Merger. The Company and Parent shall respond as promptly as practicable to
(i) any inquiries or requests received from the Federal Trade Commission or the
Department of Justice for additional information or documentation and (ii) any
inquiries or requests received from any state attorney general or other
Governmental Body in connection with antitrust or related matters. Each of the
Company and Parent shall (1) give the other party prompt notice of the
commencement of any Legal Proceeding by or before any Governmental Body with
respect to the Merger or any of the other transactions contemplated by this
Agreement, (2) keep the other party informed as to the status of any Legal
Proceeding, and (3) promptly inform the other party of any communication to or
from the Federal Trade Commission, the Department of Justice or any other
Governmental Body regarding the Merger. The Company and Parent will consult and
cooperate with one another, and will consider in good faith the views of one
another, in connection with any analysis, appearance, presentation, memorandum,
brief, argument, opinion or proposal made or submitted in connection with any
Legal Proceeding under or relating to the HSR Act or any other federal or state
antitrust or fair trade law. In addition, except as may be prohibited by any
Governmental Body or by any Legal Requirement, in connection with any Legal
Proceeding under or relating to the HSR Act or any other federal or state
antitrust or fair trade law or any other similar Legal Proceeding, each of the
Company and Parent agrees to permit authorized Representatives of the other
party to be present at each meeting or conference relating to any such Legal
Proceeding and to have access to and be consulted in connection with any
document, opinion or proposal made or submitted to any Governmental Body in
connection with any such Legal Proceeding. The Parties will split the filing
fees under the HSR Act if filing is necessary.

                                      38.
<PAGE>

      6.11 Tax Matters. Prior to the Closing, (a) Parent and the Company shall
execute and deliver, to Sheppard, Mullin, Richter & Hampton LLP and Cooley
Godward LLP tax representation letters in substantially the form of Exhibit E
(which will be used in connection with the legal opinions contemplated by
Sections 7.5(l) and 8.3(b)).

      6.12 Noncompetition Agreements. At or prior to the Closing, Clifton Cooke
and Scott Laidig shall execute and deliver to the Company and Parent a
Noncompetition Agreement in the form of Exhibit F.

      6.13 Intentionally Left Blank

      6.14 FIRPTA Matters. At the Closing, (a) the Company shall deliver to
Parent a statement (in such form as may be reasonably requested by counsel to
Parent) conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the
United States Treasury Regulations, and (b) the Company shall deliver to the
Internal Revenue Service the notification required under Section 1.897 - 2(h)(2)
of the United States Treasury Regulations.

      6.15 Release. At the Closing, each of the Insider Shareholders shall
execute and deliver to the Company a Release in the form of Exhibit G.

      6.16 Exempt Transaction. The Company shall take all actions necessary or
advisable for the issuance of shares of Parent Common Stock in connection with
the Merger to qualify as a transaction exempt from the registration provisions
of Section 5 of the Securities Act pursuant to Rule 506 of Regulation D
promulgated thereunder ("Regulation D"). The Company shall prepare an
information statement for the Company Shareholders for purposes of soliciting
the approval of the Merger in accordance with this Agreement ("Information
Statement"). The Information Statement will contain the type of information
generally included in a proxy statement for a merger as required under the
Exchange Act. The Company shall submit a draft of the Information Statement to
Parent for its prior written approval. In connection with the distribution of
the Information Statement, the Company agrees to use its best efforts to cause
each Company Shareholder to complete an investment representation letter in a
form provided by Parent. To the extent that Parent or its counsel reasonably
determines that a Company Shareholder is not sophisticated for purposes of Rule
506 of Regulation D, the Company agrees that it shall retain, at its expense, a
"Purchaser Representative" (as defined in Rule 501 of Regulation D) to assist
such Shareholder(s) in evaluating the Information Statement and the investment
decision represented by this Agreement and the transactions contemplated hereby,
including, without limitation, the Merger.

      6.17 S-8 Registration Statement. Within sixty (60) days following the
Closing Date, Parent will prepare and file with the SEC a registration statement
on Form S-8 registering the Parent Common Stock issuable upon the exercise of
the assumed Company Options and shall use best efforts to have such Parent
Common Stock approved for listing on the NYSE by the effective date of the Form
S-8.

      6.18 Tax-Free Reorganization. Parent, Merger Sub and Company each
acknowledges and agrees that (i) it intends that the Merger constitute a
tax-free "reorganization" within the meaning of Sections 368(a) of the Code, and
corresponding provisions of state and local income

                                      39.
<PAGE>

tax law, and (ii) it will report the Merger as such a "reorganization" in any
and all federal, state and local income Tax Returns filed by it. No party shall
take any action either prior to or after the Effective Time that could
reasonably be expected to cause the Merger to fail to qualify as a
"reorganization" under Section 368(a) of the Code.

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB

      The obligations of Parent and Merger Sub to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions:

      7.1 Accuracy of Representations. Each of the representations and
warranties made by the Company and the Insider Shareholders in this Agreement
and in each of the other agreements and instruments delivered to Parent in
connection with the transactions contemplated by this Agreement shall have been
accurate in all material respects as of the date of this Agreement (without
giving double effect to any "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, contained or incorporated
directly or indirectly in such representations and warranties), and shall be
accurate in all material respects as of the Scheduled Closing Time as if made at
the Scheduled Closing Time (without giving double effect to any update to the
Disclosure Schedule, and without giving effect to any "Material Adverse Effect"
or other materiality qualifications, or any similar qualifications, contained or
incorporated directly or indirectly in such representations and warranties).

      7.2 Performance of Covenants. All of the covenants and obligations that
the Company and the Insider Shareholders are required to comply with or to
perform at or prior to the Closing shall have been complied with and performed
in all respects.

      7.3 Shareholder Approval. The principal terms of the Merger shall have
been duly approved by the affirmative vote of at least (a) 95% of the shares of
Company Common Stock entitled to vote with respect thereto and no more than 5%
of the shares shall have become or shall be eligible to become "dissenting
shares".

      7.4 Consents. All Consents required to be obtained in connection with the
Merger and the other transactions contemplated by this Agreement (including the
Consents identified in Part 2.21 of the Disclosure Schedule) shall have been
obtained and shall be in full force and effect.

      7.5 Agreements and Documents. Parent and the Company shall have received
the following agreements and documents, each of which shall be in full force and
effect:

            (a) Noncompetition Agreements in the form of Exhibit F, executed by
Clifton Cooke and Scott Laidig;

            (b) a Release in the form of Exhibit G, executed by each of the
Designated Shareholders;

            (c) an Escrow Agreement in the form of Exhibit H, executed by at
least 90% of the holders of the shares of the Company;

                                      40.
<PAGE>

            (d) confidential invention and assignment agreements, reasonably
satisfactory in form and content to Parent, executed by all employees and former
employees of the Company and by all consultants and independent contractors and
former consultants and former independent contractors to the Company who have
not already signed such agreements (including the individuals identified in Part
2.9(f) of the Disclosure Schedule);

            (e) the statement referred to in Section 6.14(a), executed by the
Company;

            (f) an estoppel certificate, dated as of a date not more than five
days prior to the Closing Date and satisfactory in form and content to Parent,
executed by USAMEX Real Estate Services, Inc.;

            (g) a legal opinion of Sheppard, Mullin, Richter & Hampton LLP,
dated as of the Closing Date, in the form of Exhibit I;

            (h) good standing certificates and tax clearance certificates for
each of the Company subsidiaries incorporated in a jurisdiction other than
California and good standing certificates for the Company and each subsidiary of
the Company in each jurisdiction where such entity maintains an office and is
obligated to qualify as a foreign corporation, including, without limitation
Virginia, Massachusetts, Colorado, Florida and the United Kingdom (to the extent
good standing certificates or equivalent government certificates are available);

            (i) a legal opinion of Cooley Godward LLP, dated as of the Closing
Date, to the effect that the Merger will constitute a reorganization within the
meaning of Section 368 of the Code (it being understood that, in rendering such
opinion, such counsel may rely upon the tax representation letters referred to
in Section 6.11;

            (j) a letter from Arthur Andersen LLP, dated as of the Closing Date,
confirming that Parent may account for the Merger as a "pooling of interests" in
accordance with generally accepted accounting principles, Accounting Principles
Board Opinion No. 16 and all published rules, regulations and policies of the
SEC;

            (k) a letter from McGladrey & Pullen LLP, dated as of the Closing
Date, confirming that no transaction entered into by the Company, and no other
fact or circumstance relating to the Company, will prevent Parent from
accounting for the Merger as a "pooling of interests" in accordance with
generally accepted principles, Accounting Principles Board Opinion No. 16 and
all published rules, regulations and policies of the SEC;

            (l) a certificate executed by the Chief Executive Officer and the
Chief Financial Officer of Company certifying that each of the representations
and warranties set forth in Section 2 is accurate in all respects as of the
Closing Date as if made on the Closing Date and that the conditions set forth in
Sections 7.1, 7.2, 7.3 and 7.4 have been duly satisfied (the "Officers' Closing
Certificate"); and

            (m) written resignations of all directors of the Company, effective
as of the Effective Time.

                                      41.
<PAGE>

      7.6 FIRPTA Compliance. The Company shall have filed with the Internal
Revenue Service the notification referred to in Section 6.14.

      7.7 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.

      7.8 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by Parent of any material right pertaining to its ownership of
stock of the Surviving Corporation.

      7.9 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.

      7.10 Employees. None of the Insider Shareholders shall have ceased to be
employed by, or expressed an intention to terminate their employment with, the
Company.

      7.11 Legends. The Company shall have provided Parent with evidence,
reasonably satisfactory to Parent, that all technical data, computer software
and Company Proprietary Assets delivered or otherwise provided or made available
by or on behalf of the Company to Governmental Bodies in connection with
Government Contracts have been marked with all markings and legends (including
any "restricted rights" legend and any "government purpose license rights"
legend) appropriate (under the FAR, under other applicable Legal Requirements or
otherwise) to ensure that no Governmental Body or other Person is able to
acquire any unlimited rights with respect to any of such technical data,
computer software or Company Proprietary Assets and to ensure that the Company
has not lost or relinquished and will not lose or relinquish any material rights
with respect thereto.

      7.12 Number of Shareholders. The Company will have no more than 35
unaccredited Shareholders as of the record date for the Company Shareholders'
Meeting and the issuance of Parent Common Stock in the Merger and the
transactions contemplated hereby, can be made pursuant to an exemption from
registration in Rule 506 of Regulation D, as determined by counsel for Parent.

      7.13 Phase One Environmental Site Assessment. The Company shall, at its
expense, retain a reputable environmental consulting firm, reasonably acceptable
to Parent, to conduct a phase one environmental site assessment ("Phase 1") of
the Company's Colorado facility and shall deliver the final report on the Phase
1 and Parent shall be satisfied, in its reasonable discretion, with the results
of the Phase 1. If the Phase 1 recommends additional testing, then, upon the
request of Parent, the Company shall, at Parent's expense, arrange for
additional testing by a reputable and qualified provider, reasonably acceptable
to Parent, and Parent shall be satisfied, in its sole discretion, with the
results of the additional testing.

                                      42.
<PAGE>

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

      The obligations of the Company to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of the following conditions:

      8.1 Accuracy of Representations. Each of the representations and
warranties made by Parent and Merger Sub in this Agreement shall have been
accurate in all material respects as of the date of this Agreement and in each
of the other agreements and instruments delivered to Company in connection with
the transactions contemplated by this Agreement (without giving double effect to
any "Material Adverse Effect" or any other materiality or similar qualifications
contained in such representations and warranties), and shall be accurate in all
material respects as of the Scheduled Closing Time as if made at the Scheduled
Closing Time (without giving double effect to any "Material Adverse Effect" or
other materiality or similar qualifications contained in such representations
and warranties).

      8.2 Performance of Covenants. All of the covenants and obligations that
Parent and Merger Sub are required to comply with or to perform at or prior to
the Closing shall have been complied with and performed in all respects.

      8.3 Documents. The Company shall have received the following documents:

            (a) a legal opinion of Cooley Godward LLP, dated as of the Closing
Date, in the form of Exhibit J; and

            (b) a legal opinion of Sheppard, Mullin, Richter & Hampton LLP dated
as of the Closing Date, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the Code (it being
understood that, in rendering such opinion, such counsel may rely upon the tax
representation letters referred to in Section 6.11).

      8.4 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.

      8.5 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding against the directors of the Company challenging
or seeking the recovery of a material amount of damages from such directors in
connection with the Merger.

9. TERMINATION

      9.1 Termination Events. This Agreement may be terminated prior to the
Closing:

            (a) by Parent if Parent reasonably determines that the timely
satisfaction of any condition set forth in Section 7 has become impossible
(other than as a result of any failure on the part of Parent or Merger Sub to
comply with or perform any covenant or obligation of Parent or Merger Sub set
forth in this Agreement);

                                      43.
<PAGE>

            (b) by the Company if the Company reasonably determines that the
timely satisfaction of any condition set forth in Section 8 has become
impossible (other than as a result of any failure on the part of the Company or
any of the Insider Shareholders to comply with or perform any covenant or
obligation set forth in this Agreement or in any other agreement or instrument
delivered to Parent or as a result of any failure on the part of any Designated
Shareholders to comply with the Voting Agreements);

            (c) by Parent at or after the Scheduled Closing Time if any
condition set forth in Section 7 has not been satisfied by the Scheduled Closing
Time;

            (d) by the Company at or after the Scheduled Closing Time if any
condition set forth in Section 8 has not been satisfied by the Scheduled Closing
Time;

            (e) by Parent if the Closing has not taken place on or before
September 30, 1998 (other than as a result of any failure on the part of Parent
to comply with or perform any covenant or obligation of Parent set forth in this
Agreement);

            (f) by the Company if the Closing has not taken place on or before
September 30, 1998 (other than as a result of the failure on the part of the
Company or any of the Designated Shareholders to comply with or perform any
covenant or obligation set forth in this Agreement or in any other agreement or
instrument delivered to Parent); or

            (g) by the mutual consent of Parent and the Company.

      9.2 Termination Procedures. If Parent wishes to terminate this Agreement
pursuant to Section 9.1(a), Section 9.1(c) or Section 9.1(e), Parent shall
deliver to the Company a written notice stating that Parent is terminating this
Agreement and setting forth a brief description of the basis on which Parent is
terminating this Agreement. If the Company wishes to terminate this Agreement
pursuant to Section 9.1(b), Section 9.1(d) or Section 9.1(f), the Company shall
deliver to Parent a written notice stating that the Company is terminating this
Agreement and setting forth a brief description of the basis on which the
Company is terminating this Agreement.

      9.3 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) neither the Company nor Parent shall be
relieved of any obligation or liability arising from any prior breach by such
party of any provision of this Agreement; (b) the parties shall, in all events,
remain bound by and continue to be subject to the provisions set forth in
Section __; and (c) the Company shall, in all events, remain bound by and
continue to be subject to Section 6.4.

10. INDEMNIFICATION, ETC.

      10.1 Survival of Representations, Etc.

            (a) The representations and warranties made by the Company and the
Insider Shareholders (including the representations and warranties set forth in
Sections 2 and 3 and the representations and warranties set forth in the
Officers' Closing Certificate) shall survive the

                                      44.
<PAGE>

Closing and shall expire on the first anniversary of the Closing Date; provided,
however, that if, at any time prior to the first anniversary of the Closing
Date, any Indemnitee (acting in good faith) delivers to the Shareholders' Agent
(as defined in Section 11.1) a written notice alleging the existence of an
inaccuracy in or a breach of any of the representations and warranties made by
the Company or the Insider Shareholders (and setting forth in reasonable detail
the basis for such Indemnitee's belief that such an inaccuracy or breach may
exist) and asserting a claim for recovery under Section 9.2 based on such
alleged inaccuracy or breach, then the claim asserted in such notice shall
survive the first anniversary of the Closing until such time as such claim is
fully and finally resolved.

            (b) The representations, warranties, covenants and obligations of
the Company and the Insider Shareholders, and the rights and remedies that may
be exercised by the Indemnitees, shall not be limited or otherwise affected by
or as a result of any information furnished to, or any investigation made by or
knowledge of, any of the Indemnitees or any of their Representatives.

            (c) For purposes of this Agreement, each statement or other item of
information set forth in the Company Disclosure Schedule or in any update to the
Company Disclosure Schedule shall be deemed to be a representation and warranty
made by the Company in this Agreement. For purposes of this Agreement, each
statement or other item of information set forth in the Parent Disclosure
Schedule or in any update to the Parent Disclosure Schedule shall be deemed to
be a representation and warranty made by the Parent in this Agreement.

      10.2 Indemnification by Shareholders.

            (a) At the Effective Time, Parent will deposit 10% of the shares of
Parent Common Stock issuable pursuant to Section 1.6 into an escrow account in
accordance with the Escrow Agreement in the form of Exhibit H to be executed
prior to the Closing by Parent and by holders of at least 90% of the shares of
Company ("Escrow Fund"); provided, however, that notwithstanding any other
provision of this Section 10, before distribution of any shares of Parent Common
Stock held in the Escrow Fund with respect to any Shareholder, for purposes of
satisfying indemnification obligations hereunder, such Shareholder shall have
been provided at least 45 days' prior written notice and the opportunity to
substitute cash to be used to pay such Shareholder's portion of the amount to
which any Person is entitled to indemnification and to receive from the Escrow
Fund a distribution of that number of shares of Parent Common Stock held in the
Escrow Fund with respect to such Shareholder that would have been distributed to
the Indemnitees but for such substitution of cash. The Escrow Agreement shall
contain (among others) such terms and conditions sufficient to satisfy the
requirements of Revenue Procedure 84-42, 1984-1 C.B.521.

            (b) From and after the Effective Time (but subject to Section
10.1(a)), the Shareholders, jointly and severally, shall hold harmless and
indemnify each of the Indemnitees from and against, and shall compensate and
reimburse each of the Indemnitees for, any Damages which are directly or
indirectly suffered or incurred by any of the Indemnitees or to which any of the
Indemnitees may otherwise become subject (regardless of whether or not such
Damages relate to any third-party claim) and which arise from or as a result of,
or are directly or indirectly connected with: (i) any inaccuracy in or breach of
any representation or warranty set forth in

                                      45.
<PAGE>

Sections 2 or 3 or in the Officers' Closing Certificate; (ii) any breach of any
covenant or obligation of the Company or any of the Insider Shareholders
(including the covenants set forth in Sections 5 and 6); or (iii) any Legal
Proceeding relating to any inaccuracy or breach of the type referred to in
clause "(i)" or "(ii)" above (including any Legal Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this Section
10); provided that the Indemnitees' sole recourse under this Agreement shall be
to the Escrow Fund.

      10.3 Indirect Damages. If the Surviving Corporation suffers, incurs or
otherwise becomes subject to any Damages as a result of or in connection with
any inaccuracy in or breach of any representation, warranty, covenant or
obligation, then (without limiting any of the rights of the Surviving
Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its
ownership of the stock of the Surviving Corporation, to have incurred Damages as
a result of and in connection with such inaccuracy or breach.

      10.4 No Contribution. Each Shareholder waives, and acknowledges and agrees
that he shall not have and shall not exercise or assert (or attempt to exercise
or assert), any right of contribution, right of indemnity or other right or
remedy against the Surviving Corporation in connection with any indemnification
obligation or any other liability to which he may become subject under or in
connection with this Agreement or the Insider Shareholders' Closing Certificate.

