SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 8-K


                Current Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                                February 28, 1998
                Date of Report (Date of earliest event reported)


                              ADVENT SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)


                                    Delaware
                 (State or other jurisdiction of incorporation)
                                      
                                   94-2901952
                      (I.R.S. Employer Identification No.)

                                     0-26994
                            (Commission File Number)


                               301 Brannan Street
                         San Francisco, California 94107
                    (Address of principal executive offices)

                                 (415) 543-7696
              (Registrant's telephone number, including area code)





<PAGE>




Item 2.           Acquisition or Disposition of Assets.

     On February 28, 1998,  Advent Software,  Inc., a Delaware  corporation (the
"Registrant"  or "Advent  Software")  acquired  (the  "Acquisition")  all of the
outstanding   capital  stock  of  MicroEdge,   Inc.,  a  New  York   corporation
("MicroEdge"),  from Ximena Florez and Dov Torenberg,  the sole  shareholders of
MicroEdge (the  "Sellers"),  for a total  purchase price of $9,093,250  worth of
Registrant's  stock  as  priced  on the  date of  closing.  As a  result  of the
Acquisition, MicroEdge became a wholly-owned subsidiary of the Registrant.

                  In connection with the Acquisition, Nine Hundred Nine Thousand
Three Hundred Twenty- Five Dollars  ($909,325) of the  consideration  payable in
connection with the Acquisition (the "Escrow Amount") was placed into escrow, to
be held as security for any losses  incurred by the  Registrant  in the event of
certain  breaches by  MicroEdge of  covenants,  representations  and  warranties
contained in the Stock Purchase Agreement dated February 28, 1998 by and between
the  Registrant,  MicroEdge,  and  the  Sellers.  A copy of the  Stock  Purchase
Agreement is filed as Exhibit 2.1 to this report and is  incorporated  herein by
this reference.

                  The  Acquisition  will be treated as a pooling for  financial
accounting purposes.

Item 7.  Financial Statements and Exhibits.

                  The following  financial  statements and exhibits are filed as
part of this report, where indicated.

         (a) Financial  statements of business  acquired,  prepared  pursuant to
Rule 3.05 of Regulation S-X:

                  Not applicable.

         (b) Pro forma financial  information required pursuant to Article 11 of
Regulation S-X:

                  Not applicable.

         (c) Exhibits in accordance with Item 601 of Regulation S-K:

                  Exhibits.

                  2.1      Stock Acquisition Agreement, dated as of February 28,
                           1998, by and among Advent Software,  Inc., a Delaware
                           corporation, MicroEdge, Inc., a New York corporation,
                           and the Sellers.

                  4.1      Form of Declaration of Registration Rights.


     The Registrant agrees to supplementally furnish the Securities and Exchange
Commission with a copy of any other exhibits or schedules upon request.




<PAGE>



                                INDEX TO EXHIBITS



                                                                                
      EXHIBIT    DESCRIPTION                                     
      NUMBER

          2.1  Stock Purchase  Agreement,  dated as of February 28, 1998, by and
               among Advent Software,  Inc., a Delaware corporation,  MicroEdge,
               Inc.,  a  New  York  corporation,   and  Ximena  Florez  and  Dov
               Torenberg, sole shareholders of MicroEdge, Inc.


          4.1  Form of Declaration of Registration Rights.








<PAGE>



                                   SIGNATURES



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

                                                           ADVENT SOFTWARE, INC.



Dated:   February 28, 1998          By:   /s/ Irv H. Lichtenwald
                                          ----------------------
                                           Irv H. Lichtenwald
                                         Senior Vice President, Chief Financial
                                            Officer and Secretary





<PAGE>

                                                                     EXHIBIT 2.1

                            STOCK PURCHASE AGREEMENT


         This STOCK PURCHASE  AGREEMENT  (this  "Agreement") is made and entered
into as of February  28, 1998 by and among  Advent  Software,  Inc.,  a Delaware
corporation ("Buyer"),  MicroEdge, Inc., a New York corporation ("Company"), and
all of the holders of the outstanding  securities of the Company,  which holders
are listed on Exhibit A hereto  (individually  a "Seller" and  collectively  the
"Sellers").

                                    RECITALS

         A.  Sellers  own  all of  the  issued  and  outstanding  shares  of the
Company's  Common Stock (the "Shares"),  which  constitute all of the issued and
outstanding securities of the Company.

         B. Sellers desire to sell the Shares, and Buyer desires to purchase all
of the Shares.  The parties  hereto are entering into this  Agreement to provide
for  Buyer's   acquisition  of  the  Shares  and  Company  thereby   becoming  a
wholly-owned  subsidiary of Buyer, and to establish various rights,  obligations
and conditions in connection  therewith (the  "Acquisition").  It is intended by
the parties hereto that the Acquisition  shall qualify for accounting  treatment
as a pooling of interests.

         NOW,  THEREFORE,  in  consideration  of  the  covenants,  promises  and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:


                                    ARTICLE I

                            THE ACQUISITION OF SHARES

         1.1   Purchase   and  Sale  of   Shares.   In   consideration   of  the
representations,  warranties and other agreements of the Company and the Sellers
set forth in or otherwise  contemplated by this Agreement,  and on the terms and
subject to the  conditions  of this  Agreement,  Buyer will purchase the Shares,
constituting all of the issued and outstanding  securities of the Company,  from
Sellers for the consideration set forth in Section 1.2, and Sellers hereby sell,
transfer,  assign and deliver all of their respective rights, title and interest
in and to the Shares to Buyer.

         1.2      Consideration.

                  (a)  Issuance of Buyer Common  Stock.  As  consideration  (the
"Consideration")  for the sale,  transfer,  assignment  and  delivery  of all of
Sellers' right, title and interest in and to the Shares to Buyer, Buyer will, at
the Closing (defined below),  on the terms and subject to the conditions of this
Agreement, issue to Sellers a number of shares of Buyer Common Stock (the "Buyer
Share Number") equal to (i) the Conversion  Ratio (defined below)  multiplied by
the Aggregate Company Common


                                       -1-

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Number (defined below),  rounded down to eliminate any fractional  shares,  less
(ii) the Escrow Amount (defined below).

                  (b)  Deposit  of Escrow  Amount.  At the  Closing,  Buyer will
deposit into an escrow account, as set forth in Article V, a number of shares of
Buyer Common Stock equal to the Escrow Amount.

                  (c)  Adjustments to Conversion  Ratio.  The  Conversion  Ratio
shall be adjusted to reflect fully the effect of any stock split, reverse split,
stock dividend (including any dividend or distribution of securities convertible
into  Company  Common  Stock),  reorganization,  recapitalization  or other like
change with respect to Company Common Stock  occurring after the date hereof and
prior to the Closing.

                  (d)  Determination of Conversion Ratio and Escrow Amount.  The
"Conversion  Ratio"  shall  refer  to the  quotient  obtained  by  dividing  the
Aggregate Buyer Common Number  (defined  below) by the Aggregate  Company Common
Number.  The "Escrow Amount" shall refer to the product  obtained by multiplying
the Aggregate Buyer Common Number by 0.10. The "Aggregate Company Common Number"
shall equal 100. The  "Aggregate  Buyer Common  Number"  shall be  determined as
follows: (i) in the event that the average closing price of Buyer's Common Stock
for the five  trading  days ending two trading days before the date on which the
Closing occurs (the "Average  Price") is less than $22.00,  the Aggregate  Buyer
Common  Number shall equal the quotient  obtained by dividing  $6,600,000 by the
Average  Price,  provided,  however,  that in the event such quotient is greater
than 350,000,  the Aggregate  Buyer Common Number shall be deemed to be equal to
350,000;  (ii) in the event the Average Price is greater than or equal to $22.00
but less than $28.00, the Aggregate Buyer Common Number shall equal 300,000; and
(iii) in the event the  Average  Price is greater  than or equal to $28.00,  the
Aggregate  Buyer Common  Number  shall equal the  quotient  obtained by dividing
$8,400,000  by the  Average  Price,  provided,  however,  that in the event such
quotient is less than 250,000, the Aggregate Buyer Common Number shall be deemed
to be equal to 250,000.

         1.3      Closing; Delivery.

                  (a) Closing.  The closing of the  Acquisition  (the "Closing")
will take place  concurrently with the execution hereof at the offices of Wilson
Sonsini  Goodrich  & Rosati,  650 Page Mill  Road,  Palo  Alto,  California  and
MicroEdge,  Inc., 619 West 54th Street, 10th Floor, New York, New York. The date
upon which the Closing  actually  occurs is herein  referred to as the  "Closing
Date."

                  (b)      Delivery at Closing.  At the Closing:

     (i) Each Seller will deliver to Buyer all stock certificates, stock powers,
endorsements,  assignments  and other  instruments  and  documents  necessary or
appropriate to sell, convey, assign and deliver the Shares to Buyer.



                                       -2-

<PAGE>



     (ii) Buyer will deliver to each Seller  documentation  in a form reasonably
satisfactory  to the Company  evidencing  Buyer's  instructions  to its transfer
agent to deliver to each Seller a certificate representing a number of shares of
its Common  Stock equal to (A) the product of (x) the number of Shares  owned by
such Seller, as set forth in Schedule 2.2(a), and (y) the Conversion Ratio, less
(B) a portion of the Escrow Amount equal to the proportion of Buyer Common Stock
which such Seller would  otherwise be entitled to receive  under  Section 1.2 by
virtue of his or her ownership of outstanding Shares.

     (iii) The Company shall deliver to Buyer evidence  reasonably  satisfactory
to it that the  Agreement  and the  Acquisition  shall  have  been  adopted  and
approved  by  the  stockholders  of the  Company  by the  requisite  vote  under
applicable law and the Company's Articles of Incorporation.

     (iv) Buyer shall deliver to the Company evidence reasonably satisfactory to
it that the shares of Buyer Common Stock issuable to stockholders of the Company
pursuant to this  Agreement  and such other  shares  required to be reserved for
issuance in  connection  with the  Acquisition  shall have been  authorized  for
listing on The Nasdaq National Market upon official notice of issuance.

     (v) The Company shall deliver to Buyer evidence satisfactory to it that the
Company has obtained the  consents,  approvals and waivers set forth in Schedule
1.3(b)(v)  (including,  without limitation,  any consents,  waivers or approvals
required  under any  contract or agreement to which the Company is a party or by
which it is bound and which are necessary in connection  with the Acquisition to
transfer to the Surviving Corporation all rights of the Company thereunder).

     (vi) The Company shall  deliver to Buyer a legal  opinion in  substantially
the form  attached  hereto as Exhibit B from  Moskowitz,  Altman & Hughes,  LLP,
legal counsel to the Company.

     (vii) Buyer shall deliver to the Company a legal  opinion in  substantially
the form  attached  hereto as Exhibit C from Wilson  Sonsini  Goodrich & Rosati,
legal counsel to the Buyer.

     (viii) The Company shall  deliver an executed  Affiliate  Agreement,  which
shall be in full force and effect, executed by each of the parties identified by
the Company as being an Affiliate of the Company.

     (ix) Each of the Sellers shall  deliver to Buyer an executed  Stockholder's
Certificate which shall be in full force and effect.

     (x) Each of the Sellers  shall,  and the Sellers shall cause Ephy Torenberg
to, deliver to Buyer an Employment and Employment and Non-Competition  Agreement
pursuant to Section 4.15 hereof, which Employment and Non-Competition Agreements
shall not have been  terminated or repudiated by either Seller,  and shall be in
full force and effect.




                                       -3-

<PAGE>



     (xi) The Company shall deliver to Buyer evidence reasonably satisfactory to
it that the directors of the Company in office  immediately prior to the Closing
have resigned as directors of the Company  effective  immediately  following the
Closing.

         1.4 Directors and  Officers.  At the Closing,  Stephanie G. DiMarco and
Irv H.  Lichtenwald of Buyer shall become the directors of the Company,  each to
hold office in accordance with the Articles of  Incorporation  and Bylaws of the
Company.  At the Closing,  Dov Torenberg shall become  President,  Ximena Florez
shall become Vice President,  Sales, Marketing and Professional  Services,  Ephy
Torenberg shall become Vice President,  Operations and Irv H. Lichtenwald  shall
become Chief Financial Officer and Secretary,  each to hold office in accordance
with the Bylaws of the Company.

         1.5  Lost,  Stolen  or  Destroyed   Certificates.   In  the  event  any
certificates  evidencing  shares of Company  Common  Stock shall have been lost,
stolen or destroyed, the Buyer's transfer agent shall issue in exchange for such
lost, stolen or destroyed certificates,  upon the making of an affidavit of that
fact by the holder thereof, such shares of Buyer Common Stock as may be required
pursuant to Section 1.2;  provided,  however,  that Buyer may, in its discretion
and as a condition precedent to the issuance thereof,  require the owner of such
lost,  stolen or destroyed  certificates to deliver a bond in such sum as it may
reasonably  direct as indemnity against any claim that may be made against Buyer
or its  transfer  agent with  respect to the  certificates  alleged to have been
lost, stolen or destroyed.

         1.6 Tax and  Accounting  Consequences.  It is  intended  by the parties
hereto that the  Acquisition  shall (i) constitute a  reorganization  within the
meaning of Section 368 of the Code and (ii) qualify for accounting  treatment as
a pooling of interests.


                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as disclosed in a document dated as of the date hereof referring
specifically to the  representations,  warranties or covenants in this Agreement
which  reasonably  identifies  the basis for an exception  to a  representation,
warranty or covenant in this  Agreement and which is delivered by the Company to
Buyer prior to the execution of this  Agreement (the "Company  Schedules"),  the
Company represents and warrants to Buyer as set forth below.

         2.1  Organization  of the Company.  The Company is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
New York. The Company has the corporate power to own its properties and to carry
on its  business as now being  conducted.  The Company is duly  qualified  to do
business and in good standing as a foreign  corporation in each  jurisdiction in
which the failure to be so qualified would have, or would reasonably be expected
to have, a material adverse effect on the business, financial condition, results
of operations, assets (including intangible assets), liabilities or prospects of
the  Company  (hereinafter  referred  to as a "Material  Adverse  Effect").  The
Company



                                       -4-

<PAGE>



has  delivered a true and correct  copy of its  Articles  of  Incorporation  and
Bylaws, each as amended to date, to Buyer.

         2.2      Company Capital Structure.

                  (a) The  authorized  capital stock of the Company  consists of
1,000 shares of authorized  Common Stock,  no par value, of which 100 shares are
issued  and  outstanding.  The  Company  Capital  Stock is held of record by the
persons,  with the addresses of record and in the amounts, set forth on Schedule
2.2(a).  All outstanding  shares of Company  Capital Stock are duly  authorized,
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights  created by  statute,  the  Articles  of  Incorporation  or Bylaws of the
Company  or any  agreement  to which  the  Company  is a party or by which it is
bound.

                  (b) There are no options, warrants, calls, rights, commitments
or agreements of any character,  written or oral, to which either the Company or
a Seller is a party or by which either is bound obligating either the Company or
either Seller to issue,  deliver,  sell,  repurchase  or redeem,  or cause to be
issued,  delivered,  sold,  repurchased  or redeemed,  any shares of the capital
stock of the Company or  obligating  Company to grant,  extend,  accelerate  the
vesting of, change the price of,  otherwise amend or enter into any such option,
warrant, call, right,  commitment or agreement. As a result of this Acquisition,
Buyer will be the record and sole beneficial  owner of all  outstanding  capital
stock of the  Company  and rights to acquire  or  receive  capital  stock of the
Company.

         2.3 Subsidiaries. Except as set forth in Schedule 2.3, the Company does
not have and has never had any subsidiaries or affiliated companies and does not
otherwise own and has never  otherwise  owned any shares of capital stock or any
interest  in,  or  control,  directly  or  indirectly,  any  other  corporation,
partnership, association, joint venture or other business entity.

         2.4  Authority.  The  Company  has all  requisite  corporate  power and
authority to enter into this  Agreement and the  agreements  attached  hereto as
exhibits to which it is a party (the "Related Agreements") and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Related  Agreements and the  consummation of the  transactions
contemplated  hereby and  thereby  have been duly  authorized  by all  necessary
corporate  action on the part of the Company.  The Company's  Board of Directors
has unanimously approved the Acquisition and this Agreement.  This Agreement and
the Related  Agreements have been duly executed and delivered by the Company and
each Seller and constitute  the valid and binding  obligation of the Company and
each Seller, enforceable in accordance with their respective terms except (i) as
limited by applicable  bankruptcy,  insolvency,  reorganization,  moratorium and
other laws of general  application  affecting  enforcement of creditors'  rights
generally and (ii) as limited by laws relating to the  availability  of specific
performance,  injunctive relief or other equitable remedies. Except as set forth
on Schedule 2.4, the execution and delivery of this Agreement by the Company and
each Seller  does not,  and, as of the Closing  Date,  the  consummation  of the
transactions  contemplated  hereby  will not,  conflict  with,  or result in any
violation  of, or default  under  (with or without  notice or lapse of time,  or
both), or give rise to a right of  termination,  cancellation or acceleration of
any obligation or loss of any benefit under (any such



                                      -5-

<PAGE>



event,  a  "Conflict")  (i) any  provision of the Articles of  Incorporation  or
Bylaws of the Company or (ii) any mortgage,  indenture, lease, contract or other
agreement or  instrument,  permit,  concession,  franchise,  license,  judgment,
order, decree,  statute,  law, ordinance,  rule or regulation  applicable to the
Company or its  properties or assets.  No consent,  waiver,  approval,  order or
authorization  of, or  registration,  declaration  or filing  with,  any  court,
administrative  agency or commission or other federal,  state,  county, local or
foreign   governmental   authority,   instrumentality,   agency  or   commission
("Governmental  Entity") or any third party (so as not to trigger any  Conflict)
is required by or with respect to the Company or any Seller in  connection  with
the  execution  and  delivery  of  this  Agreement  or the  consummation  of the
transactions  contemplated  hereby,  except  for  (i)  such  consents,  waivers,
approvals, orders,  authorizations,  registrations,  declarations and filings as
may be required under applicable federal and state securities laws and (ii) such
other consents,  waivers,  authorizations,  filings, approvals and registrations
which are set forth on Schedule 2.4.

         2.5      Company Financial Statements.

                  (a) Schedule 2.5 sets forth the Company's unaudited,  reviewed
balance  sheet as of  December  31, 1997 (the  "Balance  Sheet") and the related
unaudited,  reviewed  statements of  operations,  stockholders'  equity and cash
flows  for the year then  ended and the  footnotes  thereto  (collectively,  the
"Company  Financials").  The  Company  Financials  are  correct in all  material
respects and have been prepared in accordance with generally accepted accounting
principles  ("GAAP")  applied  on a  basis  consistent  throughout  the  periods
indicated and consistent with each other. The Company  Financials present fairly
the financial condition and operating results of the Company as of the dates and
during the periods indicated therein.

         2.6 No  Undisclosed  Liabilities.  Except as set forth in Schedule 2.6,
the Company  does not have any  liability,  indebtedness,  obligation,  expense,
claim,  deficiency,  guaranty  or  endorsement  of any  type,  whether  accrued,
absolute, contingent, matured, unmatured or other (whether or not required to be
reflected  in  financial   statements  in  accordance  with  generally  accepted
accounting  principles),  which  individually or in the aggregate,  has not been
reflected in the Balance Sheet.

     2.7 No Changes.  Except as set forth in Schedule 2.7, since the date of the
Balance Sheet, there has not been, occurred or arisen any:

                  (a)  transaction by the Company except in the ordinary  course
of business as conducted on the date of the Balance  Sheet and  consistent  with
past practices;

     (b) amendments or changes to the Articles of Incorporation or Bylaws of the
Company;

                  (c) capital  expenditure or commitment by the Company  outside
the  ordinary  course of  business,  either  individually  or in the  aggregate,
exceeding $10,000;




                                       -6-

<PAGE>



                  (d) destruction of, damage to or loss of any material  assets,
business or customer of the Company (whether or not covered by insurance);

                  (e) labor trouble or claim of wrongful  discharge or other
unlawful  labor practice or action;

                  (f) change in accounting  methods or practices  (including any
change in depreciation or amortization policies or rates) by the Company;

                  (g)      revaluation by the Company of any of its assets;

                  (h)  declaration,  setting  aside or payment of a dividend  or
other  distribution  with respect to the capital  stock of the  Company,  or any
direct or indirect  redemption,  purchase or other acquisition by the Company of
any Company Capital Stock;

                  (i) increase in the salary or other compensation payable or to
become payable to any of its officers, directors,  employees or advisors, or the
declaration,  payment or commitment or obligation of any kind for the payment of
a bonus or other additional  salary or compensation to any such person except as
otherwise contemplated by this Agreement;

                  (j) sale,  lease,  license or other  disposition of any of the
assets or properties of the Company,  except in the ordinary  course of business
as conducted on that date and consistent with past practices;

                  (k)  amendment  or  termination  of  any  material   contract,
agreement or license to which the Company is a party or by which it is bound;

                  (l) loan by the Company to any person or entity,  incurring by
the  Company  of  any   indebtedness,   guaranteeing   by  the  Company  of  any
indebtedness,  issuance  or  sale  of any  debt  securities  of the  Company  or
guaranteeing of any debt securities of others,  except for advances to employees
for travel and business expenses in the ordinary course of business,  consistent
with past practices;

                  (m) waiver or  release  of any right or claim of the  Company,
including  any write-off or other  compromise  of any account  receivable of the
Company;

                  (n)  commencement  or notice or threat of  commencement of any
lawsuit or proceeding against or investigation of the Company or its affairs;

                  (o)  notice  of any  claim of  ownership  by a third  party of
Company  Intellectual  Property  (as  defined  in  Section  2.11  below)  or  of
infringement by the Company of any third party's intellectual property rights;




                                       -7-

<PAGE>



                  (p)  issuance  or sale by the  Company of any of its shares of
its capital  stock,  or  securities  exchangeable,  convertible  or  exercisable
therefor, or of any other of its securities;

                  (q)  change in  pricing  or  royalties  set or  charged by the
Company to its  customers or licensees or in pricing or royalties set or charged
by persons who have licensed Company Intellectual Property to the Company;

                  (r) event or condition of any  character  that has or could be
reasonably expected to have a Material Adverse Effect on the Company; or

                  (s)  negotiation or agreement by the Company or any officer or
employees thereof to do any of the things described in the preceding clauses (a)
through  (r)  (other  than  negotiations  with  Buyer  and  its  representatives
regarding the transactions contemplated by this Agreement).

         2.8      Tax and Other Returns and Reports.

                  (a) Definition of Taxes.  For the purposes of this  Agreement,
"Tax" or,  collectively,  "Taxes," means any and all federal,  state,  local and
foreign taxes, assessments and other governmental charges,  duties,  impositions
and  liabilities,  including  taxes based upon or  measured  by gross  receipts,
income,  profits,  sales,  use and  occupation,  and value  added,  ad  valorem,
transfer,  franchise,  withholding,  payroll, recapture,  employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and  including  any liability
for taxes of a predecessor entity.

                  (b) Tax Returns and Audits.  Except as set forth in
Schedule 2.8:

                    (i) The Company as of the  Closing  will have  prepared  and
               filed all required  federal,  state,  local and foreign  returns,
               estimates,   information   statements  and  reports   ("Returns")
               relating to any and all Taxes  concerning or  attributable to the
               Company or its  operations  and such Returns  have been  prepared
               using the accrual method of accounting,  are true and correct and
               have been completed in accordance with applicable law.

                    (ii) The  Company as of the  Closing:  (A) will have paid or
               accrued  all Taxes it is  required  to pay or accrue and (B) will
               have withheld with respect to its employees all federal and state
               income taxes, FICA, FUTA and other Taxes required to be withheld.

                    (iii) The Company has not been  delinquent in the payment of
               any Tax nor is there any Tax deficiency outstanding,  proposed or
               assessed  against the Company,  nor has the Company  executed any
               waiver of any statute of  limitations  on or extending the period
               for the assessment or collection of any Tax.




                                       -8-

<PAGE>



                    (iv) No audit  or other  examination  of any  Return  of the
               Company  is  currently  in  progress,  nor has the  Company  been
               notified of any request for such an audit or other examination.

                    (v) The  Company  does not have any  liabilities  for unpaid
               federal,  state,  local and  foreign  Taxes  which  have not been
               accrued  or  reserved  against  in  accordance  with  GAAP on the
               Balance  Sheet,  whether  asserted or  unasserted,  contingent or
               otherwise,  and the Company has no knowledge of any basis for the
               assertion of any such liability  attributable to the Company, its
               assets or operations.

                    (vi) The Company has provided to Buyer copies of all federal
               and state  income and all state sales and use Tax Returns for all
               periods since the date of the Company's incorporation.

                    (vii) There are (and as of immediately following the Closing
               there  will be) no  liens,  pledges,  charges,  claims,  security
               interests  or other  encumbrances  of any sort  ("Liens")  on the
               assets of the Company relating to or attributable to Taxes.

                    (viii) The  Company  has no  knowledge  of any basis for the
               assertion of any claim relating or  attributable  to Taxes which,
               if adversely  determined,  would result in any Lien on the assets
               of the Company.

                    (ix) None of the Company's assets are treated as "tax-exempt
               use property" within the meaning of Section 168(h) of the Code.

                    (x) As of  the  Closing,  there  will  not be any  contract,
               agreement, plan or arrangement,  including but not limited to the
               provisions  of this  Agreement,  covering  any employee or former
               employee of the Company that, individually or collectively, could
               give  rise  to  the  payment  of any  amount  that  would  not be
               deductible pursuant to Section 280G or 162 of the Code.

                    (xi) The Company has not filed any consent  agreement  under
               Section 341(f) of the Code or agreed to have Section 341(f)(2) of
               the Code apply to any  disposition  of a subsection (f) asset (as
               defined in Section 341(f)(4) of the Code) owned by the Company.

                    (xii)  The  Company  is  not a  party  to a tax  sharing  or
               allocation  agreement  nor does the Company owe any amount  under
               any such agreement.

                    (xiii) The Company is not,  and has not been at any time,  a
               "United  States real  property  holding  corporation"  within the
               meaning of Section 897(c)(2) of the Code.

                    (xiv) The  Company has  qualified  as an S  Corporation  for
               federal and state income tax purposed since its inception.




                                       -9-

<PAGE>



         2.9  Restrictions  on  Business  Activities.  Except  as set  forth  in
Schedule 2.9,  there is no agreement  (non-compete  or  otherwise),  commitment,
judgment,  injunction,  order or  decree  to  which  the  Company  is a party or
otherwise  binding upon the Company which has or reasonably could be expected to
have the  effect of  prohibiting  or  impairing  any  business  practice  of the
Company,  any acquisition of property (tangible or intangible) by the Company or
the conduct of business by the  Company.  Without  limiting the  foregoing,  the
Company has not entered into any agreement under which the Company is restricted
from  selling,  licensing or otherwise  distributing  any of its products to any
class of customers,  in any geographic area, during any period of time or in any
segment of the market.

         2.10     Title to Properties; Absence of Liens and Encumbrances.

                  (a) The Company owns no real  property,  nor has it ever owned
any real  property.  Schedule  2.10(a)  sets  forth a list of all real  property
currently,  or at any time in the past,  leased by the Company,  the name of the
lessor,  the date of the lease and each  amendment  thereto and, with respect to
any current lease,  the aggregate  annual rental and/or other fees payable under
any such lease. All such current leases are in full force and effect,  are valid
and effective in accordance with their respective terms, and there is not, under
any of such  leases,  any  existing  default or event of default (or event which
with notice or lapse of time, or both, would constitute a default).

                  (b) The  Company  has good and valid title to, or, in the case
of leased  properties  and  assets,  valid  leasehold  interests  in, all of its
tangible  properties and assets,  real, personal and mixed, used or held for use
in  its  business,   free  and  clear  of  any  Liens  (as  defined  in  Section
2.8(b)(vii)),  except as  reflected  in the  Company  Financials  or in Schedule
2.10(b)  and  except  for  liens  for  taxes  not yet due and  payable  and such
imperfections  of title and  encumbrances,  if any,  which are not  material  in
character, amount or extent, and which do not materially detract from the value,
or materially interfere with the present use, of the property subject thereto or
affected thereby.

         2.11     Intellectual Property.

                  (a) For the purposes of this  Agreement,  the following  terms
have the following definitions:

         "Intellectual  Property"  means  any or all of the  following  and  all
rights in,  arising out of, or associated  therewith:  (i) all United States and
foreign patents and applications therefor and all reissues, divisions, renewals,
extensions,   provisionals,   continuations  and  continuations-in-part  thereof
("Patents");   (ii)  all  inventions  (whether  patentable  or  not),  invention
disclosures,  improvements,  trade secrets,  proprietary information,  know how,
technology,  technical  data  and  all  documentation  relating  to  any  of the
foregoing;  (iii) all  copyrights,  copyrights  registrations  and  applications
therefor and all other rights  corresponding  thereto throughout the world; (iv)
all mask works,  mask work  registrations  and  applications  therefor;  (v) all
industrial  designs and any registrations and applications  therefor  throughout
the world; (vi) all trade names, logos, common law trademarks and service marks;
trademark  and service  mark  registrations  and  applications  therefor and all
goodwill associated therewith throughout the world; (vii) all databases and data
collections and all rights therein throughout the world; and



                                      -10-

<PAGE>



(viii) all computer software  including all source code, object code,  firmware,
development  tools,  files,  records  and  data,  all  media on which any of the
foregoing is recorded;  (ix) any similar,  corresponding or equivalent rights to
any of the foregoing and (x) all documentation related to any of the foregoing.

         "Company  Intellectual  Property" shall mean any Intellectual  Property
that is (i) owned by (ii)  exclusively  licensed  to or (iii) was  developed  or
created by the Company or any subsidiary of the Company.

         "Registered  Intellectual  Property"  shall  mean  all  United  States,
international  and  foreign:   (i)  patents,   patent  applications   (including
provisional applications); (ii) registered trademarks,  applications to register
trademarks,  intent-to-use applications,  or other registrations or applications
related  to  trademarks;   (iii)  registered  copyrights  and  applications  for
copyright  registration;  (iv) any mask work  registrations  and applications to
register  mask works;  and (v) any other Company  Intellectual  Property that is
subject of an application,  certificate,  filing, registration or other document
issued by,  filed with,  or recorded by, any state,  government  or other public
legal authority.

                  (b)  Schedule   2.11(b)  lists  all  Registered   Intellectual
Property owned by, or filed in the name of, the Company or the  Subsidiary  (the
"Company Registered Intellectual Property") and lists any proceedings or actions
before any court,  tribunal  (including  the United  States Patent and Trademark
Office (the "PTO") or equivalent authority anywhere in the world) related to any
of the Company Registered Intellectual Property.

                  (c) Each item of Company Intellectual Property,  including all
Company Registered Intellectual Property listed in Schedule 2.11(b), is free and
clear of any Liens.  The Company (i) to its knowledge is the exclusive  owner of
all trademarks and trade names used in connection  with the operation or conduct
of the business of the Company, including the sale of any products or technology
or the provision of any services by the Company and (ii) owns  exclusively,  and
has good title to, all  copyrighted  works that are  Company  products  or other
works of authorship that the Company otherwise purports to own.

                  (d)  Except as set forth in  Schedule  2.11(d),  to the extent
that any Intellectual Property has been developed or created by any person other
than the Company for which the Company has,  directly or  indirectly,  paid, the
Company has a written  agreement  with such person with respect  thereto and the
Company  thereby has obtained  ownership of, and is the exclusive  owner of, all
such Intellectual Property by operation of law or by valid assignment.

                  (e) Except as set forth in Schedule  2.11(e),  the Company has
not  transferred  ownership  of or  granted  any  license  of or right to use or
authorized the retention of any rights to use any Intellectual  Property that is
or was Company Intellectual Property, to any other person.

                  (f)  The  Company  owns  or  has  a  written  license  to  all
Intellectual Property used in and/or necessary to the conduct of its business as
it currently is conducted including, without limitation,



                                      -11-

<PAGE>



products,  technology or services  currently  under  development and the design,
development,  manufacture,  use, import and sale of the products, technology and
services of the Company.

                  (g) Other than  "shrink-wrap"  and  similar  widely  available
commercial end-user licenses,  the contracts,  licenses and agreements listed in
Schedule  2.11(g) include all contracts,  licenses and agreements,  to which the
Company is a party with respect to any Intellectual Property of any person other
than the  Company.  No person  other than the  Company has  ownership  rights to
improvements  made by the  Company  in  Intellectual  Property  which  has  been
licensed to the Company.

                  (h)  Schedule  2.11(h)  lists  all  contracts,   licenses  and
agreements  between  the  Company  and any other  person  wherein or whereby the
Company has agreed to, or assumed,  any material  obligation or duty to warrant,
indemnify,  reimburse, hold harmless,  guaranty or otherwise assume or incur any
material  obligation or liability or provide a right of rescission  with respect
to the infringement or  misappropriation  by the Company or such other person of
the Intellectual Property of any person other than the Company.

                  (i) (X) The  operation of the business of the Company as it is
currently  conducted  (including,  without limitation,  products,  technology or
services currently under development and the design,  development,  manufacture,
use,  import and sale of the products,  technology  and services of the Company)
does not  infringe  or  misappropriate  the  Intellectual  Property  (other than
Patents) of any person,  violate the rights of any person  (including  rights to
privacy or publicity), or constitute unfair competition or trade practices under
the laws of any  jurisdiction,  and the Company has not received notice from any
person claiming that such operation or any act,  product,  technology or service
(including products,  technology or services currently under development) of the
Company  infringes or  misappropriates  the  Intellectual  Property  (other than
Patents) of any person or  constitutes  unfair  competition  or trade  practices
under  the laws of any  jurisdiction  (nor is the  Company  aware  of any  basis
therefor).

                    (Y) The  operation  of the  Company's  Business  (as defined
               below)  does not and  will not  infringe  or  misappropriate  the
               Patents of any person,  and the Company has not  received  notice
               from any person claiming that such operation or any act, product,
               technology or service (including products, technology or services
               currently  under   development)  of  the  Company   infringes  or
               misappropriates  the  Patents of any person  (nor is the  Company
               aware of any basis therefor).  The representations and warranties
               of  this  Section  2.11(i)(Y)  shall  only  apply  to  claims  of
               infringement or  misappropriation  or violations arising from (i)
               the  products or  technology  of the  Company  existing as of the
               Closing Date and (ii) products or technology under development as
               of the  Closing  Date up to and  including  the first  commercial
               release of any such products or technology.  The term  "Business"
               means  the  operations  of the  Company  as  conducted  as of the
               Closing  Date,  including  the  manufacture,   sale,   licensing,
               copying,  distribution  or other  exploitation  of any product or
               technology under development as of such dates.

                  (j) To the Company's knowledge after reasonable investigation,
each item of Company Registered  Intellectual  Property is valid and subsisting,
all necessary registration, maintenance



                                      -12-

<PAGE>



and renewal fees in connection with such Registered  Intellectual  Property have
been paid and all necessary  documents and  certificates in connection with such
Company  Registered  Intellectual  Property  have been filed  with the  relevant
patent,  copyright,  trademark  or other  authorities  in the  United  States or
foreign jurisdictions,  as the case may be, for the purposes of maintaining such
Registered  Intellectual Property.  Schedule 2.11(j) lists all actions that must
be taken by the Company  within sixty (60) days of the Closing  Date,  including
the payment of any  registration,  maintenance  or renewal fees or the filing of
any documents,  applications  or  certificates  for the purposes of maintaining,
perfecting or preserving or renewing any Company Intellectual  Property. In each
case in which the Company has acquired  ownership of any  Intellectual  Property
rights  from any  person,  the  Company  has  obtained  a valid and  enforceable
assignment  sufficient to irrevocably  transfer all rights in such  Intellectual
Property  (including  the right to seek past and future  damages with respect to
such Intellectual  Property) to the Company.  To the maximum extent provided for
by, and in accordance  with,  applicable laws and  regulations,  the Company has
recorded  each  such  assignment  with the  relevant  governmental  authorities,
including the United States Copyright Office, or their respective equivalents in
any relevant foreign jurisdiction,  as the case may be except to the extent such
failure would not have a Material Adverse Effect. Notwithstanding the foregoing,
the  Company  has  recorded  with  the PTO,  or its  equivalent  in any  foreign
jurisdiction, each such assignment.

                  (k) There are no contracts, licenses or agreements between the
Company and any other person with respect to Company Intellectual Property under
which there is any  dispute  known to the  Company  regarding  the scope of such
agreement,  or performance  under such  agreement  including with respect to any
payments to be made or received by the Company thereunder.

                  (l) To the  knowledge of the Company,  no person is infringing
or misappropriating any Company Intellectual Property.

                  (m) The Company has taken  reasonable steps in accordance with
normal  industry  practice  to  protect  the  Company's  rights in  confidential
information  and trade secrets of the Company or provided by any other person to
the  Company.  Without  limiting the  foregoing,  the Company has and enforces a
policy requiring each employee, consultant and contractor to execute proprietary
information,  confidentiality  and assignment  agreements  substantially  in the
Company's standard forms, and all current and former employees,  consultants and
contractors of the Company have executed such an agreement.

                  (n) No Company Intellectual Property or product, technology or
service  of the  Company is subject to any  proceeding  or  outstanding  decree,
order, judgment,  agreement or stipulation that restricts in any manner the use,
transfer or licensing thereof by the Company or may affect the validity,  use or
enforceability of such Company Intellectual Property.

                  (o)  To  the  knowledge  of  the  Company,   no  (i)  product,
technology,  service or publication of the Company,  (ii) material  published or
distributed  by the  Company  or (iii)  conduct  or  statement  of the  Company,
constitutes  obscene  material,  a  defamatory  statement  or  material,   false
advertising or otherwise violates any law or regulation.



                                      -13-

<PAGE>



                  (p) The Company has taken  reasonable steps to ensure that its
products (including existing products and technology and products and technology
currently under development) will record, store, process,  calculate and present
calendar dates falling on and after (and if applicable, spans of time including)
January 1, 2000, and will calculate any information  dependent on or relating to
such dates in the same manner, and with the same  functionality,  data integrity
and performance,  as the products record, store, process,  calculate and present
calendar  dates on or before  December 31, 1999,  or calculate  any  information
dependent on or relating to such dates  (collectively,  "Year 2000  Compliant").
The Company has taken reasonable steps to ensure that its products (i) will lose
no functionality  with respect to the  introduction of records  containing dates
falling on or after January 1, 2000. All of the Company's  internal computer and
technology products and systems are Year 2000 Compliant.

     2.12 Agreements, Contracts and Commitments. Except as set forth on Schedule
2.12(a), the Company does not have, is not a party to nor is it bound by:

     (i) any collective bargaining agreements,

     (ii) any  agreements  or  arrangements  that contain any  severance  pay or
post-employment liabilities or obligations,

     (iii)  any  bonus,  deferred  compensation,   pension,  profit  sharing  or
retirement plans, or any other employee benefit plans or arrangements,

     (iv) any employment or consulting agreement, contract or commitment with an
employee or individual  consultant  or  salesperson  or any  consulting or sales
agreement,  contract or  commitment  under which any firm or other  organization
provides services to the Company,

     (v) any agreement or plan, including,  without limitation, any stock option
plan, stock appreciation rights plan or stock purchase plan, any of the benefits
of which  will be  increased,  or the  vesting  of  benefits  of  which  will be
accelerated,  by the occurrence of any of the transactions  contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement,

     (vi) any fidelity or surety bond or completion bond,

     (vii) any lease of personal property having a value  individually in excess
of $25,000,

     (viii) any agreement of indemnification or guaranty,

     (ix) any agreement, contract or commitment containing any covenant limiting
the freedom of the Company to engage in any line of business or to compete  with
any person,




                                      -14-

<PAGE>



     (x) any agreement,  contract or commitment relating to capital expenditures
and involving future payments in excess of $10,000,

     (xi) any agreement,  contract or commitment  relating to the disposition or
acquisition  of assets or any  interest in any business  enterprise  outside the
ordinary course of the Company's business,

     (xii)  any  mortgages,  indentures,  loans or credit  agreements,  security
agreements or other agreements or instruments relating to the borrowing of money
or  extension  of credit,  including  guaranties  referred  to in clause  (viii)
hereof,

     (xiii) any purchase  order or contract  for the  purchase of raw  materials
involving $25,000 or more,

     (xiv) any construction contracts,

     (xv) any distribution, joint marketing or development agreement,

     (xvi) any agreement  pursuant to which the Company has granted or may grant
in the future,  to any party, a source-code  license or option or other right to
use or acquire source- code, or

     (xvii) any other agreement, contract or commitment that involves $10,000 or
more or is not cancelable without penalty within thirty (30) days.

         Except for such alleged breaches,  violations and defaults,  and events
that would  constitute  a breach,  violation  or default with the lapse of time,
giving of notice, or both, as are all noted in Schedule 2.12(b), the Company has
not  breached,  violated or  defaulted  under,  or  received  notice that it has
breached,  violated or defaulted  under,  any of the terms or  conditions of any
agreement,  contract or commitment required to be set forth on Schedule 2.12(a),
Schedule  2.11(e),  Schedule  2.11(g) or Schedule  2.11(h) (each such agreement,
contract or commitment  listed on Schedule 2.12(a),  Schedule 2.11(e),  Schedule
2.11(g) or Schedule 2.11(h),  a "Contract").  Each Contract is in full force and
effect and, except as otherwise disclosed in Schedule 2.12(b), is not subject to
any default thereunder of which the Company has knowledge by any party obligated
to the Company pursuant thereto.

         2.13  Interested  Party  Transactions.  Except as set forth on Schedule
2.13,  no officer,  director or  stockholder  of the Company (nor any  ancestor,
sibling,  descendant or spouse of any of such persons, or any trust, partnership
or corporation in which any of such persons has or has had an interest),  has or
has had,  directly or indirectly,  (i) an economic  interest in any entity which
furnished or sold, or furnishes or sells,  services or products that the Company
furnishes or sells, or proposes to furnish or sell, (ii) an economic interest in
any entity that purchases from or sells or furnishes to, the Company,  any goods
or services or (iii) a  beneficial  interest in any  contract or  agreement  set
forth in Schedule 2.12(a) or Schedule  2.11(b);  provided,  that ownership of no
more than one percent (1%) of the outstanding voting



                                      -15-

<PAGE>



stock of a publicly traded corporation shall not be deemed an "economic interest
in any entity" for purposes of this Section 2.13.

         2.14  Compliance  with Laws.  The Company has  complied in all material
respects with, is not in material violation of, and has not received any notices
of violation with respect to, any foreign,  federal, state or local statute, law
or regulation.

         2.15  Litigation.  Except as set forth in  Schedule  2.15,  there is no
action,  suit or  proceeding  of any nature  pending or  threatened  against the
Company, its properties or any of its officers or directors, in their respective
capacities  as  such.  Except  as  set  forth  in  Schedule  2.15,  there  is no
investigation  pending or threatened against the Company,  its properties or any
of its officers or directors by or before any Governmental Entity. Schedule 2.15
sets forth, with respect to any pending or threatened action,  suit,  proceeding
or investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested.  No governmental entity
has at any time  challenged  or  questioned  the legal  right of the  Company to
manufacture,  offer or sell any of its  products in the present  manner or style
thereof.

         2.16 Insurance.  The Company maintains valid and enforceable  insurance
policies  and  fidelity   bonds  covering  the  assets,   business,   equipment,
properties,  operations,  employees,  officers and directors of the Company, and
such  insurance  policies and fidelity  bonds,  which are identified in Schedule
2.16,  contain  provisions  which are  reasonable and customary in the Company's
industry,  and  there is no  claim  by the  Company  pending  under  any of such
policies or bonds as to which coverage has been  questioned,  denied or disputed
by the  underwriters  of such  policies or bonds.  All  premiums due and payable
under all such policies and bonds have been paid and the Company is otherwise in
material compliance with the terms of such policies and bonds (or other policies
and bonds providing  substantially similar insurance coverage).  The Company has
no knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.

         2.17 Minute  Books.  The minute books of the Company made  available to
counsel  for  Buyer  are the only  minute  books of the  Company  and  contain a
reasonably accurate summary of all meetings of directors (or committees thereof)
and  stockholders or actions by written consent since the time of  incorporation
of the Company.

         2.18     Environmental Matters.

                  (a)  Hazardous  Materials.  The Company has not  operated  any
underground  storage tanks, and has no knowledge of the existence,  at any time,
of any  underground  storage tank (or related piping or pumps),  at any property
that the  Company  has at any time  owned,  operated,  occupied  or  leased.  No
Hazardous Materials (as defined below) are present as a result of the actions or
omissions of the Company,  or, to the  Company's  knowledge,  as a result of any
actions of any third party or otherwise, in, on or under any property, including
the land and the improvements,  ground water and surface water thereof, that the
Company has at any time owned, operated, occupied or leased.




                                      -16-

<PAGE>



                  (b)  Hazardous  Materials  Activities.  The  Company  has  not
transported,  stored, used,  manufactured,  disposed of, released or exposed its
employees or others to Hazardous  Materials in violation of any law in effect on
or before the Closing,  nor has the Company disposed of,  transported,  sold, or
manufactured  any product  containing  a Hazardous  Material  (any or all of the
foregoing being collectively referred to as "Hazardous Materials Activities") in
violation  of  any  rule,  regulation,  treaty  or  statute  promulgated  by any
Governmental  Entity in effect  prior to or as of the date  hereof to  prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.

                  (c) Permits.  The Company  currently  holds all  environmental
approvals,  permits,  licenses,  clearances  and  consents  (the  "Environmental
Permits")  necessary  for  the  conduct  of  the  Company's  Hazardous  Material
Activities and other businesses of the Company as such activities and businesses
are currently being conducted.

                  (d)   Environmental   Liabilities.   No  action,   proceeding,
revocation  proceeding,  amendment  procedure,  writ,  injunction  or  claim  is
pending, or to the Company's knowledge,  threatened concerning any Environmental
Permit,  Hazardous Material or any Hazardous  Materials Activity of the Company.
The Company is not aware of any fact or  circumstance  which  could  involve the
Company  in  any  environmental  litigation  or  impose  upon  the  Company  any
environmental liability.

                  (e)  Definition  of  "Hazardous  Materials".  As used  herein,
"Hazardous  Materials"  shall mean any substance that has been designated by any
Governmental  Entity  or  by  applicable  federal,  state  or  local  law  to be
radioactive,   toxic,   hazardous  or  otherwise  a  danger  to  health  or  the
environment,  including,  without limitation,  PCBs, asbestos, oil and petroleum
products,   urea-formaldehyde   and  all  substances   listed  as  a  "hazardous
substance,"  "hazardous  waste,"  "hazardous  material" or "toxic  substance" or
words of  similar  import,  under any law,  including  but not  limited  to, the
Comprehensive Environmental Response,  Compensation,  and Liability Act of 1980,
as amended; the Resource  Conservation and Recovery Act of 1976, as amended; the
Federal Water Pollution Control Act, as amended;  the Clean Air Act, as amended,
and the regulations promulgated pursuant to such laws.

         2.19 Brokers' and Finders' Fees;  Third Party  Expenses.  Except as set
forth on  Schedule  2.19,  the  Company  has not  incurred,  nor will it  incur,
directly or indirectly,  any liability for brokerage or finders' fees or agents'
commissions  or any similar  charges in  connection  with this  Agreement or any
transaction  contemplated  hereby.  Schedule 2.19 sets forth the principal terms
and  conditions of any  agreement,  written or oral,  with respect to such fees.
Schedule 2.19 sets forth the Company's current reasonable  estimate of all Third
Party  Expenses  (as  defined in Section  4.4)  expected  to be  incurred by the
Company in connection  with the  negotiation  and  effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereby.

         2.20     Employee Matters and Benefit Plans.

                  (a)  Definitions.  With the  exception  of the  definition  of
"Affiliate" set forth in Section  2.20(a)(i) below (which definition shall apply
only to this Section 2.20), for purposes of this Agreement,  the following terms
shall have the meanings set forth below:



                                      -17-

<PAGE>



     (i) "Affiliate"  shall mean any other person or entity under common control
with the Company  within the meaning of Section  414(b),  (c), (m) or (o) of the
Code and the regulations thereunder;

     (ii) "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974, as amended;

     (iii) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended;

     (iv)  "Company  Employee  Plan" shall refer to any plan,  program,  policy,
practice,  contract,  agreement or other arrangement providing for compensation,
severance,  termination pay, performance awards, stock or stock-related  awards,
fringe benefits or other employee benefits or remuneration of any kind,  whether
formal or  informal,  funded or unfunded  and  whether or not  legally  binding,
including without  limitation,  each "employee benefit plan," within the meaning
of Section 3(3) of ERISA which is maintained,  contributed to, or required to be
contributed  to,  by the  Company  or  any  Affiliate  for  the  benefit  of any
"Employee" (as defined below), or pursuant to which the Company or any Affiliate
has or may have any material liability contingent or otherwise;

     (v) "FMLA" shall mean the Family Medical Leave Act of 1993, as amended;

     (vi)  "Employee"  shall mean any  current,  former,  or  retired  employee,
consultant, or director of the Company or any Affiliate;

     (vii)  "Employee  Agreement"  shall refer to each  management,  employment,
stock   purchase,   severance,   separation,   consulting,   relocation,   loan,
repatriation, expatriation, visas, work permit or similar agreement, contract or
arrangement between the Company or any Affiliate and any Employee or consultant;

     (viii) "IRS" shall mean the Internal Revenue Service;

     (ix) "Multiemployer  Plan" shall mean any "Pension Plan" (as defined below)
which is a "multiemployer plan", as defined in Section 3(37) of ERISA; and

     (x) "Pension  Plan" shall refer to each Company  Employee  Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA.

                  (b)  Schedule.  Schedule  2.20(b)  contains  an  accurate  and
complete  list of each  Company  Employee  Plan  and  each  Employee  Agreement,
together with a schedule of all liabilities,  whether or not accrued, under each
such Company Employee Plan or Employee Agreement.  The Company does not have any
plan or commitment, whether legally binding or not, to establish any new Company
Employee Plan or Employee Agreement, to modify any Company Employee Plan or



                                      -18-

<PAGE>



Employee  Agreement (except to the extent required by law or to conform any such
Company  Employee  Plan  or  Employee  Agreement  to  the  requirements  of  any
applicable law, in each case as previously  disclosed to Buyer in writing, or as
required  by this  Agreement),  or to enter into any  Company  Employee  Plan or
Employee  Agreement,  nor does it have any  intention or commitment to do any of
the foregoing.

                  (c)  Documents.  The Company has provided to Buyer (i) correct
and  complete  copies of all  documents  embodying  or relating to each  Company
Employee Plan and each Employee  Agreement  including all amendments thereto and
written   interpretations   thereof;  (ii)  the  most  recent  annual  actuarial
valuations,  if any,  prepared for each Company  Employee Plan;  (iii) the three
most recent  annual  reports  (Series 5500 and all schedules  thereto),  if any,
required under ERISA or the Code in connection  with each Company  Employee Plan
or related trust;  (iv) if the Company Employee Plan is funded,  the most recent
annual and periodic  accounting of Company  Employee  Plan assets;  (v) the most
recent  summary  plan  description  together  with the most  recent  summary  of
material  modifications,  if any,  required  under  ERISA  with  respect to each
Company Employee Plan; (vi) all IRS  determination  letters and rulings relating
to Company Employee Plans and copies of all applications and  correspondence  to
or from the IRS or the  Department  of Labor ("DOL") with respect to any Company
Employee Plan;  (vii) all  communications  material to any Employee or Employees
relating to any Company  Employee Plan and any proposed  Company Employee Plans,
in  each  case,  relating  to  any  amendments,  terminations,   establishments,
increases  or  decreases  in  benefits,  acceleration  of  payments  or  vesting
schedules or other  events  which would result in any material  liability to the
Company;  and (viii) all registration  statements and  prospectuses  prepared in
connection with each Company Employee Plan.

                  (d) Employee Plan Compliance.  Except as set forth on Schedule
2.20(d),  (i) the Company has performed in all material respects all obligations
required  to be  performed  by it under each  Company  Employee  Plan,  and each
Company  Employee  Plan has been  established  and  maintained  in all  material
respects in  accordance  with its terms and in  compliance  with all  applicable
laws,  statutes,  orders,  rules and  regulations,  including but not limited to
ERISA or the Code;  (ii) no  "prohibited  transaction,"  within  the  meaning of
Section 4975 of the Code or Section 406 of ERISA,  has occurred  with respect to
any Company Employee Plan; (iii) there are no actions,  suits or claims pending,
or, to the  knowledge  of the Company,  threatened  or  anticipated  (other than
routine  claims for benefits)  against any Company  Employee Plan or against the
assets of any Company  Employee Plan; and (iv) each Company Employee Plan can be
amended,  terminated or otherwise  discontinued  after the Closing in accordance
with its terms, without liability to the Company, Buyer or any of its Affiliates
(other than ordinary administration expenses typically incurred in a termination
event);  (v) there are no inquiries or proceedings  pending or, to the knowledge
of the Company or any  affiliates,  threatened by the IRS or DOL with respect to
any Company  Employee  Plan;  and (vi) neither the Company nor any  Affiliate is
subject to any penalty or tax with  respect to any Company  Employee  Plan under
Section 402(i) of ERISA or Section 4975 through 4980 of the Code.




                                      -19-

<PAGE>



                  (e) Pension  Plans.  Neither the Company nor any Affiliate has
ever maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA, Title
IV of ERISA or Section 412 of the Code.

                  (f)  Multiemployer  Plans.  At no time has the  Company or any
Affiliate  contributed to or been  requested to contribute to any  Multiemployer
Plan.

                  (g) No  Post-Employment  Obligations.  Except  as set forth in
Schedule  2.20(g),  no Company  Employee Plan provides,  or has any liability to
provide, life insurance, medical or other employee benefits to any Employee upon
his or her retirement or termination of employment for any reason, except as may
be  required by statute,  and the  Company  has never  represented,  promised or
contracted   (whether  in  oral  or  written  form)  to  any  Employee   (either
individually or to Employees as a group) that such Employee(s) would be provided
with life  insurance,  medical or other  employee  welfare  benefits  upon their
retirement  or  termination  of  employment,  except to the extent  required  by
statute.

                  (h) COBRA. Neither the company nor any affiliate has, prior to
the  Closing  and in any  material  respect,  violated  any of the  health  care
continuation  requirements  of COBRA,  the  requirements  of FMLA or any similar
provisions of state law applicable to its Employees.

                  (i)      Effect of Transaction.

                    (i)  Except  as  set  forth  on  Schedule  2.20(i)(i),   the
               execution  of  this  Agreement  and  the   consummation   of  the
               transactions  contemplated  hereby will not (either alone or upon
               the occurrence of any additional or subsequent events) constitute
               an event under any Company  Employee  Plan,  Employee  Agreement,
               trust or loan that will or may result in any payment  (whether of
               severance  pay  or  otherwise),   acceleration,   forgiveness  of
               indebtedness,  vesting,  distribution,  increase  in  benefits or
               obligation to fund benefits with respect to any Employee.

                    (ii) Except as set forth on Schedule 2.20(i)(ii), no payment
               or  benefit  which  will  or may be made  by the  Company  or its
               Affiliates or by Buyer or any of its  affiliates  with respect to
               any Employee as a result of the transactions contemplated by this
               Agreement  or  otherwise  will  be  characterized  as  "parachute
               payment",  within the meaning of Section  280G(b)(2)  of the Code
               (but without regard to clause (ii) thereof).

                  (j)  Employment  Matters.  The Company (i) is in compliance in
all material  respects with all  applicable  foreign,  federal,  state and local
laws, rules and regulations respecting employment,  employment practices,  terms
and conditions of employment and wages and hours,  in each case, with respect to
Employees;  (ii) has withheld all amounts  required by law or by agreement to be
withheld from the wages, salaries and other payments to Employees;  (iii) is not
liable  for any  arrears  of wages or any taxes or any  penalty  for  failure to
comply with any of the foregoing;  and (iv) is not liable for any payment to any
trust or other fund or to any  governmental or  administrative  authority,  with
respect to unemployment compensation benefits, social security or other benefits
or obligations for Employees



                                      -20-

<PAGE>



(other than  routine  payments to be made in the normal  course of business  and
consistent with past practice).

                  (k)  Labor.  No work  stoppage  or labor  strike  against  the
Company is pending or, to the best knowledge of the Company, threatened.  Except
as set forth in  Schedule  2.20(k),  the  Company is not  involved in or, to the
knowledge of the Company,  threatened  with,  any labor dispute,  grievance,  or
litigation  relating to labor,  safety or  discrimination  matters involving any
Employee,  including,  without limitation,  charges of unfair labor practices or
discrimination complaints,  which, if adversely determined,  would, individually
or in the aggregate, result in liability to the Company. Neither the Company nor
any of its  subsidiaries  has engaged in any unfair labor  practices  within the
meaning of the National Labor Relations Act which would,  individually or in the
aggregate,  directly or indirectly result in a liability to the Company.  Except
as set forth in Schedule 2.20(k), the Company is not presently,  nor has it been
in the past,  a party to, or bound by, any  collective  bargaining  agreement or
union contract with respect to Employees and no collective  bargaining agreement
is being negotiated by the Company.

         2.21 Employees.  To the best of the Company's knowledge, no employee of
the Company (i) is in violation of any term of any employment  contract,  patent
disclosure agreement,  non-competition agreement, or any restrictive covenant to
a former  employer  relating to the right of any such employee to be employed by
the  Company  because  of the  nature of the  business  conducted  or  presently
proposed  to be  conducted  by the  Company  or to the use of trade  secrets  or
proprietary  information of others and (ii) has given notice to the Company, nor
is the Company  otherwise  aware,  that any employee intends to terminate his or
her employment with the Company.

         2.22 Governmental  Authorizations  and Licenses.  The Company possesses
all consents,  licenses,  permits,  grants or other authorizations issued to the
Company by a  governmental  entity (i)  pursuant to which the Company  currently
operates  or  holds  any  interest  in any of its  properties  or (ii)  which is
required for the  operation of its business or the holding of any such  interest
therein (collectively called "Company Authorizations"), except for those Company
Authorizations  which the Company's  failure to possess  would not  constitute a
Material  Adverse  Effect,  which Company  Authorizations  are in full force and
effect and constitute all Company Authorizations  required to permit the Company
to operate or conduct its  business or hold any  interest in its  properties  or
assets.

         2.23  Pooling  of  Interests.  To the  Company's  knowledge,  based  on
consultation  with its independent  accountants,  neither the Company nor any of
its  directors  or  officers,  nor any Seller,  has taken any action which would
interfere  with Buyer's  ability to account for the  Acquisition as a pooling of
interests.

         2.24   Representations   Complete.   None  of  the  representations  or
warranties  made by the  Company or the  Sellers  (as  modified  by the  Company
Schedules),  nor any statement made in any schedule or certificate  furnished by
the Company or a Seller pursuant to this Agreement,  contains or will contain at
the Closing,  any untrue  statement of a material fact, or omits or will omit at
the Closing to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which made,
not misleading.



                                      -21-

<PAGE>



         2.25  Representations  of  each  Seller.  Each  Seller  represents  and
warrants as follows:

                  (a) This  Agreement  has been duly  authorized,  executed  and
delivered by and constitutes a valid and binding obligation of Seller.

                  (b)  The   execution  and  delivery  by  Seller  of,  and  the
performance by Seller of his or her obligations  under this Agreement,  does not
and will not  contravene  any provision of  applicable  law, or any agreement or
other  instrument  binding upon Seller or any  judgment,  order or decree of any
governmental  body,  agency or court having  jurisdiction  over  Seller,  and no
consent,  approval,   authorization  or  order  of  or  qualification  with  any
governmental  body or agency is required for the performance by Seller of his or
her obligations under this Agreement.

                  (c)  Seller has valid  marketable  title to the Shares and the
legal right and power, and all  authorization  and approval  required by law, to
enter into this  Agreement,  and to sell,  transfer  and  deliver  the Shares to
Buyer.

                  (d) Delivery of the  certificates  for the Shares  pursuant to
this  Agreement  will pass valid and  marketable  title to such  Shares free and
clear of any security interests, claims, liens, equities and other encumbrances.

                  (e)  Seller  understands  that the Buyer  Common  Stock  being
issued  pursuant to this Agreement  will not be registered  under the Securities
Act of 1933, as amended, on the basis that the issuance of securities  hereunder
is exempt from  registration  under the  Securities Act pursuant to section 4(2)
and/or Rule 506 thereof,  and that Advent's  reliance on such exemption is based
on Seller's representations set forth in the Stockholder's Certificate.


                                   ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer  represents  and  warrants  to the  Company  and the  Sellers  as
follows:

         3.1  Organization,  Standing  and Power.  Buyer is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware.  Buyer has the corporate  power to own its  properties and to carry on
its business as now being  conducted and is duly qualified to do business and is
in good  standing as a foreign  corporation  in each  jurisdiction  in which the
failure to be so qualified  would have a material  adverse  effect on Buyer as a
whole.

         3.2 Authority. Buyer has all requisite corporate power and authority to
enter into this  Agreement  and the  exhibits  attached  hereto to which it is a
party (the  "Buyer  Related  Agreements")  and to  consummate  the  transactions
contemplated  hereby and thereby.  The execution and delivery of this  Agreement
and the  Buyer  Related  Agreements  and the  consummation  of the  transactions
contemplated



                                      -22-

<PAGE>



hereby and thereby have been duly authorized by all necessary  corporate  action
on the part of Buyer.  Each of this  Agreement and the Buyer Related  Agreements
has been duly  executed  and  delivered by Buyer and  constitutes  the valid and
binding  obligations of Buyer,  enforceable in accordance  with its terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization,  moratorium
and other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the  availability  of specific
performance, injunctive relief or other equitable remedies.

         3.3      Capital Structure.

                  (a) The  authorized  stock of  Buyer  consists  of  40,000,000
shares of Common Stock, of which 7,582,000 shares were issued and outstanding as
of December 31, 1997, and 2,000,000 shares of Preferred Stock,  none of which is
issued or outstanding.  All such shares have been duly authorized,  and all such
issued and  outstanding  shares  have been  validly  issued,  are fully paid and
nonassessable and are free of any liens or encumbrances  other than any liens or
encumbrances created by or imposed upon the holders thereof.

                  (b)  The  shares  of  Buyer  Common  Stock  to  be  issued  in
connection with the Acquisition,  when issued, will be duly authorized,  validly
issued, fully paid and non-assessable.

         3.4 SEC Documents;  Buyer Financial Statements.  Buyer has furnished or
made  available  to the  Company  true and  complete  copies of all  reports  or
registration  statements  filed  by it with the  United  States  Securities  and
Exchange  Commission  (the "SEC") under the Securities  Exchange Act of 1934, as
amended (the  "Exchange  Act") for all periods since January 1, 1997, all in the
form so filed (all of the foregoing being  collectively  referred to as the "SEC
Documents").  As of their respective filing dates, the SEC Documents complied in
all material  respects with the  requirements  of the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, as the case may be, and none
of the SEC  Documents  contained  any untrue  statement  of a  material  fact or
omitted to state a material fact  required to be stated  therein or necessary to
make the statements made therein,  in light of the  circumstances  in which they
were  made,  not  misleading,  except  to the  extent  corrected  by a  document
subsequently  filed with the SEC. The financial  statements of Buyer,  including
the  notes  thereto,  included  in  the  SEC  Documents  (the  "Buyer  Financial
Statements")  comply  as to  form  in  all  material  respects  with  applicable
accounting  requirements and with the published rules and regulations of the SEC
with respect  thereto,  have been prepared in accordance with GAAP  consistently
applied  (except as may be  indicated  in the notes  thereto  or, in the case of
unaudited statements,  as permitted by Form 10- Q of the SEC) and present fairly
the  consolidated  financial  position  of Buyer at the  dates  thereof  and the
consolidated results of its operations and cash flows for the periods then ended
(subject,  in the case of unaudited  statements,  to normal audit  adjustments).
There has been no change in Buyer accounting policies except as described in the
notes to the Buyer Financial Statements.