      10.5 Interest. Any Shareholder who is required to hold harmless,
indemnify, compensate or reimburse any Indemnitee pursuant to this Section 10
with respect to any Damages shall also be liable to such Indemnitee for interest
on the amount of such Damages (for the period commencing as of the date on which
such Shareholders' Agent first received notice of a claim for recovery by such
Indemnitee and ending on the date on which the liability of such Shareholder to
such Indemnitee is fully satisfied by such Shareholder) at a floating rate equal
to the rate of interest publicly announced by Bank of America, N.T. & S.A. from
time to time as its prime, base or reference rate; provided that the
Indemnitees' sole recourse for the recovery of interest shall be the Escrow
Fund.

      10.6 Defense of Third Party Claims. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against the
Surviving Corporation, against Parent or against any other Person) with respect
to which any of the Shareholders may become obligated to hold harmless,
indemnify, compensate or reimburse any Indemnitee pursuant to this Section 10,
Parent shall have the right, at its election, to proceed with the defense of
such claim or Legal Proceeding on its own. If Parent so proceeds with the
defense of any such claim or Legal Proceeding:

            (a) all reasonable expenses relating to the defense of such claim or
Legal Proceeding shall be borne and paid exclusively by the Shareholders through
the Escrow Fund;

            (b) each Shareholder, including the Insider Shareholders, shall make
available to Parent any documents and materials in his possession or control
that may be necessary to the defense of such claim or Legal Proceeding; and

                                      46.
<PAGE>

            (c) Parent shall have the right to settle, adjust or compromise such
claim or Legal Proceeding with the consent of the Shareholders' Agent (as
defined in Section 10.1); provided, however, that such consent shall not be
unreasonably withheld.

Parent shall give the Shareholders' Agent prompt notice of the commencement of
any such Legal Proceeding against Parent or the Surviving Corporation; provided,
however, that any failure on the part of Parent to so notify the Shareholders'
Agent shall not limit any of the obligations of the Shareholders under this
Section 10 (except to the extent such failure materially prejudices the defense
of such Legal Proceeding).

      10.7 Exercise of Remedies by Indemnitees Other Than Parent. No Indemnitee
(other than Parent or any successor thereto or assign thereof) shall be
permitted to assert any indemnification claim or exercise any other remedy under
this Agreement unless Parent (or any successor thereto or assign thereof) shall
have consented to the assertion of such indemnification claim or the exercise of
such other remedy.

11. MISCELLANEOUS PROVISIONS

      11.1 Shareholders' Agent. The Company on behalf of all Shareholders and
the Insiders Shareholders hereby irrevocably appoint Clifton Cooke as the agent
of the Shareholders for purposes of Section 10 and for purposes of the Escrow
Agreement (the "Shareholders' Agent"), and Clifton Cooke hereby accepts his
appointment as the Shareholders' Agent. Parent shall be entitled to deal
exclusively with the Shareholders' Agent on all matters relating to Section 10,
and shall be entitled to rely conclusively (without further evidence of any kind
whatsoever) on any document executed or purported to be executed on behalf of
any Shareholder by the Shareholders' Agent, and on any other action taken or
purported to be taken on behalf of any Shareholder by the Shareholders' Agent,
as fully binding upon such Shareholder. If the Shareholders' Agent shall die,
become disabled or otherwise be unable to fulfill his responsibilities as agent
of the Shareholders, then the Shareholders, by a vote of the majority of the
Shareholders (based upon the percent of outstanding shares of the Company Common
Stock that each owned on the record date for the Shareholders' Meeting), shall,
within ten days after such death or disability, appoint a successor agent and,
promptly thereafter, shall notify Parent of the identity of such successor. Any
such successor shall become the "Shareholders' Agent" for purposes of Section 10
and this Section 11.1. If for any reason there is no Shareholders' Agent at any
time, all references herein to the Shareholders' Agent shall be deemed to refer
to the Shareholders. By voting in favor of the principal terms and conditions of
this Agreement and the Merger, the Shareholders are agreeing to be bound by the
provisions of Sections 10 and 11 of this Agreement.

      11.2 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.

      11.3 Fees and Expenses. Each party to this Agreement shall bear and pay
all fees, costs and expenses (including legal fees and accounting fees) that
have been incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement,

                                      47.
<PAGE>

including all fees, costs and expenses incurred by such party in connection with
or by virtue of (a) the investigation and review conducted by Parent and its
Representatives with respect to the Company's business (and the furnishing of
information to Parent and its Representatives in connection with such
investigation and review), (b) the negotiation, preparation and review of this
Agreement (including the Disclosure Schedule) and all agreements, certificates,
opinions and other instruments and documents delivered or to be delivered in
connection with the transactions contemplated by this Agreement, (c) the
preparation and submission of any filing or notice required to be made or given
in connection with any of the transactions contemplated by this Agreement, and
the obtaining of any Consent required to be obtained in connection with any of
such transactions, and (d) the consummation of the Merger. To the extent that
all fees, costs and expenses incurred by and for the benefit of the Company
(including its one-half of the HSR Act filing fees and including all such fees,
costs and expenses incurred prior to the date of this Agreement but including
the amount of all special bonuses and other amounts that may become payable to
any officers of the Company or other Persons in connection with the consummation
of the transactions contemplated by this Agreement but excluding the value of
the acceleration of vesting of options pursuant to those certain Executive
Compensation Agreements) exceed $475,000 in the aggregate ("Excess Expenses"),
such Excess Expenses shall be deducted from the Total Purchase Price.

      11.4 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).

      11.5 Notices. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):

            If to Parent:
                              The Titan Corporation
                              3033 Science Park Road
                              San Diego, CA  92121
                              Attn: General Counsel
                              Tel: (619) 552-9500
                              Fax: (619) 552-9477

            With a copy to:
                              Cooley Godward LLP
                              4365 Executive Drive, Suite 1100
                              San Diego, CA  92121-2128
                              Attn: Barbara L. Borden, Esq.
                              Tel: (619) 550-6000
                              Fax: (619) 453-3555

                                      48.
<PAGE>

            If to Company:
                              VisiCom Laboratories, Inc.
                              10052 Mesa Ridge Court
                              San Diego, CA  92121
                              Attn: Chief Executive Officer
                              Tel: (619) 457-2111
                              Fax: (619) 457-0888

            With a copy to:
                              Sheppard, Mullin, Richter & Hampton, LLP
                              650 Town Center Drive, 4th Floor
                              Costa Mesa, CA  92626
                              Attn: John J. Giovannone, Esq.
                              Tel: (619) 513-5100
                              Fax: (619) 513-5130

      11.6 Confidentiality. Without limiting the generality of anything
contained in Section 6.4, on and at all times after the Closing Date, each
Insider Shareholder shall keep confidential, and shall not use or disclose to
any other Person, any non-public document or other non-public information in
such Designated Shareholder's possession that relates to the business of the
Company or Parent except to representatives who need to know the information in
connection with the transactions contemplated by this Agreement and except in
the ordinary course of Company's business, subject to commercially reasonable
confidentiality agreements.

      11.7 Time of the Essence. Time is of the essence of this Agreement.

      11.8 Headings. The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

      11.9 Counterparts. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.

      11.10 Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).

      11.11 Successors and Assigns. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); the Insider Shareholders and
their respective personal representatives, executors, administrators, estates,
heirs, successors and assigns (if any); Parent and its successors and assigns
(if any); and Merger Sub and its successors and assigns (if any).

      11.12 Remedies Cumulative; Specific Performance. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this

                                      49.
<PAGE>

Agreement, such other party shall be entitled (in addition to any other remedy
that may be available to it) to (a) a decree or order of specific performance or
mandamus to enforce the observance and performance of such covenant, obligation
or other provision, and (b) an injunction restraining such breach or threatened
breach.

      11.13 Waiver.

            (a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.

            (b) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.

      11.14 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.

      11.15 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons under circumstances other than those as to which it is determined to
be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.

      11.16 Entire Agreement. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof; provided, however, that the Confidentiality and
Standstill Agreement shall not be superseded by this Agreement and shall remain
in effect in accordance with its terms until the earlier of (a) the Effective
Time, or (b) the date on which such Mutual Non-Disclosure Agreement is
terminated in accordance with its terms.

      11.17 Construction.

            (a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.

                                      50.
<PAGE>

            (b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.

            (c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."

            (d) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                      51.
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of August7, 1998.

                                         THE TITAN CORPORATION,
                                         a Delaware corporation

                                         By:  __________________________________

                                         Its: __________________________________

                                         MERGER SUB ACQUISITION CORP.,
                                         a California corporation

                                         By:  __________________________________

                                         Its: __________________________________

                                         VISICOM LABORATORIES, INC.,
                                         a California corporation

                                         By:  __________________________________

                                         Its: __________________________________

                                         _______________________________________
                                         CLIFTON L. COOKE, JR.
<PAGE>

                                         _______________________________________
                                         SCOTT R. LAIDIG

                                         _______________________________________
                                         MICHAEL A. MOLLIN

                                         _______________________________________
                                         ROBERT A. BABBUSH
<PAGE>

                                    EXHIBIT A

                               CERTAIN DEFINITIONS

      For purposes of the Agreement (including this Exhibit A):

      Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:

            (a) the sale, license, disposition or acquisition of all or a
      material portion of the Company's business or assets;

            (b) the issuance, disposition or acquisition of (i) any capital
      stock or other equity security of the Company (other than common stock
      issued to employees of the Company, upon exercise of Company Options or
      otherwise, in routine transactions in accordance with the Company's past
      practices), (ii) any option, call, warrant or right (whether or not
      immediately exercisable) to acquire any capital stock or other equity
      security of the Company (other than stock options granted to employees of
      the Company in routine transactions in accordance with the Company's past
      practices), or (iii) any security, instrument or obligation that is or may
      become convertible into or exchangeable for any capital stock or other
      equity security of the Company; or

            (c) any merger, consolidation, business combination, reorganization
      or similar transaction involving the Company.

      Agreement. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached (including the Disclosure
Schedule), as it may be amended from time to time.

      Company Contract. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any of its assets is or may
become bound or under which the Company has, or may become subject to, any
obligation; or (c) under which the Company has or may acquire any right or
interest.

      Company Proprietary Asset. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company or otherwise used by the
Company.

      Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).

      Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.

      Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee

                                      A-1.
<PAGE>

(including reasonable attorneys' fees), charge, cost (including costs of
investigation) or expense of any nature.

      Designated Shareholder. The "Designated Shareholder" shall mean Clifton L.
Cooke, Jr., Scott R. Laidig, Charles C. Schooler, Eli Warsawski, Antares Group,
Inc., Robb Babbush, Michael Mollin, ACX Technologies, Inc and The VisiCom
Savings Plan & Trust.

      Disclosure Schedule. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to Parent on behalf of the Company
and the Designated Shareholders.

      Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).

      Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.

      Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

      Government Bid. "Government Bid" shall mean any quotation, bid or proposal
submitted to any Governmental Body or any proposed prime contractor or
higher-tier subcontractor of any Governmental Body.

      Government Contract. "Government Contract" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order executed or
submitted to or on behalf of any Governmental Body or any prime contractor or
higher-tier subcontractor, or under which any Governmental Body or any such
prime contractor or subcontractor otherwise has or may acquire any right or
interest.

      Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.

      Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department,

                                      A-2.
<PAGE>

agency, commission, instrumentality, official, organization, unit, body or
Entity and any court or other tribunal).

      HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

      Indemnitees. "Indemnitees" shall mean the following Persons: (a) Parent;
(b) Parent's current and future affiliates (including the Surviving
Corporation); (c) the respective Representatives of the Persons referred to in
clauses "(a)" and "(b)" above; and (d) the respective successors and assigns of
the Persons referred to in clauses "(a)", "(b)" and "(c)" above; provided,
however, that the Designated Shareholders shall not be deemed to be
"Indemnitees."

      Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.

      Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.

      Material Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Company if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement or
in the Officers' Closing Certificate but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar qualifications, in
such representations and warranties) would have a material adverse effect on the
Company's business, condition, assets, liabilities, operations, financial
performance or prospects.

      NYSE. "NYSE" shall mean the New York Stock Exchange.

      Person. "Person" shall mean any individual, Entity or Governmental Body.

      Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of the
foregoing.

      Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.

                                      A-3.
<PAGE>

                                    EXHIBIT B

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION

      SEC. "SEC" shall mean the United States Securities and Exchange
Commission.

      Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.

      Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.

      Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.

                                      A-4.
<PAGE>

                                    EXHIBIT B

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
<PAGE>

                                    EXHIBIT C

                             DIRECTORS AND OFFICERS

Directors

Officers<PAGE>

                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

                                     among:

             TITAN TECHNOLOGIES AND INFORMATION SYSTEMS CORPORATION
                             a Delaware corporation;

                              TTIS MERGERCO, INC.,
                             a Delaware corporation;

                   ATLANTIC AEROSPACE ELECTRONICS CORPORATION,
                             a Delaware corporation;

                                       and

       CERTAIN STOCKHOLDERS OF ATLANTIC AEROSPACE ELECTRONICS CORPORATION

                           ---------------------------

                            Dated as of July 1, 1999

                           ---------------------------
<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

1.    DESCRIPTION OF TRANSACTION..............................................1

      1.1   Merger of Merger Sub into the Company.............................1

      1.2   Effect of the Merger..............................................2

      1.3   Closing; Effective Time...........................................2

      1.4   Certificate of Incorporation and Bylaws; Directors and Officers...2

      1.5   Conversion of Shares..............................................2

      1.6   Employee Stock Options............................................5

      1.7   Closing of the Company's Transfer Books...........................5

      1.8   Exchange of Certificates..........................................6

      1.9   Dissenting Shares.................................................7

      1.10  Further Action....................................................7

2.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE DESIGNATED
      STOCKHOLDERS ...........................................................7

      2.1   Due Organization; No Subsidiaries; Etc............................8

      2.2   Certificate of Incorporation and Bylaws; Records..................8

      2.3   Capitalization, Etc...............................................9

      2.4   Financial Statements.............................................10

      2.5   Absence of Changes...............................................10

      2.6   Title to Assets..................................................12

      2.7   Bank Accounts; Receivables.......................................13

      2.8   Equipment; Leasehold.............................................13

      2.9   Proprietary Assets...............................................13

      2.10  Contracts........................................................15

      2.11  Liabilities......................................................19

      2.12  Compliance with Legal Requirements...............................19

      2.13  Governmental Authorizations......................................20

      2.14  Tax Matters......................................................20

      2.15  Employee and Labor Matters; Benefit Plans........................21

      2.16  Environmental Matters............................................24

      2.17  Insurance........................................................24

                                       i.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE
                                                                            ----

      2.18  Related Party Transactions.......................................24

      2.19  Legal Proceedings; Orders........................................25

      2.20  Authority; Binding Nature of Agreement...........................25

      2.21  Non-Contravention; Consents......................................26

      2.22  Year 2000 Compliance.............................................27

      2.23  Brokers..........................................................27

      2.24  Full Disclosure..................................................27

3.    REPRESENTATIONS AND WARRANTIES OF TTIS AND MERGER SUB..................27

      3.1   Organization and Standing........................................27

      3.2   Corporate Power; Authorization...................................27

      3.3   Consents.........................................................28

      3.4   Brokers..........................................................28

4.    CERTAIN COVENANTS OF THE COMPANY AND THE DESIGNATED STOCKHOLDERS.......28

      4.1   Access and Investigation.........................................28

      4.2   Operation of the Company's Business..............................28

      4.3   Notification; Updates to Disclosure Schedule.....................30

      4.4   No Negotiation...................................................31

5.    ADDITIONAL COVENANTS OF THE PARTIES....................................31

      5.1   Contingent Payment Obligations...................................31

      5.2   Filings and Consents.............................................32

      5.3   Company Stockholders' Action.....................................32

      5.4   Public Announcements.............................................33

      5.5   Stock Options....................................................33

      5.6   Reasonable Best Efforts..........................................33

      5.7   Regulatory Approvals.............................................33

      5.8   FIRPTA Matters...................................................34

      5.9   Release..........................................................34

      5.10  Information Statement............................................34

6.    CONDITIONS PRECEDENT TO OBLIGATIONS OF TTIS AND MERGER SUB.............34

      6.1   Accuracy of Representations......................................34

                                       ii.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE
                                                                            ----

      6.2   Performance of Covenants.........................................34

      6.3   Stockholder Approval.............................................35

      6.4   Consents.........................................................35

      6.5   Agreements and Documents.........................................35

      6.6   FIRPTA Compliance................................................35

      6.7   No Restraints....................................................35

      6.8   No Legal Proceedings.............................................35

      6.9   HSR Act..........................................................36

      6.10  Employees........................................................36

      6.11  No Material Adverse Change.......................................36

      6.12  Bring-down of Fairness Opinion...................................36

7.    CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.....................36

      7.1   Accuracy of Representations......................................36

      7.2   Performance of Covenants.........................................36

      7.3   No Restraints....................................................36

      7.4   Agreements and Documents.........................................36

      7.5   HSR Act..........................................................37

      7.6   Consents.........................................................37

      7.7   No Legal Proceedings.............................................37

8.    TERMINATION............................................................37

      8.1   Termination Events...............................................37

      8.2   Termination Procedures...........................................37

      8.3   Effect of Termination............................................38

9.    INDEMNIFICATION, ETC...................................................38

      9.1   Survival of Representations, Etc.................................38

      9.2   Indemnification by Stockholders..................................38

      9.3   Threshold; Ceiling...............................................39

      9.4   No Contribution..................................................39

      9.5   Interest.........................................................39

      9.6   Defense of Third Party Claims....................................40

                                      iii.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE
                                                                            ----

      9.7   Exercise of Remedies by Indemnitees Other Than TTIS..............40

      9.8   Recovery of Damages from First Payment or Second Payment.........40

10.   MISCELLANEOUS PROVISIONS...............................................41

      10.1  Stockholders' Agent..............................................41

      10.2  Further Assurances...............................................44

      10.3  Fees and Expenses................................................44

      10.4  Attorneys' Fees..................................................45

      10.5  Notices..........................................................45

      10.6  Confidentiality..................................................46

      10.7  Time of the Essence..............................................46

      10.8  Headings.........................................................46

      10.9  Counterparts.....................................................46

      10.10 Governing Law....................................................46

      10.11 Successors and Assigns...........................................46

      10.12 Remedies Cumulative; Specific Performance........................46

      10.13 Waiver...........................................................47

      10.14 Amendments.......................................................47

      10.15 Severability.....................................................47

      10.16 Parties in Interest..............................................47

      10.17 Entire Agreement.................................................47

      10.18 Construction.....................................................47

      10.19 Negotiation of Disputes..........................................48

                                       iv.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

EXHIBITS

Exhibit A   -     Designated Stockholders

Exhibit B   -     Certain definitions

Exhibit C   -     Principal Stockholders

Exhibit D   -     Form of Amended and Restated  Certificate of  Incorporation of
                  Surviving Corporation

Exhibit E   -     Directors and officers of Surviving Corporation

Exhibit F   -     Form of Guaranty Agreement

Exhibit G   -     Key Employees

Exhibit H   -     Form of Release

Exhibit I   -     Form of Legal Opinion of Pillsbury Madison & Sutro LLP

Exhibit J   -     Certain Employees

Exhibit K   -     Form of Legal Opinion of Cooley Godward LLP

                                       v.
<PAGE>

An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.