         3.5 No Material  Adverse  Change.  Since the date of the balance  sheet
included in the Buyer's  most  recently  filed report on Form 10-Q or Form 10-K,
Buyer has  conducted  its  business  in the  ordinary  course  and there has not
occurred:   (a)  any  material  adverse  change  in  the  financial   condition,
liabilities,  assets or business of Buyer;  (b) any  amendment  or change in the
Certificate of Incorporation or Bylaws



                                      -23-

<PAGE>



of Buyer,  or (c) any damage to,  destruction or loss of any assets of the Buyer
(whether or not covered by insurance) that materially and adversely  affects the
financial condition or business of Buyer.

         3.6  Litigation.   There  is  no  action,  suit,   proceeding,   claim,
arbitration  or  investigation  pending,  or as to which Buyer has  received any
notice of assertion  against Buyer,  which in any manner  challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions  contemplated
by this Agreement.


                                   ARTICLE IV

                              ADDITIONAL AGREEMENTS

         4.1      Sale and Registration of Shares; Stockholder Matters.

                  (a) Sale of Shares.  The parties hereto  acknowledge and agree
that the shares of Buyer Common Stock issuable to the  stockholders  pursuant to
Section 1.2 hereof shall constitute  "restricted  securities" within the meaning
of  the  Securities  Act  of  1933,  as  amended  (the  "Securities  Act").  The
certificates  for shares of Buyer Common Stock to be issued in  connection  with
the Acquisition shall bear appropriate legends to identify such privately placed
shares as being  restricted  under the Securities Act, to comply with applicable
state securities laws and, if applicable, to notice the restrictions on transfer
pursuant to the Affiliate  Agreement (as defined below).  It is acknowledged and
understood  that Buyer is relying upon certain written  representations  made by
each stockholder.

                  (b)  Stockholder's  Certificate.  The Company  will cause each
stockholder  of the  Company to  execute  and  deliver to Buyer a  Stockholder's
Certificate  in the  form  attached  hereto  as  Exhibit  D (the  "Stockholder's
Certificate").

                  (c) Registration Rights. Buyer shall grant each Seller limited
demand  registration  rights and  participation  rights with  respect to certain
registrations  of  equity  securities  effected  by  Buyer,  as set forth in the
Declaration of Registration  Rights attached hereto as Exhibit E.  Participation
by Sellers in any such registration shall be subject to the terms and conditions
set forth in the Declaration of  Registration  Rights attached hereto as Exhibit
E.

         4.2 Access to Information. Each party shall afford the others and their
accountants, counsel and other representatives,  reasonable access during normal
business  hours  during  the  period  prior  to the  Closing  to (a)  all of its
properties,  books,  contracts,  commitments  and  records,  and (b)  all  other
information  concerning  its  business,  properties  and  personnel  (subject to
restrictions  imposed by applicable  law) as the others may reasonably  request,
subject,  in the case of Buyer, to reasonable  limits on access to its technical
and other  nonpublic  information.  No information or knowledge  obtained in any
investigation  pursuant to this  Section 4.2 shall affect or be deemed to modify
any representation or warranty contained herein.




                                      -24-

<PAGE>



         4.3  Confidentiality.  Each of the parties hereto hereby agrees to keep
such information or knowledge obtained in any investigation  pursuant to Section
4.2, or pursuant to the  negotiation  and  execution  of this  Agreement  or the
effectuation of the transactions  contemplated  hereby,  confidential,  and also
agrees not to use such knowledge or  information;  provided,  however,  that the
foregoing  shall not apply to  information  or  knowledge  which (a) a party can
demonstrate was already lawfully in its possession on a  non-confidential  basis
prior to the disclosure  thereof by the other party,  (b) is generally  known to
the public and did not become so known  through any violation of law, (c) became
known  to the  public  through  no fault of such  party,  (d) is later  lawfully
acquired by such party from other  sources,  (e) is required to be  disclosed by
order of  court or  government  agency  with  subpoena  powers  or (f)  which is
disclosed in the course of any litigation between any of the parties hereto.

         4.4 Expenses.  Whether or not the Acquisition is consummated,  all fees
and expenses  incurred in connection  with the  Acquisition  including,  without
limitation, all legal, accounting,  financial advisory, consulting and all other
fees and expenses of third parties ("Third Party Expenses")  incurred by a party
in connection with the negotiation and  effectuation of the terms and conditions
of  this  Agreement  and  the  transactions  contemplated  hereby  shall  be the
obligation of the respective  party incurring such fees and expenses;  provided,
however,  that no later than  thirty  (30) days after the  Closing,  the Sellers
shall pay to Buyer a value  equal to the  amount by which all  broker and finder
fees  incurred  by the Company  and all fees and  expenses  payable to any legal
advisor, accountant,  consultant or other third party retained by the Company on
its own  behalf or on behalf of such  Sellers  prior to the  Closing  (excluding
expenses of financial advisors) exceed in the aggregate $30,000.

         4.5 Public  Disclosure.  Unless  otherwise  required by law (including,
without  limitation,  federal and state securities laws) or, as to Buyer, by the
rules and regulations of The Nasdaq Stock Market,  Inc. prior to the Closing, no
disclosure  (whether or not in response to an inquiry) of the subject  matter of
this  Agreement  shall be made by any party hereto unless  approved by Buyer and
the  Company  prior  to  release,  provided  that  such  approval  shall  not be
unreasonably withheld.

         4.6  Consents.  The  Company  shall use its best  efforts to obtain the
consents, waivers and approvals under any of the Contracts as may be required in
connection with the Acquisition (all of such consents, waivers and approvals are
set forth in Company  Schedules) so as to preserve all rights of and benefits to
the Company thereunder.

         4.7 FIRPTA  Compliance.  On or prior to the Closing  Date,  the Company
shall  deliver  to Buyer a  properly  executed  statement  in a form  reasonably
acceptable  to Buyer  for  purposes  of  satisfying  Buyer's  obligations  under
Treasury Regulation Section 1.1445-2(c)(3).

         4.8  Commercially   Reasonable  Efforts.   Subject  to  the  terms  and
conditions provided in this Agreement,  each of the parties hereto shall use its
commercially   reasonable  efforts  to  ensure  that  its   representations  and
warranties  remain  true  and  correct  in all  material  respects,  and to take
promptly,  or cause to be taken, all actions, and to do promptly, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations  to  consummate  and make  effective the  transactions  contemplated
hereby, to obtain all necessary waivers,  consents and approvals,  to effect all
necessary



                                      -25-

<PAGE>



registrations and filings, and to remove any injunctions or other impediments or
delays,  legal or  otherwise,  in order to  consummate  and make  effective  the
transactions  contemplated  by this Agreement for the purpose of securing to the
parties hereto the benefits contemplated by this Agreement;  provided that Buyer
shall not be required to agree to any divestiture by Buyer or the Company or any
of Buyer's  subsidiaries  or  affiliates  of shares of  capital  stock or of any
business,  assets or property of Buyer or its  subsidiaries or affiliates or the
Company or its affiliates,  or the imposition of any material  limitation on the
ability of any of them to conduct their businesses or to own or exercise control
of such assets, properties and stock.

         4.9  Notification  of Certain  Matters.  The Company  shall give prompt
notice to Buyer,  and Buyer shall give prompt notice to the Company,  of (i) the
occurrence or  non-occurrence  of any event, the occurrence or non-occurrence of
which is likely to cause any representation or warranty of the Company or Buyer,
respectively, contained in this Agreement to be untrue or inaccurate at or prior
to the Closing and (ii) any failure of the Company or Buyer, as the case may be,
to comply with or satisfy any  covenant,  condition  or agreement to be complied
with or satisfied by it hereunder;  provided,  however, that the delivery of any
notice  pursuant  to this  Section 4.9 shall not limit or  otherwise  affect any
remedies available to the party receiving such notice.

         4.10 Pooling  Accounting.  The Company and the Sellers  shall use their
best efforts to cause the business combination to be effected by the Acquisition
to be  accounted  for as a pooling of  interests.  Each of the  Company  and the
Sellers  shall use its  respective  best  efforts to cause (as  applicable)  its
respective employees, directors and affiliates not to take any action that would
adversely affect the ability of Buyer to account for the business combination to
be effected by the Acquisition as a pooling of interests.

         4.11 Affiliate Agreements.  Schedule 4.11 sets forth those persons who,
in the Company's reasonable judgment,  are or may be "affiliates" of the Company
within the  meaning of Rule 145 (each such  person an  "Affiliate")  promulgated
under the  Securities  Act ("Rule  145").  The Company  shall provide Buyer such
information  and  documents  as Buyer shall  reasonably  request for purposes of
reviewing such list. The Company has delivered or shall cause to be delivered to
Buyer, concurrently with the execution of this Agreement from its Affiliates, an
executed  Affiliate  Agreement in the form  attached  hereto as Exhibit F. Buyer
shall be entitled to place  appropriate  legends on the certificates  evidencing
any Buyer Common Stock to be received by such  Affiliates  pursuant to the terms
of this Agreement,  and to issue  appropriate stop transfer  instructions to the
transfer  agent  for  Buyer  Common  Stock,  consistent  with the  terms of such
Affiliate Agreements.

         4.12 Additional Documents and Further Assurances. Each party hereto, at
the  request of the other party  hereto,  shall  execute and deliver  such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting  completely the  consummation  of this Agreement and the
transactions contemplated hereby.




                                      -26-

<PAGE>



         4.13 Nasdaq National Market Listing.  Buyer shall authorize for listing
on The Nasdaq  National  Market the shares of Buyer Common Stock  issuable,  and
those required to be reserved for issuance,  in connection with the Acquisition,
upon official notice of issuance.

         4.14  Company's  Auditors.   The  Company  will  use  its  commercially
reasonable  efforts to cause its management and its  independent  accountants to
facilitate  on a  timely  basis  (i) the  preparation  of  financial  statements
(including pro forma  financial  statements if required) as required by Buyer to
comply with  applicable  SEC  regulations,  and (ii) the review of the Company's
audit work papers for up to the past three years,  including the  examination of
selected interim financial statements and data.

         4.15 Employment and Non-Competition  Agreements.  Concurrently with the
execution of this Agreement, each Seller will deliver an executed Employment and
Non-Competition  Agreement in substantially  the form attached hereto as Exhibit
G, and the Sellers shall cause Ephy Torenberg to deliver an executed  Employment
and  Non-Competition  Agreement in  substantially  the form  attached  hereto as
Exhibit H.

         4.16  Indemnification  for Not  Constituting a  Reorganization.  In the
event that the  Acquisition  is determined  not to  constitute a  reorganization
within the  meaning of Section  368(a) of the Code solely and  exclusively  as a
result of an action or omission on the part of Buyer,  Buyer agrees to indemnify
and hold Sellers  harmless  for, from and against any Loss as defined in Section
5.1 directly associated with that determination, up to a maximum of $1,000,000.

         4.17 Tax  Filings.  The  Company  shall be  responsible  for filing all
federal and state income tax returns of the Company for taxable  periods  ending
on the day before the Closing or thereafter;  however,  the  Shareholders  shall
have the right to review and comment on all tax returns for all periods in which
the Company is taxed as an S  Corporation.  Such  returns  shall be prepared and
filed in accordance  with  applicable law and in a manner  consistent  with past
practices.  After the Closing,  Buyer and the Company,  on the one hand, and the
Shareholders, on the other hand, will make available to the other, as reasonably
requested,  all information,  records or documents relating to the liability for
Taxes of the Company for all periods  ending on or prior to the Closing and will
preserve  such  information,  records or documents  until the  expiration of any
applicable statute of limitations or extensions thereof.


                                    ARTICLE V

                             INDEMNIFICATION; ESCROW

         5.1  Indemnification.  The  Sellers,  jointly and  severally,  agree to
indemnify and hold Buyer, its officers, directors, and affiliates (including the
Company)  harmless  for,  from and  against  any  claims,  losses,  liabilities,
damages, deficiencies,  costs and expenses, including reasonable attorneys' fees
and  expenses,   and  expenses  of   investigation   and  defense   (hereinafter
individually  a  "Loss"  and  collectively  "Losses")  incurred  by  Buyer,  its
officers,   directors,   or  affiliates  (including  the  Company)  directly  or
indirectly  as a result  of any  inaccuracy  or breach  of a  representation  or
warranty of the Company or the



                                      -27-

<PAGE>



Sellers  contained in Article II herein (as  modified by the Company  Schedules,
without giving effect to any update  thereto),  or any failure by the Company to
perform or comply with any covenant contained herein;  provided,  however,  that
the Seller's joint and several  liability  hereunder  shall not exceed an amount
equal to fifty  percent  of the value of the  Consideration  (as  determined  by
multiplying the Buyer Share Number by the Average Price).  Buyer and the Company
each  acknowledge  that  such  Losses,   if  any,  would  relate  to  unresolved
contingencies  existing at the Closing,  which if resolved at the Closing, would
have led to a reduction in the  aggregate  Consideration.  Nothing  herein shall
limit  the  liability  of the  Company  for any  breach  of any  representation,
warranty or covenant if the Acquisition does not close.

         5.2 Escrow Period.  Subject to the following  requirements,  the Escrow
Fund (as defined in Section  5.3(a)  below)  shall be in  existence  immediately
following the Closing and shall terminate at 5:00 p.m.,  California time, on the
date of the auditor's report for the audit of Buyer's  financial  statements for
the year ending December 31, 1998 which includes the results of the Company (the
"Escrow  Period");  provided  that the Escrow  Period shall not  terminate  with
respect to such amount (or some portion  thereof)  that is necessary (as defined
in Section  5.3(a) below) in the  reasonable  judgment of Buyer,  subject to the
objection  of the  Securityholder  Agent (as defined  below) and the  subsequent
arbitration of the matter in the manner  provided in Section  5.3(f) hereof,  to
satisfy any unsatisfied claims concerning facts and circumstances existing prior
to the termination of such Escrow Period specified in any Officer's  Certificate
(as defined in Section  5.3(d)  below)  delivered  to the Escrow  Agent prior to
termination  of such Escrow Period;  provided  further that the Escrow Fund will
terminate in full upon final and complete resolution of all disputed matters.

         5.3      Escrow Arrangements.

                  (a) Escrow Fund. At the Closing,  as partial  security for the
indemnity  provided in Section 5.1, the Sellers will be deemed to have  received
and deposited  with the Escrow Agent (as defined  below) the Escrow Amount (plus
any additional  shares as may be issued upon any stock split,  stock dividend or
recapitalization  effected  by Buyer after the  Closing)  without any act of any
stockholder.  As soon as  practicable  after the  Closing,  the  Escrow  Amount,
without any act of any Seller, will be deposited with an institution  acceptable
to Buyer and the  Securityholder  Agent (as defined in Section 5.3(g) below)) as
Escrow Agent (the "Escrow  Agent"),  such deposit to  constitute  an escrow fund
(the "Escrow  Fund") to be governed by the terms set forth herein and at Buyer's
cost and expense. The portion of the Escrow Amount contributed on behalf of each
stockholder  of the Company shall be in  proportion  to the aggregate  amount of
Buyer Common Stock which such holder would  otherwise be entitled  under Section
1.2. The Escrow Fund shall be available to compensate  Buyer and its  affiliates
for any  Losses  incurred  by Buyer,  its  officers,  directors,  or  affiliates
(including the Company)  directly or indirectly as a result of any inaccuracy or
breach of a  representation  or warranty of the Company  contained in Article II
herein (as  modified  by the Company  Schedules,  without  giving  effect to any
update  thereto),  or any  failure by the  Company to perform or comply with any
covenant  contained herein;  provided,  however,  that Buyer may not receive any
shares from the Escrow Fund unless and until such Losses exceed in the aggregate
$100,000,  in which event Buyer shall receive  shares equal in value to the full
amount of such Losses.  Buyer and the Company each acknowledge that such Losses,
if any,



                                      -28-

<PAGE>



would  relate to  unresolved  contingencies  existing at the  Closing,  which if
resolved  at the  Closing  would  have  led  to a  reduction  in  the  aggregate
Consideration.  Nothing  herein shall limit the liability of the Company for any
breach of any  representation,  warranty or covenant if the Acquisition does not
close.

                  (b)  Distribution  upon  Termination  of Escrow  Period.  Upon
termination of the Escrow Period,  (i) the Company shall notify the Escrow Agent
of such termination, and (ii) the Escrow Agent shall deliver to the stockholders
of the Company  that  portion of the Escrow Fund that is not required to satisfy
any claims made by Buyer pursuant to Section 5.3(d) hereof. Deliveries of Escrow
Amounts to the stockholders of the Company pursuant to this Section 5.3(b) shall
be made in proportion to their respective  original  contributions to the Escrow
Fund.

                  (c)      Protection of Escrow Fund.

                         (i) The  Escrow  Agent  shall  hold and  safeguard  the
                    Escrow Fund during the Escrow Period,  shall treat such fund
                    as a  trust  fund  in  accordance  with  the  terms  of this
                    Agreement  and not as the property of Buyer or the Company's
                    stockholders  and shall hold and  dispose of the Escrow Fund
                    only in accordance with the terms hereof.

                         (ii) Any shares of Buyer  Common  Stock or other equity
                    securities  issued or distributed by Buyer (including shares
                    issued  upon a stock  split)  ("New  Shares")  in respect of
                    Buyer  Common  Stock in the Escrow  Fund which have not been
                    released  from the Escrow  Fund shall be added to the Escrow
                    Fund and become a part thereof. New Shares issued in respect
                    of shares of Buyer  Common  Stock  which have been  released
                    from the Escrow  Fund shall not be added to the Escrow  Fund
                    but shall be distributed to the recordholders  thereof. Cash
                    dividends  on Buyer  Common  Stock shall not be added to the
                    Escrow Fund but shall be  distributed  to the  recordholders
                    thereof.

                         (iii) Each  stockholder  shall have voting  rights with
                    respect to the shares of Buyer Common Stock  contributed  to
                    the Escrow Fund by such  stockholder  (and on any New Shares
                    added to the Escrow  Fund in respect of such shares of Buyer
                    Common Stock).

                  (d)      Claims Upon Escrow Fund.

                         (i) Upon  receipt by the Escrow Agent at any time on or
                    before  the last day of the Escrow  Period of a  certificate
                    signed by any officer of Buyer (an "Officer's Certificate"):
                    (A)  stating  that  Buyer has paid or  properly  accrued  or
                    reasonably  anticipates  that it will  have to pay or accrue
                    Losses caused directly or indirectly by any  inaccuracy,  or
                    breach of a  representation  or warranty of the Company or a
                    Seller  contained  in Article II hereof (as  modified by the
                    Company  Schedules,  without  giving  effect  to any  update
                    thereto)  or any failure by the Company to perform or comply
                    with any covenant contained  therein,  and (B) specifying in
                    reasonable detail the individual items of Losses included in
                    the  amount so  stated,  the date each such item was paid or
                    properly   accrued,   or  the  basis  for  such  anticipated
                    liability,  and the nature of the misrepresentation,  breach
                    of warranty  or covenant to which such item is related,  the
                    Escrow Agent  shall,  subject to the  provisions  of Section
                    5.3(e) hereof,



                                      -29-

<PAGE>



                    deliver  to Buyer out of the Escrow  Fund,  as  promptly  as
                    practicable, shares of Buyer Common Stock held in the Escrow
                    Fund in an amount equal to any Losses incurred or accrued by
                    Buyer.

                         (ii) For the  purposes  of  determining  the  number of
                    shares of Buyer Common Stock to be delivered to Buyer out of
                    the Escrow Fund pursuant to Section 5.3(d)(i)  hereof,  each
                    share of Buyer  Common  Stock shall be valued at the average
                    of  the  closing  prices  of  Buyer's  Common  Stock  on the
                    principal  securities exchange on which Buyer's Common Stock
                    is then  traded,  or if not so traded,  The Nasdaq  National
                    Market,  in  either  case as  reported  in The  Wall  Street
                    Journal for the twenty (20) consecutive  trading days ending
                    on the date that is one (1) trading day prior to the Closing
                    Date. Buyer and the Securityholder  Agent shall certify such
                    fair market value in a certificate  signed by both Buyer and
                    the Securityholder Agent, and shall deliver such certificate
                    to the Escrow Agent.

                  (e)  Objections  to  Claims.  At the time of  delivery  of any
Officer's  Certificate to the Escrow Agent, a duplicate copy of such certificate
shall be delivered to the  Securityholder  Agent and for a period of thirty (30)
days after such  delivery,  the Escrow  Agent shall make no delivery to Buyer of
any Escrow  Amounts  pursuant to Section  5.3(d)  hereof unless the Escrow Agent
shall have received written  authorization from the Securityholder Agent to make
such delivery.  After the expiration of such thirty (30) day period,  the Escrow
Agent shall make  delivery of shares of Buyer  Common Stock from the Escrow Fund
in  accordance  with Section  5.3(d)  hereof,  provided  that no such payment or
delivery  may be made if the  Securityholder  Agent  shall  object  in a written
statement to the claim made in the  Officer's  Certificate,  and such  statement
shall have been  delivered to the Escrow Agent prior to the  expiration  of such
thirty (30) day period.

                  (f)  Resolution of Conflicts; Arbitration.

                         (i) In case the Securityholder Agent shall so object in
                    writing  to any  claim  or  claims  made  in  any  Officer's
                    Certificate,   the  Securityholder  Agent  and  Buyer  shall
                    attempt  in good  faith to  agree  upon  the  rights  of the
                    respective  parties with respect to each of such claims.  If
                    the  Securityholder  Agent  and Buyer  should  so  agree,  a
                    memorandum  setting forth such  agreement  shall be prepared
                    and signed by both  parties  and shall be  furnished  to the
                    Escrow Agent.  The Escrow Agent shall be entitled to rely on
                    any such  memorandum and  distribute  shares of Buyer Common
                    Stock  from the  Escrow  Fund in  accordance  with the terms
                    thereof.

                         (ii) If no such  agreement  can be  reached  after good
                    faith negotiation,  either Buyer or the Securityholder Agent
                    may demand  arbitration  of the matter  unless the amount of
                    the damage or loss is at issue in pending  litigation with a
                    third  party,  in  which  event  arbitration  shall  not  be
                    commenced  until such amount is  ascertained or both parties
                    agree to  arbitration;  and in either  such event the matter
                    shall be settled by arbitration conducted by one arbitrator.
                    Buyer  and the  Securityholder  Agent  shall  agree  on such
                    arbitrator;  provided  that if Buyer and the  Securityholder
                    Agent cannot agree on such  arbitrator,  either Buyer or the
                    Securityholder   Agent  can   request   that  the   Judicial
                    Arbitration  and  Mediation  Services  ("JAMS")  select  the
                    arbitrator.  The  arbitrator  selected  shall  determine the
                    dispute in accordance with Article V of this Agreement.  The
                    arbitrator shall set a limited time period and



                                      -30-

<PAGE>



                    establish  procedures  designed  to reduce the cost and time
                    for  discovery  while  allowing the parties an  opportunity,
                    adequate in the sole judgment of the arbitrator, to discover
                    relevant  information  from the opposing  parties  about the
                    subject  matter of the dispute.  The  arbitrator  shall rule
                    upon motions to compel or limit discovery and shall have the
                    authority to impose sanctions, including attorneys' fees and
                    costs,  to the same  extent as a court of  competent  law or
                    equity,  should the arbitrator  determine that discovery was
                    sought without  substantial  justification or that discovery
                    was   refused   or    objected   to   without    substantial
                    justification.  The  decision  of the  arbitrator  as to the
                    validity   and  amount  of  any  claim  in  such   Officer's
                    Certificate shall be binding and conclusive upon the parties
                    to this Agreement,  and notwithstanding  anything in Section
                    5.3(e) hereof,  the Escrow Agent shall be entitled to act in
                    accordance with such decision and make or withhold  payments
                    out  of  the  Escrow  Fund  in  accordance  therewith.  Such
                    decision  shall be written and shall be supported by written
                    findings of fact and  conclusions  which shall set forth the
                    award, judgment, decree or order awarded by the arbitrator.

                         (iii)   Judgment   upon  any  award   rendered  by  the
                    arbitrators may be entered in any court having jurisdiction.
                    Any such  arbitration  shall be held in Santa Clara  County,
                    California  under the rules  then in effect of the  American
                    Arbitration  Association.   For  purposes  of  this  Section
                    5.3(f),  in any arbitration  hereunder in which any claim or
                    the amount thereof stated in the Officer's Certificate is at
                    issue, Buyer shall be deemed to be the Non-Prevailing  Party
                    in the event that the arbitrators  award Buyer less than the
                    sum of  one-half  (1/2)  of the  disputed  amount  plus  any
                    amounts not in dispute;  otherwise,  the stockholders of the
                    Company as represented by the Securityholder  Agent shall be
                    deemed to be the  Non-Prevailing  Party. The  Non-Prevailing
                    Party to an arbitration shall pay its own expenses, the fees
                    of  each  arbitrator,   the  administrative   costs  of  the
                    arbitration and the expenses,  including without limitation,
                    reasonable  attorneys' fees and costs, incurred by the other
                    party to the arbitration.

                  (g)      Securityholder Agent of the Stockholders;
Power of Attorney.

                         (i)  Upon  Closing,  and  without  further  act  of any
                    stockholder,  Dov Torenberg  shall be appointed as agent and
                    attorney-in-fact  (the  "Securityholder   Agent")  for  each
                    stockholder  of the Company  (except such  stockholders,  if
                    any, as shall have perfected  their appraisal or dissenters'
                    rights  under   California   Law),  for  and  on  behalf  of
                    stockholders of the Company, to give and receive notices and
                    communications,  to authorize delivery to Buyer of shares of
                    Buyer Common Stock from the Escrow Fund in  satisfaction  of
                    claims by Buyer, to object to such deliveries,  to agree to,
                    negotiate,  enter into  settlements  and compromises of, and
                    demand  arbitration  and  comply  with  orders of courts and
                    awards of  arbitrators  with respect to such claims,  and to
                    take all actions necessary or appropriate in the judgment of
                    Securityholder   Agent   for  the   accomplishment   of  the
                    foregoing. Such agency may be changed by the stockholders of
                    the Company from time to time upon not less than thirty (30)
                    days  prior  written  notice  to  Buyer;  provided  that the
                    Securityholder  Agent may not be removed unless holders of a
                    two-thirds interest of the Escrow Fund agree to such removal
                    and to the identity of the substituted agent. Any vacancy in
                    the  position  of  Securityholder  Agent  may be  filled  by
                    approval  of the  holders of a majority  in  interest of the
                    Escrow Fund. No bond shall be required of the Securityholder
                    Agent,  and  the  Securityholder  Agent  shall  not  receive
                    compensation for his or her



                                      -31-

<PAGE>



                    services.   Notices  or   communications   to  or  from  the
                    Securityholder Agent shall constitute notice to or from each
                    of the stockholders of the Company.

                         (ii) The  Securityholder  Agent shall not be liable for
                    any act done or omitted  hereunder as  Securityholder  Agent
                    while acting in good faith and in the exercise of reasonable
                    judgment.  The  stockholders  of the Company on whose behalf
                    the Escrow Amount was  contributed  to the Escrow Fund shall
                    severally  indemnify the  Securityholder  Agent and hold the
                    Securityholder Agent harmless against any loss, liability or
                    expense incurred without negligence or bad faith on the part
                    of  the  Securityholder  Agent  and  arising  out  of  or in
                    connection  with the  acceptance  or  administration  of the
                    Securityholder  Agent's  duties  hereunder,   including  the
                    reasonable  fees and expenses of any legal counsel  retained
                    by the Securityholder Agent.

                  (h) Actions of the  Securityholder  Agent.  A  decision,  act,
consent or instruction of the  Securityholder  Agent shall constitute a decision
of all the  stockholders  for whom a  portion  of the  Escrow  Amount  otherwise
issuable to them are  deposited  in the Escrow Fund and shall be final,  binding
and conclusive  upon each of such  stockholders,  and the Escrow Agent and Buyer
may  rely  upon  any  such  decision,   act,   consent  or  instruction  of  the
Securityholder Agent as being the decision,  act, consent or instruction of each
every such  stockholder  of the  Company.  The Escrow Agent and Buyer are hereby
relieved  from  any  liability  to any  person  for  any  acts  done  by them in
accordance with such decision, act, consent or instruction of the Securityholder
Agent.

                  (i) Third-Party  Claims. In the event Buyer becomes aware of a
third-party  claim which Buyer intends to assert for a demand against the Escrow
Fund,  Buyer shall notify the  Securityholder  Agent of such claim.  Buyer shall
have the  right in its sole  discretion  to  settle  any such  claim;  provided,
however, that except with the consent of the Securityholder Agent, no settlement
of any such claim with third-party claimants shall alone be determinative of the
amount of any claim against the Escrow Fund.

                  (j)      Escrow Agent's Duties.

                         (i) The Escrow  Agent shall be  obligated  only for the
                    performance  of such  duties as are  specifically  set forth
                    herein,  and as set forth in any  additional  written escrow
                    instructions  which the Escrow  Agent may receive  after the
                    date of this  Agreement  which are  signed by an  officer of
                    Buyer and the  Securityholder  Agent, and may rely and shall
                    be  protected  in relying or  refraining  from acting on any
                    instrument  reasonably  believed  to be genuine  and to have
                    been signed or presented by the proper party or parties. The
                    Escrow Agent shall not be liable for any act done or omitted
                    hereunder  as Escrow Agent while acting in good faith and in
                    the  exercise  of  reasonable  judgment,  and any act taken,
                    suffered,  or  permitted  pursuant  to the advice of counsel
                    shall be conclusive evidence of such good faith.

                         (ii) The Escrow Agent is hereby expressly authorized to
                    comply  with and obey  orders,  judgments  or decrees of any
                    court of law, notwithstanding any notices, warnings or other
                    communications  from any of the parties  hereto or any other
                    person to the contrary. In case the



                                      -32-

<PAGE>



                    Escrow Agent obeys or complies with any such order, judgment
                    or decree of any court, the Escrow Agent shall not be liable
                    to any of the  parties  hereto  or to any  other  person  by
                    reason of such compliance,  notwithstanding  any such order,
                    judgment or decree being  subsequently  reversed,  modified,
                    annulled,  set aside,  vacated or found to have been entered
                    without jurisdiction.

                         (iii)  The  Escrow  Agent  shall  not be  liable in any
                    respect on account of the  identity,  authority or rights of
                    the parties executing or delivering or purporting to execute
                    or  deliver  this  Agreement  or  any  documents  or  papers
                    deposited or called for hereunder.

                         (iv) The  Escrow  Agent  shall  not be  liable  for the
                    expiration  of any rights  under any statute of  limitations
                    with respect to this  Agreement or any  documents  deposited
                    with the Escrow Agent.

                         (v) In performing any duties under the  Agreement,  the
                    Escrow  Agent shall not be liable to any party for  damages,
                    losses, or expenses,  except for gross negligence or willful
                    misconduct on the part of the Escrow Agent. The Escrow Agent
                    shall  not  incur  any  such  liability  for  (A) any act or
                    failure  to act made or omitted  in good  faith,  or (B) any
                    action  taken or omitted in  reliance  upon any  instrument,
                    including any written statement or affidavit provided for in
                    this  Agreement  that the Escrow  Agent  shall in good faith
                    believe to be genuine,  nor will the Escrow  Agent be liable
                    or responsible  for  forgeries,  fraud,  impersonations,  or
                    determining the scope of any  representative  authority.  In
                    addition, the Escrow Agent may consult with legal counsel in
                    connection  with Escrow Agent's duties under this Agreement.
                    The Escrow  Agent is not  responsible  for  determining  and
                    verifying  the  authority of any person acting or purporting
                    to act on behalf of any party to this Agreement.

                         (vi) If any  controversy  arises between the parties to
                    this  Agreement,  or with any other  party,  concerning  the
                    subject matter of this  Agreement,  its terms or conditions,
                    the  Escrow  Agent will not be  required  to  determine  the
                    controversy  or to take any action  regarding it. The Escrow
                    Agent may hold all  documents  and  shares  of Buyer  Common
                    Stock and may wait for settlement of any such controversy by
                    final  appropriate  legal  proceedings or other means as, in
                    the Escrow Agent's discretion, the Escrow Agent deems may be
                    required,  despite  what may be set forth  elsewhere in this
                    Agreement.  In such  event,  the  Escrow  Agent  will not be
                    liable for damages.