                                       1.
<PAGE>

                               AGREEMENT AND PLAN
                          OF MERGER AND REORGANIZATION

      THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") is made
and entered into as of July 1, 1999, by and among: TITAN TECHNOLOGIES AND
INFORMATION SYSTEMS CORPORATION, a Delaware corporation ("TTIS"); TTIS MERGERCO,
INC., a Delaware corporation and a wholly owned subsidiary of TTIS ("Merger
Sub"); ATLANTIC AEROSPACE ELECTRONICS CORPORATION, a Delaware corporation (the
"Company"); and the parties identified on Exhibit A (the "Designated
Stockholders"). Certain capitalized terms used in this Agreement are defined in
Exhibit B.

                                    RECITALS

      A. TTIS, Merger Sub and the Company intend to effect a merger of Merger
Sub into the Company in accordance with this Agreement and the Delaware General
Corporation Law (the "Merger"). Upon consummation of the Merger, Merger Sub will
cease to exist, and the Company will become a wholly owned subsidiary of TTIS.

      B. This Agreement has been approved by the respective boards of directors
of TTIS, Merger Sub and the Company.

      C. The Company has authorized 4,000,000 shares of Common Stock, par value
$0.01 per share (the "Company Common Stock") and 200,000 shares of Convertible
Preferred Stock, par value $0.01 per share (the "Company Preferred Stock," and,
collectively with the Company Common Stock, the "Company Stock").

      D. Contemporaneously with the execution and delivery of this Agreement,
each Designated Stockholder and each other stockholder identified on Exhibit C
(collectively, the "Principal Stockholders") is executing and delivering to TTIS
a Voting Agreement of even date herewith. The Principal Stockholders own a total
of 1,290,800 shares of Company Common Stock.

      E. At the Closing, the Company will deliver to TTIS a schedule (the
"Schedule of Stockholders") setting forth, as of the Effective Time, the name of
each holder of shares of Company Stock (individually, a "Stockholder" and,
collectively, the "Stockholders") and the number of shares of Company Stock held
by each Stockholder.

                                    AGREEMENT

      The parties to this Agreement agree as follows:

1. DESCRIPTION OF TRANSACTION

      1.1 Merger of Merger Sub into the Company. Upon the terms and subject to
the conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.3), Merger Sub shall be merged with and into the Company, and the
separate existence of Merger Sub shall

                                       1.
<PAGE>

cease. The Company will continue as the surviving corporation in the Merger (the
"Surviving Corporation").

      1.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the Delaware General
Corporation Law.

      1.3 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of TTIS, 3033 Science Park Road, San Diego, California 92121 at 10:00 a.m. on
July 16, 1999, or at such other time and date as TTIS and the Company shall
mutually agree (the "Scheduled Closing Time"). (The date on which the Closing
actually takes place is referred to in this Agreement as the "Closing Date.")
Contemporaneously with or as promptly as practicable after the Closing, a
properly executed agreement of merger (or Certificate of Merger) conforming to
the requirements of the Delaware General Corporation Law shall be filed with the
Secretary of State of the State of Delaware. The Merger shall become effective
at the time such agreement of merger (or Certificate of Merger) is filed with
and accepted by the Secretary of State of the State of Delaware (the "Effective
Time").

      1.4 Certificate of Incorporation and Bylaws; Directors and Officers.
Unless otherwise determined by TTIS and the Company prior to the Effective Time:

            (a) the Certificate of Incorporation of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to Exhibit D;

            (b) the Bylaws of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the Bylaws of Merger Sub as in
effect immediately prior to the Effective Time; and

            (c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the individuals identified on
Exhibit E.

      1.5 Conversion of Shares.

            (a) Subject to Section 1.7, at the Effective Time, by virtue of the
Merger and without any further action on the part of TTIS, Merger Sub, the
Company or any stockholder of the Company, each share of Company Common Stock
outstanding immediately prior to the Effective Time and each share of Company
Preferred Stock outstanding immediately prior to the Effective Time shall be
converted into the right to receive the following (the "Per Share Merger
Consideration"):

                  (i) Initial Cash Payment. Cash equal to the product of the
Applicable Fraction multiplied by the difference between (i) $18,000,000 and
(ii) (A) any Company expenses (as described in Section 10.3) and (B) $50,000,
which amount shall be deposited into an account designated by the Stockholders'
Agent in writing to TTIS prior to the Effective Time.

                  (ii) Contingent Merger Consideration. Cash equal to the
product of the Applicable Fraction multiplied by an amount of up to $3,000,000
plus interest accruing from

                                       2.
<PAGE>

the Closing Date to the date of payment, on the amount actually paid (net of any
offsets) calculated at the Applicable Federal Rate in effect at the Closing Date
for instruments of similar duration to the duration of the period from the
Closing Date through the date of payment, which may be earned as set forth below
and which will be payable on the First Payment Date, to the extent earned on or
before the First Payment Date or Second Payment Date to the extent earned prior
to the Second Payment Earn Date. The payment of all contingent amounts earned
shall be guaranteed by The Titan Corporation ("Parent") in accordance with the
Guaranty Agreement in the form of Exhibit F.

                        (1) $1,000,000 of the contingent payment amount will be
earned if, and when, (a) the Surviving Corporation shall have been awarded and
received contracts creating the Technical Demonstration and shall have been
authorized to perform work of a total funded value of $10,000,000 under such
contracts and (b) the total negotiated fee or profit of such contracts shall be
a minimum of 10% of the proposed total contract costs as specified in such
contracts, or if such contracts are award fee contracts, then the total
negotiated award fee potential for such contracts shall be a minimum of 10% of
the proposed total contract costs specified in the contract on a Weighted Basis
(with "Weighted Basis" defined as the sum of total negotiated award fee
potential for such contracts divided by the sum of the proposed total contract
costs for such contracts as specified in such contracts). The Surviving
Corporation must receive these contracts during the period commencing on the
Closing Date and ending the Second Payment Earn Date (the "Contingent Payment
Period").

                        (2) $1,000,000 of the contingent payment amount will be
earned if, and when, (a) the Surviving Corporation shall have been awarded and
received contracts to provide the Navy WSQ-9 Low Rate Production cabinets #1 and
#2 and been authorized to perform work of a total funded value of $6,000,000 in
such contracts and (b) (i) if such contracts are fixed price contracts, then the
total negotiated profit of such contracts shall be a minimum of 10% of the
proposed total contract costs as specified in such contracts, (ii) if such
contracts are cost plus fixed fee contracts then the negotiated fee of such
contracts shall be a minimum of 6.0% of the proposed total contract costs as
specified in such contracts, or (iii) if such contracts are award fee contracts,
then the negotiated fee of such contracts shall be a minimum of 10% of the
proposed total contract costs as specified in the contracts on a Weighted Basis.
The Surviving Corporation must receive these contracts during the Contingent
Payment Period.

                        (3) $300,000 of the contingent payment amount will be
earned if, and when, (a) the Surviving Corporation shall have been awarded and
received contracts to provide the Navy WSQ-9 Low Rate Production cabinets #3 and
#4 and been authorized to perform work of a total funded value of $6,000,000 in
such contracts and (b) (i) if such contracts are fixed price contracts, then the
total negotiated profit of such contracts is a minimum of 10% of the proposed
total contract costs, (ii) if such contracts are cost plus fixed fee contracts,
then the negotiated fee of such contracts shall be a minimum of 6.0% of the
proposed total contract costs as specified in the contract, or (iii) if such
contracts are award fee contracts, the negotiated fee of such contracts is a
minimum of 10% of the proposed total contract costs as specified in the
contracts on a Weighted Basis. The Surviving Corporation must receive these
contracts during the Contingent Payment Period.

                                       3.
<PAGE>

                        (4) $400,000 of the contingent payment amount will be
earned if, and when, (a) the Surviving Corporation shall have been awarded and
received contracts to provide the Navy WSQ-9 Production cabinets #1 through #3
and shall have been authorized to perform work of a total funded value of
$6,000,000 in such contracts and (b) (i) if such contracts are fixed price
contracts, then the total negotiated profit of such contracts is a minimum of
10% of the proposed total contract costs as specified in the contracts, (ii) if
such contracts are cost plus fixed fee contracts, then the negotiated fee of
such contracts shall be a minimum of 6.0% of the proposed total contract costs
as specified in the contract, or (iii) if such contracts are award fee
contracts, the negotiated fee of such contracts is a minimum of 10% of the
proposed total contract costs as specified in the contracts on a Weighted Basis.
The Surviving Corporation must receive these contracts during the Contingent
Payment Period.

                        (5) $100,000 of the contingent payment amount will be
earned if, and when, (a) the Surviving Corporation shall have been awarded and
received contracts to research, design, develop, produce or provide antennas
using Artificial Magnetic Conductors (i.e., the Reconfigurable Antenna Program
(RECAP)) and shall have been authorized to perform work of a total funded value
of $2,500,000 in contracts and (b) (i) if such contracts are fixed price
contracts, then the total negotiated fee or profit of such contracts shall be a
minimum of 10% of the proposed total contract costs as specified in the
contracts, or (ii) if such contracts are award fee contracts, then the total
negotiated award fee potential for such contracts shall be a minimum of 10% of
the proposed total contract costs as specified in the contracts on a Weighted
Basis. The Surviving Corporation must receive these contracts during the
Contingent Payment Period.

                        (6) $200,000 of the Contingent Payment Amount will be
earned if, and when, the Surviving Corporation has earned and received aggregate
minimum royalties of $500,000 on its license agreement with QuesTec. Such
royalties must be received during the Contingent Payment Period.

                        (7) Subsequent to the Closing Date, Arthur Andersen LLP
shall conduct an audit of the Company's balance sheet dated as of Closing Date,
and no later than 60 days after the Closing Date, shall deliver to TTIS and the
Stockholders' Agent a report thereon. In the audit, Arthur Andersen LLP shall
recommend any adjustments that relate to periods ending on March 31, 1999 that
should have been reflected in the balance sheet of the Company as of March 31,
1999 in conformity to GAAP, consistently applied. Any net reduction in
stockholders' equity as of March 31, 1999, resulting from such adjustments shall
be reflected as a dollar for dollar reduction of the First Payment (if any) or
the Second Payment (if any and if the adjustment exceeds the amount of the First
Payment). Notwithstanding the foregoing, no reductions shall be made to the
First Payment or the Second Payment unless the aggregate audit adjustments
result in a net reduction in stockholders' equity of more than $100,000. Any
balance sheet adjustments proposed by Arthur Andersen LLP shall be subject to
review by the Company's current auditors, Keller Bruner which review shall be
completed no later than 30 days after the Stockholders' Agent receives the
report from Arthur Andersen LLP. If the opinions of Arthur Andersen LLP and
Keller Bruner differ as to the necessity of any adjustments, TTIS and the
Stockholders' Agent shall attempt in good faith to resolve such differences. If
TTIS and the Stockholders' Agent are unable to resolve such differences, a third
independent auditing firm mutually agreeable to TTIS and the Stockholders' Agent
shall be selected to review the disputed

                                       4.
<PAGE>

adjustments. The decision of the third independent auditing firm regarding any
such adjustment shall be binding on the parties. The costs of Keller Bruner
shall be borne by the Stockholders through an offset against the First Payment,
if any, or the Second Payment if any and if the costs exceed the amount of the
First Payment, and the costs of a third auditing firm shall be split between the
Surviving Corporation and the Stockholders (with the Stockholders' share being
payable through a deduction from the First Payment, if any, or the Second
Payment if any and if the costs exceed the amount of the First Payment).

                  (iii) each share of the common stock (with par value $0.01) of
Merger Sub outstanding immediately prior to the Effective Time shall be
converted into one share of common stock of the Surviving Corporation.

            (b) For purposes of this Agreement, the "Applicable Fraction" shall
be the fraction (i) having a numerator equal one and (ii) having a denominator
equal to the total number of shares of Company Stock held by all of the
Stockholders at the Effective Time as set forth on the Schedule of Stockholders.

            (c) In connection with the Merger, each holder of a vested option,
warrant or other rights (a "Vested Option") to acquire common stock of the
Company under the Company's 1997 Stock Option Plan and 1989 Stock Options Plan
(collectively, the "Stock Option Plans") outstanding immediately prior to the
Effective Time may exercise such Vested Option effective immediately prior to
the Effective Time, by delivery to the Company of a duly executed notice of
exercise giving the Company the right to withhold from such Person's share of
the initial cash portion of the Per Share Merger Consideration, the exercise
price for such Vested Option plus any withholding taxes payable in connection
with the exercise of such Vested Option.

      1.6 Employee Stock Options. At the Effective Time, each stock option that
is then outstanding under the Company's 1997 and 1989 Stock Option Plans,
whether a Vested Option that has not been exercised or an unvested option, shall
be terminated by the Company in accordance with the terms (as in effect as of
the date of this Agreement) of the Company's 1997 and 1989 Stock Option Plans
and the stock option agreement by which such Company Option is evidenced. The
Company and TTIS shall take all action that may be necessary (under the
Company's 1997 and 1989 Stock Option Plans and otherwise) to effectuate the
provisions of this Section 1.6. Notwithstanding any other provision of this
Agreement, prior to the Effective Time, the Company may offer to terminate any
unvested options in exchange for cash payments not exceeding $500,000 in the
aggregate so long as the aggregate exercise price received by the Company for
the exercise of options since March 31, 1999 exceeds the amount paid to holders
of terminated options by at least $400,000.

      1.7 Closing of the Company's Transfer Books. At the Effective Time,
holders of certificates representing shares of the Company's capital stock that
were outstanding immediately prior to the Effective Time shall cease to have any
rights as stockholders of the Company, and the stock transfer books of the
Company shall be closed with respect to all shares of such capital stock
outstanding immediately prior to the Effective Time. No further transfer of any
such shares of the Company's capital stock shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of

                                       5.
<PAGE>

such shares of the Company's capital stock (a "Company Stock Certificate") is
presented to the Surviving Corporation or TTIS, such Company Stock Certificate
shall be canceled and shall be exchanged as provided in Section 1.8.

      1.8 Exchange of Certificates.

            (a) At or as soon as practicable after the Effective Time, TTIS, or
a transfer agent designated by TTIS (the "Transfer Agent") will send to each
registered holder of shares of Company Stock on the Schedule of Stockholders (i)
a letter of transmittal in customary form and containing such provisions as TTIS
may reasonably specify, and (ii) instructions for use in effecting the surrender
of Company Stock Certificates in exchange for payment of the Per Share Merger
Consideration for each share of Company Common Stock or Preferred Stock then due
and payable. Upon surrender of a Company Stock Certificate to TTIS or the
Transfer Agent, as the case may be, together with a duly executed letter of
transmittal and such other documents as may be reasonably required by TTIS or
the Transfer Agent, the holder of the Company Common Stock or Preferred Stock
represented by such Company Stock Certificate shall be entitled to receive in
exchange therefor the cash portion of the Per Share Merger Consideration for
each share then due and payable that such holder has the right to receive
pursuant to the provisions of this Section 1, and the Company Stock Certificate
so surrendered shall be canceled. Until surrendered as contemplated by this
Section 1.8, each Company Stock Certificate shall be deemed, from and after the
Effective Time, to represent only the right to receive for each share held by
such Stockholder upon such surrender payment of the cash portion of the Per
Share Merger Consideration then due and payable and the right to receive on the
First Payment Date or Second Payment Date as applicable, cash in the amount of
the Per Share Merger Consideration payable in the First Payment or the Second
Payment, as applicable. If any Company Stock Certificate shall have been lost,
stolen or destroyed, TTIS may, in its discretion and as a condition precedent to
payment of the Per Share Merger Consideration then due and payable for any
shares represented by such lost, stolen or destroyed Company Stock Certificate,
require the holder of such lost, stolen or destroyed Company Stock Certificate
to provide an appropriate affidavit and to deliver a bond (in such sum as TTIS
may reasonably direct) as indemnity against any claim that may be made against
TTIS or the Surviving Corporation with respect to such Company Stock
Certificate.

            (b) TTIS and the Surviving Corporation (or the Transfer Agent on
their behalf) shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable to any holder or former holder of capital stock
of the Company pursuant to this Agreement such amounts as TTIS or the Surviving
Corporation may be required to deduct or withhold therefrom under the Code or
under any provision of state, local or foreign tax law (or, in the alternative,
TTIS or the Transfer Agent, at TTIS's option may request tax information and
other documentation so no withholding is necessary). To the extent such amounts
are so deducted or withheld, such amounts shall be treated for all purposes
under this Agreement as having been paid to the Person to whom such amounts
would otherwise have been paid.

            (c) Neither TTIS nor the Surviving Corporation shall be liable to
any holder or former holder of capital stock of the Company for any of such
holder's share of the Merger Consideration lawfully and properly delivered to
any public official pursuant to any applicable abandoned property, escheat or
similar law.

                                       6.
<PAGE>

            (d) TTIS shall distribute the First Payment and the Second Payment
to the Stockholders who have previously surrendered their Company Stock
Certificates and letters of transmittal in accordance with each such
Stockholders' percentage ownership of the total number of shares of Company
Stock outstanding immediately prior to the Effective Time as shown on the
Schedule of Stockholders. All checks shall be sent to the name and address on
the letter of transmittal unless the Stockholder notifies TTIS in writing in
advance of the applicable payment date of a different address or if a change in
the name is requested, provides to TTIS such additional information as
reasonably required by TTIS.

      1.9 Dissenting Shares.

            (a) Notwithstanding anything to the contrary contained in this
Agreement, any shares of Company Stock that, as of the Effective Time, are or
may become "dissenting shares" within the meaning of the Delaware General
Corporation Law shall not be converted into or represent the right to receive
the Per Share Merger Consideration for each dissenting share in accordance with
Section 1.5, and the holder or holders of such shares shall be entitled only to
such rights as may be granted to such holder or holders in the Delaware General
Corporation Law; provided, however, that if the status of any such shares as
"dissenting shares" shall not be perfected, or if any such shares shall lose
their status as "dissenting shares," then, as of the later of the Effective Time
or the time of the failure to perfect such status or the loss of such status,
such shares shall automatically be converted into and shall represent only the
right to receive (upon the surrender of the Company Stock Certificate or
Certificates representing such shares) the Per Share Merger Consideration in
accordance with Section 1.5.

            (b) The Company shall give TTIS (i) prompt notice of any written
demand received by the Company prior to the Effective Time to require the
Company to purchase shares of capital stock of the Company pursuant to the
Delaware General Corporation Law and of any other demand, notice or instrument
delivered to the Company prior to the Effective Time pursuant to the Delaware
General Corporation Law, and (ii) the opportunity to participate in all
negotiations and proceedings with respect to any such demand, notice or
instrument. The Company shall not make any payment or settlement offer prior to
the Effective Time with respect to any such demand unless TTIS shall have
consented in writing to such payment or settlement offer.

      1.10 Further Action. If, at any time after the Effective Time, any further
action is determined by TTIS to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation or TTIS with
full right, title and possession of and to all rights and property of Merger Sub
and the Company, the officers and directors of the Surviving Corporation and
TTIS shall be fully authorized (in the name of Merger Sub, in the name of the
Company and otherwise) to take such action.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE DESIGNATED STOCKHOLDERS

      The Company and the Designated Stockholders severally, but not jointly
represent and warrant, to and for the benefit of the Indemnitees, as follows:

                                       7.
<PAGE>

      2.1 Due Organization; No Subsidiaries; Etc.

            (a) As of the Effective Date, the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all necessary power and authority: (i) to conduct its business
in the manner in which its business is currently being conducted; (ii) to own
and use its assets in the manner in which its assets are currently owned and
used; and (iii) to perform its obligations under all Company Contracts.