                         (vii) The parties and their  respective  successors and
                    assigns  agree  jointly and  severally to indemnify and hold
                    Escrow Agent  harmless  against any and all losses,  claims,
                    damages,  liabilities,  and expenses,  including  reasonable
                    costs of investigation, counsel fees, and disbursements that
                    may be imposed on Escrow  Agent or incurred by Escrow  Agent
                    in connection  with the  performance of his/her duties under
                    this Agreement,  including but not limited to any litigation
                    arising from this Agreement or involving its subject matter.

                         (viii)  The  Escrow  Agent may  resign at any time upon
                    giving  at least  thirty  (30)  days  written  notice to the
                    parties;  provided,  however, that no such resignation shall
                    become effective until the appointment of a successor escrow
                    agent which shall be  accomplished  as follows:  the parties
                    shall  use  their  best  efforts  to  mutually  agree  on  a
                    successor escrow agent within thirty (30) days



                                      -33-

<PAGE>



                    after  receiving  such notice.  If the parties fail to agree
                    upon a successor  escrow agent within such time,  the Escrow
                    Agent  shall  have the right to appoint a  successor  escrow
                    agent  authorized to do business in the State of California.
                    The  successor  escrow  agent  shall  execute and deliver an
                    instrument  accepting such appointment in form and substance
                    acceptable to Buyer and  Securityholder  Agent and it shall,
                    without  further  acts,  be  vested  with  all the  estates,
                    properties,  rights,  powers,  and duties of the predecessor
                    escrow agent as if  originally  named as escrow  agent.  The
                    predecessor  escrow  agent  shall  be  discharged  from  any
                    further  duties and liability  under this Agreement upon the
                    execution by such successor of such agreement.

                  (k) Fees. All fees of the Escrow Agent for  performance of its
duties  hereunder  shall be paid by Buyer.  It is  understood  that the fees and
usual  charges  agreed upon for services of the Escrow Agent shall be considered
compensation  for ordinary  services as contemplated  by this Agreement.  In the
event that the  conditions of this Agreement are not promptly  fulfilled,  or if
the Escrow Agent renders any service not provided for in this  Agreement,  or if
the  parties  request  a  substantial  modification  of  its  terms,  or if  any
controversy arises, or if the Escrow Agent is made a party to, or intervenes in,
any litigation pertaining to this escrow or its subject matter, the Escrow Agent
shall be reasonably  compensated for such extraordinary  services and reimbursed
for all costs,  attorney's fees, and expenses occasioned by such default, delay,
controversy or litigation. Buyer promises to pay these sums upon demand.


                                   ARTICLE VI

                               GENERAL PROVISIONS

         6.1  Survival  of  Representations,   Warranties  and  Agreements.  All
representations,  warranties,  covenants and  agreements in this Agreement or in
any instrument  delivered pursuant to this Agreement shall (except to the extent
that  survival is necessary to  effectuate  the intent of such  provisions)  not
survive the  consummation of the Acquisition and shall terminate at the Closing;
provided,  however, that, notwithstanding the foregoing, the representations and
warranties  of the Company and the Sellers set forth in Article II hereof  shall
survive the Closing and terminate two (2) years after the Closing Date.

         6.2 Notices. All notices and other communications hereunder shall be in
writing  and shall be deemed  given if  delivered  personally  or by  commercial
delivery  service,  or mailed by  registered or certified  mail (return  receipt
requested) or sent via facsimile (with acknowledgment of complete  transmission)
to the parties at the following  addresses (or at such other address for a party
as shall be specified by like notice):




                                      -34-

<PAGE>



                  (a)      if to Buyer to:

                           Advent Software, Inc.
                           301 Brannan Street
                           San Francisco, California 94107
                           Attention: Irv Lichtenwald
                           Telephone No.: (415) 543-7696
                           Facsimile No.:  (415) 777-0794

                           with a copy to:

                           Wilson Sonsini Goodrich & Rosati
                           650 Page Mill Road
                           Palo Alto, California 94304-1050
                           Attention:  Mark A. Bertelsen, Esq.
                           Telephone No.:  (650) 493-9300
                           Facsimile No.:   (650) 493-6811

                  (b)      if to the Company, to:

                           MicroEdge, Inc.
                           619 West 54th St., 10th Floor
                           New York, New York 10019
                           Attention: Dov Torenberg
                           Telephone No.:  (212) 757-1522
                           Facsimile No.: (212) 757-1713

                           with a copy to:
                           Moskowitz Altman & Hughes LLP
                           11 East 44th Street
                           New York, New York 10017
                           Attention:  John J. Hughes, Esq.
                           Telephone No.:  (212) 953-1121
                           Facsimile No.:  (212) 953-2437

                  (c)      if to the Securityholder Agent:

                           Dov Torenberg
                           147 Chestnut Street
                           Englewood, NJ 07631
                           Telephone No.:
                           Facsimile No.:




                                      -35-

<PAGE>



                  (d)      if to the Escrow Agent:

                           First Trust of California, N.A.
                           1 California Street, 4th Floor
                           San Francisco, CA 94111
                           Attention: Barbara Wise
                           Telephone No.: 415-273-4530
                           Facsimile No.: 415-273-4593

         6.3  Interpretation.  The words  "include,"  "includes" and "including"
when  used  herein  shall be deemed  in each  case to be  followed  by the words
"without  limitation."  The table of contents  and  headings  contained  in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         6.4  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and  delivered  to the other  party,  it being  understood  that all
parties need not sign the same counterpart.

         6.5 Entire  Agreement;  Assignment.  This Agreement,  the Schedules and
Exhibits  hereto,  and the documents and instruments and other  agreements among
the parties hereto referenced  herein: (a) constitute the entire agreement among
the parties with respect to the subject  matter  hereof and  supersede all prior
agreements  and  understandings,  both written and oral,  among the parties with
respect to the subject  matter  hereof;  (b) are not intended to confer upon any
other person any rights or remedies hereunder;  and (c) shall not be assigned by
operation of law or otherwise except as otherwise specifically provided,  except
that Buyer may assign its rights and delegate its  obligations  hereunder to its
affiliates.

         6.6 Severability.  In the event that any provision of this Agreement or
the  application  thereof,  becomes  or is  declared  by a  court  of  competent
jurisdiction  to be  illegal,  void  or  unenforceable,  the  remainder  of this
Agreement  will  continue in full force and effect and the  application  of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such  void or  unenforceable  provision  of  this  Agreement  with a  valid  and
enforceable  provision that will achieve, to the extent possible,  the economic,
business and other purposes of such void or unenforceable provision.

         6.7 Other Remedies.  Except as otherwise  provided herein,  any and all
remedies herein expressly  conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party,  and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

         6.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that process may be served upon



                                      -36-

<PAGE>



them in any manner  authorized by the laws of the State of  California  for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction and such process.

         6.9      Arbitration.

                  (a) The parties  shall attempt in good faith to agree upon the
rights of the  respective  parties  with  respect to any dispute or  controversy
arising  out of,  relating  to,  or in  connection  with this  Agreement  or the
interpretation,   validity,   construction,   performance,  breach  or  complete
termination thereof.

                  (b) If no such  agreement  can be  reached  after  good  faith
negotiation,  either of the parties may demand arbitration of the matter (except
any such dispute or controversy  related to Article V or Section 2.11 or 2.15 of
this Agreement) and the matter shall be settled by arbitration  conducted by one
arbitrator.  Buyer and the Company shall agree on the arbitrator;  provided that
if Buyer and the Company  cannot  agree on one  arbitrator,  either Buyer or the
Company can request that the JAMS select the arbitrator. The arbitrator selected
by the JAMS shall  determine  the dispute in  accordance  with  Section 6.9. The
arbitrator shall set a limited time period and establish  procedures designed to
reduce  the  cost  and  time  for  discovery   while  allowing  the  parties  an
opportunity,  adequate  in the sole  judgment  of the  arbitrator,  to  discover
relevant  information  from the opposing parties about the subject matter of the
dispute. The arbitrator shall rule upon motions to compel or limit discovery and
shall have the  authority to impose  sanctions,  including  attorneys'  fees and
costs,  to the same  extent as a court of  competent  law or equity,  should the
arbitrator determine that discovery was sought without substantial justification
or that discovery was refused or objected to without substantial  justification.
The decision of the arbitrator  shall be final,  conclusive and binding upon the
parties to this Agreement. Such decision shall be written and shall be supported
by written  findings  of fact and  conclusions  which shall set forth the award,
judgment, decree or order awarded by the arbitrator.

                  (c) Judgment upon any award  rendered by the arbitrator may be
entered in any court having jurisdiction. In the event that any such arbitration
is requested by Buyer, such arbitration shall be held in New York, New York, and
in the event that any such arbitration is requested by any Seller,  the Company,
or  the  Escrow  Agent,  such  arbitration  shall  be  held  in  San  Francisco,
California,  in any case under the rules then in effect of JAMS. For purposes of
this Section 6.9, in any arbitration  hereunder,  the non-prevailing Party to an
arbitration  shall  pay its  own  expenses,  the  fees  of the  arbitrator,  the
administrative  costs of the  arbitration  and the expenses,  including  without
limitation, reasonable attorneys' fees and costs, incurred by the other party to
the arbitration.

         6.10 Rules of  Construction.  The parties  hereto  agree that they have
been  represented  by  counsel  during the  negotiation  and  execution  of this
Agreement and, therefore, waive the application of any law, regulation,  holding
or rule of  construction  providing  that  ambiguities  in an agreement or other
document  will be  construed  against  the  party  drafting  such  agreement  or
document.




                                      -37-

<PAGE>



         6.11 Specific  Performance.  The parties hereto agree that  irreparable
damage  would occur in the event that any of the  provisions  of this  Agreement
were not performed in accordance  with their  specific  terms or were  otherwise
breached.  It is  accordingly  agreed that the  parties  shall be entitled to an
injunction or injunctions  to prevent  breaches of this Agreement and to enforce
specifically  the terms and provisions  hereof in any court of the United States
or any state having jurisdiction,  this being in addition to any other remedy to
which they are entitled at law or in equity.


                  [Remainder of Page Intentionally Left Blank]



                                      -38-

<PAGE>



         IN  WITNESS  WHEREOF,   Buyer,   each  Seller,   the  Company  and  the
Securityholder Agent (but only as to Articles V and VI for Securityholder Agent)
and have caused this Agreement to be signed by their duly authorized  respective
officers, all as of the date first written above.

BUYER                                                         COMPANY


By:                                                           By:

Name:                                                         Name:

Title:                                                        Title:



SECURITYHOLDER AGENT                                          SELLERS


By:                                                           By:

Name:                                                         Name:

Title:                                                        Title:



ESCROW AGENT

By:

Name:

Title:









                  [Signature Page to Reorganization Agreement]



                                      -39-

<PAGE>



                                                                      EXHIBIT A

                                   THE SELLERS




Dov Torenberg

Ximena Florez



                                      -40-

<PAGE>



                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                             ADVENT SOFTWARE, INC.,

                                MICROEDGE, INC.,

                                       AND

                                   THE SELLERS



                          Dated as of February 28, 1998




                                      -41-

<PAGE>





                                TABLE OF CONTENTS
                                                                           Page

ARTICLE I  THE ACQUISITION OF SHARES..........................................1
 1.1      Purchase and Sale of Shares.........................................1
 1.2      Consideration.......................................................1
 1.3      Closing; Delivery...................................................2
 1.4      Directors and Officers..............................................4
 1.5      Lost, Stolen or Destroyed Certificates..............................4
 1.6      Tax and Accounting Consequences.....................................4

ARTICLE II  REPRESENTATIONS AND WARRANTIES OF THE COMPANY .................. 4
 2.1      Organization of the Company........................................4
 2.2      Company Capital Structure..........................................5
 2.3      Subsidiaries.......................................................5
 2.4      Authority..........................................................5
 2.5      Company Financial Statements.......................................6
 2.6      No Undisclosed Liabilities.........................................6
 2.7      No Changes.........................................................6
 2.8      Tax and Other Returns and Reports..................................8
 2.9      Restrictions on Business Activities...............................10
 2.10     Title to Properties; Absence of Liens and Encumbrances............10
 2.11     Intellectual Property.............................................10
 2.12     Agreements, Contracts and Commitments.............................14
 2.13     Interested Party Transactions.....................................15
 2.14     Compliance with Laws..............................................16
 2.15     Litigation........................................................16
 2.16     Insurance.........................................................16
 2.17     Minute Books......................................................16
 2.18     Environmental Matters.............................................16
 2.19     Brokers' and Finders' Fees; Third Party Expenses..................17
 2.20     Employee Matters and Benefit Plans................................17
 2.21     Employees.........................................................21
 2.22     Governmental Authorizations and Licenses..........................21
 2.23     Pooling of Interests..............................................21
 2.24     Representations Complete..........................................21
 2.25     Representations of each Seller....................................22

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF BUYER.......................22
3.1      Organization, Standing and Power..................................22
3.2      Authority.........................................................22
3.3      Capital Structure.................................................23
3.4      SEC Documents; Buyer Financial Statements.........................23



                                       -i-

<PAGE>





3.5      No Material Adverse Change........................................23
3.6      Litigation........................................................24

ARTICLE IV  ADDITIONAL AGREEMENTS..........................................24
4.1      Sale and Registration of Shares; Stockholder Matters..............24
4.2      Access to Information.............................................24
4.3      Confidentiality...................................................25
4.4      Expenses..........................................................25
4.5      Public Disclosure.................................................25
4.6      Consents..........................................................25
4.7      FIRPTA Compliance.................................................25
4.8      Commercially Reasonable Efforts...................................25
4.9      Notification of Certain Matters...................................26
4.10     Pooling Accounting................................................26
4.11     Affiliate Agreements..............................................26
4.12     Additional Documents and Further Assurances.......................26
4.13     Nasdaq National Market Listing....................................27
4.14     Company's Auditors................................................27
4.15     Employment and Non-Competition Agreements.........................27
4.16     Indemnification for Not Constituting a Reorganization.............27
4.17     Tax Filings.......................................................27

ARTICLE V  INDEMNIFICATION; ESCROW.........................................27
5.1      Indemnification.  ................................................27
5.2      Escrow Period.....................................................28
5.3      Escrow Arrangements...............................................28

ARTICLE VI  GENERAL PROVISIONS.............................................34
6.1      Survival of Representations, Warranties and Agreements............34
6.2      Notices...........................................................34
6.3      Interpretation....................................................36
6.4      Counterparts......................................................36
6.5      Entire Agreement; Assignment......................................36
6.6      Severability......................................................36
6.7      Other Remedies....................................................36
6.8      Governing Law.....................................................36
6.9      Arbitration.......................................................37
6.10     Rules of Construction.............................................37
6.11     Specific Performance..............................................38



                                      -ii-

<PAGE>




                                INDEX OF EXHIBITS


Exhibit           Description


Exhibit A       Holders of Company Securities

Exhibit B       Form of Legal Opinion of Counsel to the Company

Exhibit C       Form of Legal Opinion of Counsel to Buyer

Exhibit D       Form of Stockholder's Certificate

Exhibit E       Form of Declaration of Registration Rights

Exhibit F       Form of Company Affiliate Agreement

Exhibit G       Form of Employment and Non-Competition Agreement for Sellers

Exhibit H       Form of Employment and Non-Competition Agreement for Ephy
                Torenberg










                                      -iii-

<PAGE>


                               INDEX OF SCHEDULES


Schedule          Description

1.3(b)(vi)        Third Party Consents Required of Company
2.2(a)            Stockholder List
2.3               Affiliated Companies and Subsidiaries
2.4               Governmental and Third Party Consents
2.5               Company Financials
2.6               Undisclosed Liabilities
2.7               No Changes
2.8               Tax Returns and Audits
2.9               Restrictions on Business Activities
2.10(a)           Leased Real Property
2.10(b)           Liens on Property
2.11(b)           Company Registered Intellectual Property
2.11(c)           Title to Company Intellectual Property
2.11(d)           Written Agreements Relating to Intellectual Property
                  Development
2.11(e)           Transferred  Intellectual  Property
2.11(g)           Incoming   Intellectual  Property  Licenses
2.11(h)           Obligations Regarding  Intellectual  Property
2.11(j)           Necessary  Actions to Preserve Intellectual Property Rights
2.12(a)           Agreements, Contracts and Commitments
2.12(b)           Breaches
2.13              Interested Party Transactions
2.15              Litigation
2.16              Insurance
2.19              Brokers/Finders Fees;  Expenses of Transaction
2.20(b)           Employee Benefit Plans and Employee Agreements
2.20(d)           Employee Plan Compliance
2.20(g)           Post Employment   Obligations
2.20(i)(i)        Effect   of   Transaction
2.20(i)(ii)       Excess Parachute Payments
2.20(k)           Labor 4.11 Company Affiliate List





                                       -i-

<PAGE>
                                                                    EXHIBIT  4.1

                              ADVENT SOFTWARE, INC.

                       DECLARATION OF REGISTRATION RIGHTS


         This Declaration of Registration  Rights  ("Declaration") is made as of
the Closing Date by Advent Software, Inc., a Delaware corporation ("Buyer"), for
the benefit of  shareholders  of MicroEdge,  Inc., a New York  corporation  (the
"Company"),  acquiring  shares of Common Stock of Buyer pursuant to that certain
Stock  Purchase   Agreement  dated  as  of  February  28,  1998  (the  "Purchase
Agreement"),  between Buyer and the Company.  Each capitalized term used but not
otherwise  defined herein shall have the meaning  ascribed to it in the Purchase
Agreement.

         1.       Definitions.  As used in this Declaration:

                  a. "Buyer  Consideration  Shares" means for a given Holder the
shares of Buyer Common  Stock  issued to stock  Holder  pursuant to the Purchase
Agreement.

                  b. "Exchange  Act" means the Securities  Exchange Act of 1934,
as amended.

                  c.  "Securities  Act"  means the  Securities  Act of 1933,  as
amended.

                  d. "Form S-3" means such form under the  Securities  Act as in
effect on the date  hereof or any  registration  form under the  Securities  Act
subsequently  adopted by the Commission  which  similarly  permits  inclusion or
incorporation  of substantial  information by reference to other documents filed
by Buyer with the Commission.

                  e. "Holder"  means:  (i) a shareholder  of the Company to whom
shares of Registrable  Securities are issued pursuant to the Purchase Agreement,
for so long as such holder  continues to hold such shares,  or (ii) a transferee
of Registrable  Securities by a Holder, to whom  registration  rights under this
Declaration are assigned pursuant to Section 10 of this Declaration.

                  f. "Registrable  Securities" means (a) for each Holder the sum
of (i) a number of shares of Buyer Common  Stock equal to thirty  percent of the
Buyer Consideration Shares, together with all other shares of Buyer Common Stock
issued in respect  thereof (by way of stock split,  dividend or  otherwise)  and
(ii) a number of shares of Buyer  Common  Stock  equal to the product of (A) the
percentage of her total holdings of Buyer Common Stock sold by Stephanie DiMarco
in any Buyer  Registration  (as defined in Section 4) effected  prior to May 31,
1998,  and (B) the number of Buyer  Consideration  Shares issued to such Holder,
and (b) for all Holders the aggregate of all Registrable  Securities held by all
such Holders.

                  g.       "SEC" means the Securities and Exchange Commission.



                                       -1-

<PAGE>



         2.  Registration  at  Request  of the  Holders.  Buyer  shall  use  its
commercially  reasonable efforts to cause the Registrable  Securities to be held
by each Holder  following the Acquisition to be registered  under the Securities
Act so as to permit the resale  thereof,  and in connection  therewith shall use
all  commercially  reasonable  efforts to prepare and file with the SEC promptly
after Closing,  and shall use its  commercially  reasonable  efforts to cause to
become  effective by not later than April 30, 1998, a registration  statement on
Form S-3 or on such other form as is then  available  under the  Securities  Act
covering the Registrable Securities;  provided,  however, that each Holder shall
provide all such  information and materials to Buyer and take all such action as
may be  required  in  order  to  permit  Buyer to  comply  with  all  applicable
requirements of the SEC and to obtain any desired  acceleration of the effective
date of such registration statement. Such provision of information and materials
is  a  condition  precedent  to  the  obligations  of  Buyer  pursuant  to  this
Declaration.   Buyer  shall  not  be  required  to  effect  more  than  one  (1)
registration  under  this  Declaration.  The  offering  made  pursuant  to  such
registration shall not be underwritten.

         3. Postponement of Registration. Notwithstanding Section 2 above, Buyer
shall  be  entitled  to  postpone  the  declaration  of   effectiveness  of  the
registration statement prepared and filed pursuant to Section 2 for a reasonable
period  of time,  but not in  excess  of sixty  (60)  calendar  days  after  the
applicable  deadline,  if the Board of Directors of Buyer, acting in good faith,
determines that there exists material  nonpublic  information  about Buyer which
the Board does not wish to disclose in a registration statement (due to the fact
that  such  disclosure  may not be in the best  interests  of  Buyer or  Buyer's
stockholders)  which  information  would otherwise be required by the Securities
Act to be  disclosed  in the  registration  statement  to be filed  pursuant  to
Section 2 above.

         4.       Buyer Registration.

                  a. Notice of  Registration.  If at any time prior to April 30,
1998,  Buyer shall  determine,  in its sole  discretion,  to register any of its
equity  securities,  either  for its own  account  or the  account of a security
holder  or  holders  (any  such  registration  by  Buyer  constituting  a "Buyer
Registration"),  other  than (i) a  registration  relating  solely  to  employee
benefit plans, (ii) a registration relating solely to a Rule 145 transaction, or
(iii) a  registration  in which the only equity  security  being  registered  is
capital  stock  issuable  upon   conversion  of  convertible   (or  exchange  of
exchangeable) debt securities which are also being registered, Buyer will:

                         (1) promptly give Holder written notice thereof; and

                         (2)  include  in  any  registration  (and  any  related
                    qualification under blue sky laws or other compliance),  and
                    in any underwriting  involved  therein,  all the Registrable
                    Securities not sold pursuant to Section 2 hereof  ("Eligible
                    Registrable  Securities")  specified  in a written  request,
                    made  within 10 days after  receipt of such  written  notice
                    from Buyer, by Holder.

                  b.  Underwriting.  If the  registration  of which  Buyer gives
notice is for a registered  public  offering  involving an  underwriting,  Buyer
shall so advise Holder as a part of the written notice given pursuant to Section
4.a. In such event,  the right of Holder to  registration  pursuant to Section 4
shall be conditioned upon such Holder's  participation in such  underwriting and
the inclusion of Eligible


                                       -2-

<PAGE>



Registrable  Securities  in the  underwriting  shall be  limited  to the  extent
provided  herein.  Further,  Holder  shall  (together  with  Buyer and any other
holders  distributing their securities through such underwriting)  enter into an
underwriting  agreement in customary form with the managing underwriter selected
for such  underwriting  by Buyer.  Notwithstanding  any other  provision of this
Section 4.b, if the  managing  underwriter  determines  that  marketing  factors
require a limitation  of the number of shares to be  underwritten,  the managing
underwriter may limit the Eligible Registrable Securities to be included in such
registration to zero.

                  If Holder  disapproves of the terms of any such  underwriting,
he may elect to withdraw  therefrom by written  notice to Buyer and the managing
underwriter.  Any securities  excluded or withdrawn from such underwriting shall
be withdrawn  from such  registration,  and shall not be transferred in a public
distribution  prior to 180 days  after the  effective  date of the  registration
statement  relating  thereto,  or  such  other  shorter  period  of  time as the
underwriters may require.

                  c. Right to Terminate Registration.  Buyer is not obligated to
initiate any  registration and shall have the right to terminate or withdraw any
registration  initiated by it under this Section 4.a prior to the  effectiveness
of such registration  whether or not Holder has elected to include securities in
such registration.

         5. Obligations of Buyer.  Subject to the limitations of Sections 3, and
12, Buyer shall (i) keep the  registration  statement  filed in accordance  with
Section 2 hereof  effective  until the earlier of (A) ninety (90) days after the
Closing of the Acquisition or (B) such time as all  Registrable  Securities have
been sold  hereunder;  (ii)  prepare and file with the SEC such  amendments  and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the  provisions  of the  Securities
Act with respect to the sale or other disposition of all securities  proposed to
be registered in such registration statement;  (iii) furnish to each Holder such
number of copies of any prospectus (including any preliminary prospectus and any
amended or supplemented  prospectus) in conformity with the  requirements of the
Securities Act, and such other documents,  as each Holder may reasonably request
in order to  effect  the  offering  and sale of the  shares  of the  Registrable
Securities to be offered and sold,  but only while Buyer shall be required under
the provisions hereof to cause the registration statement to remain current; and
(iv) use its commercially  reasonable  efforts to register or qualify the shares
of the Registrable  Securities covered by such registration  statement under the
securities  or blue  sky  laws  of  such  jurisdictions  as  each  Holder  shall
reasonably  request  (provided  that Buyer shall not be  required in  connection
therewith  or as a  condition  thereto to qualify  to do  business  or to file a
general consent to service of process in any such jurisdiction  where it has not
been qualified).

         6. Selling Procedures.  Any sale of Registrable  Securities pursuant to
the  registration  statement  filed in accordance with Section 2 hereof shall be
subject to the following conditions and procedures:

                  a.  Stockholder  Notice:  The  selling  Holder  shall  provide
written  notice  ("Stockholder  Notice") to Buyer no less than six (6)  business
days prior to such  Holder's  intended  sale.  Within five (5) business  days of
receipt of the Stockholder Notice, Buyer will inform such Holder in


                                       -3-

<PAGE>



writing if the registration statement and final prospectus then on file with the
SEC is current and otherwise  complies with the  Securities  Act such that sales
may be made thereunder.  Beginning immediately upon receipt of notice from Buyer
that the registration statement is current and complies with the Securities Act,
such  Holder  shall  then have ten (10)  business  days to sell the  Registrable
Securities  proposed to be sold,  unless the notice from Buyer specifies that no
sale  may be  made  until  the  date  of  intended  sale,  as  specified  in the
Stockholder  Notice,  in which case the Holders  must wait until the date of the
intended  sale to make such sale and Holder  shall have ten (10)  business  days
thereafter to make such sale.  After such ten (10) day period,  the seller shall
once again comply with the procedures set forth in this Section 5.a prior to any
further sales;

                  b.  Updating  the  Prospectus:  If Buyer  informs  the selling
Holder that the registration statement or final prospectus then on file with the
SEC is not current or otherwise does not comply with the  Securities  Act, Buyer
shall use  commercially  reasonable  efforts to provide to the selling  Holder a
current  prospectus  that complies with the Securities Act on or before the date
of  the  intended  sale  of  the  Registrable  Securities  as  disclosed  in the
Stockholder Notice;  provided,  however,  that for a period of not more than one
hundred  twenty (120) days (or any number of lesser periods which total not more
than one hundred twenty (120) days) during any twelve-month  period, Buyer shall
have the right to delay the  preparation of a current  prospectus  that complies
with the Securities Act without explanation to such Holder;

                  c.  Blackout  Periods:  Holders who become  employees of Buyer
agree to be bound by  Buyer's  Insider  Trading  Policy as such may be in effect
from time to time for so long as such Holders remain employees of Buyer;

                  d. General:  Notwithstanding the foregoing, Buyer shall notify
each  Holder  (i) of any  request  by the  SEC or any  other  federal  or  state
governmental  authority  during the period of  effectiveness of the registration
statement for amendments or supplements to the registration statement or related
prospectus or for additional information relating to the registration statement,
(ii) of the  issuance  by the SEC or any  other  federal  or state  governmental
authority of any stop order  suspending the  effectiveness  of the  registration
statement or the initiation of any  proceedings  for that purpose,  (iii) of the
receipt  by Buyer of any  notification  with  respect to the  suspension  of the
qualification  or  exemption  from  qualification  of  any  of  the  Registrable
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such purpose,  or (iv) of the happening of any event which makes
any statement made in the  registration  statement or related  prospectus or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect or which  requires  the  making of any  changes in the
registration  statement or prospectus  so that, in the case of the  registration
statement, it will not contain an untrue statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein not misleading,  and that in the case of the prospectus,  it
will not  contain  an untrue  statement  of a  material  fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances  under which they were made, not misleading.  Advent may, upon
the happening of any event (x) described in  subparagraph  (i),  (ii),  (iii) or
(iv)  above,  or (y) that,  in the good  faith  judgment  of  Advent's  Board of
Directors,  renders it  advisable to suspend use of the  prospectus  for no more
than sixty (60) days due to pending corporate  developments,  suspend use of the
prospectus on written notice to each Holder, in which case each Holder


                                       -4-

<PAGE>



shall  not  dispose  of  Registrable  Securities  covered  by  the  registration
statement or prospectus until copies of a supplemented or amended prospectus are
distributed  to the Holders or until the Holders are advised in writing by Buyer
that the use of the applicable  prospectus  may be resumed.  Buyer shall use its
commercially  reasonable efforts to ensure that the use of the prospectus may be
resumed as soon as  practicable.  Buyer  shall use its  commercially  reasonable
efforts to obtain the withdrawal of any order  suspending the  effectiveness  of
the   registration   statement,   or  the  lifting  of  any  suspension  of  the
qualification  (or exemption  from  qualification)  of any of the securities for
sale in any jurisdiction,  at the earliest practicable moment. Buyer shall, upon
the occurrence of any event contemplated by clause (iv), prepare a supplement or
post-effective  amendment to the  registration  statement or a supplement to the
related prospectus or any document incorporated therein by reference or file any
other  required  document so that, as thereafter  delivered to the purchasers of
the  Registrable  Securities  being sold  thereunder,  such  prospectus will not
contain an untrue  statement of a material fact or omit to state a material fact
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading.

         7.  Availability  of Form S-3.  Buyer  represents  that it is currently
eligible to utilize Form S-3 and agrees that,  for a period of one (1) year from
the Closing,  Buyer will not intentionally  take any action which would preclude
Buyer's eligibility to use Form S-3.

         8.  Expenses.  Buyer  shall  pay  all  of  the  out-of-pocket  expenses
incurred,  other than  underwriting  or selling  discounts and  commissions,  in
connection  with the  registration  of Registrable  Securities  pursuant to this
Declaration,  including,  without limitation,  all SEC, National  Association of
Securities  Dealers,  Inc. and blue sky registration  and filing fees,  printing
expenses,  transfer  agents' and  registrars'  fees, and the reasonable fees and
disbursements of Buyer's outside counsel and independent accountants.

         9. Reports Under Securities Exchange Act of 1934. Buyer agrees to:

     a. use all commercially reasonable efforts to file with the SEC in a timely
manner all reports and other  documents  required of Buyer under the  Securities
Act and the Exchange Act; and

                  b. furnish to each Holder forthwith upon request (i) a written
statement by Buyer that it has complied with the reporting  requirements  of the
Securities Act and the Exchange Act, or that it qualifies as a registrant  whose
securities  may be  resold  pursuant  to  Form  S-3  (at  any  time  that  it so
qualifies),  (ii) a copy of the most recent annual or quarterly  report of Buyer
and (iii) such other information as may be reasonably requested in availing each
Holder of any rule or  regulation  of the SEC which  permits  the selling of any
such securities pursuant to Form S-3.

         10. Assignment of Registration  Rights. The rights of a Holder pursuant
to this Declaration shall not be assignable,  except for a transfer by operation
of law to his or her heirs and successors.

         11. Amendment of Registration  Rights. The Holders of a majority of the
Registrable  Securities then outstanding  may, with the consent of Buyer,  amend
the registration rights granted hereunder.


                                       -5-

<PAGE>


         12. Termination.  The registration rights set forth in this Declaration
shall  terminate  with  respect to a Holder  (and the shares held by such Holder
shall cease to constitute  Registrable  Securities)  upon the earlier of (i) the
date which is one year  following the Closing of the  Acquisition,  and (ii) the
sale of all of such Holder's Registrable Securities.

         13.  Obligations of Holders.  By exercising any rights hereunder,  each
Holder shall be deemed to assume all obligations of a Holder hereunder as though
such  Holder were a signatory  hereto.  Buyer may require  Holders to execute an
instrument  whereby such Holders  expressly  assume all  obligations  of Holders
hereunder as a condition precedent to any obligations of Buyer hereunder.




                                       -6-

<PAGE>
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{"company-data": {"conformed-name": "ADVENT SOFTWARE INC /DE/", "cik": "0001002225", "assigned-sic": "7371", "irs-number": "942901952", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26994", "film-number": "98565574"}, "business-address": {"street1": "301 BRANNAN ST", "city": "SAN FRANCISCO", "state": "CA", "zip": "94107", "phone": "4155437696"}}
SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 8-K

                Current Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                                February 28, 1998
                Date of Report (Date of earliest event reported)

                              ADVENT SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)

                                    Delaware
                 (State or other jurisdiction of incorporation)
                                      
                                   94-2901952
                      (I.R.S. Employer Identification No.)

                                     0-26994
                            (Commission File Number)

                               301 Brannan Street
                         San Francisco, California 94107
                    (Address of principal executive offices)

                                 (415) 543-7696
              (Registrant's telephone number, including area code)
Item 2.           Acquisition or Disposition of Assets.

     On February 28, 1998,  Advent Software,  Inc., a Delaware  corporation (the
"Registrant"  or "Advent  Software")  acquired  (the  "Acquisition")  all of the
outstanding   capital  stock  of  MicroEdge,   Inc.,  a  New  York   corporation
("MicroEdge"),  from Ximena Florez and Dov Torenberg,  the sole  shareholders of
MicroEdge (the  "Sellers"),  for a total  purchase price of $9,093,250  worth of
Registrant's  stock  as  priced  on the  date of  closing.  As a  result  of the
Acquisition, MicroEdge became a wholly-owned subsidiary of the Registrant.

                  In connection with the Acquisition, Nine Hundred Nine Thousand
Three Hundred Twenty- Five Dollars  ($909,325) of the  consideration  payable in
connection with the Acquisition (the "Escrow Amount") was placed into escrow, to
be held as security for any losses  incurred by the  Registrant  in the event of
certain  breaches by  MicroEdge of  covenants,  representations  and  warranties
contained in the Stock Purchase Agreement dated February 28, 1998 by and between
the  Registrant,  MicroEdge,  and  the  Sellers.  A copy of the  Stock  Purchase
Agreement is filed as Exhibit 2.1 to this report and is  incorporated  herein by
this reference.

                  The  Acquisition  will be treated as a pooling for  financial
accounting purposes.

Item 7.  Financial Statements and Exhibits.

                  The following  financial  statements and exhibits are filed as
part of this report, where indicated.

         (a) Financial  statements of business  acquired,  prepared  pursuant to
Rule 3.05 of Regulation S-X:

                  Not applicable.

         (b) Pro forma financial  information required pursuant to Article 11 of
Regulation S-X:

                  Not applicable.

         (c) Exhibits in accordance with Item 601 of Regulation S-K:

                  Exhibits.

                  2.1      Stock Acquisition Agreement, dated as of February 28,
                           1998, by and among Advent Software,  Inc., a Delaware
                           corporation, MicroEdge, Inc., a New York corporation,
                           and the Sellers.

                  4.1      Form of Declaration of Registration Rights.

     The Registrant agrees to supplementally furnish the Securities and Exchange
Commission with a copy of any other exhibits or schedules upon request.
INDEX TO EXHIBITS

                                                                                
      EXHIBIT    DESCRIPTION                                     
      NUMBER

          2.1  Stock Purchase  Agreement,  dated as of February 28, 1998, by and
               among Advent Software,  Inc., a Delaware corporation,  MicroEdge,
               Inc.,  a  New  York  corporation,   and  Ximena  Florez  and  Dov
               Torenberg, sole shareholders of MicroEdge, Inc.

          4.1  Form of Declaration of Registration Rights.
SIGNATURES

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

                                                           ADVENT SOFTWARE, INC.

Dated:   February 28, 1998          By:   /s/ Irv H. Lichtenwald
                                          ----------------------
                                           Irv H. Lichtenwald
                                         Senior Vice President, Chief Financial
                                            Officer and Secretary
EXHIBIT 2.1

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE  AGREEMENT  (this  "Agreement") is made and entered
into as of February  28, 1998 by and among  Advent  Software,  Inc.,  a Delaware
corporation ("Buyer"),  MicroEdge, Inc., a New York corporation ("Company"), and
all of the holders of the outstanding  securities of the Company,  which holders
are listed on Exhibit A hereto  (individually  a "Seller" and  collectively  the
"Sellers").

                                    RECITALS

         A.  Sellers  own  all of  the  issued  and  outstanding  shares  of the
Company's  Common Stock (the "Shares"),  which  constitute all of the issued and
outstanding securities of the Company.

         B. Sellers desire to sell the Shares, and Buyer desires to purchase all
of the Shares.  The parties  hereto are entering into this  Agreement to provide
for  Buyer's   acquisition  of  the  Shares  and  Company  thereby   becoming  a
wholly-owned  subsidiary of Buyer, and to establish various rights,  obligations
and conditions in connection  therewith (the  "Acquisition").  It is intended by
the parties hereto that the Acquisition  shall qualify for accounting  treatment
as a pooling of interests.

         NOW,  THEREFORE,  in  consideration  of  the  covenants,  promises  and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:

                                    ARTICLE I

                            THE ACQUISITION OF SHARES

         1.1   Purchase   and  Sale  of   Shares.   In   consideration   of  the
representations,  warranties and other agreements of the Company and the Sellers
set forth in or otherwise  contemplated by this Agreement,  and on the terms and
subject to the  conditions  of this  Agreement,  Buyer will purchase the Shares,
constituting all of the issued and outstanding  securities of the Company,  from
Sellers for the consideration set forth in Section 1.2, and Sellers hereby sell,
transfer,  assign and deliver all of their respective rights, title and interest
in and to the Shares to Buyer.

         1.2      Consideration.

                  (a)  Issuance of Buyer Common  Stock.  As  consideration  (the
"Consideration")  for the sale,  transfer,  assignment  and  delivery  of all of
Sellers' right, title and interest in and to the Shares to Buyer, Buyer will, at
the Closing (defined below),  on the terms and subject to the conditions of this
Agreement, issue to Sellers a number of shares of Buyer Common Stock (the "Buyer
Share Number") equal to (i) the Conversion  Ratio (defined below)  multiplied by
the Aggregate Company Common

                                       -1-
Number (defined below),  rounded down to eliminate any fractional  shares,  less
(ii) the Escrow Amount (defined below).

                  (b)  Deposit  of Escrow  Amount.  At the  Closing,  Buyer will
deposit into an escrow account, as set forth in Article V, a number of shares of
Buyer Common Stock equal to the Escrow Amount.

                  (c)  Adjustments to Conversion  Ratio.  The  Conversion  Ratio
shall be adjusted to reflect fully the effect of any stock split, reverse split,
stock dividend (including any dividend or distribution of securities convertible
into  Company  Common  Stock),  reorganization,  recapitalization  or other like
change with respect to Company Common Stock  occurring after the date hereof and
prior to the Closing.

                  (d)  Determination of Conversion Ratio and Escrow Amount.  The
"Conversion  Ratio"  shall  refer  to the  quotient  obtained  by  dividing  the
Aggregate Buyer Common Number  (defined  below) by the Aggregate  Company Common
Number.  The "Escrow Amount" shall refer to the product  obtained by multiplying
the Aggregate Buyer Common Number by 0.10. The "Aggregate Company Common Number"
shall equal 100. The  "Aggregate  Buyer Common  Number"  shall be  determined as
follows: (i) in the event that the average closing price of Buyer's Common Stock
for the five  trading  days ending two trading days before the date on which the
Closing occurs (the "Average  Price") is less than $22.00,  the Aggregate  Buyer
Common  Number shall equal the quotient  obtained by dividing  $6,600,000 by the
Average  Price,  provided,  however,  that in the event such quotient is greater
than 350,000,  the Aggregate  Buyer Common Number shall be deemed to be equal to
350,000;  (ii) in the event the Average Price is greater than or equal to $22.00
but less than $28.00, the Aggregate Buyer Common Number shall equal 300,000; and
(iii) in the event the  Average  Price is greater  than or equal to $28.00,  the
Aggregate  Buyer Common  Number  shall equal the  quotient  obtained by dividing
$8,400,000  by the  Average  Price,  provided,  however,  that in the event such
quotient is less than 250,000, the Aggregate Buyer Common Number shall be deemed
to be equal to 250,000.

         1.3      Closing; Delivery.

                  (a) Closing.  The closing of the  Acquisition  (the "Closing")
will take place  concurrently with the execution hereof at the offices of Wilson
Sonsini  Goodrich  & Rosati,  650 Page Mill  Road,  Palo  Alto,  California  and
MicroEdge,  Inc., 619 West 54th Street, 10th Floor, New York, New York. The date
upon which the Closing  actually  occurs is herein  referred to as the  "Closing
Date."

                  (b)      Delivery at Closing.  At the Closing:

     (i) Each Seller will deliver to Buyer all stock certificates, stock powers,
endorsements,  assignments  and other  instruments  and  documents  necessary or
appropriate to sell, convey, assign and deliver the Shares to Buyer.

                                       -2-
(ii) Buyer will deliver to each Seller  documentation  in a form reasonably
satisfactory  to the Company  evidencing  Buyer's  instructions  to its transfer
agent to deliver to each Seller a certificate representing a number of shares of
its Common  Stock equal to (A) the product of (x) the number of Shares  owned by
such Seller, as set forth in Schedule 2.2(a), and (y) the Conversion Ratio, less
(B) a portion of the Escrow Amount equal to the proportion of Buyer Common Stock
which such Seller would  otherwise be entitled to receive  under  Section 1.2 by
virtue of his or her ownership of outstanding Shares.

     (iii) The Company shall deliver to Buyer evidence  reasonably  satisfactory
to it that the  Agreement  and the  Acquisition  shall  have  been  adopted  and
approved  by  the  stockholders  of the  Company  by the  requisite  vote  under
applicable law and the Company's Articles of Incorporation.

     (iv) Buyer shall deliver to the Company evidence reasonably satisfactory to
it that the shares of Buyer Common Stock issuable to stockholders of the Company
pursuant to this  Agreement  and such other  shares  required to be reserved for
issuance in  connection  with the  Acquisition  shall have been  authorized  for
listing on The Nasdaq National Market upon official notice of issuance.

     (v) The Company shall deliver to Buyer evidence satisfactory to it that the
Company has obtained the  consents,  approvals and waivers set forth in Schedule
1.3(b)(v)  (including,  without limitation,  any consents,  waivers or approvals
required  under any  contract or agreement to which the Company is a party or by
which it is bound and which are necessary in connection  with the Acquisition to
transfer to the Surviving Corporation all rights of the Company thereunder).

     (vi) The Company shall  deliver to Buyer a legal  opinion in  substantially
the form  attached  hereto as Exhibit B from  Moskowitz,  Altman & Hughes,  LLP,
legal counsel to the Company.

     (vii) Buyer shall deliver to the Company a legal  opinion in  substantially
the form  attached  hereto as Exhibit C from Wilson  Sonsini  Goodrich & Rosati,
legal counsel to the Buyer.

     (viii) The Company shall  deliver an executed  Affiliate  Agreement,  which
shall be in full force and effect, executed by each of the parties identified by
the Company as being an Affiliate of the Company.

     (ix) Each of the Sellers shall  deliver to Buyer an executed  Stockholder's
Certificate which shall be in full force and effect.

     (x) Each of the Sellers  shall,  and the Sellers shall cause Ephy Torenberg
to, deliver to Buyer an Employment and Employment and Non-Competition  Agreement
pursuant to Section 4.15 hereof, which Employment and Non-Competition Agreements
shall not have been  terminated or repudiated by either Seller,  and shall be in
full force and effect.

                                       -3-
(xi) The Company shall deliver to Buyer evidence reasonably satisfactory to
it that the directors of the Company in office  immediately prior to the Closing
have resigned as directors of the Company  effective  immediately  following the
Closing.

         1.4 Directors and  Officers.  At the Closing,  Stephanie G. DiMarco and
Irv H.  Lichtenwald of Buyer shall become the directors of the Company,  each to
hold office in accordance with the Articles of  Incorporation  and Bylaws of the
Company.  At the Closing,  Dov Torenberg shall become  President,  Ximena Florez
shall become Vice President,  Sales, Marketing and Professional  Services,  Ephy
Torenberg shall become Vice President,  Operations and Irv H. Lichtenwald  shall
become Chief Financial Officer and Secretary,  each to hold office in accordance
with the Bylaws of the Company.

         1.5  Lost,  Stolen  or  Destroyed   Certificates.   In  the  event  any
certificates  evidencing  shares of Company  Common  Stock shall have been lost,
stolen or destroyed, the Buyer's transfer agent shall issue in exchange for such
lost, stolen or destroyed certificates,  upon the making of an affidavit of that
fact by the holder thereof, such shares of Buyer Common Stock as may be required
pursuant to Section 1.2;  provided,  however,  that Buyer may, in its discretion
and as a condition precedent to the issuance thereof,  require the owner of such
lost,  stolen or destroyed  certificates to deliver a bond in such sum as it may
reasonably  direct as indemnity against any claim that may be made against Buyer
or its  transfer  agent with  respect to the  certificates  alleged to have been
lost, stolen or destroyed.

         1.6 Tax and  Accounting  Consequences.  It is  intended  by the parties
hereto that the  Acquisition  shall (i) constitute a  reorganization  within the
meaning of Section 368 of the Code and (ii) qualify for accounting  treatment as
a pooling of interests.

                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as disclosed in a document dated as of the date hereof referring
specifically to the  representations,  warranties or covenants in this Agreement
which  reasonably  identifies  the basis for an exception  to a  representation,
warranty or covenant in this  Agreement and which is delivered by the Company to
Buyer prior to the execution of this  Agreement (the "Company  Schedules"),  the
Company represents and warrants to Buyer as set forth below.

         2.1  Organization  of the Company.  The Company is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
New York. The Company has the corporate power to own its properties and to carry
on its  business as now being  conducted.  The Company is duly  qualified  to do
business and in good standing as a foreign  corporation in each  jurisdiction in
which the failure to be so qualified would have, or would reasonably be expected
to have, a material adverse effect on the business, financial condition, results
of operations, assets (including intangible assets), liabilities or prospects of
the  Company  (hereinafter  referred  to as a "Material  Adverse  Effect").  The
Company

                                       -4-
has  delivered a true and correct  copy of its  Articles  of  Incorporation  and
Bylaws, each as amended to date, to Buyer.

         2.2      Company Capital Structure.

                  (a) The  authorized  capital stock of the Company  consists of
1,000 shares of authorized  Common Stock,  no par value, of which 100 shares are
issued  and  outstanding.  The  Company  Capital  Stock is held of record by the
persons,  with the addresses of record and in the amounts, set forth on Schedule
2.2(a).  All outstanding  shares of Company  Capital Stock are duly  authorized,
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights  created by  statute,  the  Articles  of  Incorporation  or Bylaws of the
Company  or any  agreement  to which  the  Company  is a party or by which it is
bound.

                  (b) There are no options, warrants, calls, rights, commitments
or agreements of any character,  written or oral, to which either the Company or
a Seller is a party or by which either is bound obligating either the Company or
either Seller to issue,  deliver,  sell,  repurchase  or redeem,  or cause to be
issued,  delivered,  sold,  repurchased  or redeemed,  any shares of the capital
stock of the Company or  obligating  Company to grant,  extend,  accelerate  the
vesting of, change the price of,  otherwise amend or enter into any such option,
warrant, call, right,  commitment or agreement. As a result of this Acquisition,
Buyer will be the record and sole beneficial  owner of all  outstanding  capital
stock of the  Company  and rights to acquire  or  receive  capital  stock of the
Company.

         2.3 Subsidiaries. Except as set forth in Schedule 2.3, the Company does
not have and has never had any subsidiaries or affiliated companies and does not
otherwise own and has never  otherwise  owned any shares of capital stock or any
interest  in,  or  control,  directly  or  indirectly,  any  other  corporation,
partnership, association, joint venture or other business entity.

         2.4  Authority.  The  Company  has all  requisite  corporate  power and
authority to enter into this  Agreement and the  agreements  attached  hereto as
exhibits to which it is a party (the "Related Agreements") and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Related  Agreements and the  consummation of the  transactions
contemplated  hereby and  thereby  have been duly  authorized  by all  necessary
corporate  action on the part of the Company.  The Company's  Board of Directors
has unanimously approved the Acquisition and this Agreement.  This Agreement and
the Related  Agreements have been duly executed and delivered by the Company and
each Seller and constitute  the valid and binding  obligation of the Company and
each Seller, enforceable in accordance with their respective terms except (i) as
limited by applicable  bankruptcy,  insolvency,  reorganization,  moratorium and
other laws of general  application  affecting  enforcement of creditors'  rights
generally and (ii) as limited by laws relating to the  availability  of specific
performance,  injunctive relief or other equitable remedies. Except as set forth
on Schedule 2.4, the execution and delivery of this Agreement by the Company and
each Seller  does not,  and, as of the Closing  Date,  the  consummation  of the
transactions  contemplated  hereby  will not,  conflict  with,  or result in any
violation  of, or default  under  (with or without  notice or lapse of time,  or
both), or give rise to a right of  termination,  cancellation or acceleration of
any obligation or loss of any benefit under (any such

                                      -5-
event,  a  "Conflict")  (i) any  provision of the Articles of  Incorporation  or
Bylaws of the Company or (ii) any mortgage,  indenture, lease, contract or other
agreement or  instrument,  permit,  concession,  franchise,  license,  judgment,
order, decree,  statute,  law, ordinance,  rule or regulation  applicable to the
Company or its  properties or assets.  No consent,  waiver,  approval,  order or
authorization  of, or  registration,  declaration  or filing  with,  any  court,
administrative  agency or commission or other federal,  state,  county, local or
foreign   governmental   authority,   instrumentality,   agency  or   commission
("Governmental  Entity") or any third party (so as not to trigger any  Conflict)
is required by or with respect to the Company or any Seller in  connection  with
the  execution  and  delivery  of  this  Agreement  or the  consummation  of the
transactions  contemplated  hereby,  except  for  (i)  such  consents,  waivers,
approvals, orders,  authorizations,  registrations,  declarations and filings as
may be required under applicable federal and state securities laws and (ii) such
other consents,  waivers,  authorizations,  filings, approvals and registrations
which are set forth on Schedule 2.4.

         2.5      Company Financial Statements.

                  (a) Schedule 2.5 sets forth the Company's unaudited,  reviewed
balance  sheet as of  December  31, 1997 (the  "Balance  Sheet") and the related
unaudited,  reviewed  statements of  operations,  stockholders'  equity and cash
flows  for the year then  ended and the  footnotes  thereto  (collectively,  the
"Company  Financials").  The  Company  Financials  are  correct in all  material
respects and have been prepared in accordance with generally accepted accounting
principles  ("GAAP")  applied  on a  basis  consistent  throughout  the  periods
indicated and consistent with each other. The Company  Financials present fairly
the financial condition and operating results of the Company as of the dates and
during the periods indicated therein.

         2.6 No  Undisclosed  Liabilities.  Except as set forth in Schedule 2.6,
the Company  does not have any  liability,  indebtedness,  obligation,  expense,
claim,  deficiency,  guaranty  or  endorsement  of any  type,  whether  accrued,
absolute, contingent, matured, unmatured or other (whether or not required to be
reflected  in  financial   statements  in  accordance  with  generally  accepted
accounting  principles),  which  individually or in the aggregate,  has not been
reflected in the Balance Sheet.

     2.7 No Changes.  Except as set forth in Schedule 2.7, since the date of the
Balance Sheet, there has not been, occurred or arisen any:

                  (a)  transaction by the Company except in the ordinary  course
of business as conducted on the date of the Balance  Sheet and  consistent  with
past practices;

     (b) amendments or changes to the Articles of Incorporation or Bylaws of the
Company;

                  (c) capital  expenditure or commitment by the Company  outside
the  ordinary  course of  business,  either  individually  or in the  aggregate,
exceeding $10,000;

                                       -6-
(d) destruction of, damage to or loss of any material  assets,
business or customer of the Company (whether or not covered by insurance);

                  (e) labor trouble or claim of wrongful  discharge or other
unlawful  labor practice or action;

                  (f) change in accounting  methods or practices  (including any
change in depreciation or amortization policies or rates) by the Company;

                  (g)      revaluation by the Company of any of its assets;

                  (h)  declaration,  setting  aside or payment of a dividend  or
other  distribution  with respect to the capital  stock of the  Company,  or any
direct or indirect  redemption,  purchase or other acquisition by the Company of
any Company Capital Stock;

                  (i) increase in the salary or other compensation payable or to
become payable to any of its officers, directors,  employees or advisors, or the
declaration,  payment or commitment or obligation of any kind for the payment of
a bonus or other additional  salary or compensation to any such person except as
otherwise contemplated by this Agreement;

                  (j) sale,  lease,  license or other  disposition of any of the
assets or properties of the Company,  except in the ordinary  course of business
as conducted on that date and consistent with past practices;

                  (k)  amendment  or  termination  of  any  material   contract,
agreement or license to which the Company is a party or by which it is bound;

                  (l) loan by the Company to any person or entity,  incurring by
the  Company  of  any   indebtedness,   guaranteeing   by  the  Company  of  any
indebtedness,  issuance  or  sale  of any  debt  securities  of the  Company  or
guaranteeing of any debt securities of others,  except for advances to employees
for travel and business expenses in the ordinary course of business,  consistent
with past practices;

                  (m) waiver or  release  of any right or claim of the  Company,
including  any write-off or other  compromise  of any account  receivable of the
Company;

                  (n)  commencement  or notice or threat of  commencement of any
lawsuit or proceeding against or investigation of the Company or its affairs;

                  (o)  notice  of any  claim of  ownership  by a third  party of
Company  Intellectual  Property  (as  defined  in  Section  2.11  below)  or  of
infringement by the Company of any third party's intellectual property rights;

                                       -7-
(p)  issuance  or sale by the  Company of any of its shares of
its capital  stock,  or  securities  exchangeable,  convertible  or  exercisable
therefor, or of any other of its securities;

                  (q)  change in  pricing  or  royalties  set or  charged by the
Company to its  customers or licensees or in pricing or royalties set or charged
by persons who have licensed Company Intellectual Property to the Company;

                  (r) event or condition of any  character  that has or could be
reasonably expected to have a Material Adverse Effect on the Company; or

                  (s)  negotiation or agreement by the Company or any officer or
employees thereof to do any of the things described in the preceding clauses (a)
through  (r)  (other  than  negotiations  with  Buyer  and  its  representatives
regarding the transactions contemplated by this Agreement).

         2.8      Tax and Other Returns and Reports.

                  (a) Definition of Taxes.  For the purposes of this  Agreement,
"Tax" or,  collectively,  "Taxes," means any and all federal,  state,  local and
foreign taxes, assessments and other governmental charges,  duties,  impositions
and  liabilities,  including  taxes based upon or  measured  by gross  receipts,
income,  profits,  sales,  use and  occupation,  and value  added,  ad  valorem,
transfer,  franchise,  withholding,  payroll, recapture,  employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and  including  any liability
for taxes of a predecessor entity.

                  (b) Tax Returns and Audits.  Except as set forth in
Schedule 2.8:

                    (i) The Company as of the  Closing  will have  prepared  and
               filed all required  federal,  state,  local and foreign  returns,
               estimates,   information   statements  and  reports   ("Returns")
               relating to any and all Taxes  concerning or  attributable to the
               Company or its  operations  and such Returns  have been  prepared
               using the accrual method of accounting,  are true and correct and
               have been completed in accordance with applicable law.

                    (ii) The  Company as of the  Closing:  (A) will have paid or
               accrued  all Taxes it is  required  to pay or accrue and (B) will
               have withheld with respect to its employees all federal and state
               income taxes, FICA, FUTA and other Taxes required to be withheld.

                    (iii) The Company has not been  delinquent in the payment of
               any Tax nor is there any Tax deficiency outstanding,  proposed or
               assessed  against the Company,  nor has the Company  executed any
               waiver of any statute of  limitations  on or extending the period
               for the assessment or collection of any Tax.

                                       -8-
(iv) No audit  or other  examination  of any  Return  of the
               Company  is  currently  in  progress,  nor has the  Company  been
               notified of any request for such an audit or other examination.

                    (v) The  Company  does not have any  liabilities  for unpaid
               federal,  state,  local and  foreign  Taxes  which  have not been
               accrued  or  reserved  against  in  accordance  with  GAAP on the
               Balance  Sheet,  whether  asserted or  unasserted,  contingent or
               otherwise,  and the Company has no knowledge of any basis for the
               assertion of any such liability  attributable to the Company, its
               assets or operations.

                    (vi) The Company has provided to Buyer copies of all federal
               and state  income and all state sales and use Tax Returns for all
               periods since the date of the Company's incorporation.

                    (vii) There are (and as of immediately following the Closing
               there  will be) no  liens,  pledges,  charges,  claims,  security
               interests  or other  encumbrances  of any sort  ("Liens")  on the
               assets of the Company relating to or attributable to Taxes.

                    (viii) The  Company  has no  knowledge  of any basis for the
               assertion of any claim relating or  attributable  to Taxes which,
               if adversely  determined,  would result in any Lien on the assets
               of the Company.

                    (ix) None of the Company's assets are treated as "tax-exempt
               use property" within the meaning of Section 168(h) of the Code.

                    (x) As of  the  Closing,  there  will  not be any  contract,
               agreement, plan or arrangement,  including but not limited to the
               provisions  of this  Agreement,  covering  any employee or former
               employee of the Company that, individually or collectively, could
               give  rise  to  the  payment  of any  amount  that  would  not be
               deductible pursuant to Section 280G or 162 of the Code.

                    (xi) The Company has not filed any consent  agreement  under
               Section 341(f) of the Code or agreed to have Section 341(f)(2) of
               the Code apply to any  disposition  of a subsection (f) asset (as
               defined in Section 341(f)(4) of the Code) owned by the Company.

                    (xii)  The  Company  is  not a  party  to a tax  sharing  or
               allocation  agreement  nor does the Company owe any amount  under
               any such agreement.

                    (xiii) The Company is not,  and has not been at any time,  a
               "United  States real  property  holding  corporation"  within the
               meaning of Section 897(c)(2) of the Code.

                    (xiv) The  Company has  qualified  as an S  Corporation  for
               federal and state income tax purposed since its inception.

                                       -9-
2.9  Restrictions  on  Business  Activities.  Except  as set  forth  in
Schedule 2.9,  there is no agreement  (non-compete  or  otherwise),  commitment,
judgment,  injunction,  order or  decree  to  which  the  Company  is a party or
otherwise  binding upon the Company which has or reasonably could be expected to
have the  effect of  prohibiting  or  impairing  any  business  practice  of the
Company,  any acquisition of property (tangible or intangible) by the Company or
the conduct of business by the  Company.  Without  limiting the  foregoing,  the
Company has not entered into any agreement under which the Company is restricted
from  selling,  licensing or otherwise  distributing  any of its products to any
class of customers,  in any geographic area, during any period of time or in any
segment of the market.

         2.10     Title to Properties; Absence of Liens and Encumbrances.

                  (a) The Company owns no real  property,  nor has it ever owned
any real  property.  Schedule  2.10(a)  sets  forth a list of all real  property
currently,  or at any time in the past,  leased by the Company,  the name of the
lessor,  the date of the lease and each  amendment  thereto and, with respect to
any current lease,  the aggregate  annual rental and/or other fees payable under
any such lease. All such current leases are in full force and effect,  are valid
and effective in accordance with their respective terms, and there is not, under
any of such  leases,  any  existing  default or event of default (or event which
with notice or lapse of time, or both, would constitute a default).

                  (b) The  Company  has good and valid title to, or, in the case
of leased  properties  and  assets,  valid  leasehold  interests  in, all of its
tangible  properties and assets,  real, personal and mixed, used or held for use
in  its  business,   free  and  clear  of  any  Liens  (as  defined  in  Section
2.8(b)(vii)),  except as  reflected  in the  Company  Financials  or in Schedule
2.10(b)  and  except  for  liens  for  taxes  not yet due and  payable  and such
imperfections  of title and  encumbrances,  if any,  which are not  material  in
character, amount or extent, and which do not materially detract from the value,
or materially interfere with the present use, of the property subject thereto or
affected thereby.

         2.11     Intellectual Property.

                  (a) For the purposes of this  Agreement,  the following  terms
have the following definitions:

         "Intellectual  Property"  means  any or all of the  following  and  all
rights in,  arising out of, or associated  therewith:  (i) all United States and
foreign patents and applications therefor and all reissues, divisions, renewals,
extensions,   provisionals,   continuations  and  continuations-in-part  thereof
("Patents");   (ii)  all  inventions  (whether  patentable  or  not),  invention
disclosures,  improvements,  trade secrets,  proprietary information,  know how,
technology,  technical  data  and  all  documentation  relating  to  any  of the
foregoing;  (iii) all  copyrights,  copyrights  registrations  and  applications
therefor and all other rights  corresponding  thereto throughout the world; (iv)
all mask works,  mask work  registrations  and  applications  therefor;  (v) all
industrial  designs and any registrations and applications  therefor  throughout
the world; (vi) all trade names, logos, common law trademarks and service marks;
trademark  and service  mark  registrations  and  applications  therefor and all
goodwill associated therewith throughout the world; (vii) all databases and data
collections and all rights therein throughout the world; and

                                      -10-
(viii) all computer software  including all source code, object code,  firmware,
development  tools,  files,  records  and  data,  all  media on which any of the
foregoing is recorded;  (ix) any similar,  corresponding or equivalent rights to
any of the foregoing and (x) all documentation related to any of the foregoing.

         "Company  Intellectual  Property" shall mean any Intellectual  Property
that is (i) owned by (ii)  exclusively  licensed  to or (iii) was  developed  or
created by the Company or any subsidiary of the Company.

         "Registered  Intellectual  Property"  shall  mean  all  United  States,
international  and  foreign:   (i)  patents,   patent  applications   (including
provisional applications); (ii) registered trademarks,  applications to register
trademarks,  intent-to-use applications,  or other registrations or applications
related  to  trademarks;   (iii)  registered  copyrights  and  applications  for
copyright  registration;  (iv) any mask work  registrations  and applications to
register  mask works;  and (v) any other Company  Intellectual  Property that is
subject of an application,  certificate,  filing, registration or other document
issued by,  filed with,  or recorded by, any state,  government  or other public
legal authority.

                  (b)  Schedule   2.11(b)  lists  all  Registered   Intellectual
Property owned by, or filed in the name of, the Company or the  Subsidiary  (the
"Company Registered Intellectual Property") and lists any proceedings or actions
before any court,  tribunal  (including  the United  States Patent and Trademark
Office (the "PTO") or equivalent authority anywhere in the world) related to any
of the Company Registered Intellectual Property.

                  (c) Each item of Company Intellectual Property,  including all
Company Registered Intellectual Property listed in Schedule 2.11(b), is free and
clear of any Liens.  The Company (i) to its knowledge is the exclusive  owner of
all trademarks and trade names used in connection  with the operation or conduct
of the business of the Company, including the sale of any products or technology
or the provision of any services by the Company and (ii) owns  exclusively,  and
has good title to, all  copyrighted  works that are  Company  products  or other
works of authorship that the Company otherwise purports to own.

                  (d)  Except as set forth in  Schedule  2.11(d),  to the extent
that any Intellectual Property has been developed or created by any person other
than the Company for which the Company has,  directly or  indirectly,  paid, the
Company has a written  agreement  with such person with respect  thereto and the
Company  thereby has obtained  ownership of, and is the exclusive  owner of, all
such Intellectual Property by operation of law or by valid assignment.

                  (e) Except as set forth in Schedule  2.11(e),  the Company has
not  transferred  ownership  of or  granted  any  license  of or right to use or
authorized the retention of any rights to use any Intellectual  Property that is
or was Company Intellectual Property, to any other person.