            (b) Except as set forth in Part 2.1 of the Disclosure Schedule, the
Company has not conducted any business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name, assumed name, trade name or other
name, other than the name "Atlantic Aerospace Electronics Corporation."

            (c) The Company is not and has not been required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction other than the jurisdictions identified in Part 2.1 of the
Disclosure Schedule, except where the failure to be so qualified, authorized,
registered or licensed has not had and will not have a Material Adverse Effect
on the Company. The Company is in good standing as a foreign corporation in each
of the jurisdictions identified in Part 2.1 of the Disclosure Schedule.

            (d) Part 2.1 of the Disclosure Schedule accurately sets forth (i)
the names of the members of the Company's board of directors, (ii) the names of
the members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.

            (e) The Company has no direct or indirect subsidiaries and does not
own any controlling interest in any Entity and, except for the equity interests
identified in Part 2.1 of the Disclosure Schedule, the Company has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect equity interest in, any Entity. The Company has not agreed and is not
obligated to make any future investment in or capital contribution to any
Entity. The Company has not guaranteed and is not responsible or liable for any
obligation of any of the Entities in which it owns or has owned any equity
interest.

            (f) The Company has all requisite legal and corporate power and
authority to enter into the Agreement and to carry out and perform all of its
obligations under the terms of the Agreement. All corporate action on the part
of the Company and all action on the part of its officers and directors
necessary for the authorization, execution and delivery of this Agreement by the
Company and for the performance of the Company's obligations hereunder and
thereunder has been taken, and the Agreement, when duly executed and delivered,
shall constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditor's rights
and by rules of law governing specific performance, injunctive relief or other
equitable remedies.

      2.2 Certificate of Incorporation and Bylaws; Records. The Company has
delivered to TTIS accurate and complete copies of: (1) the Company's Certificate
of

                                       8.
<PAGE>

Incorporation and bylaws, including all amendments thereto; (2) the stock
records of the Company; and (3) substantially all of the minutes and other
records of the meetings and other proceedings (including any actions taken by
written consent or otherwise without a meeting) of the stockholders of the
Company, the board of directors of the Company and all committees of the board
of directors of the Company. To the best knowledge of the Company and the
Designated Stockholders, there have been no formal meetings or other proceedings
of the stockholders of the Company, the board of directors of the Company or any
committee of the board of directors of the Company that are not fully reflected
in such minutes or other records. There has not been any violation of any of the
provisions of the Company's Certificate of Incorporation or bylaws, and the
Company has not taken any action that is inconsistent in any material respect
with any resolution adopted by the Company's stockholders, the Company's board
of directors or any committee of the Company's board of directors. The books of
account, stock records, minute books and other records of the Company are
accurate, up-to-date and complete in all material respects, and have been
maintained in accordance with prudent business practices.

      2.3 Capitalization, Etc.

            (a) The authorized capital stock of the Company consists of:
4,000,000 shares of Common Stock (with par value $0.01) and 200,000 shares of
Preferred Stock (with par value $0.01) of which 2,278,726 shares of Common Stock
and 80,000 shares of Preferred Stock have been issued and are outstanding as of
the date of this Agreement. All of the outstanding shares of Company Common
Stock have been duly authorized and validly issued, and are fully paid and
non-assessable. Part 2.3 of the Disclosure Schedule provides an accurate and
complete description of the terms of each repurchase option which is held by the
Company and to which any of such shares is subject.

            (b) The Company has reserved 1,250,000 shares of Company Common
Stock for issuance under the Stock Option Plans, of which options to purchase
1,025,958 shares are outstanding as of the date of this Agreement. Part 2.3 of
the Disclosure Schedule accurately sets forth, with respect to each Company
Option that is outstanding as of the date of this Agreement: (i) the name of the
holder of such Company Option; (ii) the total number of shares of Company Common
Stock that are subject to such Company Option and the number of shares of
Company Common Stock with respect to which such Company Option is immediately
exercisable; (iii) the date on which such Company Option was granted and the
term of such Company Option; (iv) the vesting schedule for such Company Option;
(v) the exercise price per share of Company Common Stock purchasable under such
Company Option; and (vi) whether such Company Option has been designated an
"incentive stock option" as defined in Section 422 of the Code. Except as set
forth in Part 2.3 of the Disclosure Schedule, there is no: (i) outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other securities of
the Company; (ii) outstanding security, instrument or obligation that is or may
become convertible into or exchangeable for any shares of the capital stock or
other securities of the Company other than shares of Company Preferred Stock;
(iii) Contract under which the Company is or may become obligated to sell or
otherwise issue any shares of its capital stock or any other securities; or (iv)
to the best of the knowledge of the Company and the Designated Stockholders,
condition or circumstance that may give rise to

                                       9.
<PAGE>

or provide a basis for the assertion of a claim by any Person to the effect that
such Person is entitled to acquire or receive any shares of capital stock or
other securities of the Company.

            (c) All outstanding shares of Company Common Stock and all
outstanding Company Options, have been issued and granted in compliance with (i)
all applicable securities laws and other applicable Legal Requirements, and (ii)
all requirements set forth in applicable Contracts.

            (d) Except as set forth in Part 2.3 of the Disclosure Schedule, the
Company has never repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities of the Company. All securities so reacquired
by the Company were reacquired in compliance with (i) the applicable provisions
of the Delaware General Corporation Law and all other applicable Legal
Requirements, and (ii) all requirements set forth in applicable restricted stock
purchase agreements and other applicable Contracts.

      2.4 Financial Statements.

            (a) The Company has delivered to TTIS the following financial
statements and notes (collectively, the "Company Financial Statements"):

                  (i) The audited balance sheets of the Company as of June 30,
1998, 1997 and 1996, and the related audited income statements, statements of
stockholders' equity and statements of cash flows of the Company for the years
then ended, together with the notes thereto and the unqualified report and
opinion of Deloitte & Touche LLP, relating thereto;

                  (ii) the unaudited balance sheet of the Company as of March
31, 1999 (the "Unaudited Interim Balance Sheet"), and the related unaudited
income statement of the Company for the nine months then ended; and

                  (iii) the unaudited balance sheet of the Company as of May 31,
1999, and the related unaudited income statement of the Company for the eleven
months then ended.

            (b) The Company Financial Statements are accurate and complete in
all material respects and present fairly the financial position of the Company
as of the respective dates thereof and the results of operations and (in the
case of the financial statements referred to in Section 2.4(a)(i)) cash flows of
the Company for the periods covered thereby. The Company Financial Statements
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered (except that the financial statements referred to
in Sections 2.4(a)(ii) and 2.4(a)(iii) do not contain footnotes and are subject
to normal and recurring year-end audit adjustments, which will not, individually
or in the aggregate, be material in magnitude).

      2.5 Absence of Changes. Except as set forth in Part 2.5 of the Disclosure
Schedule, since June 30, 1998:

            (a) there has not been any material adverse change in the Company's
business, condition, assets, liabilities, operations, financial performance or
prospects, and, to the

                                      10.
<PAGE>

best of the knowledge of the Company and the Designated Stockholders, no event
has occurred that will, or could reasonably be expected to, have a Material
Adverse Effect on the Company;

            (b) there has not been any material loss, damage or destruction to,
or any material interruption in the use of, any of the Company's assets (whether
or not covered by insurance);

            (c) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;

            (d) the Company has not sold, issued or authorized the issuance of
(i) any capital stock or other security (except for Company Common Stock issued
upon the exercise of outstanding Company Options), (ii) any option or right to
acquire any capital stock or any other security (except for Company Options
described in Part 2.3 of the Disclosure Schedule), or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;

            (e) the Company has not amended or waived any of its rights under,
or permitted the acceleration of vesting under, (i) any provision of its 1997 or
1989 Stock Option Plans, (ii) any provision of any agreement evidencing any
outstanding Company Option, or (iii) any restricted stock purchase agreement;

            (f) there has been no amendment to the Company's Certificate of
Incorporation or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;

            (g) the Company has not formed any subsidiary or acquired any equity
interest or other interest in any other Entity;

            (h) the Company has not made aggregate capital expenditure of more
than $500,000 or individual capital expenditures of more than $25,000;

            (i) the Company has not (i) acquired, leased or licensed any right
or other asset from any other Person, (ii) sold or otherwise disposed of, or
leased or licensed, any right or other asset to any other Person, or (iii)
waived or relinquished any right, except for immaterial rights or other
immaterial assets acquired, leased, licensed or disposed of in the ordinary
course of business and consistent with the Company's past practices;

            (j) the Company has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness other than write-offs of uncollectible accounts in the ordinary
course of business not exceeding $10,000 as to any individual account or $30,000
in the aggregate;

            (k) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for Encumbrances of immaterial assets made in the ordinary course of
business and consistent with the Company's

                                      11.
<PAGE>

past practices, and except for the security interest in the assets granted to
Crestar Bank to secure the Company's credit facility;

            (l) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money;

            (m) the Company has not (i) established or adopted any Employee
Benefit Plan, (ii) paid any bonus or made any profit-sharing or similar payment
to, or increased the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors, officers
or employees other than in the ordinary course of business consistent with past
practices and payment amounts, or (iii) hired any new employee with salaries in
excess of $100,000 per year;

            (n) the Company has not changed any of its methods of accounting or
accounting practices in any respect;

            (o) the Company has not made any Tax election;

            (p) the Company has not commenced or settled any Legal Proceeding;

            (q) the Company has not entered into any material transaction or
taken any other material action outside the ordinary course of business or
inconsistent with its past practices; and

            (r) the Company has not agreed or committed to take any of the
actions referred to in clauses "(c)" through "(q)" above.

      2.6 Title to Assets

            (a) The Company owns, and has good, valid and marketable title to,
all assets purported to be owned by it, including: (i) all assets reflected on
the Unaudited Interim Balance Sheet; (ii) all assets referred to in Parts 2.1,
2.7(b) and 2.9 of the Disclosure Schedule and all of the Company's rights under
the Material Contracts identified in Part 2.10 of the Disclosure Schedule; and
(iii) all other assets reflected in the Company's books and records as being
owned by the Company except for immaterial assets. Except as set forth in Part
2.6 of the Disclosure Schedule, all of said assets are owned by the Company free
and clear of any liens or other Encumbrances, except for (x) any lien for
current taxes not yet due and payable, and (y) minor liens that have arisen in
the ordinary course of business and that do not (in any case or in the
aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of the Company.

            (b) Part 2.6 of the Disclosure Schedule identifies all assets that
are material to the business of the Company and that are being leased or
licensed to the Company.

                                      12.
<PAGE>

      2.7 Bank Accounts; Receivables.

            (a) Part 2.7(a) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.

            (b) Part 2.7(b) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of May 31, 1999. Except as set forth in Part
2.7(b) of the Disclosure Schedule, all existing accounts receivable of the
Company (including those accounts receivable reflected on the Unaudited Interim
Balance Sheet that have not yet been collected and those accounts receivable
that have arisen since March 31, 1999 and have not yet been collected) (i)
represent valid obligations of customers of the Company arising from bona fide
transactions entered into in the ordinary course of business, (ii) are current
and will be collected in full when due, without any counterclaim or set off (net
of an allowance for doubtful accounts not to exceed $150,000 in the aggregate).

      2.8 Equipment; Leasehold.

            (a) All material items of equipment and other tangible assets owned
by or leased to the Company are adequate for the uses to which they are being
put, are in good condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the Company's business in the manner in which such
business is currently being conducted.

            (b) The Company does not own any real property or any interest in
real property, except for the leaseholds created under the real property leases
identified in Part 2.10 of the Disclosure Schedule.

      2.9 Proprietary Assets.

            (a) Part 2.9(a)(i) of the Disclosure Schedule sets forth, with
respect to each Company Proprietary Asset owned by the Company and registered
with any Governmental Body or for which an application has been filed with any
Governmental Body, (i) a brief description of such Proprietary Asset, and (ii)
the names of the jurisdictions covered by the applicable registration or
application. Part 2.9(a)(ii) of the Disclosure Schedule identifies and provides
a brief description of all other Company Proprietary Assets owned by the
Company. Part 2.9(a)(iii) of the Disclosure Schedule identifies and provides a
brief description of each Proprietary Asset licensed to the Company by any
Person (except for any Proprietary Asset that is licensed to the Company under
any third party software license generally available to the public at a cost of
less than $10,000), and identifies the license agreement under which such
Proprietary Asset is being licensed to the Company. Except as set forth in Part
2.9(a)(iv) of the Disclosure Schedule, the Company has good, valid and
marketable title to all of the Company Proprietary Assets identified in Parts
2.9(a)(i) and 2.9(a)(ii) of the Disclosure Schedule, free and clear of all liens
and other Encumbrances, and has a valid right to use all Proprietary Assets
identified in Part 2.9(a)(iii) of the Disclosure Schedule. Except as set forth
in Part 2.9(a)(v) of the Disclosure Schedule, the Company is not obligated to
make any payment to any Person for the use of any Company Proprietary Asset
identified in Parts 2.9(a)(i), 2.9(a)(ii) or 2.9(a)(iii) of

                                      13.
<PAGE>

the Disclosure Schedule. Except as set forth in Part 2.9(a)(vi) of the
Disclosure Schedule, the Company has not developed jointly with any other Person
any Company Proprietary Asset with respect to which such other Person has any
rights.

            (b) The Company has taken all measures and precautions reasonably
necessary to protect and maintain the confidentiality and secrecy of all Company
Proprietary Assets (except Company Proprietary Assets whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Company Proprietary Assets. Except as set forth in Part 2.9(b) of the
Disclosure Schedule, the Company has not (other than pursuant to license
agreements identified in Part 2.10 of the Disclosure Schedule) disclosed or
delivered to any Person, or permitted the disclosure or delivery to any Person
of, (i) the source code, or any portion or aspect of the source code, of any
Company Proprietary Asset, or (ii) the object code, or any portion or aspect of
the object code, of any Company Proprietary Asset.

            (c) None of the Company Proprietary Assets infringes or conflicts
with any Proprietary Asset owned or used by any other Person. The Company is not
infringing, misappropriating or making any unlawful use of, and the Company has
not at any time infringed, misappropriated or made any unlawful use of, or
received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Proprietary Asset owned or used by any other Person. To the
best of the knowledge of the Company and the Designated Stockholders, no other
Person is infringing, misappropriating or making any unlawful use of, and no
Proprietary Asset owned or used by any other Person infringes or conflicts with,
any Company Proprietary Asset.

            (d) Except as set forth in Part 2.9(d) of the Disclosure Schedule:
(i) each Company Proprietary Asset conforms in all material respects with any
specification, documentation, performance standard, representation or statement
made or provided with respect thereto by or on behalf of the Company; and (ii)
there has not been any claim by any customer or other Person alleging that any
Company Proprietary Asset (including each version thereof that has ever been
licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company and the
Designated Stockholders, there is no basis for any such claim. The Company has
established adequate reserves on the Unaudited Interim Balance Sheet to cover
all costs associated with any obligations that the Company may have with respect
to the correction or repair of programming errors or other defects in the
Company Proprietary Assets.

            (e) The Company Proprietary Assets constitute all the Proprietary
Assets reasonably necessary to enable the Company to conduct its business in the
manner in which such business has been and is being conducted. Except as set
forth in Part 2.9(e) of the Disclosure Schedule, (i) the Company has not
licensed any of the Company Proprietary Assets to any Person on an exclusive
basis, and (ii) the Company has not entered into any covenant not to compete or
Contract limiting its ability to exploit fully any of its Proprietary Assets or
to transact business in any market or geographical area or with any Person.

            (f) Except as set forth in Part 2.9(f) of the Disclosure Schedule,
(i) all current and former employees of the Company have executed and delivered
to the Company an

                                      14.
<PAGE>

agreement (containing no exceptions to or exclusions from the scope of its
coverage) that is substantially identical to the form of Confidential
Information and Invention Assignment Agreement previously delivered to TTIS, and
(ii) all current and former consultants and independent contractors to the
Company have executed and delivered to the Company an agreement (containing no
exceptions to or exclusions from the scope of its coverage) that is
substantially identical to the form of Consultant Confidential Information and
Invention Assignment Agreement previously delivered to TTIS.

      2.10 Contracts.

            (a) Part 2.10 of the Disclosure Schedule identifies:

                  (i) each Company Contract relating to the employment of, or
the performance of services by, any employee, and each Company Contract relating
to the employment of, or performance of services by, any consultant or
independent contractor that would require the Company to make payments or
provide benefits having a value in excess of $50,000 in the aggregate;

                  (ii) each Company Contract, other than for commercial
off-the-shelf software, relating to the acquisition, transfer, use, development,
sharing or license of any technology or any Proprietary Asset;

                  (iii) each Company Contract imposing any restriction on the
Company's right or ability (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C)
develop or distribute any technology;

                  (iv) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;

                  (v) each Company Contract relating to the acquisition,
issuance or transfer of any securities;

                  (vi) each Company Contract relating to the creation of any
Encumbrance with respect to any material asset of the Company;

                  (vii) each Company Contract that would require the Company to
make payments (whether contingent or otherwise) or provide services or other
benefits having a value in excess of $50,000 in the aggregate under any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;

                  (viii) each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;

                  (ix) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in Section 2.18);

                                      15.
<PAGE>

                  (x) each Company Contract that would require the Company to
make payments or provide services or benefits having a value in excess of
$50,000 under a Government Contract or Government Bid as of April 30, 1999;

                  (xi) any other Company Contract that was entered into outside
the ordinary course of business or was inconsistent with the Company's past
practices;

                  (xii) any other Company Contract that would require the
Company to make payments or provide services or benefits having a value in
excess of $50,000, that has a term of more than 60 days and that may not be
terminated by the Company (without penalty) within 60 days after the delivery of
a termination notice by the Company; and

                  (xiii) any other Company Contract that contemplates or
involves (A) the payment or delivery of cash or other consideration in an amount
or having a value in excess of $50,000 in the aggregate, or (B) the performance
of services having a value in excess of $50,000 in the aggregate.

(Contracts in the respective categories described in clauses "(i)" through
"(xiii)" above are referred to in this Agreement as "Material Contracts.")

            (b) The Company has delivered to TTIS accurate and complete copies
of all written Contracts identified in Part 2.10 of the Disclosure Schedule,
including all amendments thereto. Part 2.10 of the Disclosure Schedule provides
an accurate description of the terms of each Company Contract that is not in
written form. Each Contract identified in Part 2.10 of the Disclosure Schedule
is valid and in full force and effect, and, to the best of the knowledge of the
Company and the Designated Stockholders, is enforceable by the Company in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.

            (c) Except as set forth in Part 2.10 of the Disclosure Schedule:

                  (i) the Company has not violated or breached, or committed any
default under, any Material Contract, and, to the best of the knowledge of the
Company and the Designated Stockholders, no other Person has violated or
breached, or committed any default under, any Material Contract;

                  (ii) to the best of the knowledge of the Company and the
Designated Stockholders, no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will, or could reasonably
be expected to, (A) result in a violation or breach of any of the provisions of
any Material Contract, (B) give any Person the right to declare a default or
exercise any remedy under any Material Contract, (C) give any Person the right
to accelerate the maturity or performance of any Material Contract, or (D) give
any Person the right to cancel, terminate or modify any Material Contract;

                  (iii) since June 30, 1997, the Company has not received any
notice or other communication regarding any actual or possible violation or
breach of, or default under, any Material Contract; and

                                      16.
<PAGE>

                  (iv) the Company has not waived any of its material rights
under any Material Contract.

            (d) No Person is renegotiating, or has a right pursuant to the terms
of any Material Contract to renegotiate, any amount paid or payable to the
Company under any Material Contract or any other material term or provision of
any Material Contract.

            (e) The Contracts identified in Part 2.10 of the Disclosure Schedule
collectively constitute all of the Contracts necessary to enable the Company to
conduct its business in the manner in which its business is currently being
conducted.

            (f) Part 2.10 of the Disclosure Schedule identifies each proposed
Contract as to which any bid, offer, award, written proposal, term sheet or
similar document has been submitted or received by the Company and that is still
pending as of April 30, 1999.

            (g) Part 2.10 of the Disclosure Schedule provides an accurate
description and breakdown of the Company's backlog under Company Contracts as of
April 30, 1999.

            (h) Except as set forth in Part 2.10(h) of the Disclosure Schedule:

                  (i) the Company has not had any determination of
noncompliance, entered into any consent order or undertaken any internal
investigation relating directly or indirectly to any Government Contract or
Government Bid;

                  (ii) the Company has complied in all material respects with
all Legal Requirements with respect to all Government Contracts and Government
Bids;

                  (iii) the Company has not, in obtaining or performing any
Government Contract, violated (A) the Truth in Negotiations Act of 1962, as
amended, (B) the Service Contract Act of 1963, as amended, (C) the Contract
Disputes Act of 1978, as amended, (D) the Office of Federal Procurement Policy
Act, as amended, (E) the Federal Acquisition Regulations (the "FAR") or any
applicable agency supplement thereto, (F) the Cost Accounting Standards, (G) the
Defense Industrial Security Manual (DOD 5220.22-M), (H) the Defense Industrial
Security Regulation (DOD 5220.22-R) or any related security regulations, or (I)
any other applicable procurement law or regulation or other Legal Requirement;

                  (iv) all facts set forth in or acknowledged by the Company in
any certification, representation or disclosure statement submitted by the
Company with respect to any Government Contract or Government Bid were current,
accurate and complete as of the date of submission;

                  (v) neither the Company nor any of its employees has been
debarred or suspended from doing business with any Governmental Body, and, to
the best of the knowledge of the Company and the Designated Stockholders, no
circumstances exist that would warrant the institution of debarment or
suspension proceedings against the Company or any employee of the Company;

                                      17.
<PAGE>

                  (vi) no negative determinations of responsibility have been
issued against the Company in connection with any Government Contract or
Government Bid;

                  (vii) no direct or indirect costs incurred by the Company have
been questioned or disallowed as a result of a finding or determination of any
kind by any Governmental Body since June 30, 1997;

                  (viii) no Governmental Body, and no prime contractor or
higher-tier subcontractor of any Governmental Body, has withheld or set off, or
threatened to withhold or set off, any amount due to the Company under any
Government Contract;

                  (ix) there are not and have not been any irregularities,
misstatements or omissions relating to any Government Contract or Government Bid
that have led to or could reasonably be expected to lead to (A) any
administrative, civil, criminal or other investigation, Legal Proceeding (other
than routine audits) or indictment involving the Company or any of its
employees, (B) the questioning or disallowance of any costs submitted for
payment by the Company (other than routine audit adjustments), (C) the
recoupment of any material payments previously made to the Company, (D) a
finding or claim of fraud, defective pricing, mischarging or improper payments
on the part of the Company, or (E) the assessment of any material penalties or
damages of any kind against the Company;

                  (x) there is not and has not been any (A) outstanding claim
against the Company by, or dispute involving the Company with, any prime
contractor, subcontractor, vendor or other Person arising under or relating to
the award or performance of any Government Contract, (B) fact known by the
Company or any of the Designated Stockholders upon which any such claim could
reasonably be expected to be based or which may give rise to any such dispute,
(C) final decision of any Governmental Body against the Company;

                  (xi) the Company is not undergoing and has not undergone any
audit, and neither the Company nor any of the Designated Stockholders has any
knowledge of any basis for any impending audit, arising under or relating to any
Government Contract (other than normal routine audits conducted in the ordinary
course of business);

                  (xii) the Company has not entered into any financing
arrangement or assignment of proceeds with respect to the performance of any
Government Contract;

                  (xiii) no payment has been made by the Company or by any
Person acting on the Company's behalf to any Person (other than to any bona fide
employee or agent (as defined in subpart 3.4 of the FAR) of the Company) which
is or was contingent upon the award of any Government Contract or which would
otherwise be in violation of any applicable procurement law or regulation or any
other Legal Requirement;

                  (xiv) the Company's cost accounting system is in compliance
with applicable regulations and other applicable Legal Requirements, and has not
been determined by any Governmental Body not to be in compliance with any Legal
Requirement;

                  (xv) the Company has complied in all material respects with
all applicable regulations and other Legal Requirements and with all applicable
contractual

                                      18.
<PAGE>

requirements relating to the placement of legends or restrictive markings on
technical data, computer software and other Proprietary Assets;

                  (xvi) in each case in which the Company has delivered or
otherwise provided any technical data, computer software or Company Proprietary
Asset to any Governmental Body in connection with any Government Contract, the
Company has marked such technical data, computer software or Company Proprietary
Asset with all markings and legends (including any "restricted rights" legend
and any "government purpose license rights" legend) necessary (under the FAR or
other applicable Legal Requirements) to ensure that no Governmental Body or
other Person is able to acquire any unlimited rights with respect to such
technical data, computer software or Company Proprietary Asset;

                  (xvii) the Company has not made any disclosure to any
Governmental Body pursuant to any voluntary disclosure agreement;

                  (xviii) the Company has reached agreement with the cognizant
government representatives approving and "closing" all indirect costs charged to
Government Contracts for fiscal years ended June 30, 1986 through 1998 and those
years are closed;

                  (xix) the responsible government representatives have agreed
in writing with the Company on the "provisional billing rates" that the Company
is charging on cost-type Government Contracts and including in Government Bids;
and

                  (xx) the Company is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any
Governmental Body under or in connection with any Government Contract or
Government Bid as a result of or by virtue of (A) the execution, delivery of
performance of this Agreement or any of the other agreements to be executed,
delivered or performed in connection with this Agreement, or (B) the
consummation of the Merger or any of the other transactions contemplated by this
Agreement.

      2.11 Liabilities. The Company has no accrued, contingent or other
liabilities of any nature, either matured or unmatured (whether or not required
to be reflected in financial statements in accordance with GAAP, and whether due
or to become due), except for: (a) liabilities identified as such in the
"liabilities" column of the Unaudited Interim Balance Sheet; (b) accounts
payable or accrued salaries and benefits that have been incurred by the Company
since March 31, 1999 in the ordinary course of business and consistent with the
Company's past practices; (c) liabilities under the Company Contracts identified
in Part 2.10 of the Disclosure Schedule, to the extent the nature and magnitude
of such liabilities can be specifically ascertained by reference to the text of
such Company Contracts; (d) the liabilities identified in Part 2.11 of the
Disclosure Schedule; and (e) any other liabilities which individually or in the
aggregate cannot reasonably be expected to have a Material Adverse Effect on the
Company.

      2.12 Compliance with Legal Requirements. The Company is, and has at all
times, has been in compliance with all applicable Legal Requirements, except
where the failure to comply with such Legal Requirements has not had and will
not have a Material Adverse Effect on the Company. Except as set forth in Part
2.12 of the Disclosure Schedule, the Company has

                                      19.
<PAGE>

not received any notice or other communication from any Governmental Body
regarding any actual or possible violation of, or failure to comply with, any
Legal Requirement.

      2.13 Governmental Authorizations. Part 2.13 of the Disclosure Schedule
identifies each material Governmental Authorization held by the Company, and the
Company has delivered to, or in the case of security clearances made available
to, TTIS accurate and complete copies of all Governmental Authorizations
identified in Part 2.13 of the Disclosure Schedule. The Governmental
Authorizations identified in Part 2.13 of the Disclosure Schedule are valid and
in full force and effect, and collectively constitute all Governmental
Authorizations necessary to enable the Company to conduct its business in the
manner in which its business is currently being conducted. The Company is, and
at all times, has been, in substantial compliance with the terms and
requirements of the respective Governmental Authorizations identified in Part
2.13 of the Disclosure Schedule. The Company has not received any notice or
other communication from any Governmental Body regarding (a) any actual or
possible violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification of any
Governmental Authorization.

      2.14 Tax Matters.

            (a) Except as set forth in Part 2.14 of the Disclosure Schedule, all
Tax Returns required to be filed by or on behalf of the Company with any
Governmental Body with respect to any taxable period ending on or before the
Closing Date (the "Company Returns") (i) have been or will be filed on or before
the applicable due date (including any extensions of such due date), and (ii)
have been, or will be when filed, accurately and completely prepared in all
material respects in compliance with all applicable Legal Requirements. All
amounts shown on the Company Returns to be due on or before the Closing Date
have been or will be paid on or before the Closing Date. The Company has
delivered to TTIS accurate and complete copies of all Company Returns filed
since June 30, 1995, which have been requested by TTIS.

            (b) Except as set forth in Part 2.14 of the Disclosure Schedule, (i)
the Company Financial Statements fully accrue all actual and contingent
liabilities for Taxes with respect to all periods through the dates thereof in
accordance with GAAP; and (ii) the Company has established or will establish, in
the ordinary course of business and consistent with its past practices, reserves
adequate for the payment of all Taxes for the period from July 1, 1998 through
the Closing Date, and the Company will disclose the dollar amount of such
reserves to TTIS on or prior to the Closing Date.

            (c) Except as set forth in Part 2.14 of the Disclosure Schedule,
there have been no examinations or audits of any Company Return. The Company has
delivered to TTIS accurate and complete copies of all audit reports and similar
documents (to which the Company has access) relating to the Company Returns.
Except as set forth in Part 2.14 of the Disclosure Schedule, no extension or
waiver of the limitation period applicable to any of the Company Returns has
been granted (by the Company or any other Person), and no such extension or
waiver has been requested from the Company.

                                      20.
<PAGE>

            (d) Except as set forth in Part 2.14 of the Disclosure Schedule, no
claim or Proceeding is pending or has been threatened against or with respect to
the Company in respect of any Tax. There are no unsatisfied liabilities for
Taxes (including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to any notice of deficiency or
similar document received by the Company with respect to any Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect
to which adequate reserves for payment have been established). There are no
liens for Taxes upon any of the assets of the Company except liens for current
Taxes not yet due and payable. The Company has not entered into or become bound
by any agreement or consent pursuant to Section 341(f) of the Code. The Company
has not been, and the Company will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods employed,
prior to the Closing.

            (e) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any amount
that would not be deductible pursuant to Section 280G or Section 162 of the
Code. The Company is not, and has never been, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.

      2.15 Employee and Labor Matters; Benefit Plans.

            (a) Part 2.15(a) of the Disclosure Schedule identifies each salary,
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance pay, termination pay, hospitalization, medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, employee welfare or employee benefit plan (as such terms are
defined under ERISA), program or agreement (collectively, the "Plans")
sponsored, maintained, contributed to or required to be contributed to by the
Company for the benefit of any employee of the Company ("Employee"), except for
Plans which would not require the Company to make payments or provide benefits
having a value in excess of $25,000 in the aggregate.

            (b) Except as set forth in Part 2.15(a) of the Disclosure Schedule,
the Company does not maintain, sponsor or contribute to, and, to the best of the
knowledge of the Company and the Designated Stockholders, has not at any time in
the past maintained, sponsored or contributed to, any employee pension benefit
plan (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether or not excluded from coverage under
specific Titles or Merger Subtitles of ERISA) for the benefit of Employees or
former Employees (a "Pension Plan").

            (c) The Company maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific Titles or Merger Subtitles of ERISA)
for the benefit of Employees or

                                      21.
<PAGE>

former Employees which are described in Part 2.15(c) of the Disclosure Schedule
(the "Welfare Plans"), none of which is a multiemployer plan (within the meaning
of Section 3(37) of ERISA).

            (d) With respect to each Plan, the Company has delivered to TTIS:

                  (i) an accurate and complete copy of such Plan (including all
amendments thereto);

                  (ii) an accurate and complete copy of the annual report, if
required under ERISA, with respect to such Plan for the last two years;

                  (iii) an accurate and complete copy of the most recent summary
plan description, together with each Summary of Material Modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;

                  (iv) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;

                  (v) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-loss agreements, investment management agreements,
subscription and participation agreements and record keeping agreements; and

                  (vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).

            (e) The Company is not required to be, and, to the best of the
knowledge of the Company and the Designated Stockholders, has never been
required to be, treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code. The Company
has never been a member of an "affiliated service group" within the meaning of
Section 414(m) of the Code. To the best of the knowledge of the Company and the
Designated Stockholders, the Company has never made a complete or partial
withdrawal from a multiemployer plan, as such term is defined in Section 3(37)
of ERISA, resulting in "withdrawal liability," as such term is defined in
Section 4201 of ERISA (without regard to subsequent reduction or waiver of such
liability under either Section 4207 or 4208 of ERISA).

            (f) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.

            (g) Except as set forth in Part 2.15(g) of the Disclosure Schedule,
no Welfare Plan provides death, medical or health benefits (whether or not
insured) with respect to any current or former Employee after any such
Employee's termination of service (other than (i)

                                      22.
<PAGE>

benefit coverage mandated by applicable law, including coverage provided
pursuant to Section 4980B of the Code, (ii) deferred compensation benefits
accrued as liabilities on the Unaudited Interim Balance Sheet, and (iii)
benefits the full cost of which are borne by current or former Employees (or the
Employees' beneficiaries)).

            (h) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.

            (i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.

            (j) Each of the Plans intended to be qualified under Section 401(a)
of the Code has received a favorable determination from the Internal Revenue
Service, and neither the Company nor any of the Designated Stockholders is aware
of any reason why any such determination letter should be revoked.

            (k) Except as set forth in Part 2.15(k) of the Disclosure Schedule,
neither the execution, delivery or performance of this Agreement, nor the
consummation of the Merger or any of the other transactions contemplated by this
Agreement, will result in any payment (including any bonus, golden parachute or
severance payment) to any current or former Employee or director of the Company
(whether or not under any Plan), or materially increase the benefits payable
under any Plan, or result in any acceleration of the time of payment or vesting
of any such benefits.

            (l) Part 2.15(l) of the Disclosure Schedule contains a list of all
salaried employees of the Company as of the date of this Agreement, and
correctly reflects, in all material respects, their salaries, any other
compensation payable to them (including compensation payable pursuant to bonus,
deferred compensation or commission arrangements), their dates of employment and
their positions. The Company is not a party to any collective bargaining
contract or other Contract with a labor union involving any of its Employees.
All of the Company's employees are "at will" employees.

            (m) Part 2.15(m) of the Disclosure Schedule identifies each Employee
who is not fully available to perform work because of disability or other leave
and sets forth the basis of such leave and the anticipated date of return to
full service.

            (n) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters.

            (o) Except as set forth in Part 2.15(o) of the Disclosure Schedule,
the Company has good labor relations, and none of the Designated Stockholders
has any reason to believe that (i) the consummation of the Merger or any of the
other transactions contemplated by this Agreement will have a material adverse
effect on the Company's labor relations, or (ii) any of the Company's employees
intends to terminate his or her employment with the Company.

                                      23.
<PAGE>

      2.16 Environmental Matters. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law, and, to the best of the knowledge of the
Company and Designated Stockholders, there are no circumstances that may prevent
or interfere with the Company's compliance with any Environmental Law in the
future. To the best of the knowledge of the Company and the Designated
Stockholders, no current or prior owner of any property leased or controlled by
the Company has received any notice or other communication (in writing or
otherwise), whether from a Government Body, citizens group, employee or
otherwise, that alleges that such current or prior owner or the Company is not
in compliance with any Environmental Law. All Governmental Authorizations
currently held by the Company pursuant to Environmental Laws are identified in
Part 2.16 of the Disclosure Schedule. (For purposes of this Section 2.16: (i)
"Environmental Law" means any federal, state, local or foreign Legal Requirement
relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata), including any law or regulation relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern;
and (ii) "Materials of Environmental Concern" include chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products and any
other substance that is now or hereafter regulated by any Environmental Law or
that is otherwise a danger to health, reproduction or the environment.)

      2.17 Insurance. Part 2.17 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder, and the Company has
delivered to TTIS accurate and complete copies of the insurance policies
identified on Part 2.17 of the Disclosure Schedule. Each of the insurance
policies identified in Part 2.17 of the Disclosure Schedule is in full force and
effect. Since January 1, 1996, the Company has not received any notice or other
communication regarding any actual or possible (a) cancellation or invalidation
of any insurance policy, (b) refusal of any coverage or rejection of any claim
under any insurance policy, or (c) material adjustment in the amount of the
premiums payable with respect to any insurance policy other than premium changes
made in the ordinary course not resulting from the Company's claims history.

      2.18 Related Party Transactions.

            (a) Except as set forth in Part 2.18 of the Disclosure Schedule: (a)
no Related Party has, and no Related Party has at any time had, any direct or
indirect interest in any material asset used in or otherwise relating to the
business of the Company; (b) no Related Party is, or has at any time been,
indebted to the Company other than for travel or other similar advances; (c) no
Related Party has entered into, or has had any direct or indirect financial
interest in, any material Contract, transaction or business dealing involving
the Company; (d) to the best knowledge of Company and the Designated
Stockholders, no Related Party is competing, or has at any time

                                      24.
<PAGE>

competed, directly or indirectly, with the Company; and (e) no Related Party has
any claim or right against the Company (other than rights under company Options
and rights to receive compensation for services performed as an employee,
director or consultant of the Company). (For purposes of the Section 2.18 each
of the following shall be deemed to be a "Related Party": (i) each of the
Designated Stockholders; (ii) each individual who is, or who has at any time
since July 1, 1997 been, an officer of the Company; (iii) each member of the
immediate family of each of the individuals referred to in clauses "(i)" and
"(ii)" above; and (iv) any trust or other Entity (other than the Company) in
which any one of the individuals referred to in clauses "(i)", "(ii)" and
"(iii)" above holds (or in which more than one of such individuals collectively
hold), beneficially or otherwise, a material voting, proprietary or equity
interest.)

            (b) All costs related to any Related Party, including, but not
limited, to compensation, consultation fees, life insurance premiums, auto
allowances, business meals, related party facility cost and any facility
purchase options have been properly classified as unallowable costs for
Government Contract accounting purposes.

      2.19 Legal Proceedings; Orders.

            (a) Except as set forth in Part 2.19 of the Disclosure Schedule,
there is no pending Legal Proceeding, and (to the best of the knowledge of the
Company and the Designated Stockholders) no Person has overtly threatened to
commence any Legal Proceeding: (i) that involves the Company or any of the
assets owned or used by the Company or any Person whose liability the Company
has or may have retained or assumed, either contractually or by operation of
law; or (ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, the Merger or any of the
other transactions contemplated by this Agreement. To the best of the knowledge
of the Company and the Designated Stockholders, except as set forth in Part 2.19
of the Disclosure Schedule, no event has occurred, and no claim, dispute or
other condition or circumstance exists, that will, or that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding (other than routine audits).

            (b) Except as set forth in Part 2.19 of the Disclosure Schedule, no
Legal Proceeding (other than routine audits) has ever been commenced by or has
ever been pending against the Company.