                  (f)  The  Company  owns  or  has  a  written  license  to  all
Intellectual Property used in and/or necessary to the conduct of its business as
it currently is conducted including, without limitation,

                                      -11-
products,  technology or services  currently  under  development and the design,
development,  manufacture,  use, import and sale of the products, technology and
services of the Company.

                  (g) Other than  "shrink-wrap"  and  similar  widely  available
commercial end-user licenses,  the contracts,  licenses and agreements listed in
Schedule  2.11(g) include all contracts,  licenses and agreements,  to which the
Company is a party with respect to any Intellectual Property of any person other
than the  Company.  No person  other than the  Company has  ownership  rights to
improvements  made by the  Company  in  Intellectual  Property  which  has  been
licensed to the Company.

                  (h)  Schedule  2.11(h)  lists  all  contracts,   licenses  and
agreements  between  the  Company  and any other  person  wherein or whereby the
Company has agreed to, or assumed,  any material  obligation or duty to warrant,
indemnify,  reimburse, hold harmless,  guaranty or otherwise assume or incur any
material  obligation or liability or provide a right of rescission  with respect
to the infringement or  misappropriation  by the Company or such other person of
the Intellectual Property of any person other than the Company.

                  (i) (X) The  operation of the business of the Company as it is
currently  conducted  (including,  without limitation,  products,  technology or
services currently under development and the design,  development,  manufacture,
use,  import and sale of the products,  technology  and services of the Company)
does not  infringe  or  misappropriate  the  Intellectual  Property  (other than
Patents) of any person,  violate the rights of any person  (including  rights to
privacy or publicity), or constitute unfair competition or trade practices under
the laws of any  jurisdiction,  and the Company has not received notice from any
person claiming that such operation or any act,  product,  technology or service
(including products,  technology or services currently under development) of the
Company  infringes or  misappropriates  the  Intellectual  Property  (other than
Patents) of any person or  constitutes  unfair  competition  or trade  practices
under  the laws of any  jurisdiction  (nor is the  Company  aware  of any  basis
therefor).

                    (Y) The  operation  of the  Company's  Business  (as defined
               below)  does not and  will not  infringe  or  misappropriate  the
               Patents of any person,  and the Company has not  received  notice
               from any person claiming that such operation or any act, product,
               technology or service (including products, technology or services
               currently  under   development)  of  the  Company   infringes  or
               misappropriates  the  Patents of any person  (nor is the  Company
               aware of any basis therefor).  The representations and warranties
               of  this  Section  2.11(i)(Y)  shall  only  apply  to  claims  of
               infringement or  misappropriation  or violations arising from (i)
               the  products or  technology  of the  Company  existing as of the
               Closing Date and (ii) products or technology under development as
               of the  Closing  Date up to and  including  the first  commercial
               release of any such products or technology.  The term  "Business"
               means  the  operations  of the  Company  as  conducted  as of the
               Closing  Date,  including  the  manufacture,   sale,   licensing,
               copying,  distribution  or other  exploitation  of any product or
               technology under development as of such dates.

                  (j) To the Company's knowledge after reasonable investigation,
each item of Company Registered  Intellectual  Property is valid and subsisting,
all necessary registration, maintenance

                                      -12-
and renewal fees in connection with such Registered  Intellectual  Property have
been paid and all necessary  documents and  certificates in connection with such
Company  Registered  Intellectual  Property  have been filed  with the  relevant
patent,  copyright,  trademark  or other  authorities  in the  United  States or
foreign jurisdictions,  as the case may be, for the purposes of maintaining such
Registered  Intellectual Property.  Schedule 2.11(j) lists all actions that must
be taken by the Company  within sixty (60) days of the Closing  Date,  including
the payment of any  registration,  maintenance  or renewal fees or the filing of
any documents,  applications  or  certificates  for the purposes of maintaining,
perfecting or preserving or renewing any Company Intellectual  Property. In each
case in which the Company has acquired  ownership of any  Intellectual  Property
rights  from any  person,  the  Company  has  obtained  a valid and  enforceable
assignment  sufficient to irrevocably  transfer all rights in such  Intellectual
Property  (including  the right to seek past and future  damages with respect to
such Intellectual  Property) to the Company.  To the maximum extent provided for
by, and in accordance  with,  applicable laws and  regulations,  the Company has
recorded  each  such  assignment  with the  relevant  governmental  authorities,
including the United States Copyright Office, or their respective equivalents in
any relevant foreign jurisdiction,  as the case may be except to the extent such
failure would not have a Material Adverse Effect. Notwithstanding the foregoing,
the  Company  has  recorded  with  the PTO,  or its  equivalent  in any  foreign
jurisdiction, each such assignment.

                  (k) There are no contracts, licenses or agreements between the
Company and any other person with respect to Company Intellectual Property under
which there is any  dispute  known to the  Company  regarding  the scope of such
agreement,  or performance  under such  agreement  including with respect to any
payments to be made or received by the Company thereunder.

                  (l) To the  knowledge of the Company,  no person is infringing
or misappropriating any Company Intellectual Property.

                  (m) The Company has taken  reasonable steps in accordance with
normal  industry  practice  to  protect  the  Company's  rights in  confidential
information  and trade secrets of the Company or provided by any other person to
the  Company.  Without  limiting the  foregoing,  the Company has and enforces a
policy requiring each employee, consultant and contractor to execute proprietary
information,  confidentiality  and assignment  agreements  substantially  in the
Company's standard forms, and all current and former employees,  consultants and
contractors of the Company have executed such an agreement.

                  (n) No Company Intellectual Property or product, technology or
service  of the  Company is subject to any  proceeding  or  outstanding  decree,
order, judgment,  agreement or stipulation that restricts in any manner the use,
transfer or licensing thereof by the Company or may affect the validity,  use or
enforceability of such Company Intellectual Property.

                  (o)  To  the  knowledge  of  the  Company,   no  (i)  product,
technology,  service or publication of the Company,  (ii) material  published or
distributed  by the  Company  or (iii)  conduct  or  statement  of the  Company,
constitutes  obscene  material,  a  defamatory  statement  or  material,   false
advertising or otherwise violates any law or regulation.

                                      -13-
(p) The Company has taken  reasonable steps to ensure that its
products (including existing products and technology and products and technology
currently under development) will record, store, process,  calculate and present
calendar dates falling on and after (and if applicable, spans of time including)
January 1, 2000, and will calculate any information  dependent on or relating to
such dates in the same manner, and with the same  functionality,  data integrity
and performance,  as the products record, store, process,  calculate and present
calendar  dates on or before  December 31, 1999,  or calculate  any  information
dependent on or relating to such dates  (collectively,  "Year 2000  Compliant").
The Company has taken reasonable steps to ensure that its products (i) will lose
no functionality  with respect to the  introduction of records  containing dates
falling on or after January 1, 2000. All of the Company's  internal computer and
technology products and systems are Year 2000 Compliant.

     2.12 Agreements, Contracts and Commitments. Except as set forth on Schedule
2.12(a), the Company does not have, is not a party to nor is it bound by:

     (i) any collective bargaining agreements,

     (ii) any  agreements  or  arrangements  that contain any  severance  pay or
post-employment liabilities or obligations,

     (iii)  any  bonus,  deferred  compensation,   pension,  profit  sharing  or
retirement plans, or any other employee benefit plans or arrangements,

     (iv) any employment or consulting agreement, contract or commitment with an
employee or individual  consultant  or  salesperson  or any  consulting or sales
agreement,  contract or  commitment  under which any firm or other  organization
provides services to the Company,

     (v) any agreement or plan, including,  without limitation, any stock option
plan, stock appreciation rights plan or stock purchase plan, any of the benefits
of which  will be  increased,  or the  vesting  of  benefits  of  which  will be
accelerated,  by the occurrence of any of the transactions  contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement,

     (vi) any fidelity or surety bond or completion bond,

     (vii) any lease of personal property having a value  individually in excess
of $25,000,

     (viii) any agreement of indemnification or guaranty,

     (ix) any agreement, contract or commitment containing any covenant limiting
the freedom of the Company to engage in any line of business or to compete  with
any person,

                                      -14-
(x) any agreement,  contract or commitment relating to capital expenditures
and involving future payments in excess of $10,000,

     (xi) any agreement,  contract or commitment  relating to the disposition or
acquisition  of assets or any  interest in any business  enterprise  outside the
ordinary course of the Company's business,

     (xii)  any  mortgages,  indentures,  loans or credit  agreements,  security
agreements or other agreements or instruments relating to the borrowing of money
or  extension  of credit,  including  guaranties  referred  to in clause  (viii)
hereof,

     (xiii) any purchase  order or contract  for the  purchase of raw  materials
involving $25,000 or more,

     (xiv) any construction contracts,

     (xv) any distribution, joint marketing or development agreement,

     (xvi) any agreement  pursuant to which the Company has granted or may grant
in the future,  to any party, a source-code  license or option or other right to
use or acquire source- code, or

     (xvii) any other agreement, contract or commitment that involves $10,000 or
more or is not cancelable without penalty within thirty (30) days.

         Except for such alleged breaches,  violations and defaults,  and events
that would  constitute  a breach,  violation  or default with the lapse of time,
giving of notice, or both, as are all noted in Schedule 2.12(b), the Company has
not  breached,  violated or  defaulted  under,  or  received  notice that it has
breached,  violated or defaulted  under,  any of the terms or  conditions of any
agreement,  contract or commitment required to be set forth on Schedule 2.12(a),
Schedule  2.11(e),  Schedule  2.11(g) or Schedule  2.11(h) (each such agreement,
contract or commitment  listed on Schedule 2.12(a),  Schedule 2.11(e),  Schedule
2.11(g) or Schedule 2.11(h),  a "Contract").  Each Contract is in full force and
effect and, except as otherwise disclosed in Schedule 2.12(b), is not subject to
any default thereunder of which the Company has knowledge by any party obligated
to the Company pursuant thereto.

         2.13  Interested  Party  Transactions.  Except as set forth on Schedule
2.13,  no officer,  director or  stockholder  of the Company (nor any  ancestor,
sibling,  descendant or spouse of any of such persons, or any trust, partnership
or corporation in which any of such persons has or has had an interest),  has or
has had,  directly or indirectly,  (i) an economic  interest in any entity which
furnished or sold, or furnishes or sells,  services or products that the Company
furnishes or sells, or proposes to furnish or sell, (ii) an economic interest in
any entity that purchases from or sells or furnishes to, the Company,  any goods
or services or (iii) a  beneficial  interest in any  contract or  agreement  set
forth in Schedule 2.12(a) or Schedule  2.11(b);  provided,  that ownership of no
more than one percent (1%) of the outstanding voting

                                      -15-
stock of a publicly traded corporation shall not be deemed an "economic interest
in any entity" for purposes of this Section 2.13.

         2.14  Compliance  with Laws.  The Company has  complied in all material
respects with, is not in material violation of, and has not received any notices
of violation with respect to, any foreign,  federal, state or local statute, law
or regulation.

         2.15  Litigation.  Except as set forth in  Schedule  2.15,  there is no
action,  suit or  proceeding  of any nature  pending or  threatened  against the
Company, its properties or any of its officers or directors, in their respective
capacities  as  such.  Except  as  set  forth  in  Schedule  2.15,  there  is no
investigation  pending or threatened against the Company,  its properties or any
of its officers or directors by or before any Governmental Entity. Schedule 2.15
sets forth, with respect to any pending or threatened action,  suit,  proceeding
or investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested.  No governmental entity
has at any time  challenged  or  questioned  the legal  right of the  Company to
manufacture,  offer or sell any of its  products in the present  manner or style
thereof.

         2.16 Insurance.  The Company maintains valid and enforceable  insurance
policies  and  fidelity   bonds  covering  the  assets,   business,   equipment,
properties,  operations,  employees,  officers and directors of the Company, and
such  insurance  policies and fidelity  bonds,  which are identified in Schedule
2.16,  contain  provisions  which are  reasonable and customary in the Company's
industry,  and  there is no  claim  by the  Company  pending  under  any of such
policies or bonds as to which coverage has been  questioned,  denied or disputed
by the  underwriters  of such  policies or bonds.  All  premiums due and payable
under all such policies and bonds have been paid and the Company is otherwise in
material compliance with the terms of such policies and bonds (or other policies
and bonds providing  substantially similar insurance coverage).  The Company has
no knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.

         2.17 Minute  Books.  The minute books of the Company made  available to
counsel  for  Buyer  are the only  minute  books of the  Company  and  contain a
reasonably accurate summary of all meetings of directors (or committees thereof)
and  stockholders or actions by written consent since the time of  incorporation
of the Company.

         2.18     Environmental Matters.

                  (a)  Hazardous  Materials.  The Company has not  operated  any
underground  storage tanks, and has no knowledge of the existence,  at any time,
of any  underground  storage tank (or related piping or pumps),  at any property
that the  Company  has at any time  owned,  operated,  occupied  or  leased.  No
Hazardous Materials (as defined below) are present as a result of the actions or
omissions of the Company,  or, to the  Company's  knowledge,  as a result of any
actions of any third party or otherwise, in, on or under any property, including
the land and the improvements,  ground water and surface water thereof, that the
Company has at any time owned, operated, occupied or leased.

                                      -16-
(b)  Hazardous  Materials  Activities.  The  Company  has  not
transported,  stored, used,  manufactured,  disposed of, released or exposed its
employees or others to Hazardous  Materials in violation of any law in effect on
or before the Closing,  nor has the Company disposed of,  transported,  sold, or
manufactured  any product  containing  a Hazardous  Material  (any or all of the
foregoing being collectively referred to as "Hazardous Materials Activities") in
violation  of  any  rule,  regulation,  treaty  or  statute  promulgated  by any
Governmental  Entity in effect  prior to or as of the date  hereof to  prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.

                  (c) Permits.  The Company  currently  holds all  environmental
approvals,  permits,  licenses,  clearances  and  consents  (the  "Environmental
Permits")  necessary  for  the  conduct  of  the  Company's  Hazardous  Material
Activities and other businesses of the Company as such activities and businesses
are currently being conducted.

                  (d)   Environmental   Liabilities.   No  action,   proceeding,
revocation  proceeding,  amendment  procedure,  writ,  injunction  or  claim  is
pending, or to the Company's knowledge,  threatened concerning any Environmental
Permit,  Hazardous Material or any Hazardous  Materials Activity of the Company.
The Company is not aware of any fact or  circumstance  which  could  involve the
Company  in  any  environmental  litigation  or  impose  upon  the  Company  any
environmental liability.

                  (e)  Definition  of  "Hazardous  Materials".  As used  herein,
"Hazardous  Materials"  shall mean any substance that has been designated by any
Governmental  Entity  or  by  applicable  federal,  state  or  local  law  to be
radioactive,   toxic,   hazardous  or  otherwise  a  danger  to  health  or  the
environment,  including,  without limitation,  PCBs, asbestos, oil and petroleum
products,   urea-formaldehyde   and  all  substances   listed  as  a  "hazardous
substance,"  "hazardous  waste,"  "hazardous  material" or "toxic  substance" or
words of  similar  import,  under any law,  including  but not  limited  to, the
Comprehensive Environmental Response,  Compensation,  and Liability Act of 1980,
as amended; the Resource  Conservation and Recovery Act of 1976, as amended; the
Federal Water Pollution Control Act, as amended;  the Clean Air Act, as amended,
and the regulations promulgated pursuant to such laws.

         2.19 Brokers' and Finders' Fees;  Third Party  Expenses.  Except as set
forth on  Schedule  2.19,  the  Company  has not  incurred,  nor will it  incur,
directly or indirectly,  any liability for brokerage or finders' fees or agents'
commissions  or any similar  charges in  connection  with this  Agreement or any
transaction  contemplated  hereby.  Schedule 2.19 sets forth the principal terms
and  conditions of any  agreement,  written or oral,  with respect to such fees.
Schedule 2.19 sets forth the Company's current reasonable  estimate of all Third
Party  Expenses  (as  defined in Section  4.4)  expected  to be  incurred by the
Company in connection  with the  negotiation  and  effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereby.

         2.20     Employee Matters and Benefit Plans.

                  (a)  Definitions.  With the  exception  of the  definition  of
"Affiliate" set forth in Section  2.20(a)(i) below (which definition shall apply
only to this Section 2.20), for purposes of this Agreement,  the following terms
shall have the meanings set forth below:

                                      -17-
(i) "Affiliate"  shall mean any other person or entity under common control
with the Company  within the meaning of Section  414(b),  (c), (m) or (o) of the
Code and the regulations thereunder;

     (ii) "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974, as amended;

     (iii) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended;

     (iv)  "Company  Employee  Plan" shall refer to any plan,  program,  policy,
practice,  contract,  agreement or other arrangement providing for compensation,
severance,  termination pay, performance awards, stock or stock-related  awards,
fringe benefits or other employee benefits or remuneration of any kind,  whether
formal or  informal,  funded or unfunded  and  whether or not  legally  binding,
including without  limitation,  each "employee benefit plan," within the meaning
of Section 3(3) of ERISA which is maintained,  contributed to, or required to be
contributed  to,  by the  Company  or  any  Affiliate  for  the  benefit  of any
"Employee" (as defined below), or pursuant to which the Company or any Affiliate
has or may have any material liability contingent or otherwise;

     (v) "FMLA" shall mean the Family Medical Leave Act of 1993, as amended;

     (vi)  "Employee"  shall mean any  current,  former,  or  retired  employee,
consultant, or director of the Company or any Affiliate;

     (vii)  "Employee  Agreement"  shall refer to each  management,  employment,
stock   purchase,   severance,   separation,   consulting,   relocation,   loan,
repatriation, expatriation, visas, work permit or similar agreement, contract or
arrangement between the Company or any Affiliate and any Employee or consultant;

     (viii) "IRS" shall mean the Internal Revenue Service;

     (ix) "Multiemployer  Plan" shall mean any "Pension Plan" (as defined below)
which is a "multiemployer plan", as defined in Section 3(37) of ERISA; and

     (x) "Pension  Plan" shall refer to each Company  Employee  Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA.

                  (b)  Schedule.  Schedule  2.20(b)  contains  an  accurate  and
complete  list of each  Company  Employee  Plan  and  each  Employee  Agreement,
together with a schedule of all liabilities,  whether or not accrued, under each
such Company Employee Plan or Employee Agreement.  The Company does not have any
plan or commitment, whether legally binding or not, to establish any new Company
Employee Plan or Employee Agreement, to modify any Company Employee Plan or

                                      -18-
Employee  Agreement (except to the extent required by law or to conform any such
Company  Employee  Plan  or  Employee  Agreement  to  the  requirements  of  any
applicable law, in each case as previously  disclosed to Buyer in writing, or as
required  by this  Agreement),  or to enter into any  Company  Employee  Plan or
Employee  Agreement,  nor does it have any  intention or commitment to do any of
the foregoing.

                  (c)  Documents.  The Company has provided to Buyer (i) correct
and  complete  copies of all  documents  embodying  or relating to each  Company
Employee Plan and each Employee  Agreement  including all amendments thereto and
written   interpretations   thereof;  (ii)  the  most  recent  annual  actuarial
valuations,  if any,  prepared for each Company  Employee Plan;  (iii) the three
most recent  annual  reports  (Series 5500 and all schedules  thereto),  if any,
required under ERISA or the Code in connection  with each Company  Employee Plan
or related trust;  (iv) if the Company Employee Plan is funded,  the most recent
annual and periodic  accounting of Company  Employee  Plan assets;  (v) the most
recent  summary  plan  description  together  with the most  recent  summary  of
material  modifications,  if any,  required  under  ERISA  with  respect to each
Company Employee Plan; (vi) all IRS  determination  letters and rulings relating
to Company Employee Plans and copies of all applications and  correspondence  to
or from the IRS or the  Department  of Labor ("DOL") with respect to any Company
Employee Plan;  (vii) all  communications  material to any Employee or Employees
relating to any Company  Employee Plan and any proposed  Company Employee Plans,
in  each  case,  relating  to  any  amendments,  terminations,   establishments,
increases  or  decreases  in  benefits,  acceleration  of  payments  or  vesting
schedules or other  events  which would result in any material  liability to the
Company;  and (viii) all registration  statements and  prospectuses  prepared in
connection with each Company Employee Plan.

                  (d) Employee Plan Compliance.  Except as set forth on Schedule
2.20(d),  (i) the Company has performed in all material respects all obligations
required  to be  performed  by it under each  Company  Employee  Plan,  and each
Company  Employee  Plan has been  established  and  maintained  in all  material
respects in  accordance  with its terms and in  compliance  with all  applicable
laws,  statutes,  orders,  rules and  regulations,  including but not limited to
ERISA or the Code;  (ii) no  "prohibited  transaction,"  within  the  meaning of
Section 4975 of the Code or Section 406 of ERISA,  has occurred  with respect to
any Company Employee Plan; (iii) there are no actions,  suits or claims pending,
or, to the  knowledge  of the Company,  threatened  or  anticipated  (other than
routine  claims for benefits)  against any Company  Employee Plan or against the
assets of any Company  Employee Plan; and (iv) each Company Employee Plan can be
amended,  terminated or otherwise  discontinued  after the Closing in accordance
with its terms, without liability to the Company, Buyer or any of its Affiliates
(other than ordinary administration expenses typically incurred in a termination
event);  (v) there are no inquiries or proceedings  pending or, to the knowledge
of the Company or any  affiliates,  threatened by the IRS or DOL with respect to
any Company  Employee  Plan;  and (vi) neither the Company nor any  Affiliate is
subject to any penalty or tax with  respect to any Company  Employee  Plan under
Section 402(i) of ERISA or Section 4975 through 4980 of the Code.

                                      -19-
(e) Pension  Plans.  Neither the Company nor any Affiliate has
ever maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA, Title
IV of ERISA or Section 412 of the Code.

                  (f)  Multiemployer  Plans.  At no time has the  Company or any
Affiliate  contributed to or been  requested to contribute to any  Multiemployer
Plan.

                  (g) No  Post-Employment  Obligations.  Except  as set forth in
Schedule  2.20(g),  no Company  Employee Plan provides,  or has any liability to
provide, life insurance, medical or other employee benefits to any Employee upon
his or her retirement or termination of employment for any reason, except as may
be  required by statute,  and the  Company  has never  represented,  promised or
contracted   (whether  in  oral  or  written  form)  to  any  Employee   (either
individually or to Employees as a group) that such Employee(s) would be provided
with life  insurance,  medical or other  employee  welfare  benefits  upon their
retirement  or  termination  of  employment,  except to the extent  required  by
statute.

                  (h) COBRA. Neither the company nor any affiliate has, prior to
the  Closing  and in any  material  respect,  violated  any of the  health  care
continuation  requirements  of COBRA,  the  requirements  of FMLA or any similar
provisions of state law applicable to its Employees.

                  (i)      Effect of Transaction.

                    (i)  Except  as  set  forth  on  Schedule  2.20(i)(i),   the
               execution  of  this  Agreement  and  the   consummation   of  the
               transactions  contemplated  hereby will not (either alone or upon
               the occurrence of any additional or subsequent events) constitute
               an event under any Company  Employee  Plan,  Employee  Agreement,
               trust or loan that will or may result in any payment  (whether of
               severance  pay  or  otherwise),   acceleration,   forgiveness  of
               indebtedness,  vesting,  distribution,  increase  in  benefits or
               obligation to fund benefits with respect to any Employee.

                    (ii) Except as set forth on Schedule 2.20(i)(ii), no payment
               or  benefit  which  will  or may be made  by the  Company  or its
               Affiliates or by Buyer or any of its  affiliates  with respect to
               any Employee as a result of the transactions contemplated by this
               Agreement  or  otherwise  will  be  characterized  as  "parachute
               payment",  within the meaning of Section  280G(b)(2)  of the Code
               (but without regard to clause (ii) thereof).

                  (j)  Employment  Matters.  The Company (i) is in compliance in
all material  respects with all  applicable  foreign,  federal,  state and local
laws, rules and regulations respecting employment,  employment practices,  terms
and conditions of employment and wages and hours,  in each case, with respect to
Employees;  (ii) has withheld all amounts  required by law or by agreement to be
withheld from the wages, salaries and other payments to Employees;  (iii) is not
liable  for any  arrears  of wages or any taxes or any  penalty  for  failure to
comply with any of the foregoing;  and (iv) is not liable for any payment to any
trust or other fund or to any  governmental or  administrative  authority,  with
respect to unemployment compensation benefits, social security or other benefits
or obligations for Employees

                                      -20-
(other than  routine  payments to be made in the normal  course of business  and
consistent with past practice).

                  (k)  Labor.  No work  stoppage  or labor  strike  against  the
Company is pending or, to the best knowledge of the Company, threatened.  Except
as set forth in  Schedule  2.20(k),  the  Company is not  involved in or, to the
knowledge of the Company,  threatened  with,  any labor dispute,  grievance,  or
litigation  relating to labor,  safety or  discrimination  matters involving any
Employee,  including,  without limitation,  charges of unfair labor practices or
discrimination complaints,  which, if adversely determined,  would, individually
or in the aggregate, result in liability to the Company. Neither the Company nor
any of its  subsidiaries  has engaged in any unfair labor  practices  within the
meaning of the National Labor Relations Act which would,  individually or in the
aggregate,  directly or indirectly result in a liability to the Company.  Except
as set forth in Schedule 2.20(k), the Company is not presently,  nor has it been
in the past,  a party to, or bound by, any  collective  bargaining  agreement or
union contract with respect to Employees and no collective  bargaining agreement
is being negotiated by the Company.

         2.21 Employees.  To the best of the Company's knowledge, no employee of
the Company (i) is in violation of any term of any employment  contract,  patent
disclosure agreement,  non-competition agreement, or any restrictive covenant to
a former  employer  relating to the right of any such employee to be employed by
the  Company  because  of the  nature of the  business  conducted  or  presently
proposed  to be  conducted  by the  Company  or to the use of trade  secrets  or
proprietary  information of others and (ii) has given notice to the Company, nor
is the Company  otherwise  aware,  that any employee intends to terminate his or
her employment with the Company.

         2.22 Governmental  Authorizations  and Licenses.  The Company possesses
all consents,  licenses,  permits,  grants or other authorizations issued to the
Company by a  governmental  entity (i)  pursuant to which the Company  currently
operates  or  holds  any  interest  in any of its  properties  or (ii)  which is
required for the  operation of its business or the holding of any such  interest
therein (collectively called "Company Authorizations"), except for those Company
Authorizations  which the Company's  failure to possess  would not  constitute a
Material  Adverse  Effect,  which Company  Authorizations  are in full force and
effect and constitute all Company Authorizations  required to permit the Company
to operate or conduct its  business or hold any  interest in its  properties  or
assets.

         2.23  Pooling  of  Interests.  To the  Company's  knowledge,  based  on
consultation  with its independent  accountants,  neither the Company nor any of
its  directors  or  officers,  nor any Seller,  has taken any action which would
interfere  with Buyer's  ability to account for the  Acquisition as a pooling of
interests.

         2.24   Representations   Complete.   None  of  the  representations  or
warranties  made by the  Company or the  Sellers  (as  modified  by the  Company
Schedules),  nor any statement made in any schedule or certificate  furnished by
the Company or a Seller pursuant to this Agreement,  contains or will contain at
the Closing,  any untrue  statement of a material fact, or omits or will omit at
the Closing to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which made,
not misleading.

                                      -21-
2.25  Representations  of  each  Seller.  Each  Seller  represents  and
warrants as follows:

                  (a) This  Agreement  has been duly  authorized,  executed  and
delivered by and constitutes a valid and binding obligation of Seller.

                  (b)  The   execution  and  delivery  by  Seller  of,  and  the
performance by Seller of his or her obligations  under this Agreement,  does not
and will not  contravene  any provision of  applicable  law, or any agreement or
other  instrument  binding upon Seller or any  judgment,  order or decree of any
governmental  body,  agency or court having  jurisdiction  over  Seller,  and no
consent,  approval,   authorization  or  order  of  or  qualification  with  any
governmental  body or agency is required for the performance by Seller of his or
her obligations under this Agreement.

                  (c)  Seller has valid  marketable  title to the Shares and the
legal right and power, and all  authorization  and approval  required by law, to
enter into this  Agreement,  and to sell,  transfer  and  deliver  the Shares to
Buyer.

                  (d) Delivery of the  certificates  for the Shares  pursuant to
this  Agreement  will pass valid and  marketable  title to such  Shares free and
clear of any security interests, claims, liens, equities and other encumbrances.

                  (e)  Seller  understands  that the Buyer  Common  Stock  being
issued  pursuant to this Agreement  will not be registered  under the Securities
Act of 1933, as amended, on the basis that the issuance of securities  hereunder
is exempt from  registration  under the  Securities Act pursuant to section 4(2)
and/or Rule 506 thereof,  and that Advent's  reliance on such exemption is based
on Seller's representations set forth in the Stockholder's Certificate.

                                   ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer  represents  and  warrants  to the  Company  and the  Sellers  as
follows:

         3.1  Organization,  Standing  and Power.  Buyer is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware.  Buyer has the corporate  power to own its  properties and to carry on
its business as now being  conducted and is duly qualified to do business and is
in good  standing as a foreign  corporation  in each  jurisdiction  in which the
failure to be so qualified  would have a material  adverse  effect on Buyer as a
whole.

         3.2 Authority. Buyer has all requisite corporate power and authority to
enter into this  Agreement  and the  exhibits  attached  hereto to which it is a
party (the  "Buyer  Related  Agreements")  and to  consummate  the  transactions
contemplated  hereby and thereby.  The execution and delivery of this  Agreement
and the  Buyer  Related  Agreements  and the  consummation  of the  transactions
contemplated

                                      -22-
hereby and thereby have been duly authorized by all necessary  corporate  action
on the part of Buyer.  Each of this  Agreement and the Buyer Related  Agreements
has been duly  executed  and  delivered by Buyer and  constitutes  the valid and
binding  obligations of Buyer,  enforceable in accordance  with its terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization,  moratorium
and other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the  availability  of specific
performance, injunctive relief or other equitable remedies.

         3.3      Capital Structure.

                  (a) The  authorized  stock of  Buyer  consists  of  40,000,000
shares of Common Stock, of which 7,582,000 shares were issued and outstanding as
of December 31, 1997, and 2,000,000 shares of Preferred Stock,  none of which is
issued or outstanding.  All such shares have been duly authorized,  and all such
issued and  outstanding  shares  have been  validly  issued,  are fully paid and
nonassessable and are free of any liens or encumbrances  other than any liens or
encumbrances created by or imposed upon the holders thereof.

                  (b)  The  shares  of  Buyer  Common  Stock  to  be  issued  in
connection with the Acquisition,  when issued, will be duly authorized,  validly
issued, fully paid and non-assessable.

         3.4 SEC Documents;  Buyer Financial Statements.  Buyer has furnished or
made  available  to the  Company  true and  complete  copies of all  reports  or
registration  statements  filed  by it with the  United  States  Securities  and
Exchange  Commission  (the "SEC") under the Securities  Exchange Act of 1934, as
amended (the  "Exchange  Act") for all periods since January 1, 1997, all in the
form so filed (all of the foregoing being  collectively  referred to as the "SEC
Documents").  As of their respective filing dates, the SEC Documents complied in
all material  respects with the  requirements  of the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, as the case may be, and none
of the SEC  Documents  contained  any untrue  statement  of a  material  fact or
omitted to state a material fact  required to be stated  therein or necessary to
make the statements made therein,  in light of the  circumstances  in which they
were  made,  not  misleading,  except  to the  extent  corrected  by a  document
subsequently  filed with the SEC. The financial  statements of Buyer,  including
the  notes  thereto,  included  in  the  SEC  Documents  (the  "Buyer  Financial
Statements")  comply  as to  form  in  all  material  respects  with  applicable
accounting  requirements and with the published rules and regulations of the SEC
with respect  thereto,  have been prepared in accordance with GAAP  consistently
applied  (except as may be  indicated  in the notes  thereto  or, in the case of
unaudited statements,  as permitted by Form 10- Q of the SEC) and present fairly
the  consolidated  financial  position  of Buyer at the  dates  thereof  and the
consolidated results of its operations and cash flows for the periods then ended
(subject,  in the case of unaudited  statements,  to normal audit  adjustments).
There has been no change in Buyer accounting policies except as described in the
notes to the Buyer Financial Statements.

         3.5 No Material  Adverse  Change.  Since the date of the balance  sheet
included in the Buyer's  most  recently  filed report on Form 10-Q or Form 10-K,
Buyer has  conducted  its  business  in the  ordinary  course  and there has not
occurred:   (a)  any  material  adverse  change  in  the  financial   condition,
liabilities,  assets or business of Buyer;  (b) any  amendment  or change in the
Certificate of Incorporation or Bylaws

                                      -23-
of Buyer,  or (c) any damage to,  destruction or loss of any assets of the Buyer
(whether or not covered by insurance) that materially and adversely  affects the
financial condition or business of Buyer.

         3.6  Litigation.   There  is  no  action,  suit,   proceeding,   claim,
arbitration  or  investigation  pending,  or as to which Buyer has  received any
notice of assertion  against Buyer,  which in any manner  challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions  contemplated
by this Agreement.

                                   ARTICLE IV

                              ADDITIONAL AGREEMENTS

         4.1      Sale and Registration of Shares; Stockholder Matters.

                  (a) Sale of Shares.  The parties hereto  acknowledge and agree
that the shares of Buyer Common Stock issuable to the  stockholders  pursuant to
Section 1.2 hereof shall constitute  "restricted  securities" within the meaning
of  the  Securities  Act  of  1933,  as  amended  (the  "Securities  Act").  The
certificates  for shares of Buyer Common Stock to be issued in  connection  with
the Acquisition shall bear appropriate legends to identify such privately placed
shares as being  restricted  under the Securities Act, to comply with applicable
state securities laws and, if applicable, to notice the restrictions on transfer
pursuant to the Affiliate  Agreement (as defined below).  It is acknowledged and
understood  that Buyer is relying upon certain written  representations  made by
each stockholder.

                  (b)  Stockholder's  Certificate.  The Company  will cause each
stockholder  of the  Company to  execute  and  deliver to Buyer a  Stockholder's
Certificate  in the  form  attached  hereto  as  Exhibit  D (the  "Stockholder's
Certificate").

                  (c) Registration Rights. Buyer shall grant each Seller limited
demand  registration  rights and  participation  rights with  respect to certain
registrations  of  equity  securities  effected  by  Buyer,  as set forth in the
Declaration of Registration  Rights attached hereto as Exhibit E.  Participation
by Sellers in any such registration shall be subject to the terms and conditions
set forth in the Declaration of  Registration  Rights attached hereto as Exhibit
E.

         4.2 Access to Information. Each party shall afford the others and their
accountants, counsel and other representatives,  reasonable access during normal
business  hours  during  the  period  prior  to the  Closing  to (a)  all of its
properties,  books,  contracts,  commitments  and  records,  and (b)  all  other
information  concerning  its  business,  properties  and  personnel  (subject to
restrictions  imposed by applicable  law) as the others may reasonably  request,
subject,  in the case of Buyer, to reasonable  limits on access to its technical
and other  nonpublic  information.  No information or knowledge  obtained in any
investigation  pursuant to this  Section 4.2 shall affect or be deemed to modify
any representation or warranty contained herein.

                                      -24-
4.3  Confidentiality.  Each of the parties hereto hereby agrees to keep
such information or knowledge obtained in any investigation  pursuant to Section
4.2, or pursuant to the  negotiation  and  execution  of this  Agreement  or the
effectuation of the transactions  contemplated  hereby,  confidential,  and also
agrees not to use such knowledge or  information;  provided,  however,  that the
foregoing  shall not apply to  information  or  knowledge  which (a) a party can
demonstrate was already lawfully in its possession on a  non-confidential  basis
prior to the disclosure  thereof by the other party,  (b) is generally  known to
the public and did not become so known  through any violation of law, (c) became
known  to the  public  through  no fault of such  party,  (d) is later  lawfully
acquired by such party from other  sources,  (e) is required to be  disclosed by
order of  court or  government  agency  with  subpoena  powers  or (f)  which is
disclosed in the course of any litigation between any of the parties hereto.

         4.4 Expenses.  Whether or not the Acquisition is consummated,  all fees
and expenses  incurred in connection  with the  Acquisition  including,  without
limitation, all legal, accounting,  financial advisory, consulting and all other
fees and expenses of third parties ("Third Party Expenses")  incurred by a party
in connection with the negotiation and  effectuation of the terms and conditions
of  this  Agreement  and  the  transactions  contemplated  hereby  shall  be the
obligation of the respective  party incurring such fees and expenses;  provided,
however,  that no later than  thirty  (30) days after the  Closing,  the Sellers
shall pay to Buyer a value  equal to the  amount by which all  broker and finder
fees  incurred  by the Company  and all fees and  expenses  payable to any legal
advisor, accountant,  consultant or other third party retained by the Company on
its own  behalf or on behalf of such  Sellers  prior to the  Closing  (excluding
expenses of financial advisors) exceed in the aggregate $30,000.

         4.5 Public  Disclosure.  Unless  otherwise  required by law (including,
without  limitation,  federal and state securities laws) or, as to Buyer, by the
rules and regulations of The Nasdaq Stock Market,  Inc. prior to the Closing, no
disclosure  (whether or not in response to an inquiry) of the subject  matter of
this  Agreement  shall be made by any party hereto unless  approved by Buyer and
the  Company  prior  to  release,  provided  that  such  approval  shall  not be
unreasonably withheld.

         4.6  Consents.  The  Company  shall use its best  efforts to obtain the
consents, waivers and approvals under any of the Contracts as may be required in
connection with the Acquisition (all of such consents, waivers and approvals are
set forth in Company  Schedules) so as to preserve all rights of and benefits to
the Company thereunder.

         4.7 FIRPTA  Compliance.  On or prior to the Closing  Date,  the Company
shall  deliver  to Buyer a  properly  executed  statement  in a form  reasonably
acceptable  to Buyer  for  purposes  of  satisfying  Buyer's  obligations  under
Treasury Regulation Section 1.1445-2(c)(3).

         4.8  Commercially   Reasonable  Efforts.   Subject  to  the  terms  and
conditions provided in this Agreement,  each of the parties hereto shall use its
commercially   reasonable  efforts  to  ensure  that  its   representations  and
warranties  remain  true  and  correct  in all  material  respects,  and to take
promptly,  or cause to be taken, all actions, and to do promptly, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations  to  consummate  and make  effective the  transactions  contemplated
hereby, to obtain all necessary waivers,  consents and approvals,  to effect all
necessary

                                      -25-
registrations and filings, and to remove any injunctions or other impediments or
delays,  legal or  otherwise,  in order to  consummate  and make  effective  the
transactions  contemplated  by this Agreement for the purpose of securing to the
parties hereto the benefits contemplated by this Agreement;  provided that Buyer
shall not be required to agree to any divestiture by Buyer or the Company or any
of Buyer's  subsidiaries  or  affiliates  of shares of  capital  stock or of any
business,  assets or property of Buyer or its  subsidiaries or affiliates or the
Company or its affiliates,  or the imposition of any material  limitation on the
ability of any of them to conduct their businesses or to own or exercise control
of such assets, properties and stock.

         4.9  Notification  of Certain  Matters.  The Company  shall give prompt
notice to Buyer,  and Buyer shall give prompt notice to the Company,  of (i) the
occurrence or  non-occurrence  of any event, the occurrence or non-occurrence of
which is likely to cause any representation or warranty of the Company or Buyer,
respectively, contained in this Agreement to be untrue or inaccurate at or prior
to the Closing and (ii) any failure of the Company or Buyer, as the case may be,
to comply with or satisfy any  covenant,  condition  or agreement to be complied
with or satisfied by it hereunder;  provided,  however, that the delivery of any
notice  pursuant  to this  Section 4.9 shall not limit or  otherwise  affect any
remedies available to the party receiving such notice.

         4.10 Pooling  Accounting.  The Company and the Sellers  shall use their
best efforts to cause the business combination to be effected by the Acquisition
to be  accounted  for as a pooling of  interests.  Each of the  Company  and the
Sellers  shall use its  respective  best  efforts to cause (as  applicable)  its
respective employees, directors and affiliates not to take any action that would
adversely affect the ability of Buyer to account for the business combination to
be effected by the Acquisition as a pooling of interests.

         4.11 Affiliate Agreements.  Schedule 4.11 sets forth those persons who,
in the Company's reasonable judgment,  are or may be "affiliates" of the Company
within the  meaning of Rule 145 (each such  person an  "Affiliate")  promulgated
under the  Securities  Act ("Rule  145").  The Company  shall provide Buyer such
information  and  documents  as Buyer shall  reasonably  request for purposes of
reviewing such list. The Company has delivered or shall cause to be delivered to
Buyer, concurrently with the execution of this Agreement from its Affiliates, an
executed  Affiliate  Agreement in the form  attached  hereto as Exhibit F. Buyer
shall be entitled to place  appropriate  legends on the certificates  evidencing
any Buyer Common Stock to be received by such  Affiliates  pursuant to the terms
of this Agreement,  and to issue  appropriate stop transfer  instructions to the
transfer  agent  for  Buyer  Common  Stock,  consistent  with the  terms of such
Affiliate Agreements.

         4.12 Additional Documents and Further Assurances. Each party hereto, at
the  request of the other party  hereto,  shall  execute and deliver  such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting  completely the  consummation  of this Agreement and the
transactions contemplated hereby.

                                      -26-
4.13 Nasdaq National Market Listing.  Buyer shall authorize for listing
on The Nasdaq  National  Market the shares of Buyer Common Stock  issuable,  and
those required to be reserved for issuance,  in connection with the Acquisition,
upon official notice of issuance.

         4.14  Company's  Auditors.   The  Company  will  use  its  commercially
reasonable  efforts to cause its management and its  independent  accountants to
facilitate  on a  timely  basis  (i) the  preparation  of  financial  statements
(including pro forma  financial  statements if required) as required by Buyer to
comply with  applicable  SEC  regulations,  and (ii) the review of the Company's
audit work papers for up to the past three years,  including the  examination of
selected interim financial statements and data.

         4.15 Employment and Non-Competition  Agreements.  Concurrently with the
execution of this Agreement, each Seller will deliver an executed Employment and
Non-Competition  Agreement in substantially  the form attached hereto as Exhibit
G, and the Sellers shall cause Ephy Torenberg to deliver an executed  Employment
and  Non-Competition  Agreement in  substantially  the form  attached  hereto as
Exhibit H.

         4.16  Indemnification  for Not  Constituting a  Reorganization.  In the
event that the  Acquisition  is determined  not to  constitute a  reorganization
within the  meaning of Section  368(a) of the Code solely and  exclusively  as a
result of an action or omission on the part of Buyer,  Buyer agrees to indemnify
and hold Sellers  harmless  for, from and against any Loss as defined in Section
5.1 directly associated with that determination, up to a maximum of $1,000,000.

         4.17 Tax  Filings.  The  Company  shall be  responsible  for filing all
federal and state income tax returns of the Company for taxable  periods  ending
on the day before the Closing or thereafter;  however,  the  Shareholders  shall
have the right to review and comment on all tax returns for all periods in which
the Company is taxed as an S  Corporation.  Such  returns  shall be prepared and
filed in accordance  with  applicable law and in a manner  consistent  with past
practices.  After the Closing,  Buyer and the Company,  on the one hand, and the
Shareholders, on the other hand, will make available to the other, as reasonably
requested,  all information,  records or documents relating to the liability for
Taxes of the Company for all periods  ending on or prior to the Closing and will
preserve  such  information,  records or documents  until the  expiration of any
applicable statute of limitations or extensions thereof.

                                    ARTICLE V

                             INDEMNIFICATION; ESCROW

         5.1  Indemnification.  The  Sellers,  jointly and  severally,  agree to
indemnify and hold Buyer, its officers, directors, and affiliates (including the
Company)  harmless  for,  from and  against  any  claims,  losses,  liabilities,
damages, deficiencies,  costs and expenses, including reasonable attorneys' fees
and  expenses,   and  expenses  of   investigation   and  defense   (hereinafter
individually  a  "Loss"  and  collectively  "Losses")  incurred  by  Buyer,  its
officers,   directors,   or  affiliates  (including  the  Company)  directly  or
indirectly  as a result  of any  inaccuracy  or breach  of a  representation  or
warranty of the Company or the

                                      -27-
Sellers  contained in Article II herein (as  modified by the Company  Schedules,
without giving effect to any update  thereto),  or any failure by the Company to
perform or comply with any covenant contained herein;  provided,  however,  that
the Seller's joint and several  liability  hereunder  shall not exceed an amount
equal to fifty  percent  of the value of the  Consideration  (as  determined  by
multiplying the Buyer Share Number by the Average Price).  Buyer and the Company
each  acknowledge  that  such  Losses,   if  any,  would  relate  to  unresolved
contingencies  existing at the Closing,  which if resolved at the Closing, would
have led to a reduction in the  aggregate  Consideration.  Nothing  herein shall
limit  the  liability  of the  Company  for any  breach  of any  representation,
warranty or covenant if the Acquisition does not close.

         5.2 Escrow Period.  Subject to the following  requirements,  the Escrow
Fund (as defined in Section  5.3(a)  below)  shall be in  existence  immediately
following the Closing and shall terminate at 5:00 p.m.,  California time, on the
date of the auditor's report for the audit of Buyer's  financial  statements for
the year ending December 31, 1998 which includes the results of the Company (the
"Escrow  Period");  provided  that the Escrow  Period shall not  terminate  with
respect to such amount (or some portion  thereof)  that is necessary (as defined
in Section  5.3(a) below) in the  reasonable  judgment of Buyer,  subject to the
objection  of the  Securityholder  Agent (as defined  below) and the  subsequent
arbitration of the matter in the manner  provided in Section  5.3(f) hereof,  to
satisfy any unsatisfied claims concerning facts and circumstances existing prior
to the termination of such Escrow Period specified in any Officer's  Certificate
(as defined in Section  5.3(d)  below)  delivered  to the Escrow  Agent prior to
termination  of such Escrow Period;  provided  further that the Escrow Fund will
terminate in full upon final and complete resolution of all disputed matters.

         5.3      Escrow Arrangements.

                  (a) Escrow Fund. At the Closing,  as partial  security for the
indemnity  provided in Section 5.1, the Sellers will be deemed to have  received
and deposited  with the Escrow Agent (as defined  below) the Escrow Amount (plus
any additional  shares as may be issued upon any stock split,  stock dividend or
recapitalization  effected  by Buyer after the  Closing)  without any act of any
stockholder.  As soon as  practicable  after the  Closing,  the  Escrow  Amount,
without any act of any Seller, will be deposited with an institution  acceptable
to Buyer and the  Securityholder  Agent (as defined in Section 5.3(g) below)) as
Escrow Agent (the "Escrow  Agent"),  such deposit to  constitute  an escrow fund
(the "Escrow  Fund") to be governed by the terms set forth herein and at Buyer's
cost and expense. The portion of the Escrow Amount contributed on behalf of each
stockholder  of the Company shall be in  proportion  to the aggregate  amount of
Buyer Common Stock which such holder would  otherwise be entitled  under Section
1.2. The Escrow Fund shall be available to compensate  Buyer and its  affiliates
for any  Losses  incurred  by Buyer,  its  officers,  directors,  or  affiliates
(including the Company)  directly or indirectly as a result of any inaccuracy or
breach of a  representation  or warranty of the Company  contained in Article II
herein (as  modified  by the Company  Schedules,  without  giving  effect to any
update  thereto),  or any  failure by the  Company to perform or comply with any
covenant  contained herein;  provided,  however,  that Buyer may not receive any
shares from the Escrow Fund unless and until such Losses exceed in the aggregate
$100,000,  in which event Buyer shall receive  shares equal in value to the full
amount of such Losses.  Buyer and the Company each acknowledge that such Losses,
if any,

                                      -28-
would  relate to  unresolved  contingencies  existing at the  Closing,  which if
resolved  at the  Closing  would  have  led  to a  reduction  in  the  aggregate
Consideration.  Nothing  herein shall limit the liability of the Company for any
breach of any  representation,  warranty or covenant if the Acquisition does not
close.

                  (b)  Distribution  upon  Termination  of Escrow  Period.  Upon
termination of the Escrow Period,  (i) the Company shall notify the Escrow Agent
of such termination, and (ii) the Escrow Agent shall deliver to the stockholders
of the Company  that  portion of the Escrow Fund that is not required to satisfy
any claims made by Buyer pursuant to Section 5.3(d) hereof. Deliveries of Escrow
Amounts to the stockholders of the Company pursuant to this Section 5.3(b) shall
be made in proportion to their respective  original  contributions to the Escrow
Fund.

                  (c)      Protection of Escrow Fund.

                         (i) The  Escrow  Agent  shall  hold and  safeguard  the
                    Escrow Fund during the Escrow Period,  shall treat such fund
                    as a  trust  fund  in  accordance  with  the  terms  of this
                    Agreement  and not as the property of Buyer or the Company's
                    stockholders  and shall hold and  dispose of the Escrow Fund
                    only in accordance with the terms hereof.

                         (ii) Any shares of Buyer  Common  Stock or other equity
                    securities  issued or distributed by Buyer (including shares
                    issued  upon a stock  split)  ("New  Shares")  in respect of
                    Buyer  Common  Stock in the Escrow  Fund which have not been
                    released  from the Escrow  Fund shall be added to the Escrow
                    Fund and become a part thereof. New Shares issued in respect
                    of shares of Buyer  Common  Stock  which have been  released
                    from the Escrow  Fund shall not be added to the Escrow  Fund
                    but shall be distributed to the recordholders  thereof. Cash
                    dividends  on Buyer  Common  Stock shall not be added to the
                    Escrow Fund but shall be  distributed  to the  recordholders
                    thereof.

                         (iii) Each  stockholder  shall have voting  rights with
                    respect to the shares of Buyer Common Stock  contributed  to
                    the Escrow Fund by such  stockholder  (and on any New Shares
                    added to the Escrow  Fund in respect of such shares of Buyer
                    Common Stock).

                  (d)      Claims Upon Escrow Fund.

                         (i) Upon  receipt by the Escrow Agent at any time on or
                    before  the last day of the Escrow  Period of a  certificate
                    signed by any officer of Buyer (an "Officer's Certificate"):
                    (A)  stating  that  Buyer has paid or  properly  accrued  or
                    reasonably  anticipates  that it will  have to pay or accrue
                    Losses caused directly or indirectly by any  inaccuracy,  or
                    breach of a  representation  or warranty of the Company or a
                    Seller  contained  in Article II hereof (as  modified by the
                    Company  Schedules,  without  giving  effect  to any  update
                    thereto)  or any failure by the Company to perform or comply
                    with any covenant contained  therein,  and (B) specifying in
                    reasonable detail the individual items of Losses included in
                    the  amount so  stated,  the date each such item was paid or
                    properly   accrued,   or  the  basis  for  such  anticipated
                    liability,  and the nature of the misrepresentation,  breach
                    of warranty  or covenant to which such item is related,  the
                    Escrow Agent  shall,  subject to the  provisions  of Section
                    5.3(e) hereof,

                                      -29-
deliver  to Buyer out of the Escrow  Fund,  as  promptly  as
                    practicable, shares of Buyer Common Stock held in the Escrow
                    Fund in an amount equal to any Losses incurred or accrued by
                    Buyer.

                         (ii) For the  purposes  of  determining  the  number of
                    shares of Buyer Common Stock to be delivered to Buyer out of
                    the Escrow Fund pursuant to Section 5.3(d)(i)  hereof,  each
                    share of Buyer  Common  Stock shall be valued at the average
                    of  the  closing  prices  of  Buyer's  Common  Stock  on the
                    principal  securities exchange on which Buyer's Common Stock
                    is then  traded,  or if not so traded,  The Nasdaq  National
                    Market,  in  either  case as  reported  in The  Wall  Street
                    Journal for the twenty (20) consecutive  trading days ending
                    on the date that is one (1) trading day prior to the Closing
                    Date. Buyer and the Securityholder  Agent shall certify such
                    fair market value in a certificate  signed by both Buyer and
                    the Securityholder Agent, and shall deliver such certificate
                    to the Escrow Agent.

                  (e)  Objections  to  Claims.  At the time of  delivery  of any
Officer's  Certificate to the Escrow Agent, a duplicate copy of such certificate
shall be delivered to the  Securityholder  Agent and for a period of thirty (30)
days after such  delivery,  the Escrow  Agent shall make no delivery to Buyer of
any Escrow  Amounts  pursuant to Section  5.3(d)  hereof unless the Escrow Agent
shall have received written  authorization from the Securityholder Agent to make
such delivery.  After the expiration of such thirty (30) day period,  the Escrow
Agent shall make  delivery of shares of Buyer  Common Stock from the Escrow Fund
in  accordance  with Section  5.3(d)  hereof,  provided  that no such payment or
delivery  may be made if the  Securityholder  Agent  shall  object  in a written
statement to the claim made in the  Officer's  Certificate,  and such  statement
shall have been  delivered to the Escrow Agent prior to the  expiration  of such
thirty (30) day period.

                  (f)  Resolution of Conflicts; Arbitration.

                         (i) In case the Securityholder Agent shall so object in
                    writing  to any  claim  or  claims  made  in  any  Officer's
                    Certificate,   the  Securityholder  Agent  and  Buyer  shall
                    attempt  in good  faith to  agree  upon  the  rights  of the
                    respective  parties with respect to each of such claims.  If
                    the  Securityholder  Agent  and Buyer  should  so  agree,  a
                    memorandum  setting forth such  agreement  shall be prepared
                    and signed by both  parties  and shall be  furnished  to the
                    Escrow Agent.  The Escrow Agent shall be entitled to rely on
                    any such  memorandum and  distribute  shares of Buyer Common
                    Stock  from the  Escrow  Fund in  accordance  with the terms
                    thereof.

                         (ii) If no such  agreement  can be  reached  after good
                    faith negotiation,  either Buyer or the Securityholder Agent
                    may demand  arbitration  of the matter  unless the amount of
                    the damage or loss is at issue in pending  litigation with a
                    third  party,  in  which  event  arbitration  shall  not  be
                    commenced  until such amount is  ascertained or both parties
                    agree to  arbitration;  and in either  such event the matter
                    shall be settled by arbitration conducted by one arbitrator.
                    Buyer  and the  Securityholder  Agent  shall  agree  on such
                    arbitrator;  provided  that if Buyer and the  Securityholder
                    Agent cannot agree on such  arbitrator,  either Buyer or the
                    Securityholder   Agent  can   request   that  the   Judicial
                    Arbitration  and  Mediation  Services  ("JAMS")  select  the
                    arbitrator.  The  arbitrator  selected  shall  determine the
                    dispute in accordance with Article V of this Agreement.  The
                    arbitrator shall set a limited time period and

                                      -30-
establish  procedures  designed  to reduce the cost and time
                    for  discovery  while  allowing the parties an  opportunity,
                    adequate in the sole judgment of the arbitrator, to discover
                    relevant  information  from the opposing  parties  about the
                    subject  matter of the dispute.  The  arbitrator  shall rule
                    upon motions to compel or limit discovery and shall have the
                    authority to impose sanctions, including attorneys' fees and
                    costs,  to the same  extent as a court of  competent  law or
                    equity,  should the arbitrator  determine that discovery was
                    sought without  substantial  justification or that discovery
                    was   refused   or    objected   to   without    substantial
                    justification.  The  decision  of the  arbitrator  as to the
                    validity   and  amount  of  any  claim  in  such   Officer's
                    Certificate shall be binding and conclusive upon the parties
                    to this Agreement,  and notwithstanding  anything in Section
                    5.3(e) hereof,  the Escrow Agent shall be entitled to act in
                    accordance with such decision and make or withhold  payments
                    out  of  the  Escrow  Fund  in  accordance  therewith.  Such
                    decision  shall be written and shall be supported by written
                    findings of fact and  conclusions  which shall set forth the
                    award, judgment, decree or order awarded by the arbitrator.

                         (iii)   Judgment   upon  any  award   rendered  by  the
                    arbitrators may be entered in any court having jurisdiction.
                    Any such  arbitration  shall be held in Santa Clara  County,
                    California  under the rules  then in effect of the  American
                    Arbitration  Association.   For  purposes  of  this  Section
                    5.3(f),  in any arbitration  hereunder in which any claim or
                    the amount thereof stated in the Officer's Certificate is at
                    issue, Buyer shall be deemed to be the Non-Prevailing  Party
                    in the event that the arbitrators  award Buyer less than the
                    sum of  one-half  (1/2)  of the  disputed  amount  plus  any
                    amounts not in dispute;  otherwise,  the stockholders of the
                    Company as represented by the Securityholder  Agent shall be
                    deemed to be the  Non-Prevailing  Party. The  Non-Prevailing
                    Party to an arbitration shall pay its own expenses, the fees
                    of  each  arbitrator,   the  administrative   costs  of  the
                    arbitration and the expenses,  including without limitation,
                    reasonable  attorneys' fees and costs, incurred by the other
                    party to the arbitration.

                  (g)      Securityholder Agent of the Stockholders;
Power of Attorney.

                         (i)  Upon  Closing,  and  without  further  act  of any
                    stockholder,  Dov Torenberg  shall be appointed as agent and
                    attorney-in-fact  (the  "Securityholder   Agent")  for  each
                    stockholder  of the Company  (except such  stockholders,  if
                    any, as shall have perfected  their appraisal or dissenters'
                    rights  under   California   Law),  for  and  on  behalf  of
                    stockholders of the Company, to give and receive notices and
                    communications,  to authorize delivery to Buyer of shares of
                    Buyer Common Stock from the Escrow Fund in  satisfaction  of
                    claims by Buyer, to object to such deliveries,  to agree to,
                    negotiate,  enter into  settlements  and compromises of, and
                    demand  arbitration  and  comply  with  orders of courts and
                    awards of  arbitrators  with respect to such claims,  and to
                    take all actions necessary or appropriate in the judgment of
                    Securityholder   Agent   for  the   accomplishment   of  the
                    foregoing. Such agency may be changed by the stockholders of
                    the Company from time to time upon not less than thirty (30)
                    days  prior  written  notice  to  Buyer;  provided  that the
                    Securityholder  Agent may not be removed unless holders of a
                    two-thirds interest of the Escrow Fund agree to such removal
                    and to the identity of the substituted agent. Any vacancy in
                    the  position  of  Securityholder  Agent  may be  filled  by
                    approval  of the  holders of a majority  in  interest of the
                    Escrow Fund. No bond shall be required of the Securityholder
                    Agent,  and  the  Securityholder  Agent  shall  not  receive
                    compensation for his or her

                                      -31-
services.   Notices  or   communications   to  or  from  the
                    Securityholder Agent shall constitute notice to or from each
                    of the stockholders of the Company.

                         (ii) The  Securityholder  Agent shall not be liable for
                    any act done or omitted  hereunder as  Securityholder  Agent
                    while acting in good faith and in the exercise of reasonable
                    judgment.  The  stockholders  of the Company on whose behalf
                    the Escrow Amount was  contributed  to the Escrow Fund shall
                    severally  indemnify the  Securityholder  Agent and hold the
                    Securityholder Agent harmless against any loss, liability or
                    expense incurred without negligence or bad faith on the part
                    of  the  Securityholder  Agent  and  arising  out  of  or in
                    connection  with the  acceptance  or  administration  of the
                    Securityholder  Agent's  duties  hereunder,   including  the
                    reasonable  fees and expenses of any legal counsel  retained
                    by the Securityholder Agent.

                  (h) Actions of the  Securityholder  Agent.  A  decision,  act,
consent or instruction of the  Securityholder  Agent shall constitute a decision
of all the  stockholders  for whom a  portion  of the  Escrow  Amount  otherwise
issuable to them are  deposited  in the Escrow Fund and shall be final,  binding
and conclusive  upon each of such  stockholders,  and the Escrow Agent and Buyer
may  rely  upon  any  such  decision,   act,   consent  or  instruction  of  the
Securityholder Agent as being the decision,  act, consent or instruction of each
every such  stockholder  of the  Company.  The Escrow Agent and Buyer are hereby
relieved  from  any  liability  to any  person  for  any  acts  done  by them in
accordance with such decision, act, consent or instruction of the Securityholder
Agent.

                  (i) Third-Party  Claims. In the event Buyer becomes aware of a
third-party  claim which Buyer intends to assert for a demand against the Escrow
Fund,  Buyer shall notify the  Securityholder  Agent of such claim.  Buyer shall
have the  right in its sole  discretion  to  settle  any such  claim;  provided,
however, that except with the consent of the Securityholder Agent, no settlement
of any such claim with third-party claimants shall alone be determinative of the
amount of any claim against the Escrow Fund.

                  (j)      Escrow Agent's Duties.

                         (i) The Escrow  Agent shall be  obligated  only for the
                    performance  of such  duties as are  specifically  set forth
                    herein,  and as set forth in any  additional  written escrow
                    instructions  which the Escrow  Agent may receive  after the
                    date of this  Agreement  which are  signed by an  officer of
                    Buyer and the  Securityholder  Agent, and may rely and shall
                    be  protected  in relying or  refraining  from acting on any
                    instrument  reasonably  believed  to be genuine  and to have
                    been signed or presented by the proper party or parties. The
                    Escrow Agent shall not be liable for any act done or omitted
                    hereunder  as Escrow Agent while acting in good faith and in
                    the  exercise  of  reasonable  judgment,  and any act taken,
                    suffered,  or  permitted  pursuant  to the advice of counsel
                    shall be conclusive evidence of such good faith.

                         (ii) The Escrow Agent is hereby expressly authorized to
                    comply  with and obey  orders,  judgments  or decrees of any
                    court of law, notwithstanding any notices, warnings or other
                    communications  from any of the parties  hereto or any other
                    person to the contrary. In case the

                                      -32-
Escrow Agent obeys or complies with any such order, judgment
                    or decree of any court, the Escrow Agent shall not be liable
                    to any of the  parties  hereto  or to any  other  person  by
                    reason of such compliance,  notwithstanding  any such order,
                    judgment or decree being  subsequently  reversed,  modified,
                    annulled,  set aside,  vacated or found to have been entered
                    without jurisdiction.

                         (iii)  The  Escrow  Agent  shall  not be  liable in any
                    respect on account of the  identity,  authority or rights of
                    the parties executing or delivering or purporting to execute
                    or  deliver  this  Agreement  or  any  documents  or  papers
                    deposited or called for hereunder.

                         (iv) The  Escrow  Agent  shall  not be  liable  for the
                    expiration  of any rights  under any statute of  limitations
                    with respect to this  Agreement or any  documents  deposited
                    with the Escrow Agent.

                         (v) In performing any duties under the  Agreement,  the
                    Escrow  Agent shall not be liable to any party for  damages,
                    losses, or expenses,  except for gross negligence or willful
                    misconduct on the part of the Escrow Agent. The Escrow Agent
                    shall  not  incur  any  such  liability  for  (A) any act or
                    failure  to act made or omitted  in good  faith,  or (B) any
                    action  taken or omitted in  reliance  upon any  instrument,
                    including any written statement or affidavit provided for in
                    this  Agreement  that the Escrow  Agent  shall in good faith
                    believe to be genuine,  nor will the Escrow  Agent be liable
                    or responsible  for  forgeries,  fraud,  impersonations,  or
                    determining the scope of any  representative  authority.  In
                    addition, the Escrow Agent may consult with legal counsel in
                    connection  with Escrow Agent's duties under this Agreement.
                    The Escrow  Agent is not  responsible  for  determining  and
                    verifying  the  authority of any person acting or purporting
                    to act on behalf of any party to this Agreement.

                         (vi) If any  controversy  arises between the parties to
                    this  Agreement,  or with any other  party,  concerning  the
                    subject matter of this  Agreement,  its terms or conditions,
                    the  Escrow  Agent will not be  required  to  determine  the
                    controversy  or to take any action  regarding it. The Escrow
                    Agent may hold all  documents  and  shares  of Buyer  Common
                    Stock and may wait for settlement of any such controversy by
                    final  appropriate  legal  proceedings or other means as, in
                    the Escrow Agent's discretion, the Escrow Agent deems may be
                    required,  despite  what may be set forth  elsewhere in this
                    Agreement.  In such  event,  the  Escrow  Agent  will not be
                    liable for damages.