            (c) There is no order, writ, injunction, judgment or decree to which
the Company, or any of the assets owned or used by the Company, is subject. None
of the Designated Stockholders is subject to any order, writ, injunction,
judgment or decree that relates to the Company's business or to any of the
assets owned or used by the Company. To the best of the knowledge of the Company
and the Designated Stockholders, no officer or other employee of the Company is
subject to any order, writ, injunction, judgment or decree that prohibits such
officer or other employee from engaging in or continuing any conduct, activity
or practice relating to the Company's business.

      2.20 Authority; Binding Nature of Agreement. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement

                                      25.
<PAGE>

have been duly authorized by all necessary action on the part of the Company and
its board of directors. This Agreement when duly executed and delivered,
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.

      2.21 Non-Contravention; Consents. Except as set forth in Part 2.21 of the
Disclosure Schedule, neither (1) the execution, delivery or performance of this
Agreement or any of the other agreements documents or certificates to be
executed, delivered or performed in connection with this Agreement by the
Company or the Designated Stockholders, nor (2) the consummation of the Merger
or any of the other transactions contemplated by this Agreement by the Company
or the Designated Stockholders, will directly or indirectly (with or without
notice or lapse of time):

            (a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's Certificate of Incorporation or bylaws, or (ii)
any resolution adopted by the Company's stockholders, the Company's board of
directors or any committee of the Company's board of directors;

            (b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which the Company, or any of the assets owned or used by the
Company, is subject;

            (c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the Company's business
or to any of the assets owned or used by the Company;

            (d) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract; or

            (e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company).

Except as set forth in Part 2.21 of the Disclosure Schedule, the Company is not
and will not be required to make any filing with or give any notice to, or to
obtain any Consent from, any Person in connection with (x) the execution,
delivery or performance of this Agreement or any of the

                                       26.
<PAGE>

other agreements referred to in this Agreement, or (y) the consummation of the
Merger or any of the other transactions contemplated by this Agreement.

      2.22 Year 2000 Compliance. Except as set forth in Part 2.22 of the
Disclosure Schedule (and excluding any systems provided to the Company by a
third party for which the Company has received from such third party a
certification that such systems are Year 2000 Compliant), all of the Company's
products and internal systems are designed to be used prior to, during and after
the year 2000, and are Year 2000 Compliant. The Company has provided to TTIS the
results of the testing to date of all of the Company's products and systems to
determine whether they are or will become Year 2000 Compliant in accordance with
the Company's compliance plan.

      2.23 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
based on any arrangement or agreement made by or on behalf of the Company or any
Designated Stockholder.

      2.24 Full Disclosure. This Agreement (including the Disclosure Schedule)
does not, and the Designated Stockholders' Closing Certificate will not, (i)
contain any representation, warranty or information that is false or misleading
with respect to any material fact, or (ii) omit to state any material fact or
necessary in order to make the representations, warranties and information
contained and to be contained herein and therein (in the light of the
circumstances under which such representations, warranties and information were
or will be made or provided) not false or misleading.

3. REPRESENTATIONS AND WARRANTIES OF TTIS AND MERGER SUB

      TTIS and Merger Sub jointly and severally represent and warrant to the
Company and the Designated Stockholders as follows:

      3.1 Organization and Standing. Each of TTIS and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all necessary power and authority to conduct
its business in the manner in which its business is currently being conducted,
to own and use its assets in the manner in which its assets are currently owned
and used and to perform its respective obligations under this Agreement or any
Exhibit hereto. TTIS is qualified or licensed to do business as a foreign
corporation in all jurisdictions in which the nature of its business or
properties requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business, condition, assets,
liabilities or financial performance of TTIS.

      3.2 Corporate Power; Authorization. Each of TTIS and Merger Sub has all
requisite legal and corporate power and authority to enter into the Agreement
and to carry out and perform all of its obligations under the terms of the
Agreement. All corporate action on the part of TTIS and Merger Sub and all
action on the part of its officers and directors necessary for the
authorization, execution and delivery of this Agreement by TTIS and Merger Sub
and for the performance of TTIS's and Merger Sub's obligations hereunder and
thereunder has been taken, and the Agreement, when duly executed and delivered,
shall constitute the valid and binding obligation of TTIS and Merger Sub
enforceable against TTIS and Merger Sub in accordance

                                      27.
<PAGE>

with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditor's rights and by rules of law governing
specific performance, injunctive relief or other equitable remedies.

      3.3 Consents. The execution and delivery of this Agreement and all
documents and certificates to be delivered hereunder by TTIS and Merger Sub in
connection with the transactions contemplated hereby do not, and the performance
and consummation by TTIS and Merger Sub of its obligations hereunder will not
result in any conflict with, breach or violation of or default, termination,
forfeiture or Encumbrance under any terms of provisions of TTIS's and Merger
Sub's respective Certificate of Incorporation or Bylaws, any statute, rule,
regulation, judicial or governmental decree, order or judgment or any material
agreement, lease or other instrument or other obligation, to which TTIS or
Merger Sub is a party or to which TTIS or Merger Sub's assets are subject and do
not require any consent, approval, authorization or permit of or filing with or
notification to any Governmental Body, other than a filing under the HSR Act, or
except as disclosed in Part 3.3 of the Disclosure Schedule, require any consent
or approval of any third party, including any party to a material contract of
TTIS or Merger Sub.

      3.4 Brokers. Other than A.G. Edwards who will be providing a fairness
opinion to TTIS, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
based on any arrangement or agreement made by or on behalf of TTIS.

4. CERTAIN COVENANTS OF THE COMPANY AND THE DESIGNATED STOCKHOLDERS

      4.1 Access and Investigation. During the period from the date of this
Agreement through the Effective Time (the "Pre-Closing Period"), the Company
shall, and shall cause its Representatives to: (a) provide TTIS and TTIS's
Representatives with reasonable access to the Company's Representatives,
personnel and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company including
balance sheets as of April 30, 1999 and May 31, 1999, and statements of
operations for the periods then ended; and (b) provide TTIS and TTIS's
Representatives with copies of such existing books, records, Tax Returns, work
papers and other documents and information relating to the Company, and with
such additional financial, operating and other data and information regarding
the Company, as TTIS may reasonably request.

      4.2 Operation of the Company's Business. During the Pre-Closing Period:

            (a) the Company shall conduct its business and operations in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement;

            (b) the Company shall use reasonable best efforts to preserve intact
its current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with all
suppliers, customers, landlords, creditors, employees and other Persons having
business relationships with the Company;

                                      28.
<PAGE>

            (c) the Company shall keep in full force all insurance policies
identified in Part 2.17 of the Disclosure Schedule;

            (d) the Company shall cause its executive officers to report
verbally on a regular basis to TTIS concerning the status of the Company's
business;

            (e) the Company shall not declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of capital
stock, and shall not repurchase, redeem or otherwise reacquire any shares of
capital stock or other securities except that the Company may terminate unvested
options with cash payments in accordance with Section 1.6 hereof;

            (f) the Company shall not sell, issue or authorize the issuance of
(i) any capital stock or other security, (ii) any option or right to acquire any
capital stock or other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security (except that the Company
shall be permitted (A) to grant stock options to employees in accordance with
its past practices, (B) to issue Company Common Stock upon the exercise of
outstanding Company Options and (c) to issue Company Common Stock upon
conversion of Company Preferred Stock);

            (g) except for the Company's acceleration of vesting of any unvested
options as provided for in the Stock Option Plans or agreements thereunder or
immediately prior to the Effective Time, the Company shall not amend or waive
any of its rights under, or permit the acceleration of vesting under, (i) any
provision of its Stock Option Plans, (ii) any provision of any agreement
evidencing any outstanding Company Option, or (iii) any provision of any
restricted stock purchase agreement;

            (h) neither the Company nor any of the Designated Stockholders shall
amend or permit the adoption of any amendment to the Company's Certificate of
Incorporation or bylaws, or effect or permit the Company to become a party to
any Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;

            (i) the Company shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;

            (j) the Company shall not make any capital expenditure, except for
capital expenditures that, when added to all other capital expenditures made on
behalf of the Company during the Pre-Closing Period, do not exceed $30,000 per
month;

            (k) the Company shall not (i) enter into any Contract that is or
would constitute a Material Contract, or (ii) amend or prematurely terminate, or
waive any material right or remedy under, any Material Contract;

            (l) the Company shall not (i) acquire, lease or license any right or
other asset from any other Person, (ii) sell or otherwise dispose of, or lease
or license, any right or other asset to any other Person, or (iii) waive or
relinquish any right requiring if the acquisition cost or the value of the
disposition exceeds $50,000;

                                      29.
<PAGE>

            (m) the Company shall not (i) lend money to any Person (except that
the Company may make routine travel advances to employees in the ordinary course
of business and may allow employees to acquire Company Common Stock in exchange
for promissory notes upon exercise of Company options), or (ii) incur or
guarantee any indebtedness for borrowed money (except that the Company may make
routine borrowings in the ordinary course of business under its line of credit
with Crestar Bank);

            (n) the Company shall not (i) establish, adopt or amend any Employee
Benefit Plan, (ii) pay any bonus or make any profit-sharing payment, cash
incentive payment or similar payment to, or increase the amount of the wages,
salary, commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees, or (iii) hire any new
employee whose aggregate annual compensation is expected to exceed $75,000
except for commitments existing as of the date of this Agreement as disclosed on
the Disclosure Schedule;

            (o) the Company shall not change any of its methods of accounting or
accounting practices in any material respect;

            (p) the Company shall not make any Tax election;

            (q) the Company shall not commence or settle any material Legal
Proceeding;

            (r) the Company shall not agree or commit to take any of the actions
described in clauses "(e)" through "(q)" above.

      4.3 Notification; Updates to Disclosure Schedule.

            (a) During the Pre-Closing Period, the Company shall promptly notify
TTIS in writing of:

                  (i) the discovery by the Company of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by the Company or any of the Designated
Stockholders in this Agreement;

                  (ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute an inaccuracy in or breach of any representation or warranty made by
the Company or any of the Designated Stockholders in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement;

                  (iii) any breach of any covenant or obligation of the Company
or any of the Designated Stockholders; and

                  (iv) any event, condition, fact or circumstance that would
make the timely satisfaction of any of the conditions set forth in Section 6
impossible or unlikely.

                                      30.
<PAGE>

            (b) If any event, condition, fact or circumstance that is required
to be disclosed pursuant to Section 4.3(a) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then the Company shall promptly deliver to TTIS an update to the
Disclosure Schedule specifying such change. No such update shall be deemed to
supplement or amend the Disclosure Schedule for the purpose of (i) determining
the accuracy of any of the representations and warranties made by the Company or
any of the Designated Stockholders in this Agreement prior to the Effective
Time, or (ii) determining whether any of the conditions set forth in Section 6
has been satisfied. If TTIS elects to consummate the Merger after receipt of any
update to the Disclosure Schedule, then the update shall be deemed to amend the
Disclosure Schedule for the purpose of determining the accuracy of any of the
representations and warranties made by the Company or any of the Designated
Stockholders.

      4.4 No Negotiation. During the Pre-Closing Period, neither the Company nor
any of the Designated Stockholders shall, directly or indirectly:

            (a) solicit or encourage the initiation of any inquiry, proposal or
offer from any Person (other than TTIS) relating to a possible Acquisition
Transaction;

            (b) participate in any discussions or negotiations or enter into any
agreement with, or provide any non-public information to, any Person (other than
TTIS) relating to or in connection with a possible Acquisition Transaction; or

            (c) consider, entertain or accept any proposal or offer from any
Person (other than TTIS) relating to a possible Acquisition Transaction.

The Company shall promptly notify TTIS in writing of any material inquiry,
proposal or offer relating to a possible Acquisition Transaction that is
received by the Company or any of the Designated Stockholders during the
Pre-Closing Period.

5. ADDITIONAL COVENANTS OF THE PARTIES

      5.1 Contingent Payment Obligations.

            (a) During the Contingent Payment Period, TTIS shall continue to
conduct the Company's business and operations in substantially the same manner
as such business and operations have been conducted prior to the date of this
Agreement, including operating it as a separate subsidiary or operating
division.

            (b) During the Contingent Payment Period, the Company shall use
commercially reasonable and diligent efforts to prepare and submit competitive
bids for those Contracts set forth in Section 1.5(a)(ii)(1) through
1.5(a)(ii)(6) inclusive (the "Contingent Payment Contracts") on terms specified
in Section 1.5(a)(ii)(1) through 1.5(a)(ii)(6) inclusive and take other actions
reasonably necessary to be awarded each of the Contingent Payment Contracts in
satisfaction of each of the contingent payment provisions specified herein. In
addition, neither TTIS nor Parent shall take any action to prevent or materially
prejudice the Company's ability to bid for or be awarded any of the Contingent
Payment Contracts. As used

                                      31.
<PAGE>

herein, "commercially reasonable and diligent efforts" will mean, unless the
Stockholders' Agent and the Company otherwise agree in writing following the
Closing, those efforts consistent with the exercise of prudent business
judgment, as applied to the pursuit of other contract awards of similar
potential and size. Without limiting the generality of the foregoing,
"commercially reasonable and diligent efforts" shall include the dedication by
the Company from its operating budget of adequate business development resources
and personnel to prepare and submit competitive bid proposals for each of the
Contingent Payment Contracts consistent with the criteria for achieving each
contingent payment (provided, that neither TTIS nor Parent shall have any
obligation to provide any additional resources or working capital to the Company
in connection with the contingent payment). If subsequent to the Closing, the
Company or the Stockholders' Agent determines in good faith that TTIS or Parent
has taken or has proposed to take any action that is inconsistent with its
obligations under this Agreement, then the Company or the Stockholders' Agent
may deliver a written notice to TTIS or Parent, in accordance with Section 10.5
hereof, setting forth the proposed or actual action or actions of TTIS or Parent
that are deemed not to be commercially reasonable and diligent. TTIS or Parent
will be given a commercially reasonable period (which shall be not less than 10
days) from the date of such notice to take corrective action prior to the
institution of any remedial action by or on behalf of any Stockholder or the
Stockholders' Agent.

            (c) If, after the Closing and during the Contingent Payment Period,
the Company sells all or substantially all of its assets or any Person or group
of Persons (other than Parent or its affiliates) acquires more than 50% of the
voting control of TTIS in one or more related transactions or there is a change
of control of Parent, then, to the extent that any of the Contingent Payment
Contracts have not yet been awarded by the contracting party as of the closing
date of such transaction, then the associated contingent payment for each of
such Contingent Payment Contracts shall be deemed earned and shall be payable on
the First Payment Date or Second Payment Date, as applicable, subject to any
offsets as provided under this Agreement.

      5.2 Filings and Consents. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings (if
any) and give all notices (if any) required to be made and given by such party
in connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use all commercially reasonable best efforts to obtain
all Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger and the other transactions contemplated by this Agreement. The Company
shall (upon request) promptly deliver to TTIS a copy of each such filing made,
each such notice given and each such Consent obtained by the Company during the
Pre-Closing Period.

      5.3 Company Stockholders' Action. The Company shall, in accordance with
its certificate of incorporation and bylaws and the applicable requirements of
the Delaware General Corporation Law, either (a) call and hold a special meeting
of its stockholders or (b) circulate an action by written consent, as promptly
as practicable after the execution of this Agreement for the purpose of
permitting them to consider and to vote upon and approve the Merger and this
Agreement (the "Company Stockholders' Action"). Without limiting the generality
or the effect of anything contained in the Voting Agreements being executed and
delivered by the Designated Stockholders to TTIS contemporaneously with the
execution and delivery of this

                                      32.
<PAGE>

Agreement, each Designated Stockholder shall cause all shares of the capital
stock of the Company that are owned, beneficially or of record, by such
Designated Stockholder on the record date for the Company Stockholders' Action
to be voted in favor of the Merger and this Agreement at such meeting or in such
action.

      5.4 Public Announcements. During the Pre-Closing Period, (a) neither the
Company nor any of the Designated Stockholders nor TTIS shall (and the Company
and TTIS shall not permit any of its Representatives to) issue any press release
or make any public statement regarding this Agreement or the Merger, or
regarding any of the other transactions contemplated by this Agreement, without
the other party's prior written consent provided that TTIS shall be entitled to
issue any press release or make any public statement regarding the Merger as
required by law, in which event TTIS will use reasonable best efforts to consult
with the Company prior to issuing any such press release or making any such
public statement.

      5.5 Stock Options. Following the Closing, TTIS shall grant to the key
managerial employees of the Company (the "Key Employees") listed on Exhibit G
hereto, either nonqualified options or incentive stock options to acquire shares
of TTIS's Common Stock (the "Options") in TTIS's sole discretion. The Options
will be granted to the Key Employees subject to substantially similar terms and
conditions as options granted to similarly situated employees of TTIS. The
exercise price for such options shall be set at the fair market value of TTIS's
Common Stock on the date of grant and shall vest from the date of grant equally
over four years, on an annual basis.

      5.6 Reasonable Best Efforts. During the Pre-Closing Period, (a) the
Company and the Designated Stockholders shall use their reasonable best efforts
to cause the conditions set forth in Section 6 to be satisfied on a timely
basis, and (b) TTIS and Merger Sub shall use their reasonable best efforts to
cause the conditions set forth in Section 7 to be satisfied on a timely basis.

      5.7 Regulatory Approvals. The Company and TTIS shall use reasonable best
efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed with any Governmental
Body with respect to the Merger and the other transactions contemplated by this
Agreement, and to submit promptly any additional information requested by any
such Governmental Body. Without limiting the generality of the foregoing, the
Company and TTIS shall, promptly after the date of this Agreement, prepare and
file the notifications, if any, required under the HSR Act in connection with
the Merger. The Company and TTIS shall respond as promptly as practicable to (i)
any inquiries or requests received from the Federal Trade Commission or the
Department of Justice for additional information or documentation and (ii) any
inquiries or requests received from any state attorney general or other
Governmental Body in connection with antitrust or related matters. Each of the
Company and TTIS shall (1) give the other party prompt notice of the
commencement of any Legal Proceeding by or before any Governmental Body with
respect to the Merger or any of the other transactions contemplated by this
Agreement, (2) keep the other party informed as to the status of any Legal
Proceeding, and (3) promptly inform the other party of any communication to or
from the Federal Trade Commission, the Department of Justice or any other
Governmental Body regarding the Merger. The Company and TTIS will consult and
cooperate with one another, and will consider in good faith the views of one
another, in connection with any

                                      33.
<PAGE>

analysis, appearance, presentation, memorandum, brief, argument, opinion or
proposal made or submitted in connection with any Legal Proceeding under or
relating to the HSR Act or any other federal or state antitrust or fair trade
law. In addition, except as may be prohibited by any Governmental Body or by any
Legal Requirement, in connection with any Legal Proceeding under or relating to
the HSR Act or any other federal or state antitrust or fair trade law or any
other similar Legal Proceeding, each of the Company and TTIS agrees to permit
authorized Representatives of the other party to be present at each meeting or
conference relating to any such Legal Proceeding and to have access to and be
consulted in connection with any document, opinion or proposal made or submitted
to any Governmental Body in connection with any such Legal Proceeding. The
Parties will split the filing fees under the HSR Act as set forth in Section
10.3 if filing is necessary.

      5.8 FIRPTA Matters. At the Closing, (a) the Company shall deliver to TTIS
a statement (in such form as may be reasonably requested by counsel to TTIS)
conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the United
States Treasury Regulations, and (b) the Company shall deliver to the Internal
Revenue Service the notification required under Section 1.897 - 2(h)(2) of the
United States Treasury Regulations.