                         (vii) The parties and their  respective  successors and
                    assigns  agree  jointly and  severally to indemnify and hold
                    Escrow Agent  harmless  against any and all losses,  claims,
                    damages,  liabilities,  and expenses,  including  reasonable
                    costs of investigation, counsel fees, and disbursements that
                    may be imposed on Escrow  Agent or incurred by Escrow  Agent
                    in connection  with the  performance of his/her duties under
                    this Agreement,  including but not limited to any litigation
                    arising from this Agreement or involving its subject matter.

                         (viii)  The  Escrow  Agent may  resign at any time upon
                    giving  at least  thirty  (30)  days  written  notice to the
                    parties;  provided,  however, that no such resignation shall
                    become effective until the appointment of a successor escrow
                    agent which shall be  accomplished  as follows:  the parties
                    shall  use  their  best  efforts  to  mutually  agree  on  a
                    successor escrow agent within thirty (30) days

                                      -33-
after  receiving  such notice.  If the parties fail to agree
                    upon a successor  escrow agent within such time,  the Escrow
                    Agent  shall  have the right to appoint a  successor  escrow
                    agent  authorized to do business in the State of California.
                    The  successor  escrow  agent  shall  execute and deliver an
                    instrument  accepting such appointment in form and substance
                    acceptable to Buyer and  Securityholder  Agent and it shall,
                    without  further  acts,  be  vested  with  all the  estates,
                    properties,  rights,  powers,  and duties of the predecessor
                    escrow agent as if  originally  named as escrow  agent.  The
                    predecessor  escrow  agent  shall  be  discharged  from  any
                    further  duties and liability  under this Agreement upon the
                    execution by such successor of such agreement.

                  (k) Fees. All fees of the Escrow Agent for  performance of its
duties  hereunder  shall be paid by Buyer.  It is  understood  that the fees and
usual  charges  agreed upon for services of the Escrow Agent shall be considered
compensation  for ordinary  services as contemplated  by this Agreement.  In the
event that the  conditions of this Agreement are not promptly  fulfilled,  or if
the Escrow Agent renders any service not provided for in this  Agreement,  or if
the  parties  request  a  substantial  modification  of  its  terms,  or if  any
controversy arises, or if the Escrow Agent is made a party to, or intervenes in,
any litigation pertaining to this escrow or its subject matter, the Escrow Agent
shall be reasonably  compensated for such extraordinary  services and reimbursed
for all costs,  attorney's fees, and expenses occasioned by such default, delay,
controversy or litigation. Buyer promises to pay these sums upon demand.

                                   ARTICLE VI

                               GENERAL PROVISIONS

         6.1  Survival  of  Representations,   Warranties  and  Agreements.  All
representations,  warranties,  covenants and  agreements in this Agreement or in
any instrument  delivered pursuant to this Agreement shall (except to the extent
that  survival is necessary to  effectuate  the intent of such  provisions)  not
survive the  consummation of the Acquisition and shall terminate at the Closing;
provided,  however, that, notwithstanding the foregoing, the representations and
warranties  of the Company and the Sellers set forth in Article II hereof  shall
survive the Closing and terminate two (2) years after the Closing Date.

         6.2 Notices. All notices and other communications hereunder shall be in
writing  and shall be deemed  given if  delivered  personally  or by  commercial
delivery  service,  or mailed by  registered or certified  mail (return  receipt
requested) or sent via facsimile (with acknowledgment of complete  transmission)
to the parties at the following  addresses (or at such other address for a party
as shall be specified by like notice):

                                      -34-
(a)      if to Buyer to:

                           Advent Software, Inc.
                           301 Brannan Street
                           San Francisco, California 94107
                           Attention: Irv Lichtenwald
                           Telephone No.: (415) 543-7696
                           Facsimile No.:  (415) 777-0794

                           with a copy to:

                           Wilson Sonsini Goodrich & Rosati
                           650 Page Mill Road
                           Palo Alto, California 94304-1050
                           Attention:  Mark A. Bertelsen, Esq.
                           Telephone No.:  (650) 493-9300
                           Facsimile No.:   (650) 493-6811

                  (b)      if to the Company, to:

                           MicroEdge, Inc.
                           619 West 54th St., 10th Floor
                           New York, New York 10019
                           Attention: Dov Torenberg
                           Telephone No.:  (212) 757-1522
                           Facsimile No.: (212) 757-1713

                           with a copy to:
                           Moskowitz Altman & Hughes LLP
                           11 East 44th Street
                           New York, New York 10017
                           Attention:  John J. Hughes, Esq.
                           Telephone No.:  (212) 953-1121
                           Facsimile No.:  (212) 953-2437

                  (c)      if to the Securityholder Agent:

                           Dov Torenberg
                           147 Chestnut Street
                           Englewood, NJ 07631
                           Telephone No.:
                           Facsimile No.:

                                      -35-
(d)      if to the Escrow Agent:

                           First Trust of California, N.A.
                           1 California Street, 4th Floor
                           San Francisco, CA 94111
                           Attention: Barbara Wise
                           Telephone No.: 415-273-4530
                           Facsimile No.: 415-273-4593

         6.3  Interpretation.  The words  "include,"  "includes" and "including"
when  used  herein  shall be deemed  in each  case to be  followed  by the words
"without  limitation."  The table of contents  and  headings  contained  in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         6.4  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and  delivered  to the other  party,  it being  understood  that all
parties need not sign the same counterpart.

         6.5 Entire  Agreement;  Assignment.  This Agreement,  the Schedules and
Exhibits  hereto,  and the documents and instruments and other  agreements among
the parties hereto referenced  herein: (a) constitute the entire agreement among
the parties with respect to the subject  matter  hereof and  supersede all prior
agreements  and  understandings,  both written and oral,  among the parties with
respect to the subject  matter  hereof;  (b) are not intended to confer upon any
other person any rights or remedies hereunder;  and (c) shall not be assigned by
operation of law or otherwise except as otherwise specifically provided,  except
that Buyer may assign its rights and delegate its  obligations  hereunder to its
affiliates.

         6.6 Severability.  In the event that any provision of this Agreement or
the  application  thereof,  becomes  or is  declared  by a  court  of  competent
jurisdiction  to be  illegal,  void  or  unenforceable,  the  remainder  of this
Agreement  will  continue in full force and effect and the  application  of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such  void or  unenforceable  provision  of  this  Agreement  with a  valid  and
enforceable  provision that will achieve, to the extent possible,  the economic,
business and other purposes of such void or unenforceable provision.

         6.7 Other Remedies.  Except as otherwise  provided herein,  any and all
remedies herein expressly  conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party,  and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

         6.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that process may be served upon

                                      -36-
them in any manner  authorized by the laws of the State of  California  for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction and such process.

         6.9      Arbitration.

                  (a) The parties  shall attempt in good faith to agree upon the
rights of the  respective  parties  with  respect to any dispute or  controversy
arising  out of,  relating  to,  or in  connection  with this  Agreement  or the
interpretation,   validity,   construction,   performance,  breach  or  complete
termination thereof.

                  (b) If no such  agreement  can be  reached  after  good  faith
negotiation,  either of the parties may demand arbitration of the matter (except
any such dispute or controversy  related to Article V or Section 2.11 or 2.15 of
this Agreement) and the matter shall be settled by arbitration  conducted by one
arbitrator.  Buyer and the Company shall agree on the arbitrator;  provided that
if Buyer and the Company  cannot  agree on one  arbitrator,  either Buyer or the
Company can request that the JAMS select the arbitrator. The arbitrator selected
by the JAMS shall  determine  the dispute in  accordance  with  Section 6.9. The
arbitrator shall set a limited time period and establish  procedures designed to
reduce  the  cost  and  time  for  discovery   while  allowing  the  parties  an
opportunity,  adequate  in the sole  judgment  of the  arbitrator,  to  discover
relevant  information  from the opposing parties about the subject matter of the
dispute. The arbitrator shall rule upon motions to compel or limit discovery and
shall have the  authority to impose  sanctions,  including  attorneys'  fees and
costs,  to the same  extent as a court of  competent  law or equity,  should the
arbitrator determine that discovery was sought without substantial justification
or that discovery was refused or objected to without substantial  justification.
The decision of the arbitrator  shall be final,  conclusive and binding upon the
parties to this Agreement. Such decision shall be written and shall be supported
by written  findings  of fact and  conclusions  which shall set forth the award,
judgment, decree or order awarded by the arbitrator.

                  (c) Judgment upon any award  rendered by the arbitrator may be
entered in any court having jurisdiction. In the event that any such arbitration
is requested by Buyer, such arbitration shall be held in New York, New York, and
in the event that any such arbitration is requested by any Seller,  the Company,
or  the  Escrow  Agent,  such  arbitration  shall  be  held  in  San  Francisco,
California,  in any case under the rules then in effect of JAMS. For purposes of
this Section 6.9, in any arbitration  hereunder,  the non-prevailing Party to an
arbitration  shall  pay its  own  expenses,  the  fees  of the  arbitrator,  the
administrative  costs of the  arbitration  and the expenses,  including  without
limitation, reasonable attorneys' fees and costs, incurred by the other party to
the arbitration.

         6.10 Rules of  Construction.  The parties  hereto  agree that they have
been  represented  by  counsel  during the  negotiation  and  execution  of this
Agreement and, therefore, waive the application of any law, regulation,  holding
or rule of  construction  providing  that  ambiguities  in an agreement or other
document  will be  construed  against  the  party  drafting  such  agreement  or
document.

                                      -37-
6.11 Specific  Performance.  The parties hereto agree that  irreparable
damage  would occur in the event that any of the  provisions  of this  Agreement
were not performed in accordance  with their  specific  terms or were  otherwise
breached.  It is  accordingly  agreed that the  parties  shall be entitled to an
injunction or injunctions  to prevent  breaches of this Agreement and to enforce
specifically  the terms and provisions  hereof in any court of the United States
or any state having jurisdiction,  this being in addition to any other remedy to
which they are entitled at law or in equity.

                  [Remainder of Page Intentionally Left Blank]

                                      -38-
IN  WITNESS  WHEREOF,   Buyer,   each  Seller,   the  Company  and  the
Securityholder Agent (but only as to Articles V and VI for Securityholder Agent)
and have caused this Agreement to be signed by their duly authorized  respective
officers, all as of the date first written above.

BUYER                                                         COMPANY

By:                                                           By:

Name:                                                         Name:

Title:                                                        Title:

SECURITYHOLDER AGENT                                          SELLERS

By:                                                           By:

Name:                                                         Name:

Title:                                                        Title:

ESCROW AGENT

By:

Name:

Title:

                  [Signature Page to Reorganization Agreement]

                                      -39-
EXHIBIT A

                                   THE SELLERS

Dov Torenberg

Ximena Florez

                                      -40-
STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                             ADVENT SOFTWARE, INC.,

                                MICROEDGE, INC.,

                                       AND

                                   THE SELLERS

                          Dated as of February 28, 1998

                                      -41-
TABLE OF CONTENTS
                                                                           Page

ARTICLE I  THE ACQUISITION OF SHARES..........................................1
 1.1      Purchase and Sale of Shares.........................................1
 1.2      Consideration.......................................................1
 1.3      Closing; Delivery...................................................2
 1.4      Directors and Officers..............................................4
 1.5      Lost, Stolen or Destroyed Certificates..............................4
 1.6      Tax and Accounting Consequences.....................................4

ARTICLE II  REPRESENTATIONS AND WARRANTIES OF THE COMPANY .................. 4
 2.1      Organization of the Company........................................4
 2.2      Company Capital Structure..........................................5
 2.3      Subsidiaries.......................................................5
 2.4      Authority..........................................................5
 2.5      Company Financial Statements.......................................6
 2.6      No Undisclosed Liabilities.........................................6
 2.7      No Changes.........................................................6
 2.8      Tax and Other Returns and Reports..................................8
 2.9      Restrictions on Business Activities...............................10
 2.10     Title to Properties; Absence of Liens and Encumbrances............10
 2.11     Intellectual Property.............................................10
 2.12     Agreements, Contracts and Commitments.............................14
 2.13     Interested Party Transactions.....................................15
 2.14     Compliance with Laws..............................................16
 2.15     Litigation........................................................16
 2.16     Insurance.........................................................16
 2.17     Minute Books......................................................16
 2.18     Environmental Matters.............................................16
 2.19     Brokers' and Finders' Fees; Third Party Expenses..................17
 2.20     Employee Matters and Benefit Plans................................17
 2.21     Employees.........................................................21
 2.22     Governmental Authorizations and Licenses..........................21
 2.23     Pooling of Interests..............................................21
 2.24     Representations Complete..........................................21
 2.25     Representations of each Seller....................................22

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF BUYER.......................22
3.1      Organization, Standing and Power..................................22
3.2      Authority.........................................................22
3.3      Capital Structure.................................................23
3.4      SEC Documents; Buyer Financial Statements.........................23

                                       -i-
3.5      No Material Adverse Change........................................23
3.6      Litigation........................................................24

ARTICLE IV  ADDITIONAL AGREEMENTS..........................................24
4.1      Sale and Registration of Shares; Stockholder Matters..............24
4.2      Access to Information.............................................24
4.3      Confidentiality...................................................25
4.4      Expenses..........................................................25
4.5      Public Disclosure.................................................25
4.6      Consents..........................................................25
4.7      FIRPTA Compliance.................................................25
4.8      Commercially Reasonable Efforts...................................25
4.9      Notification of Certain Matters...................................26
4.10     Pooling Accounting................................................26
4.11     Affiliate Agreements..............................................26
4.12     Additional Documents and Further Assurances.......................26
4.13     Nasdaq National Market Listing....................................27
4.14     Company's Auditors................................................27
4.15     Employment and Non-Competition Agreements.........................27
4.16     Indemnification for Not Constituting a Reorganization.............27
4.17     Tax Filings.......................................................27

ARTICLE V  INDEMNIFICATION; ESCROW.........................................27
5.1      Indemnification.  ................................................27
5.2      Escrow Period.....................................................28
5.3      Escrow Arrangements...............................................28

ARTICLE VI  GENERAL PROVISIONS.............................................34
6.1      Survival of Representations, Warranties and Agreements............34
6.2      Notices...........................................................34
6.3      Interpretation....................................................36
6.4      Counterparts......................................................36
6.5      Entire Agreement; Assignment......................................36
6.6      Severability......................................................36
6.7      Other Remedies....................................................36
6.8      Governing Law.....................................................36
6.9      Arbitration.......................................................37
6.10     Rules of Construction.............................................37
6.11     Specific Performance..............................................38

                                      -ii-
INDEX OF EXHIBITS

Exhibit           Description

Exhibit A       Holders of Company Securities

Exhibit B       Form of Legal Opinion of Counsel to the Company

Exhibit C       Form of Legal Opinion of Counsel to Buyer

Exhibit D       Form of Stockholder's Certificate

Exhibit E       Form of Declaration of Registration Rights

Exhibit F       Form of Company Affiliate Agreement

Exhibit G       Form of Employment and Non-Competition Agreement for Sellers

Exhibit H       Form of Employment and Non-Competition Agreement for Ephy
                Torenberg

                                      -iii-
INDEX OF SCHEDULES

Schedule          Description

1.3(b)(vi)        Third Party Consents Required of Company
2.2(a)            Stockholder List
2.3               Affiliated Companies and Subsidiaries
2.4               Governmental and Third Party Consents
2.5               Company Financials
2.6               Undisclosed Liabilities
2.7               No Changes
2.8               Tax Returns and Audits
2.9               Restrictions on Business Activities
2.10(a)           Leased Real Property
2.10(b)           Liens on Property
2.11(b)           Company Registered Intellectual Property
2.11(c)           Title to Company Intellectual Property
2.11(d)           Written Agreements Relating to Intellectual Property
                  Development
2.11(e)           Transferred  Intellectual  Property
2.11(g)           Incoming   Intellectual  Property  Licenses
2.11(h)           Obligations Regarding  Intellectual  Property
2.11(j)           Necessary  Actions to Preserve Intellectual Property Rights
2.12(a)           Agreements, Contracts and Commitments
2.12(b)           Breaches
2.13              Interested Party Transactions
2.15              Litigation
2.16              Insurance
2.19              Brokers/Finders Fees;  Expenses of Transaction
2.20(b)           Employee Benefit Plans and Employee Agreements
2.20(d)           Employee Plan Compliance
2.20(g)           Post Employment   Obligations
2.20(i)(i)        Effect   of   Transaction
2.20(i)(ii)       Excess Parachute Payments
2.20(k)           Labor 4.11 Company Affiliate List

                                       -i-
EXHIBIT  4.1

                              ADVENT SOFTWARE, INC.

                       DECLARATION OF REGISTRATION RIGHTS

         This Declaration of Registration  Rights  ("Declaration") is made as of
the Closing Date by Advent Software, Inc., a Delaware corporation ("Buyer"), for
the benefit of  shareholders  of MicroEdge,  Inc., a New York  corporation  (the
"Company"),  acquiring  shares of Common Stock of Buyer pursuant to that certain
Stock  Purchase   Agreement  dated  as  of  February  28,  1998  (the  "Purchase
Agreement"),  between Buyer and the Company.  Each capitalized term used but not
otherwise  defined herein shall have the meaning  ascribed to it in the Purchase
Agreement.

         1.       Definitions.  As used in this Declaration:

                  a. "Buyer  Consideration  Shares" means for a given Holder the
shares of Buyer Common  Stock  issued to stock  Holder  pursuant to the Purchase
Agreement.

                  b. "Exchange  Act" means the Securities  Exchange Act of 1934,
as amended.

                  c.  "Securities  Act"  means the  Securities  Act of 1933,  as
amended.

                  d. "Form S-3" means such form under the  Securities  Act as in
effect on the date  hereof or any  registration  form under the  Securities  Act
subsequently  adopted by the Commission  which  similarly  permits  inclusion or
incorporation  of substantial  information by reference to other documents filed
by Buyer with the Commission.

                  e. "Holder"  means:  (i) a shareholder  of the Company to whom
shares of Registrable  Securities are issued pursuant to the Purchase Agreement,
for so long as such holder  continues to hold such shares,  or (ii) a transferee
of Registrable  Securities by a Holder, to whom  registration  rights under this
Declaration are assigned pursuant to Section 10 of this Declaration.

                  f. "Registrable  Securities" means (a) for each Holder the sum
of (i) a number of shares of Buyer Common  Stock equal to thirty  percent of the
Buyer Consideration Shares, together with all other shares of Buyer Common Stock
issued in respect  thereof (by way of stock split,  dividend or  otherwise)  and
(ii) a number of shares of Buyer  Common  Stock  equal to the product of (A) the
percentage of her total holdings of Buyer Common Stock sold by Stephanie DiMarco
in any Buyer  Registration  (as defined in Section 4) effected  prior to May 31,
1998,  and (B) the number of Buyer  Consideration  Shares issued to such Holder,
and (b) for all Holders the aggregate of all Registrable  Securities held by all
such Holders.

                  g.       "SEC" means the Securities and Exchange Commission.

                                       -1-
2.  Registration  at  Request  of the  Holders.  Buyer  shall  use  its
commercially  reasonable efforts to cause the Registrable  Securities to be held
by each Holder  following the Acquisition to be registered  under the Securities
Act so as to permit the resale  thereof,  and in connection  therewith shall use
all  commercially  reasonable  efforts to prepare and file with the SEC promptly
after Closing,  and shall use its  commercially  reasonable  efforts to cause to
become  effective by not later than April 30, 1998, a registration  statement on
Form S-3 or on such other form as is then  available  under the  Securities  Act
covering the Registrable Securities;  provided,  however, that each Holder shall
provide all such  information and materials to Buyer and take all such action as
may be  required  in  order  to  permit  Buyer to  comply  with  all  applicable
requirements of the SEC and to obtain any desired  acceleration of the effective
date of such registration statement. Such provision of information and materials
is  a  condition  precedent  to  the  obligations  of  Buyer  pursuant  to  this
Declaration.   Buyer  shall  not  be  required  to  effect  more  than  one  (1)
registration  under  this  Declaration.  The  offering  made  pursuant  to  such
registration shall not be underwritten.

         3. Postponement of Registration. Notwithstanding Section 2 above, Buyer
shall  be  entitled  to  postpone  the  declaration  of   effectiveness  of  the
registration statement prepared and filed pursuant to Section 2 for a reasonable
period  of time,  but not in  excess  of sixty  (60)  calendar  days  after  the
applicable  deadline,  if the Board of Directors of Buyer, acting in good faith,
determines that there exists material  nonpublic  information  about Buyer which
the Board does not wish to disclose in a registration statement (due to the fact
that  such  disclosure  may not be in the best  interests  of  Buyer or  Buyer's
stockholders)  which  information  would otherwise be required by the Securities
Act to be  disclosed  in the  registration  statement  to be filed  pursuant  to
Section 2 above.

         4.       Buyer Registration.

                  a. Notice of  Registration.  If at any time prior to April 30,
1998,  Buyer shall  determine,  in its sole  discretion,  to register any of its
equity  securities,  either  for its own  account  or the  account of a security
holder  or  holders  (any  such  registration  by  Buyer  constituting  a "Buyer
Registration"),  other  than (i) a  registration  relating  solely  to  employee
benefit plans, (ii) a registration relating solely to a Rule 145 transaction, or
(iii) a  registration  in which the only equity  security  being  registered  is
capital  stock  issuable  upon   conversion  of  convertible   (or  exchange  of
exchangeable) debt securities which are also being registered, Buyer will:

                         (1) promptly give Holder written notice thereof; and

                         (2)  include  in  any  registration  (and  any  related
                    qualification under blue sky laws or other compliance),  and
                    in any underwriting  involved  therein,  all the Registrable
                    Securities not sold pursuant to Section 2 hereof  ("Eligible
                    Registrable  Securities")  specified  in a written  request,
                    made  within 10 days after  receipt of such  written  notice
                    from Buyer, by Holder.

                  b.  Underwriting.  If the  registration  of which  Buyer gives
notice is for a registered  public  offering  involving an  underwriting,  Buyer
shall so advise Holder as a part of the written notice given pursuant to Section
4.a. In such event,  the right of Holder to  registration  pursuant to Section 4
shall be conditioned upon such Holder's  participation in such  underwriting and
the inclusion of Eligible

                                       -2-
Registrable  Securities  in the  underwriting  shall be  limited  to the  extent
provided  herein.  Further,  Holder  shall  (together  with  Buyer and any other
holders  distributing their securities through such underwriting)  enter into an
underwriting  agreement in customary form with the managing underwriter selected
for such  underwriting  by Buyer.  Notwithstanding  any other  provision of this
Section 4.b, if the  managing  underwriter  determines  that  marketing  factors
require a limitation  of the number of shares to be  underwritten,  the managing
underwriter may limit the Eligible Registrable Securities to be included in such
registration to zero.

                  If Holder  disapproves of the terms of any such  underwriting,
he may elect to withdraw  therefrom by written  notice to Buyer and the managing
underwriter.  Any securities  excluded or withdrawn from such underwriting shall
be withdrawn  from such  registration,  and shall not be transferred in a public
distribution  prior to 180 days  after the  effective  date of the  registration
statement  relating  thereto,  or  such  other  shorter  period  of  time as the
underwriters may require.

                  c. Right to Terminate Registration.  Buyer is not obligated to
initiate any  registration and shall have the right to terminate or withdraw any
registration  initiated by it under this Section 4.a prior to the  effectiveness
of such registration  whether or not Holder has elected to include securities in
such registration.

         5. Obligations of Buyer.  Subject to the limitations of Sections 3, and
12, Buyer shall (i) keep the  registration  statement  filed in accordance  with
Section 2 hereof  effective  until the earlier of (A) ninety (90) days after the
Closing of the Acquisition or (B) such time as all  Registrable  Securities have
been sold  hereunder;  (ii)  prepare and file with the SEC such  amendments  and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the  provisions  of the  Securities
Act with respect to the sale or other disposition of all securities  proposed to
be registered in such registration statement;  (iii) furnish to each Holder such
number of copies of any prospectus (including any preliminary prospectus and any
amended or supplemented  prospectus) in conformity with the  requirements of the
Securities Act, and such other documents,  as each Holder may reasonably request
in order to  effect  the  offering  and sale of the  shares  of the  Registrable
Securities to be offered and sold,  but only while Buyer shall be required under
the provisions hereof to cause the registration statement to remain current; and
(iv) use its commercially  reasonable  efforts to register or qualify the shares
of the Registrable  Securities covered by such registration  statement under the
securities  or blue  sky  laws  of  such  jurisdictions  as  each  Holder  shall
reasonably  request  (provided  that Buyer shall not be  required in  connection
therewith  or as a  condition  thereto to qualify  to do  business  or to file a
general consent to service of process in any such jurisdiction  where it has not
been qualified).

         6. Selling Procedures.  Any sale of Registrable  Securities pursuant to
the  registration  statement  filed in accordance with Section 2 hereof shall be
subject to the following conditions and procedures:

                  a.  Stockholder  Notice:  The  selling  Holder  shall  provide
written  notice  ("Stockholder  Notice") to Buyer no less than six (6)  business
days prior to such  Holder's  intended  sale.  Within five (5) business  days of
receipt of the Stockholder Notice, Buyer will inform such Holder in

                                       -3-
writing if the registration statement and final prospectus then on file with the
SEC is current and otherwise  complies with the  Securities  Act such that sales
may be made thereunder.  Beginning immediately upon receipt of notice from Buyer
that the registration statement is current and complies with the Securities Act,
such  Holder  shall  then have ten (10)  business  days to sell the  Registrable
Securities  proposed to be sold,  unless the notice from Buyer specifies that no
sale  may be  made  until  the  date  of  intended  sale,  as  specified  in the
Stockholder  Notice,  in which case the Holders  must wait until the date of the
intended  sale to make such sale and Holder  shall have ten (10)  business  days
thereafter to make such sale.  After such ten (10) day period,  the seller shall
once again comply with the procedures set forth in this Section 5.a prior to any
further sales;

                  b.  Updating  the  Prospectus:  If Buyer  informs  the selling
Holder that the registration statement or final prospectus then on file with the
SEC is not current or otherwise does not comply with the  Securities  Act, Buyer
shall use  commercially  reasonable  efforts to provide to the selling  Holder a
current  prospectus  that complies with the Securities Act on or before the date
of  the  intended  sale  of  the  Registrable  Securities  as  disclosed  in the
Stockholder Notice;  provided,  however,  that for a period of not more than one
hundred  twenty (120) days (or any number of lesser periods which total not more
than one hundred twenty (120) days) during any twelve-month  period, Buyer shall
have the right to delay the  preparation of a current  prospectus  that complies
with the Securities Act without explanation to such Holder;

                  c.  Blackout  Periods:  Holders who become  employees of Buyer
agree to be bound by  Buyer's  Insider  Trading  Policy as such may be in effect
from time to time for so long as such Holders remain employees of Buyer;

                  d. General:  Notwithstanding the foregoing, Buyer shall notify
each  Holder  (i) of any  request  by the  SEC or any  other  federal  or  state
governmental  authority  during the period of  effectiveness of the registration
statement for amendments or supplements to the registration statement or related
prospectus or for additional information relating to the registration statement,
(ii) of the  issuance  by the SEC or any  other  federal  or state  governmental
authority of any stop order  suspending the  effectiveness  of the  registration
statement or the initiation of any  proceedings  for that purpose,  (iii) of the
receipt  by Buyer of any  notification  with  respect to the  suspension  of the
qualification  or  exemption  from  qualification  of  any  of  the  Registrable
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such purpose,  or (iv) of the happening of any event which makes
any statement made in the  registration  statement or related  prospectus or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect or which  requires  the  making of any  changes in the
registration  statement or prospectus  so that, in the case of the  registration
statement, it will not contain an untrue statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein not misleading,  and that in the case of the prospectus,  it
will not  contain  an untrue  statement  of a  material  fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances  under which they were made, not misleading.  Advent may, upon
the happening of any event (x) described in  subparagraph  (i),  (ii),  (iii) or
(iv)  above,  or (y) that,  in the good  faith  judgment  of  Advent's  Board of
Directors,  renders it  advisable to suspend use of the  prospectus  for no more
than sixty (60) days due to pending corporate  developments,  suspend use of the
prospectus on written notice to each Holder, in which case each Holder

                                       -4-
shall  not  dispose  of  Registrable  Securities  covered  by  the  registration
statement or prospectus until copies of a supplemented or amended prospectus are
distributed  to the Holders or until the Holders are advised in writing by Buyer
that the use of the applicable  prospectus  may be resumed.  Buyer shall use its
commercially  reasonable efforts to ensure that the use of the prospectus may be
resumed as soon as  practicable.  Buyer  shall use its  commercially  reasonable
efforts to obtain the withdrawal of any order  suspending the  effectiveness  of
the   registration   statement,   or  the  lifting  of  any  suspension  of  the
qualification  (or exemption  from  qualification)  of any of the securities for
sale in any jurisdiction,  at the earliest practicable moment. Buyer shall, upon
the occurrence of any event contemplated by clause (iv), prepare a supplement or
post-effective  amendment to the  registration  statement or a supplement to the
related prospectus or any document incorporated therein by reference or file any
other  required  document so that, as thereafter  delivered to the purchasers of
the  Registrable  Securities  being sold  thereunder,  such  prospectus will not
contain an untrue  statement of a material fact or omit to state a material fact
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading.

         7.  Availability  of Form S-3.  Buyer  represents  that it is currently
eligible to utilize Form S-3 and agrees that,  for a period of one (1) year from
the Closing,  Buyer will not intentionally  take any action which would preclude
Buyer's eligibility to use Form S-3.

         8.  Expenses.  Buyer  shall  pay  all  of  the  out-of-pocket  expenses
incurred,  other than  underwriting  or selling  discounts and  commissions,  in
connection  with the  registration  of Registrable  Securities  pursuant to this
Declaration,  including,  without limitation,  all SEC, National  Association of
Securities  Dealers,  Inc. and blue sky registration  and filing fees,  printing
expenses,  transfer  agents' and  registrars'  fees, and the reasonable fees and
disbursements of Buyer's outside counsel and independent accountants.

         9. Reports Under Securities Exchange Act of 1934. Buyer agrees to:

     a. use all commercially reasonable efforts to file with the SEC in a timely
manner all reports and other  documents  required of Buyer under the  Securities
Act and the Exchange Act; and

                  b. furnish to each Holder forthwith upon request (i) a written
statement by Buyer that it has complied with the reporting  requirements  of the
Securities Act and the Exchange Act, or that it qualifies as a registrant  whose
securities  may be  resold  pursuant  to  Form  S-3  (at  any  time  that  it so
qualifies),  (ii) a copy of the most recent annual or quarterly  report of Buyer
and (iii) such other information as may be reasonably requested in availing each
Holder of any rule or  regulation  of the SEC which  permits  the selling of any
such securities pursuant to Form S-3.

         10. Assignment of Registration  Rights. The rights of a Holder pursuant
to this Declaration shall not be assignable,  except for a transfer by operation
of law to his or her heirs and successors.

         11. Amendment of Registration  Rights. The Holders of a majority of the
Registrable  Securities then outstanding  may, with the consent of Buyer,  amend
the registration rights granted hereunder.

                                       -5-
12. Termination.  The registration rights set forth in this Declaration
shall  terminate  with  respect to a Holder  (and the shares held by such Holder
shall cease to constitute  Registrable  Securities)  upon the earlier of (i) the
date which is one year  following the Closing of the  Acquisition,  and (ii) the
sale of all of such Holder's Registrable Securities.

         13.  Obligations of Holders.  By exercising any rights hereunder,  each
Holder shall be deemed to assume all obligations of a Holder hereunder as though
such  Holder were a signatory  hereto.  Buyer may require  Holders to execute an
instrument  whereby such Holders  expressly  assume all  obligations  of Holders
hereunder as a condition precedent to any obligations of Buyer hereunder.

                                       -6-