      5.9 Release. At the Closing, each of the Designated Stockholders shall
execute and deliver to the Company a Release in the form of Exhibit H.

      5.10 Information Statement. The Company shall prepare an information
statement for the Company Stockholders for purposes of soliciting the approval
of the Merger in accordance with this Agreement (the "Information Statement").
The Information Statement will contain the type of information generally
included in a proxy statement for a merger as required under the Exchange Act.
The Company shall submit a draft of the Information Statement to TTIS for its
prior written approval.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TTIS AND MERGER SUB

      The obligations of TTIS and Merger Sub to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:

      6.1 Accuracy of Representations. Each of the representations and
warranties made by the Company and the Designated Stockholders in this Agreement
and in each of the other agreements and instruments delivered to TTIS in
connection with the transactions contemplated by this Agreement shall have been
accurate in all material respects as of the date of this Agreement and shall be
accurate in all material respects as of the Scheduled Closing Time as if made at
the Scheduled Closing Time (without giving effect to any update to the
Disclosure Schedule other than the Special Disclosure Schedule Amendment).

      6.2 Performance of Covenants. All of the covenants and obligations that
the Company and the Designated Stockholders are required to comply with or to
perform at or prior to the Closing shall have been complied with and performed
in all respects.

                                      34.
<PAGE>

      6.3 Stockholder Approval. The principal terms of the Merger shall have
been duly approved by the affirmative vote of at least (a) 95% of the shares of
Company Common Stock and Preferred Stock entitled to vote with respect thereto.

      6.4 Consents. All Consents required to be obtained by the Company in
connection with the Merger and the other transactions contemplated by this
Agreement (including the Consents identified in Part 2.21 of the Disclosure
Schedule) shall have been obtained and shall be in full force and effect.

      6.5 Agreements and Documents. TTIS and the Company shall have received the
following agreements and documents, each of which shall be in full force and
effect:

            (a) a Release, executed by each of the Designated Stockholders and
each director or officer of the Company;

            (b) the statement referred to in Section 5.8, executed by the
Company;

            (c) an estoppel certificate, dated as of a date not more than five
days prior to the Closing Date and satisfactory in form and content to TTIS,
executed by the landlords of the Company's leased premises in Greenbelt,
Maryland and Waltham, Massachusetts;

            (d) a legal opinion of Pillsbury Madison & Sutro LLP, dated as of
the Closing Date, in the form of Exhibit I;

            (e) a certificate executed by the Designated Stockholders and
containing the representation and warranty of each Designated Stockholder that
each of the representations and warranties set forth in Section 2 is accurate in
all respects as of the Closing Date as if made on the Closing Date and that the
conditions set forth in Sections 6.1, 6.2, 6.3 and 6.4 have been duly satisfied
(the "Designated Stockholders' Closing Certificate"); and

            (f) written resignations of all directors of the Company, effective
as of the Effective Time.

      6.6 FIRPTA Compliance. The Company shall have filed with the Internal
Revenue Service the notification referred to in Section 5.8.

      6.7 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.

      6.8 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by TTIS of any material right pertaining to its ownership of stock
of the Surviving Corporation.

                                      35.
<PAGE>

      6.9 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.

      6.10 Employees. No more than three (3) of the individuals identified on
Exhibit J shall have ceased to be employed by, or expressed an intention to
terminate their employment with, the Company.

      6.11 No Material Adverse Change. Since March 31, 1999, there shall have
been no material adverse change in the business, conditions, assets,
liabilities, operations, financial performance or prospects of the Company;
provided that TTIS first notifies the Company in writing of the alleged material
adverse change and gives the Company a commercially reasonable period to cure
the material adverse change (unless the change is a nature that it cannot be
cured or can only be cured in a manner that itself constitutes a material
adverse change).

      6.12 Bring-down of Fairness Opinion If Parent requests a bring-down of its
fairness opinion from AG Edwards, it shall have received a bring-down of such
opinion to a date immediately prior the Closing Date.

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

      The obligations of the Company to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of the following conditions:

      7.1 Accuracy of Representations. Each of the representations and
warranties made by TTIS and Merger Sub in this Agreement shall have been
accurate in all material respects as of the date of this Agreement (without
giving effect to any materiality or similar qualifications contained in such
representations and warranties), and shall be accurate in all material respects
as of the Scheduled Closing Time as if made at the Scheduled Closing Time
(without giving effect to any materiality or similar qualifications contained in
such representations and warranties).

      7.2 Performance of Covenants. All of the covenants and obligations that
TTIS and Merger Sub are required to comply with or to perform at or prior to the
Closing shall have been complied with and performed in all respects.

      7.3 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.

      7.4 Agreements and Documents. The Company shall have received the
following agreements and documents, each of which shall be in full force and
effect:

            (a) a legal opinion of Cooley Godward LLP, dated as of the Closing
Date, in the form of Exhibit K; and

            (b) the Guaranty Agreement, executed by Parent.

                                      36.
<PAGE>

            (c) a certificate executed by the President of TTIS containing the
representation and warranty that each of the representations and warranties set
forth in Section 3 is accurate in all respects as of the Closing Date as if made
on the Closing Date and that the conditions set forth in Sections 7.1, 7.2 and
7.6 have been duly satisfied.

      7.5 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.

      7.6 Consents. All Consents required to be obtained by TTIS in connection
with the Merger and the other transactions contemplated by this Agreement shall
have been obtained and shall be in full force and effect.

      7.7 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger.

8. TERMINATION

      8.1 Termination Events. This Agreement may be terminated prior to the
Closing:

            (a) by TTIS if TTIS reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of TTIS or Merger Sub to
comply with or perform any covenant or obligation of TTIS or Merger Sub set
forth in this Agreement);

            (b) by the Company if the Company reasonably determines that the
timely satisfaction of any condition set forth in Section 7 has become
impossible (other than as a result of any failure on the part of the Company or
any of the Designated Stockholders to comply with or perform any covenant or
obligation set forth in this Agreement or in any other agreement or instrument
delivered to TTIS);

            (c) by TTIS if the Closing has not taken place on or before August
2, 1999 (other than as a result of any failure on the part of TTIS to comply
with or perform any covenant or obligation of TTIS set forth in this Agreement);

            (d) by the Company if the Closing has not taken place on or before
August 2, 1999 (other than as a result of the failure on the part of the Company
or any of the Designated Stockholders to comply with or perform any covenant or
obligation set forth in this Agreement or in any other agreement or instrument
delivered to TTIS); or

            (e) by the mutual consent of TTIS and the Company.

      8.2 Termination Procedures. If TTIS wishes to terminate this Agreement
pursuant to Section 8.1(a) or Section 8.1(c), TTIS shall deliver to the Company
a written notice stating that TTIS is terminating this Agreement and setting
forth a brief description of the basis on which TTIS is terminating this
Agreement. If the Company wishes to terminate this Agreement pursuant to Section
8.1(b) or Section 8.1(d), the Company shall deliver to TTIS a written notice

                                      37.
<PAGE>

stating that the Company is terminating this Agreement and setting forth a brief
description of the basis on which the Company is terminating this Agreement.

      8.3 Effect of Termination. If this Agreement is terminated pursuant to
Section 8.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) neither the Company nor TTIS shall be
relieved of any obligation or liability arising from any prior breach by such
party of any provision of this Agreement; and (b) the parties shall, in all
events, remain bound by and continue to be subject to the provisions set forth
in Section 5.4 and Section 10.

9. INDEMNIFICATION, ETC.

      9.1 Survival of Representations, Etc.

            (a) The representations and warranties made by the Company and the
Designated Stockholders (including the representations and warranties set forth
in Section 2 and the representations and warranties set forth in the Designated
Stockholders' Closing Certificate) shall survive the Closing and shall expire on
the first anniversary of the Closing Date; provided, however, that if, at any
time prior to the first anniversary of the Closing Date, any Indemnitee (acting
in good faith) delivers to the Stockholders' Agent a written notice alleging the
existence of an inaccuracy in or a breach of any of the representations and
warranties made by the Company or Designated Stockholders (and setting forth in
reasonable detail the basis for such Indemnitee's belief that such an inaccuracy
or breach may exist) and asserting a claim for recovery under Section 9.2 based
on such alleged inaccuracy or breach, then the claim asserted in such notice
shall survive the first anniversary of the Closing until such time as such claim
is fully and finally resolved. All representations and warranties made by TTIS
and Merger Sub shall terminate and expire as of the Effective Time, and any
liability of TTIS or Merger Sub with respect to such representations and
warranties shall thereupon cease.

            (b) The representations, warranties, covenants and obligations of
the Company and the Designated Stockholders, and the rights and remedies that
may be exercised by the Indemnitees, shall not be limited or otherwise affected
by or as a result of any information furnished to, or any investigation made by
or knowledge of, any of the Indemnitees or any of their Representatives.

            (c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Company and the Designated Stockholders in this Agreement in the context of
the representation and warranty to which such statement or other item of
information applies.

      9.2 Indemnification by Stockholders.

            (a) From and after the Effective Time (but subject to Section
9.1(a)), the Stockholders, jointly but not severally, shall hold harmless and
indemnify each of the Indemnitees from and against, and shall compensate and
reimburse each of the Indemnitees for, any Damages which are directly or
indirectly suffered or incurred by any of the Indemnitees or to which any of the
Indemnitees may otherwise become subject (regardless of whether or not such

                                      38.
<PAGE>

Damages relate to any third-party claim) and which arise from or as a result of,
or are directly or indirectly connected with: (i) any inaccuracy in or breach of
any representation or warranty set forth in Section 2; (ii) any breach of any
covenant or obligation of the Company or any of the Designated Stockholders
(including the covenants set forth in Sections 4 and 5); or (iii) any Legal
Proceeding relating to any inaccuracy or breach of the type referred to in
clause "(i)" or "(ii)" above (including any Legal Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this Section
9)(each of the foregoing, an "Indemnification Event").

            (b) The Stockholders acknowledge and agree that, if the Surviving
Corporation suffers, incurs or otherwise becomes subject to any Damages as a
result of or in connection with any inaccuracy in or breach of any
representation, warranty, covenant or obligation, then (without limiting any of
the rights of the Surviving Corporation as an Indemnitee) TTIS shall also be
deemed, by virtue of its ownership of the stock of the Surviving Corporation, to
have incurred Damages as a result of and in connection with such inaccuracy or
breach.

      9.3 Threshold; Ceiling.

            (a) Except as set forth in this Section 9.3 the Stockholders shall
not be required to make any indemnification payment pursuant to Section 9.2 for
any inaccuracy in or breach of any of the representations, covenants or
obligations made by the Company or Designated Stockholders herein until such
time as the total amount of all Damages that have been directly or indirectly
suffered or incurred by any one or more of the Indemnitees, or to which any one
or more of the Indemnitees has or have otherwise become subject, exceeds
$250,000 in the aggregate. If the total amount of such Damages exceeds $250,000,
then the Indemnitees shall be entitled to be indemnified against and compensated
and reimbursed only for the portion of such Damages exceeding $250,000.

            (b) Except in the case of fraud, the Indemnitees' exclusive remedy
for any Indemnifiable Event shall be the indemnification provided for under this
Section 9 and the exclusive source of payment for any indemnification liability
under this Section 9, shall be in the form of an offset to the First Payment or
Second Payment in accordance with Section 9.8.

      9.4 No Contribution. Each Designated Stockholder waives, and acknowledges
and agrees that he shall not have and shall not exercise or assert (or attempt
to exercise or assert), any right of contribution, right of indemnity or other
right or remedy against the Surviving Corporation in connection with any
indemnification obligation or any other liability to which he may become subject
under or in connection with this Agreement or the Designated Stockholders'
Closing Certificate.

      9.5 Interest. Any Indemnitee who is held harmless, indemnified,
compensated or reimbursed pursuant to this Section 9 with respect to any Damages
shall also be entitled to receive interest on the amount of such Damages (but
only to the extent that the Damages on which interest accrues does not include
an interest accrual for the same period)(for the period commencing as of the
date on which the Stockholders' Agent first received notice of a claim for
recovery by such Indemnitee and ending on the date on which the liability for
such payment to

                                      39.
<PAGE>

such Indemnitee is fully satisfied) at a floating rate equal to the rate of
interest publicly announced by Bank of America, N.T. & S.A. from time to time as
its prime, base or reference rate.

      9.6 Defense of Third Party Claims. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against the
Surviving Corporation, against TTIS or against any other Person) with respect to
which the Stockholders may become obligated to hold harmless, indemnify,
compensate or reimburse any Indemnitee pursuant to this Section 9, TTIS shall
have the right, at its election, to proceed with the defense of such claim or
Legal Proceeding on its own. If TTIS so proceeds with the defense of any such
claim or Legal Proceeding, TTIS shall:

            (a) pursue the defense of such claim or Legal Proceeding diligently
and in good faith;

            (b) consult with the Stockholders' Agent or a representative thereof
(including legal counsel appointed by the Stockholders' Agent) throughout the
defense of such claim or Legal Proceeding regarding the status of, and the
strategy for defending, such claim or Legal Proceeding; and

            (c) have the right to settle, adjust or compromise such claim or
Legal Proceeding with the consent of the Stockholders' Agent, such consent not
to be unreasonably withheld.

      9.7 Exercise of Remedies by Indemnitees Other Than TTIS. No Indemnitee
(other than TTIS or any successor thereto or assign thereof) shall be permitted
to assert any indemnification claim or exercise any other remedy under this
Agreement unless TTIS (or any successor thereto or assign thereof) shall have
consented to the assertion of such indemnification claim or the exercise of such
other remedy.

      9.8 Recovery of Damages from First Payment or Second Payment. Any
Indemnitee that has suffered, incurred or otherwise become subject to any
Damages subject to indemnification in accordance with the provisions of this
Section 9, including the limitations on indemnification set forth in Section
9.3, shall be entitled to offset the aggregate amount of such Damages plus
interest thereon computed as set forth in Section 9.5 through an offset pro rata
against the First Payment and/or the Second Payment payable pursuant to Section
1.5(a)(ii)(to the extent that Damages are offset first against the principal
amount of any First Payment or Second Payment and then against any accrued and
unpaid interest); provided that the Indemnitee complies with the following
procedure:

            (a) Prior to any offset, the Indemnitee shall deliver to the
Stockholders' Agent a notice (a "Claim Notice") that shall: (i) state that the
Indemnitee has suffered or incurred Damages or reasonably believes in good faith
it will prospectively incur Damages, (ii) specify the amount of such Damages and
the date on which such Damages were suffered or incurred or are expected to be
incurred and (iii) specify in reasonable detail the facts alleged as the basis
for such Damages and the section or sections of this Agreement or other document
the violation or breach of which is alleged to have resulted in or given rise to
such Damages.

                                      40.
<PAGE>

            (b) If the Indemnitee delivers a Claim Notice to the Stockholders'
Agent and the Stockholders' Agent agrees with the Claim or fails to respond
within 30 calendar days commencing on the delivery of the Claim Notice, then
TTIS may offset the claim against the First Payment or Second Payment.

            (c) If, during the 30 day period commencing on the date of delivery
of a Claim Notice, TTIS shall have received a written notice from or on behalf
of the Stockholders' Agent stating that the Stockholders in good faith dispute
the claim asserted in such Claim Notice, then TTIS shall not make any offset
against the First Payment and/or the Second Payment until: (i) TTIS and the
Stockholders' Agent agree in writing on the amount of Damages to be offset, or
(ii) the disputed claim is resolved through a final arbitration in accordance
with this Agreement.

10. MISCELLANEOUS PROVISIONS

      10.1 Stockholders' Agent. By virtue of approval of this Agreement and the
Merger by the Company's Board of Directors and approval of this Agreement by the
Stockholders pursuant to the Company's Certificate of Incorporation and By-Laws
and applicable provisions of the Delaware General Corporation Law, each
Stockholder (whether or not he, she or it executes a letter of transmittal) will
be agreeing and hereby agrees as follows:

            (a) The Stockholders hereby irrevocably appoint, authorize and
empower Charles A. Fowler, and each successor appointed in accordance with this
Section 10.1, as their agent (the "Stockholders' Agent") in connection with and
to facilitate the consummation of the transactions contemplated by this
Agreement, and in connection with the activities to be performed on behalf of
Stockholders under this Agreement, for the purposes and with the powers and
authority hereinafter set forth in this Section 10.1, which shall include the
power and authority:

                  (i) to execute and deliver such waivers and consents in
connection with this Agreement and the consummation of the transactions
contemplated hereby and thereby as the Stockholders' Agent, in his sole
discretion, may deem necessary or desirable;

                  (ii) to enforce and protect the rights and interests of the
Stockholders and to enforce and protect the rights and interests of the
Stockholders' Agent arising out of or under or in any manner relating to this
Agreement and each other agreement, document, instrument or certificate referred
to herein or the transactions provided for herein (including, without
limitation, in connection with any and all claims for Damages brought by any
Indemnitee under Section 9 of this Agreement) and, in connection therewith, to:
(A) investigate, defend, contest or litigate any claim initiated by any
Indemnitee, or any other Person, against the Stockholders or the Stockholders'
Agent and receive process on behalf of the Stockholders in any such claim,
action, proceeding or investigation and compromise or settle on such terms as
the Stockholders' Agent shall determine to be appropriate, and give receipts,
releases and discharges on behalf of all of the Stockholders with respect to,
any such claim; (B) file any proofs of debts, claims and petitions as the
Stockholders' Agent may deem advisable or necessary; (C) settle or compromise
any claims asserted under Section 9 of this Agreement; (D) assume, on behalf of
all of the Stockholders the defense of any claim asserted under Section 9 of
this Agreement; and (E) file and prosecute appeals from any decision, judgment
or award

                                      41.
<PAGE>

rendered in any of the foregoing actions, proceedings or investigations, it
being understood that the Stockholders' Agent shall not have any obligation to
take any such actions, and shall not have any liability for any failure to take
any such actions;

                  (iii) to enforce payment of any amounts payable to the
Stockholders, in each case on behalf of the Stockholders, in the name of the
Stockholders' Agent or, if the Stockholders' Agent so elects, in the names of
one or more of the Stockholders;

                  (iv) to refrain from enforcing any right of the Stockholders
or any of them and/or of the Stockholders' Agent arising out of or under or in
any manner relating to this Agreement or any other agreement, instrument or
document in connection herewith;

                  (v) to make, execute, acknowledge and deliver all such other
agreements, guarantees, orders, receipts, endorsements, notices, requests,
instructions, certificates, stock powers, letters and other writings, and, in
general, to do any and all things and to take any and all action that the
Stockholders' Agent, in his sole and absolute discretion, may consider necessary
or proper or convenient in connection with or to carry out the activities
described in paragraphs (i) through (iv) above and the transactions contemplated
by this Agreement and all other agreements, documents or instruments referred to
herein or therein or executed in connection herewith or therewith.

      The grant of authority provided for in this Section 10.1: (i) is coupled
with an interest and is being granted, in part, as an inducement to TTIS and
Merger Sub to enter into this Agreement and shall be irrevocable and survive the
death, incompetency, bankruptcy or liquidation of any Stockholder and shall be
binding on any successor thereto; (ii) subject to the provisions of Section
10.1(j) below, may be exercised by the Stockholders' Agent acting by signing as
a Stockholders' Agent of each of the Stockholders; and (iii) shall survive the
delivery of an assignment by any Stockholder of the whole or any fraction of
his, her or its interest in this Agreement or any payment to be made to such
Stockholder hereunder.

            (b) In connection with the performance of his obligations hereunder,
the Stockholders' Agent shall have the right at any time and from time to time
to select and engage, at the cost and expense of the Stockholders, attorneys,
accountants, investment bankers, advisors, consultants and clerical personnel
and obtain such other professional and expert assistance, and maintain such
records, as the Stockholders' Agent may deem necessary or desirable and incur
other out-of-pocket expenses.

            (c) The Stockholders' Agent shall have the right to open such
account or accounts, which, in the discretion of the Stockholders' Agent, may or
may not be interest-bearing accounts, in his own name as Stockholders' Agent of
the Stockholders in any bank or trust company as he may select in order to
deposit all sums which he may receive and hold hereunder and to issue checks or
draw money upon his signature (or the signature of one or more Persons the
Stockholders' Agent may designate) on each such account. In accordance with
Section 1.5(a)(i) of this Agreement, an amount of $50,000 shall be withheld from
the initial cash payment to be paid to the Stockholders and deposited in an
account established in the name of the Stockholder's Agent for purposes of this
Section 10.1. The Stockholders' Agent shall have no responsibility or obligation
whatsoever to any of the Stockholders or to any other Person for

                                      42.
<PAGE>

the performance of any accounts or investments made in accordance with the
provisions of this Agreement or for any losses realized by any thereof.

            (d) The Stockholders' Agent shall be entitled to the payment of all
of his out-of-pocket expenses incurred as Stockholders' Agent, and in
furtherance of the foregoing, may pay or cause to be paid or reimburse himself
for the payment of any and all such expenses (it being understood that neither
TTIS nor the Company shall be responsible for any such payments).

            (e) In dealing with this and any instruments, agreements or
documents relating thereto, and in exercising or failing to exercise all or any
of the powers conferred upon the Stockholders' Agent hereunder or thereunder,
(i) the Stockholders' Agent shall not assume any, and shall incur no,
responsibility whatsoever to any of the Stockholders by reason of any error in
judgment or other act or omission performed or omitted hereunder or in
connection with this Agreement or any other agreement, instrument or document
other than with respect to willful misconduct or gross negligence on the part of
the Stockholders' Agent, and (ii) the Stockholders' Agent shall be entitled to
rely in good faith on the advice of counsel, public accountants or other
independent experts experienced in the matter at issue, and any error in
judgment or other act or omission of the Stockholders' Agent pursuant to such
advice shall in no event subject the Stockholders' Agent to liability to any of
the Stockholders of Seller's Stock or any other Person.

            (f) Each of the Stockholders shall indemnify the Stockholders' Agent
pro rata, based on the number of shares of the Company held by each Stockholder
immediately prior to the Effective Time, against all damages, liabilities,
claims, obligations, costs and expenses, including reasonable attorneys',
accountants' and other experts' fees and the amount of any judgment against
them, of any nature whatsoever, arising out of or in connection with any claim,
investigation, challenge, action or proceeding or in connection with any appeal
thereof, relating to the acts or omissions of the Stockholders' Agent hereunder
or otherwise. The foregoing indemnification shall not be deemed exclusive of any
other right to which the Stockholders' Agent may be entitled apart from the
provisions hereof.

            (g) All of the indemnities, immunities and powers granted to the
Stockholders' Agent under this Agreement shall survive the Closing and/or any
termination of this Agreement.

            (h) TTIS shall be entitled to deal exclusively with the
Stockholders' Agent on all matters relating to this Agreement and shall be
entitled to rely conclusively (without further evidence of any kind whatsoever)
on any document executed or purported to be executed on behalf of any
Stockholder by the Stockholders' Agent, and on any other action taken or
purported to be taken on behalf of any Stockholder by the Stockholders' Agent,
as fully binding upon such Stockholder.

            (i) If the Stockholders' Agent shall die, become disabled or
otherwise be unable to fulfill his responsibilities as agent of the
Stockholders, then the Stockholders (by majority vote based upon the number of
shares held by the Stockholder in the Company immediately prior to the Effective
Time) shall, within ten days after such death or disability,

                                      43.
<PAGE>

appoint a successor agent and, promptly thereafter, shall notify TTIS of the
identity of such successor. Any successor Stockholders' Agent shall have all of
the authority and responsibilities conferred upon or delegated to a
Stockholders' Agent pursuant to this Section 10.1. If for any reason there is no
Stockholders' Agent at any time, all references herein to the Stockholders'
Agent shall be deemed to refer to the Designated Stockholders.

            (j) The Stockholders' Agent may be removed at any time by a written
notice to the Stockholders' Agent, the Stockholders and TTIS delivered by
Stockholders holding a majority vote (based upon the number of shares held by
the Stockholders in the Company immediately prior to the Effective Time). A
Stockholders' Agent so removed shall be replaced promptly in accordance with
Section 10.1(i).

      10.2 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.

      10.3 Fees and Expenses.

            (a) Each party to this Agreement shall bear and pay all fees, costs
and expenses (including legal fees and accounting fees and including any special
bonuses or change of control payments payable by the Company if the Merger is
consummated) that have been incurred or that are incurred by such party in
connection with the transactions contemplated by this Agreement, including all
fees, costs and expenses incurred by such party in connection with or by virtue
of (a) the investigation and review conducted by TTIS and its Representatives
with respect to the Company's business (and the furnishing of information to
TTIS and its Representatives in connection with such investigation and review),
(b) the negotiation, preparation and review of this Agreement (including the
Disclosure Schedule) and all agreements, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
transactions contemplated by this Agreement, (c) the preparation and submission
of any filing or notice required to be made or given in connection with any of
the transactions contemplated by this Agreement, and the obtaining of any
Consent required to be obtained in connection with any of such transactions, and
(d) the consummation of the Merger. Any Stockholder who retains counsel or
advisors (other than counsel to the Company) to advise or represent such
Stockholder in connection with such transaction shall be responsible for paying
such fees and shall not seek reimbursement from TTIS or the Company.
Notwithstanding anything to the contrary contained in this Section, the
Stockholders and TTIS shall each bear and pay 50% of all filing fees required to
be paid under the HSR Act, in connection with the transactions contemplated
hereby. Immediately prior to the Effective Time, the Company shall provide to
TTIS the amount of all of its accrued transaction costs (will shall include a
good faith estimate of any amounts that have not yet been billed and paid) and
TTIS shall reduce the cash Merger Consideration payable by the total amount of
the Company's transaction costs.

            (b) Notwithstanding the foregoing, if the Company and/or any of the
Stockholders elect not to consummate this transaction, other than as a result of
a breach of Section 4.4 hereof, they shall pay TTIS's actual transaction costs,
fees and expenses incurred up

                                      44.
<PAGE>

to $75,000. In the event that the Company and/or the Stockholders fail to
consummate this transaction as a result of a breach of Section 4.4 hereof, then
so long as TTIS does not first withdraw from this transaction, the Company and
the Stockholders shall pay TTIS's actual transaction costs, fees and expenses up
to $250,000. If TTIS elects not to consummate this transaction, other than due
to a material adverse change as set forth in Section 6.11 or other than failure
of the conditions to closing set forth in Sections 6.1, 6.2, 6.3 or 6.4, it
shall pay the Company's transaction costs, fees and expenses incurred up to
$250,000.

      10.4 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).

      10.5 Notices. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):

        if to TTIS:
                              The Titan Corporation
                              3033 Science Park Road
                              San Diego, CA  92121
                              Attention: Ira Frazer, Esq., General Counsel
                              Telephone: (858) 552-9500
                              Facsimile: (858) 597-9055

        with a copy to:
                              Barbara L. Borden, Esq.
                              Cooley Godward LLP
                              4365 Executive Drive, Suite 1100
                              San Diego, CA  92121-2128
                              Telephone: (858) 550-6000
                              Facsimile: (858) 453-3555

        if to the Company:    Atlantic Aerospace Electronics Corporation
                              6404 Ivy Lane, Suite 300
                              Greenbelt, MD 20770-1406
                              Telephone: (301) 220-1501
                              Facsimile: (301) 982-5278

        with a copy to:       Pillsbury Madison & Sutro LLP
                              1100 New York Avenue, N.W.
                              Washington, D.C. 20005-3918
                              Attention: Keith J. Mendelson, Esq.
                              Telephone: (202) 861-3593

                                      45.
<PAGE>

                              Facsimile: (202) 822-0944

            if to Stockholders' Agent:
                              Charles A. Fowler
                              15 Woodberry Road
                              Sudbury, MA  01776
                              Telephone: (978) 443-7509
                              Facsimile: (978) 443-7509

      10.6 Confidentiality. Without limiting the generality of anything
contained in Section 5.5, on and at all times after the Closing Date, each
Designated Stockholder shall keep confidential, and shall not use or disclose to
any other Person, any non-public document or other non-public information in
such Designated Stockholder's possession that relates to the business of the
Company or TTIS.

      10.7 Time of the Essence. Time is of the essence of this Agreement.

      10.8 Headings. The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

      10.9 Counterparts. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.

      10.10 Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).

      10.11 Successors and Assigns. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); the Designated Stockholders and
their respective personal representatives, executors, administrators, estates,
heirs, successors and assigns (if any); TTIS and its successors and assigns (if
any); and Merger Sub and its successors and assigns (if any). This Agreement
shall inure to the benefit of: the Company; the Company's stockholders (to the
extent set forth in Section 1.7); TTIS; Merger Sub; the other Indemnitees
(subject to Section 9.7); and the respective successors and assigns (if any) of
the foregoing. TTIS may freely assign any or all of its rights under this
Agreement (including its indemnification rights under Section 9), in whole or in
part, to any other Person without obtaining the consent or approval of any other
party hereto or of any other Person.

      10.12 Remedies Cumulative; Specific Performance. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the

                                      46.
<PAGE>

observance and performance of such covenant, obligation or other provision, and
(b) an injunction restraining such breach or threatened breach.

      10.13 Waiver.

            (a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.

            (b) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.

      10.14 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.

      10.15 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.

      10.16 Parties in Interest. Except for the provisions of Sections 1.5, 1.8
and 1.9 and 9, none of the provisions of this Agreement is intended to provide
any rights or remedies to any Person other than the parties hereto and their
respective successors and assigns (if any).

      10.17 Entire Agreement. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof; provided, however, that the Mutual Non-Disclosure
Agreement executed on behalf of TTIS and the Company on __________, ____ shall
not be superseded by this Agreement and shall remain in effect in accordance
with its terms until the earlier of (a) the Effective Time, or (b) the date on
which such Mutual Non-Disclosure Agreement is terminated in accordance with its
terms.

      10.18 Construction.

            (a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.

                                      47.
<PAGE>

            (b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.

            (c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."

            (d) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.

      10.19 Negotiation of Disputes. Except as provided in Section 1.5(a)(ii)(7)
if a dispute arises between the parties relating to the interpretation or
performance of this Agreement or any other agreement or instrument that is an
exhibit to this Agreement or the grounds for the termination thereof, and the
parties cannot resolve the dispute within thirty days of a written request by
either party to the other, such dispute shall be referred to the Chief Financial
Officer of TTIS and the Stockholders' Agent for resolution. Such persons shall
hold a meeting to attempt in good faith to negotiate a resolution of the dispute
prior to pursuing other available remedies. If within 10 business days after
such meeting, the Chief Financial Officer of TTIS and the Stockholders' Agent
have not succeeded in negotiating a resolution of the dispute, such dispute
shall be submitted to arbitration as set forth in Section 10.19(a) below:

            (a) Arbitration. Except as provided in Section 1.5(a)(ii)(1)
disputes that have not been successfully resolved pursuant to Section 10.19
above shall be submitted to final and binding arbitration under the then current
commercial rules and regulations of JAMS Endispute ("JAMS") relating to
voluntary arbitration in San Diego, California. The arbitration shall be
conducted by three arbitrators, one selected by each party to the arbitration
and one selected by arbitrators appointed by the parties. If the arbitrators
cannot agree on a third arbitrator, the third arbitrator shall be selected in
accordance with the JAMS rules. If a party fails to designate an arbitrator
within the time limits set by the JAMS rules, the arbitrator selected by the
other party shall be the sole arbitrator. All arbitrators must be knowledgeable
in the subject matter at issue in the dispute. Each party shall initially bear
its own costs and legal fees associated with such arbitration and the parties
shall split the cost of the arbitrators. The prevailing party in any such
arbitration shall be entitled to recover from the other party the reasonable
attorneys' fees, costs and expenses incurred by such prevailing party in
connection with such arbitration. The decision of the arbitrator(s) shall be
final and may be sued on or enforced by the party in whose favor it runs in any
court of competent jurisdiction at the option of the successful party. The
rights and obligations of the parties to arbitrate any dispute relating to the
interpretation or performance of this Agreement or the grounds for the
termination thereof, shall survive the expiration or termination of this
Agreement for any reason. The arbitrator(s) shall be empowered to award specific
performance, injunctive relief and other equitable remedies as well as damages,
but shall not be empowered to award punitive or exemplary damages or award any
damages in excess of any limitations set forth in this Agreement.

                                      48.
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of July 1, 1999.

                                              TITAN TECHNOLOGIES AND INFORMATION
                                              SYSTEMS CORPORATION,
                                              a Delaware corporation

                                              By:  _____________________________

                                              Its: _____________________________

                                              TTIS MERGERCO, INC.,
                                              a Delaware corporation

                                              By:  _____________________________

                                              Its: _____________________________

                                              ATLANTIC AEROSPACE ELECTRONICS
                                              CORPORATION,
                                              a Delaware corporation

                                              By:  _____________________________

                                              Its: _____________________________

                [AGREEMENT AND PLAN OF MERGER AND REORGANIZATION]
<PAGE>

                                         DESIGNATED STOCKHOLDERS:

                                               _________________________________
                                               ROBERT S. COOPER

                                               _________________________________
                                               V. LARRY LYNN

                                               _________________________________
                                               A. CHARLES BUFFALANO

                [AGREEMENT AND PLAN OF MERGER AND REORGANIZATION]
<PAGE>

                                    EXHIBIT A

                             DESIGNATED STOCKHOLDERS

Robert S. Cooper
V. Larry Lynn
A. Charles Buffalano

                                      A-1.
<PAGE>

                                   EXHIBIT B

                               CERTAIN DEFINITIONS

      For purposes of the Agreement (including this Exhibit B):

      Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:

            (a) the sale, license, disposition or acquisition of all or a
      material portion of the Company's business or assets;

            (b) the issuance, disposition or acquisition of (i) any capital
      stock or other equity security of the Company (other than common stock
      issued to employees of the Company, upon exercise of Company Options or
      otherwise, in routine transactions in accordance with the Company's past
      practices), (ii) any option, call, warrant or right (whether or not
      immediately exercisable) to acquire any capital stock or other equity
      security of the Company (other than stock options granted to employees of
      the Company in routine transactions in accordance with the Company's past
      practices), or (iii) any security, instrument or obligation that is or may
      become convertible into or exchangeable for any capital stock or other
      equity security of the Company; or

            (c) any merger, consolidation, business combination, reorganization
      or similar transaction involving the Company.

      Agreement. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit B is attached (including the Disclosure
Schedule), as it may be amended from time to time.

      Company Contract. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any of its assets is or may
become bound or under which the Company has, or may become subject to, any
obligation; or (c) under which the Company has or may acquire any right or
interest.

      Company Proprietary Asset. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company or otherwise used by the
Company.

      Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).

      Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.

      Damages. "Damages" shall include any loss, damage, injury, decline in
value, liability, claim, demand, settlement, judgment, award, fine, penalty,
Tax, fee (including reasonable attorneys' fees), charge, cost (including costs
of investigation) or expense of any nature less

                                      B-1.
<PAGE>

amounts recovered through insurance (provided that the claim does not cause an
increase in the Surviving Company's or its affiliates insurance premiums).

      Disclosure Schedule. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to TTIS on behalf of the Company and
the Designated Stockholders.

      Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).

      Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.

      Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

      First Payment. "First Payment" shall mean any of the contingent payment
amount earned in accordance with Section 1.5(a)(ii) on or before the First
Payment Date.

      "First Payment Date. "First Payment Date" shall mean the last business day
of the month which is the twenty-first month after the month in which the
Closing occurs.

      Government Bid. "Government Bid" shall mean any quotation, bid or proposal
submitted to any Governmental Body or any proposed prime contractor or
higher-tier subcontractor of any Governmental Body.

      Government Contract. "Government Contract" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order executed or
submitted to or on behalf of any Governmental Body or any prime contractor or
higher-tier subcontractor, or under which any Governmental Body or any such
prime contractor or subcontractor otherwise has or may acquire any right or
interest.

      Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.

      Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or

                                      B-2.
<PAGE>

quasi-governmental authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization, unit,
body or Entity and any court or other tribunal).

      HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

      Indemnitees. "Indemnitees" shall mean the following Persons: (a) TTIS; (b)
TTIS's current and future affiliates (including the Surviving Corporation); (c)
the respective Representatives of the Persons referred to in clauses "(a)" and
"(b)" above; and (d) the respective successors and assigns of the Persons
referred to in clauses "(a)", "(b)" and "(c)" above; provided, however, that the
Designated Stockholders shall not be deemed to be "Indemnitees."

      Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit
(other than federal income tax audits), examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any court or
other Governmental Body or any arbitrator or arbitration panel.

      Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.

      Material Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Company if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement or
in the Designated Stockholders' Closing Certificate but for the presence of
"Material Adverse Effect" or other materiality qualifications, or any similar
qualifications, in such representations and warranties) would have a material
adverse effect on the Company's business, condition, assets, liabilities,
operations, financial performance or prospects.

      Person. "Person" shall mean any individual, Entity or Governmental Body.

      Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of the
foregoing.

      Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.

                                      B-3.
<PAGE>

      SEC. "SEC" shall mean the United States Securities and Exchange
Commission.

      Second Payment. "Second Payment" shall mean any of the contingent payments
earned in accordance with Section 1.5(a)(ii) on or before June 30, 2002 that
were not earned on or before the First Payment Date.

      Second Payment Date. "Second Payment Date" shall mean the last business
day of the month which is the thirty-ninth month after the month in which the
Closing occurs.

      Second Payment Earn Date. "Second Payment Earn Date" shall mean the last
business day of the month which is the thirty-sixth month after the month in
which the Closing occurs.

      Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.

      Stockholders' Agent. "Stockholders' Agent" shall have the meaning assigned
to such term in Section 10.1 of the Agreement.

      Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.

      Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.

      Year 2000 Compliant. "Year 2000 Compliant" shall mean, in regard to any
product or internal system, that such product or internal system can
individually continue to be used normally and to operate successfully (both in
functionality and performance in all material respects) over the transition into
the twenty first century when used in accordance with the documentation relating
to such product or internal system, including being able to, before, on and
after January 1, 2000 substantially conform to the following: (i) use logic
pertaining to dates that allow users to identify and/or use the century portion
of any date fields without special processing; and (ii) respond to all date
elements and date input so as to resolve any ambiguity as to century in a
disclosed, defined and pre-determined manner and provide date information in
ways that are unambiguous as to century, either by permitting or requiring the
century to be specified or where the data element is represented without a
century, the correct century is unambiguous for all manipulations involving that
element.

                                      B-4.
<PAGE>

                                    EXHIBIT C

                             PRINCIPAL STOCKHOLDERS

Harry B. Lee
Robert Stovall
Ted Bially
Robert Schneider

                                      C-1.

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